Johnson & Johnson (JNJ) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary and Q&A indicate strong financial performance with significant sales growth in key products and sectors. The company has a positive outlook with plans for growth in MedTech and innovative medicines. Despite some unclear responses, the overall sentiment is positive, supported by strong sales figures and strategic investments in product launches and market expansion. The company's confidence in double-digit growth by the end of the decade further supports a positive outlook.
Key Financial Performance
Worldwide Sales $24.1 billion for Q1 2026, increased by 6.4% year-over-year. Growth was driven by operational sales growth and acquisitions, despite a 540 basis point headwind from STELARA.
Net Earnings $5.2 billion for Q1 2026, decreased from $4.54 per share a year ago. Adjusted net earnings were $6.6 billion, representing a decrease of 1.4% year-over-year. The decline was due to increased investments in new launches and unfavorable product mix.
Innovative Medicine Sales $15.4 billion for Q1 2026, increased by 7.4% year-over-year. Growth was driven by strong performance in oncology, immunology, and neuroscience, despite a 920 basis point headwind from STELARA.
MedTech Sales $8.6 billion for Q1 2026, increased by 4.6% year-over-year. Growth was driven by cardiovascular, surgery, and vision segments, despite competitive pressures and divestitures.
DARZALEX Sales $4 billion for Q1 2026, increased by 17.8% year-over-year. Growth was driven by strong share gains across all lines of therapy and market growth.
CARVYKTI Sales Approximately $600 million for Q1 2026, increased by 57.4% year-over-year. Growth was driven by share gains and continued site expansion.
TECVAYLI Sales Increased by 30.1% year-over-year, driven by launch uptake and share gains from expansion in the community setting.
TREMFYA Sales Increased by 63.8% year-over-year. Growth was driven by share gains across all indications and market growth.
STELARA Sales Declined by 61.7% year-over-year, driven by share loss due to biosimilar competition and unfavorable patient mix.
SPRAVATO Sales Increased by 44.5% year-over-year, driven by strong demand from physicians and patients.
CAPLYTA Sales $270 million for Q1 2026, with strong momentum following its FDA approval in adjunctive major depressive disorder.
Electrophysiology Sales Increased by 9.5% year-over-year, driven by newly launched products like VARIPULSE and strong commercial execution.
Abiomed Sales Increased by 14.4% year-over-year, driven by strong adoption of the Impella technology.
Shockwave Sales Increased by 18.1% year-over-year, driven by adoption of coronary and peripheral products.
Contact Lenses and Other Products Sales Increased by 2.7% year-over-year, driven by strong performance in the ACUVUE OASYS 1-Day family of products and strategic price actions.
Surgical Vision Sales Increased by 6% year-over-year, driven by new product innovations and robust demand for premium IOLs.
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Operating Highlights
ICOTYDE: FDA approval for the first-line treatment of plaque psoriasis. It is the first and only IL-23 targeted oral peptide, offering a convenient once-daily pill. Full launch occurred on the same day as approval.
TECNIS PureSee: FDA approval for the first and only extended depth of focus intraocular lens in the U.S., maintaining contrast sensitivity comparable to a monofocal lens.
TREMFYA: Projected to deliver more than $10 billion in peak year sales. It is the fastest-growing IL-23 therapy in the U.S. and now the share leader for new patient starts in inflammatory bowel disease.
DARZALEX: Sales of $4 billion with operational sales growth of 18%, remaining the gold standard in multiple myeloma treatment.
CARVYKTI: Achieved sales of approximately $600 million with growth of 57.4%, driven by share gains and site expansion.
TECVAYLI: Growth of 30.1%, driven by launch uptake and share gains from expansion in the community setting.
RYBREVANT FASPRO: FDA approval for subcutaneous monthly dosing for EGFR-mutated non-small cell lung cancer and breakthrough therapy designation in advanced head and neck cancer.
MedTech Cardiovascular: Abiomed and Shockwave delivered strong growth, with Abiomed growing 14.4% and Shockwave achieving 18.1% growth due to adoption of coronary and peripheral products.
MedTech Vision: Expanding access globally for ACUVUE OASYS MAX disposable lenses and TECNIS intraocular lenses.
MedTech Surgery: Progress on OTTAVA robotic surgical system with a second investigational device exemption trial underway for inguinal hernia repair.
Operational Sales Growth: Achieved 6.4% operational sales growth in Q1 2026, with U.S. growth at 8.3% and 3.9% outside the U.S.
