Johnson & Johnson (NYSE: JNJ), a leading pharmaceutical company, is set to disclose its fourth-quarter earnings on Wednesday, marking a significant juncture as it navigates one of the most transformative phases in its recent history. Market participants are closely scrutinizing the company’s capacity to substitute the substantial revenue previously generated by its immunology cornerstone product, Stelara.
For several years, Stelara has stood as a primary revenue driver for Johnson & Johnson, peaking at nearly $10 billion annually. This dominance in sales is currently diminishing due to the entry of biosimilar competitors in the U.S. market following the drug's loss of patent exclusivity. The resulting dynamics have created a revenue gap that the company is actively attempting to bridge through its expanding portfolio of newer therapies and acquisitions.
In its recent third-quarter financial report, Johnson & Johnson revealed a dramatic 42% year-over-year decline in Stelara sales, largely attributed to the impact of biosimilar competition. Against this backdrop, management emphasized a group of newer therapies poised to mitigate this downturn. Among these, the oncology drug Darzalex has established itself as a multibillion-dollar franchise. Additionally, the immunology agent Tremfya and the depression treatment Spravato have been spotlighted as rapidly growing contributors to the product mix. The company's innovative cell therapy, Carvykti, is also exhibiting robust growth momentum, with projections targeting $5 billion in peak sales.
Beyond pharmaceuticals, Johnson & Johnson is intensifying focus on its Medical Technologies (MedTech) division as a fertile avenue for sustained growth. Recent acquisitions, including Abiomed and Shockwave Medical, have significantly enhanced the company’s portfolio in this sector. The MedTech segment is viewed as less exposed to patent expirations compared to branded pharmaceuticals, thereby offering a strategic cushion against revenue losses from drugs like Stelara. CEO Joaquin Duato has highlighted this unit's growth as a crucial component of the company's long-term strategy to navigate the challenges posed by Stelara’s declining exclusivity.
Financial leadership at Johnson & Johnson is approaching the situation with measured prudence. CFO Joseph Wolk has explicitly ruled out a reliance on hastily arranged mergers and acquisitions to fill revenue gaps. Instead, the company's policy is to pursue a deliberate, long-term discipline in capital deployment, rejecting what he termed “desperation” acquisitions. This stance suggests a strategic focus on organic growth and carefully considered investments rather than reactive deal-making.
Given these factors, stakeholders are anticipating critical insights from Johnson & Johnson's outlook into 2026. Investors will particularly monitor management’s expectations regarding the trajectory of Stelara’s sales decline and the capacity of emerging assets and business units to compensate for these losses. The balance between these variables is considered pivotal in assessing the company’s future revenue stability and growth potential heading into the final quarter.
Despite the uncertainties surrounding Stelara's patent cliff, Johnson & Johnson's share price recently reached a fresh all-time high of $220.11. The stock has delivered a 5.45% increase so far this year and a substantial 47.59% appreciation over the past twelve months. However, analyst sentiment remains cautiously bearish, with the average price target set at $198.82. This suggests a potential downside risk of approximately 9.07% from current market levels.
On trading days recently, shares have experienced modest fluctuations, closing at $218.66 with a slight decline of 0.41% on Friday and an overnight dip of 0.70%. Market metrics rate Johnson & Johnson favorably on momentum, with a consistently strong price trend across short, medium, and long-term intervals, as reflected in independent stock ranking services.
These dynamics encapsulate a complex but strategic period for Johnson & Johnson. The company faces the daunting challenge of replacing high-revenue products losing patent protection without resorting to short-term measures that could compromise its long-term financial health. Success will hinge on the performance of its newly developed pharmaceuticals and its increasingly significant MedTech operations, both areas under close scrutiny as the 2026 outlook approaches.