Johnson & Johnson - Changing health for humanity

For many investors, Johnson & Johnson is a familiar name, but it’s worth understanding the company’s current state and future prospects, as it is no longer just a giant known for its consumer brands. Instead, it is a company that combines healthcare stability and technological development, building long-term value on multiple fronts.

J&J currently?

Healthcare is a defensive sector, but the company doesn’t rely solely on stability. The company operates in three areas – innovative medicine, MedTech, and the previously spun-off consumer business – with the first two being its growth drivers. In the pharmaceutical sector, products aimed at treating cancer and autoimmune diseases, in particular, continue strong development, even if biosimilars are starting to weigh on the sales of some brands. In the MedTech segment, the company benefits from technological advancements, such as the development of cardiac devices and surgical solutions.

Q4/2024 figures show the company’s investment in the future; revenue grew by approximately 5 percent, but profit decreased due to rising R&D costs. Over 5 billion dollars were directed straight to product development in the quarter alone – over 23 percent of revenue. This is not a sign of problems, but an indication that the company is building growth for the next decade now.

Strategic moves strengthen position

J&J’s planned acquisition in the neuroscience field (ITCI) and partnerships for developing new treatments expand its footprint, especially in the treatment of depression and psychiatric disorders. At the same time, the company aims for 5–7 percent annual growth until 2030.

About risks and their management

Patent expirations and biosimilar competition are quite possible, as are regulatory changes and potential lawsuits. Nevertheless, the company’s diversified structure, strong balance sheet, and long history of operating with regulations provide investors with a solid foundation.

In summary

Johnson & Johnson may not be the most media-sexy company, but it offers a combination of stability, dividends, and long-term growth potential. For an investor who values defensiveness but wants to be part of the technological disruption in healthcare, Johnson & Johnson can be a different kind of choice (or not :smiley: ).


Reading material and other such nonsense:


My main source of information was @TradingLady’s excellent pitching text, and I asked for permission to use it as a significant aid. If there are errors in my text, it is due to me; my possible misunderstandings, etc.

Thank you, TradingLady! :pray: :slightly_smiling_face:

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Regarding potential lawsuits, it’s probably good to mention at least the most obvious one that has already materialized in the form of the talc episode, which has been grinding through the wheels of justice for a long time. No court-approved solutions have really been found yet, but of course, it’s peanuts in the grand scheme of things (was the latest proposal around 10B if I remember correctly).

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Johnson & Johnson exceeded first-quarter expectations in both earnings and revenue. The company raised its dividend and affirmed its full-year guidance, anticipating stronger performance in the second half of the year with new product launches.

Revenue from innovative medicines grew particularly with oncology and immunology products, despite STELARA losses impacting results. The MedTech segment grew steadily, and the company launched a new robotic surgery system. The company also strengthened its neuroscience business through an acquisition and received several FDA approvals, among others.

According to the CEO, J&J is moving forward from a strong position, and its broad product portfolio helps the company succeed in a challenging market environment.

https://x.com/Earnings_Time/status/1912090327927710073

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Let’s also add J&J’s latest figures here, beautifully visualized

https://x.com/Mayhem4Markets/status/1912844876334440826
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Johnson & Johnson exceeded expectations with its second-quarter results for the year. Revenue and EPS were both better than anticipated.

The company raised its full-year outlook and expects stable growth, with particular growth in pharmaceuticals and health technology. The CEO emphasized a strong and diversified business.

https://x.com/Earnings_Time/status/1945432077064671701
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Company’s Official Materials:

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Johnson & Johnson researchers discovered a new type of “hybrid cell” in atopic dermatitis, which functions in two different ways simultaneously. This explains why some patients don’t get enough help from current medications, as they only target one half of the problem.

Up to a quarter of cells in dermatitis patients belong to this new group, which is why broader-acting drugs, such as some JAK inhibitors, appear to work better than traditional treatments. According to the tweet, the discovery could guide the development of new, more effective drugs in the future.

Well… a lot of this went over my head, at least regarding the things in those pictures. :slight_smile:

https://x.com/HOThomasWPhelps/status/1971951634080014608





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A Los Angeles jury ordered Johnson & Johnson to pay $966 million to the family of a woman who died of mesothelioma, as the court found that the company’s talc products contained asbestos and caused cancer.

J&J denies the allegations and plans to appeal; additionally, the company claims the decision is based on “junk science.”

J&J is facing lawsuits from more than 67,000 plaintiffs who say they were diagnosed with cancer after using baby powder and other talc products, according to court filings. The number of lawsuits alleging talc caused mesothelioma is a small subset of these cases, with the vast majority involving ovarian cancer claims.