Innovative Medicine Sales: Delivered operational sales growth of 7.4% in Q1 2026, driven by 10 brands growing double digits.
MedTech Sales: Reported Q1 operational sales growth of 4.6%, with growth across cardiovascular, surgery, and vision segments.
Pipeline and Portfolio Strength: Johnson & Johnson has 28 platforms or products generating at least $1 billion annually, aiming to add more.
U.S.-Based Investments: Plans to invest $55 billion in U.S.-based manufacturing, technology, and R&D through early 2029, with $12 billion already invested by the end of 2025.
Dividend Growth: Announced a 3.1% increase in annual dividend rate to $5.36 per share, marking the 64th consecutive year of dividend growth.
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Risk or Challenges
STELARA Sales Decline: STELARA experienced a significant sales decline of 61.7% due to biosimilar competition, adoption of novel classes, and unfavorable patient mix, impacting revenue in the immunology segment.
Cost of Goods Sold Increase: Cost of goods sold increased due to tariffs and unfavorable product mix in the Innovative Medicine business, which could pressure profit margins.
Selling, Marketing, and Administrative Expenses: Expenses increased by 180 basis points due to heavier investment in new product launches and costs related to the Intra-Cellular acquisition, potentially impacting profitability.
Volume-Based Procurement in China: The MedTech business anticipates a second-half impact from volume-based procurement in China for electrophysiology products, which could affect sales in the region.
Competitive Pressures in Surgery: The surgery segment faced competitive pressures in energy and endocutters, as well as volume-based procurement in China, which could hinder growth.
Debt Levels: The company has a net debt of approximately $33 billion, which could limit financial flexibility and increase interest expenses.
Free Cash Flow Timing: Free cash flow in Q1 was below the full-year projection due to timing changes in U.S. rebate programs and increased capital expenditures, which could affect liquidity.
Regulatory and Approval Risks: Several products and platforms are awaiting regulatory approvals, such as the OTTAVA Robotic Surgical System and TECNIS PureSee intraocular lens. Delays or denials could impact growth projections.
Biosimilar Competition: Biosimilar competition, particularly affecting STELARA, poses a risk to revenue in the immunology segment.
Tariffs Impact: Tariffs have negatively impacted the cost structure in the MedTech business, potentially reducing profitability.
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Guidance & Outlook
Revenue Growth: Johnson & Johnson is on track to achieve $100 billion in annual revenue for 2026, with expectations of double-digit growth by the end of the decade. The company has raised its operational sales guidance to 5.9%-6.9% for 2026, with a midpoint of $100.2 billion.
Innovative Medicine: The company expects continued growth in oncology, immunology, and neuroscience, driven by new product launches and strong performance of existing products. Key products like ICOTYDE and TREMFYA are projected to deliver significant revenue, with TREMFYA expected to achieve over $10 billion in peak annual sales.
MedTech: Growth is anticipated across cardiovascular, surgery, and vision segments. Key launches include the TECNIS PureSee intraocular lens and the OTTAVA robotic surgical system. The company expects continued adoption of products like VARIPULSE Pro and ETHICON 4000.
Pipeline and Approvals: Regulatory approvals are expected for TREMFYA in psoriatic arthritis, OTTAVA Robotic Surgical System, and other key products. Data presentations are anticipated for products in oncology, immunology, and neuroscience, including ERLEADA and CAPLYTA.
Capital Allocation: Johnson & Johnson plans to invest $55 billion in U.S.-based manufacturing, technology, and R&D by 2029, with significant investments already underway in 2026. The company also announced a 3.1% dividend increase, marking its 64th consecutive year of dividend growth.
Earnings Per Share: Adjusted operational earnings per share guidance has been increased to $11.30-$11.50, representing 5.7% growth at the midpoint.
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Shareholder Return Plan
Dividend Growth: The Board of Directors authorized a 3.1% increase in the annual dividend rate to $5.36 per share. This marks the 64th consecutive year of dividend growth.
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Key Q&A
Q:How is ICOTYDE being positioned in the market, and what is the expected ramp of reimbursement coverage?
A:ICOTYDE is positioned as the first and only targeted oral peptide that blocks the IL-23 receptor, offering complete skin clearance, favorable safety, and simplicity as a once-daily pill. It is expected to become the preferred first-line systemic therapy for psoriasis. Early uptake includes 1,500 prescriptions and over 1,000 unique prescribers. The company is in positive conversations with payers to drive early and broad access.
Q:What are the company's views on the medical device market and its growth outlook?
