Charles Sternberg, Associate Editor12.06.23
Johnson & Johnson, which recently refurbished its brand by uniting its medtech and pharmaceutical segments, hosted a meeting yesterday with the investment community at the NYSE to present its overarching strategy, Medicine and MedTech pipelines and long-term financial outlook.
“Science and technology will advance human health more in the next decade than it has in the last century, leading to more effective and personalized treatment, earlier intervention, and smarter, less invasive healthcare,” said Joaquin Duato, Chairman and Chief Executive Officer. “We are excited to share today how the breadth of our scientific capabilities, diverse portfolio and robust pipelines uniquely position Johnson & Johnson to be a leader in this next wave of innovation while delivering strong financial performance.”
At the meeting, members of Johnson & Johnson’s Executive Committee and leaders from the Innovative Medicine and MedTech businesses highlighted the Company’s key drivers for sustained competitive growth and value creation. Specifically:
The Company’s 2024 financial guidance metrics, including the previously announced anticipated impact from the Laminar, Inc. transaction, are as follows:
References:
1 Based on risk-adjusted sales projections
2 Peak non-risk adjusted operational sales, including partner sales
3 MedTech Market WAMGR reflects the following sources: Internal estimates, Fitch, HRI, GlobalData, and DRG
4 Products launched within last five years
5 Excludes COVID-19 Vaccine
6 Risk adjusted basis; includes filings and current year approvals
“Science and technology will advance human health more in the next decade than it has in the last century, leading to more effective and personalized treatment, earlier intervention, and smarter, less invasive healthcare,” said Joaquin Duato, Chairman and Chief Executive Officer. “We are excited to share today how the breadth of our scientific capabilities, diverse portfolio and robust pipelines uniquely position Johnson & Johnson to be a leader in this next wave of innovation while delivering strong financial performance.”
At the meeting, members of Johnson & Johnson’s Executive Committee and leaders from the Innovative Medicine and MedTech businesses highlighted the Company’s key drivers for sustained competitive growth and value creation. Specifically:
Enterprise
Given the Company’s confidence in its future growth prospects and the strength of its pipeline, Johnson & Johnson is providing long-term financial targets and expects:- At least 3% operational sales growth in 20255, despite STELARA biosimilar entry in the United States
- 5-7%1 operational sales CAGR from 2025-2030
MedTech
The Company expects to build upon its market-leading position with continued expansion into high-growth markets such as interventional cardiovascular, robotics and digital. As a result, the Company expects the MedTech business to:- Grow operational sales in the upper range of its markets, which are projected to grow 5-7%3 through 2027
- Generate one-third of sales from new products4 in 2027
Innovative Medicine
The Company is continuing to focus on areas of high innovation and higher growth while maintaining its pipeline which is expected to deliver more than 20 novel therapies and more than 50 product expansions by 20306. In addition, by 2030, Johnson & Johnson’s Innovative Medicine pipeline and portfolio are expected to deliver:- 5-7%1 operational sales growth from 2025-2030
- 10+ assets having the potential to deliver over $5 billion in operational PYS2, including the five assets highlighted during the 2021 Pharmaceutical Business Review as well as TALVEY, TECVAYLI, and JNJ-2113
- 15+ assets having the potential to generate $1-5 billion in operational PYS2, including SPRAVATO, seltorexant, aticaprant, and JNJ-4804
Strong Financial Foundation
With robust free cash flow generation and a healthy balance sheet, the Company intends to continue its focus on its capital allocation strategy including continued investment in R&D, increasing dividends on an annual basis, executing strategic business development initiatives for inorganic growth and assessing share repurchases, when appropriate.The Company’s 2024 financial guidance metrics, including the previously announced anticipated impact from the Laminar, Inc. transaction, are as follows:
- Operational sales growth in the range of 5-6%5
- Adjusted operational earnings per share growth of 7.3% at the midpoint with a range of $10.55-$10.75. The Company’s 2024 guidance range reflects an approximate $0.15 dilutive impact to adjusted operational EPS associated with the previously announced acquisition of Laminar, Inc.
References:
1 Based on risk-adjusted sales projections
2 Peak non-risk adjusted operational sales, including partner sales
3 MedTech Market WAMGR reflects the following sources: Internal estimates, Fitch, HRI, GlobalData, and DRG
4 Products launched within last five years
5 Excludes COVID-19 Vaccine
6 Risk adjusted basis; includes filings and current year approvals