Healthcare investors looking for long-term growth don't always have to choose between fast-growing companies and defensive businesses. Sometimes the more interesting decision is between two high-quality companies that are growing for entirely different reasons. Johnson & Johnson (NYSE:JNJ) continues to benefit from the breadth of its pharmaceutical and medical technology businesses, while Thermo Fisher's (NYSE:TMO) outlook increasingly depends on a recovery in life sciences spending after several difficult years.
Both companies reported encouraging results, but does steady diversification or an improving industry cycle offer the stronger long-term opportunity for investors? Let's take a look.
Johnson & Johnson's (NYSE:JNJ) pharmaceutical business was arguably the biggest contributor to its strong quarter, as it helped increase total sales, generating $16.38 billion in quarterly sales and exceeding **** ysts' estimate of $16.1 billion. The healthcare giant now expects its annual sales to be around $101.1 billion at the midpoint, compared with $100.8 billion previously. In another optimistic feat, it raised its adjusted earnings per share forecast to $11.68 at the midpoint, from a previous $11.55 per share.
The most impressive aspect for Johnson & Johnson (NYSE:JNJ), however, wasn't simply pharmaceutical growth but rather the company's ability to offset one of the largest patent cliffs in its portfolio, as it absorbed a significant patent-related decline in Stelara sales while still raising its full-year outlook. Revenue from Johnson & Johnson's (NYSE:JNJ) Stelara, which treats psoriasis, Crohn's disease, and other autoimmune conditions, dropped over 55% in the quarter to $740 million due to patent loss.
However, the company's cancer and newer immunology drugs can be seen countering this loss, as sales of Tremfya, its psoriasis and inflammatory bowel disease drug, rose 72.5% to $2 billion, considerably exceeding the estimate of $1.74 billion. Strong performance from newer drugs such as Tremfya suggests the company's pipeline is successfully offsetting losses from older products.
#billion #tremfya
Both companies reported encouraging results, but does steady diversification or an improving industry cycle offer the stronger long-term opportunity for investors? Let's take a look.
Johnson & Johnson's (NYSE:JNJ) pharmaceutical business was arguably the biggest contributor to its strong quarter, as it helped increase total sales, generating $16.38 billion in quarterly sales and exceeding **** ysts' estimate of $16.1 billion. The healthcare giant now expects its annual sales to be around $101.1 billion at the midpoint, compared with $100.8 billion previously. In another optimistic feat, it raised its adjusted earnings per share forecast to $11.68 at the midpoint, from a previous $11.55 per share.
The most impressive aspect for Johnson & Johnson (NYSE:JNJ), however, wasn't simply pharmaceutical growth but rather the company's ability to offset one of the largest patent cliffs in its portfolio, as it absorbed a significant patent-related decline in Stelara sales while still raising its full-year outlook. Revenue from Johnson & Johnson's (NYSE:JNJ) Stelara, which treats psoriasis, Crohn's disease, and other autoimmune conditions, dropped over 55% in the quarter to $740 million due to patent loss.
However, the company's cancer and newer immunology drugs can be seen countering this loss, as sales of Tremfya, its psoriasis and inflammatory bowel disease drug, rose 72.5% to $2 billion, considerably exceeding the estimate of $1.74 billion. Strong performance from newer drugs such as Tremfya suggests the company's pipeline is successfully offsetting losses from older products.
#billion #tremfya
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