A:The company is focused on higher growth and innovation markets, particularly cardiovascular, vision, and surgery. Q1 growth was 4.6%, consistent with expectations, despite some procedural softness and weather-related disruptions. The company expects further acceleration in growth throughout 2026, driven by robust demand and operational execution.
Q:What is the company's outlook for double-digit top-line growth by the end of the decade?
A:The company is confident in achieving double-digit growth by the end of the decade, driven by its strong product portfolio and pipeline, including ICOTYDE, RYBREVANT, and INLEXZO. Growth will also be supported by MedTech innovations and the separation of orthopedics. Business development is not required to achieve this growth, but remains a priority for capital allocation.
Q:What is the early feedback on ICOTYDE prescriptions and its potential market dynamics?
A:Early data shows broad prescriber interest, but specific details on patient sources (new vs. switching) are not yet available. ICOTYDE is expected to expand the systemic therapy market for psoriasis and have significant potential in inflammatory bowel diseases (IBD). The drug is anticipated to have balanced sales across indications.
Q:What are the growth drivers within the medical device business, particularly Abiomed and Shockwave?
A:Abiomed grew nearly 15% in Q1, driven by Impella products and robust clinical data. Shockwave grew 18.1%, maintaining leadership in the IVL market through innovation and a strong portfolio. The company plans to launch new IVL catheters annually and expects MedTech to transition from mid-single-digit to high-single-digit growth by the end of the decade.
Q:What investments are being made for ICOTYDE's prescriber and patient education?
A:The company is heavily investing in ICOTYDE's launch, including field teams, patient access and support services, and evaluating direct-to-consumer advertising to raise awareness among clinicians and patients.
Q:What is the outlook for the ophthalmology franchise, particularly U.S. surgical and contact lens markets?
A:Vision grew 3.6% in Q1, with contact lenses up 2.7% and surgical vision up 6%. U.S. surgical growth faced competitive pressures but is expected to accelerate in the second half of the year with the launch of TECNIS PureSee, a premium IOL with strong clinical benefits.
Q:What is the vision for JNJ-4804 in IBD treatment paradigms?
A:JNJ-4804, a co-antibody combining guselkumab and golimumab, aims to address unmet needs in IBD by offering a fixed-dose combination for patients not achieving remission with monotherapy. Phase II data will be presented this year, and Phase III programs are underway.
Q:What is the commercialization plan for INLEXZO, and how is it performing?
A:INLEXZO is designed for bladder-sparing treatment in BCG-unresponsive bladder cancer. It is outperforming recent launches in the space, with a significant increase in new patient insertions following J-code approval. The company is leveraging its MedTech expertise for training and support to ensure seamless adoption.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the sources of ICOTYDE prescriptions (e.g., new patients vs. those switching therapies) and did not disclose IMAAVY sales figures.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
ACUVUE OASYS
CAPLYTA
Catheter platform
DARZALEX FASPRO
ICOTYDE
Instructions
Intra acquisition
Medicine Research
RYBREVANT FASPRO
Shockwave
TALVEY
TECVAYLI DARZALEX
VARIPULSE
aMDD
ablation
approval TECVAYLI
area need
cancer RYBREVANT
choice
decrease
depth
focus area
gain expansion
heart recovery
immunology neuroscience
innovation
investment launch
launch uptake
leader
oncology immunology
plaque psoriasis
point Intra
restoration electrophysiology
reversal
sale focus
sight
surgery vision
talc
JNJ Transcript
Johnson & Johnson (JNJ) Q1 2026 Earnings Call Transcript
Positive4-14
The earnings call summary and Q&A indicate strong financial performance with significant sales growth in key products and sectors. The company has a positive outlook with plans for growth in MedTech and innovative medicines. Despite some unclear responses, the overall sentiment is positive, supported by strong sales figures and strategic investments in product launches and market expansion. The company's confidence in double-digit growth by the end of the decade further supports a positive outlook.
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Neutral3-3
Johnson & Johnson (JNJ) Q4 2025 Earnings Call Transcript
Positive1-21
The earnings call summary shows strong financial performance, with impressive growth in key products like CARVYKTI and TECVAYLI, and positive MedTech developments. The guidance is optimistic, with increased operational sales and EPS projections. The Q&A reveals confidence in growth strategies and market positioning, despite some uncertainties around litigation and ACA impact. Overall, the positive growth outlook and strategic focus on high-growth areas support a positive sentiment, likely leading to a stock price increase.
JNJ Report
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