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Stock Watch: Is Johnson & Johnson Edging Away From Pharma?

A Mixed Bag In Pharma And Mixed Messaging In Oncology Irks Investors

 
• By Andy Smith

J&J’s Medtech division outshone pharma while recently launched innovative products contributed minimally: it is to be hoped investors’ reactions to the first set of big pharma Q1 results will not set the tempo for earnings season.

Stock Watch Image, Andy Smith
ANDY SMITH OFFERS A LIFE SCIENCE INVESTOR'S PERSPECTIVE ON BIOPHARMA BUSINESS

As usual, Johnson & Johnson opened first-quarter 2024 earnings season for life sciences companies, reporting sales that grew by just over 2% on the same quarter of 2023 and were just below those of the fourth quarter of 2023. While the absence of sequential quarterly revenue growth – which is usually generated in the first quarter by early January pharmaceutical list price increases – was a minor theme of J&J’s results, it was not enough to explain investors’ reaction to the announcement. In the premarket, J&J’s stock price opened modestly down but this accelerated in normal trading to reach a 52-week low. J&J’s stock price closed the day of its announcement down by over 2% compared to the NYSE Arca Pharmaceutical Index’s decline of less than 1%. Investors seemed partially aligned with analysts whose consensus estimates of J&J’s total first-quarter sales were missed slightly.

The lack of sequential growth was not the only recurring theme in J&J’s first-quarter results. There is another theme that...

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