J&J Forecasts Weak Annual Profit, Misses Revenue Estimates

Johnson & Johnson on Wednesday forecast 2020 profit below Wall Street estimates and said increased competition for its off-patent treatments could somewhat limit growth in the top-earning pharmaceuticals unit.

Shares of the healthcare conglomerate fell nearly 2% to $146.62 after it reported a rare miss on quarterly revenue, as sales of cancer drug Imbruvica and psoriasis treatment Stelara came in below lofty Wall Street estimates.

J&J’s pharmaceuticals unit, which makes up half of the company’s overall sales, has powered much of its recent growth.

However, generic competition for medicines such as prostate cancer drug Zytiga, coupled with pressure to hold down prescription drug price increases in the United States, has weighed on revenue.

Chief Financial Officer Joseph Wolk said the company still expects sales growth to accelerate in 2020, but it will “probably not be as robust as we would have thought this time last year.”

He said J&J did not take as big a hit from generic and biosimilar competition in 2019 as feared, and that the company hoped its off-patent branded products could maintain market share into 2020.

J&J expects full-year 2020 adjusted earnings of $8.95 to $9.10 per share, with a midpoint below current analysts’ average estimates at the top of the range.

Important newer drugs posted double-digit sales gains in the fourth quarter but missed analysts’ forecasts.-Reuters