Johnson & Johnson Tops Forecasts as Stelara Decline Tests Growth

Johnson & Johnson delivered a strong first quarter, but the numbers made clear that its next stage of growth depends on replacing a fading giant. Sales rose 9.9% to $24.062 billion, adjusted earnings came in at $2.70 a share, and the company said adjusted operational sales growth was 5.3%. Darzalex and Tremfya did much of the heavy lifting, while Stelara, once one of the company’s most valuable drugs, fell about 60% from a year earlier to $656 million.

That drop matters because Stelara was not a small product in decline. At its peak, it exceeded $10 billion in annual sales, leaving Johnson & Johnson with a large revenue gap as biosimilar competition accelerates after patent protection faded. Darzalex generated $4.0 billion in quarterly sales and Tremfya brought in $1.6 billion, but the company is still asking whether those gains, plus a new generation of launches, can fully replace a franchise that once anchored the immunology business.

Management responded by raising its 2026 outlook. The midpoint of revenue guidance moved to about $100.8 billion, while adjusted earnings guidance rose to a midpoint of $11.55 a share. The company said that revenue midpoint implies 7.0% growth at the midpoint and the earnings midpoint implies 7.1% growth. It also said recent approvals across its medicines and device businesses support a path to double-digit growth by the end of the decade.

Chief Financial Officer Joseph Wolk said many patients are staying with alternative treatments rather than switching to biosimilars. “We are seeing increased share in Tremfya and we anticipate we’ll see something similar in the new oral offering,” he said. Wolk also said the company is “not a fan of codifying” most-favored-nation drug pricing into law, underscoring the policy pressure hanging over the sector as drugmakers negotiate with the Trump administration.

The company is banking on newer products to keep the earnings engine running. On March 18, the U.S. Food and Drug Administration approved ICOTYDE, a once-daily oral peptide for moderate-to-severe plaque psoriasis, and Johnson & Johnson is betting it can help cushion Stelara’s erosion. The medical technology division added another layer of support, posting $8.6 billion in sales, up 7.7% from a year earlier. Free cash flow was about $1.5 billion in the quarter, a reminder that the company still has room to fund dividends and dealmaking even as it works through the patent reset.

J.P. Morgan analysts called Johnson & Johnson one of the cleaner names in the sector as it moves beyond Stelara’s loss of exclusivity. Investors, though, are still waiting for proof that the company’s newer drugs can grow fast enough to replace a blockbuster that once defined the franchise.