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Johnson & Johnson had a good third quarter; revenue and earnings exceeded expectations, and the company also raised its outlook for this year. Both the pharmaceutical side and medical devices grew strongly, and earnings also clearly improved from last year.

The company plans to spin off its orthopedics business into its own DePuy Synthes company.

According to the CEO, the focus is now on six growth areas, such as cancer and cardiovascular disease treatment, and eye surgery.

https://x.com/Earnings_Time/status/1978045505977327996



Company’s Own Materials


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Johnson & Johnson now faces over 73,000 lawsuits, as its talcum powder is alleged to cause cancer.

The company’s settlement attempt was rejected, the product was removed from the market, but J&J nevertheless denies the allegations and caps potential compensation at $9 billion.

Johnson & Johnson has experienced a 17% increase in lawsuits alleging its talc-based baby powder causes cancer after a court rejected the company’s latest settlement attempt.

https://www.investing.com/news/stock-market-news/johnson--johnson-faces-17-increase-in-talc-lawsuits-93CH-4311358

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Johnson & Johnson was also included in this SalkunRakentaja article. :slight_smile:

The growth strategy is built on a strengthening research pipeline, acquisitions, and partnerships, which help expand the product portfolio globally and strengthen the position in developing pharmaceutical markets. The company particularly aims to accelerate market launches, strengthen major medical areas, and increase sustainability and social impact, while financial stability, continuous dividend growth, and regular capital returns play a key role in the strategy.

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Johnson & Johnson discontinued its Phase 2b DUPLEX-AD study of an atopic dermatitis drug earlier than anticipated, as an interim analysis showed that its efficacy fell significantly short of the criteria. The candidate was not unsafe or anything of that nature, but simply too ineffective, and therefore its research will not be continued.

The company will continue to develop its other dermatology projects. According to the company, these types of skin conditions affect more than a hundred million people worldwide and create a significant overall need for treatment.

https://www.investing.com/news/assorted/johnson--johnson-ends-atopic-dermatitis-drug-trial-early-over-low-efficacy-432SI-4423078

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Johnson & Johnson acquired Halda Therapeutics for $3.05 billion and gained a cancer drug platform as well as a prostate cancer drug candidate.

Returns may come later (or maybe not :D), but in the coming years, the deal will weigh on earnings according to the article.

The acquisition will be accounted for as a business combination. With the transaction now closing in 2025, Johnson & Johnson expects dilution in Q4 2025 and 2026 earnings. The total dilution to Adjusted Earnings Per Share (EPS) of approximately $0.20 is expected to split equally between 2025 and 2026 based on the latest estimates for the non-recurring charge related to Halda employee equity awards, financing and integration costs. Johnson & Johnson will provide commentary on full year 2026 guidance during the fourth quarter earnings call on Wednesday, January 21, 2026.

https://www.businesswire.com/news/home/20251229435345/en/Johnson-Johnson-completes-acquisition-of-Halda-Therapeutics-and-its-novel-platform-to-revolutionize-cancer-treatment-and-enable-next-generation-oral-therapies

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Johnson & Johnson says it has reached an agreement with the Trump administration to lower drug prices for Americans. In exchange, the company will receive an exemption from U.S. tariffs on pharmaceuticals.

J&J plans to participate in the TrumpRx.gov program and promise “more comparable” prices; additionally, the company announced two new factories in Pennsylvania and North Carolina as part of its $55 billion U.S. investment plan.

https://www.investing.com/news/stock-market-news/johnson--johnson-strikes-deal-with-trump-admin-to-lower-drug-prices-4438389

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The company’s “final quarter” beat expectations in terms of both earnings and revenue. :slight_smile: The overall performance looked quite okay, nothing too surprising – at the time of writing, it’s down 3.5% in the pre-market, but let’s see what happens when the market opens.

Growth was driven and supported especially by the pharmaceutical business and medical technology. Guidance for the coming year predicts strong growth; additionally, operating profit is expected to be weighted toward the end of the year.

However, the company anticipates losses of hundreds of millions of dollars due to a drug pricing agreement signed with the government. Generally, political pressure has forced industry players into price cuts in hopes of tariff exemptions (or for fear of tariff threats :smiling_face_with_tear:); it doesn’t sound massive on the company’s scale, though :thinking:

The company’s strategic focus areas are new product launches for e.g. cancer treatments and robotic surgery; in addition, the company is still planning the separation of its orthopaedics business to further streamline its focus on key core areas.

https://x.com/earnings_guy/status/2013934683894034658



Company’s own materials

The PDF version was quite hard to read in my opinion. :slight_smile:



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