J&J To Power Ahead With 10 Launches In Four Years
Set To Outpace Sector Again
Executive Summary
Johnson & Johnson has achieved exceptional growth in recent years, and a raft of new products is set to sustain it further.
Johnson & Johnson has sustained remarkable growth in recent years, and a raft of new products are set to help them maintain this form.
Johnson & Johnson’s pharma division looks set to outperform its peers thanks to a portfolio of fast-growing products and up to 10 more new launches between now and 2023.
The company’s EVP and worldwide chairman of pharmaceuticals Jennifer Taubert presented an upbeat picture for the 2020-2023 period at the J.P. Morgan conference on 13 January: its medicines division is set to provide the strongest growth for the healthcare conglomerate.
J&J has sustained a well above average growth rate for the last eight years – achieving a compound annual growth rate (CAGR) of 8% between 2010 and 2018, compared with the market average of 4.6% in that period.
This has been achieved by stellar growth from newer products such as hemato-oncology medicines Imbruvica (ibrutinib) and Darzalex (daratumumab) plus immunology treatments such as Stelara (ustekinumab) and Tremfya (guselkumab).
Analysts at J.P. Morgan forecast that the company will continue this run over the next five years, although at a lower 5% CAGR.
This will be sustained by the arrival of new products, to include potentially best-in-class BCMA-targeting multiple myeloma CAR-T therapy, JNJ 4528, expected to be filed with the US Food and Drug Administration in the second half of 2020. (Also see "J&J Quickly Advances BCMA-Targeting CAR-T As JNJ-4528 Shows 100% Response" - Scrip, 8 Dec, 2019.)
Following this will be entries into new markets for Janssen, the company’s pharma division, including cusatuzumab for acute myeloid leukemia (AML), lazertinib for lung cancer and seltorexant for major depressive disorder.
While none of these new agents will reach the market this year, the company does have an important line extension set for approval, in the shape of a subcutaneous injection of myeloma blockbuster, Darzalex. This will turn its current hours-long infusion time into a five minute injection, an advance which should help the drug carve out an even greater share of its market.
The biggest headwinds facing the company are ongoing lawsuits against it regarding allegations that its talcum powder caused cancer in consumers, and its involvement in opioids marketing, the latter J&J wants to end with a $4bn settlement.
Backing Out-Of-Pocket Cost Controls
The other major area of uncertainty for 2020 and beyond is US pricing and proposed reforms now being debated ahead of November’s US elections.
Taubert stuck closely to the industry line that capping and lowering out-of-pocket costs for patients was the best way to reform the system.
The industry is giving its backing to a bipartisan bill from the Senate Finance Committee, which sets out proposals to set an out-of-pocket limit in Medicare Part D.
Industry groups forecast that this would cost the industry $2-3bn a year, but would remove a great deal of the pressure from patients – and also remove political pressure for more aggressive reforms of pharma’s current business model.
These include the international reference pricing proposals put forward by President Trump, and the “Medicare for all” plans espoused by Democrat candidates Elizabeth Warren and Bernie Sanders.
“There are elements which I don't think address the fundamental problem which is patient out-of-pocket costs…things such as trying to import foreign price controls,” said Taubert. “What that really means is delays and restrictions to access of therapy, [which] I don't think is going to be helpful.”
The company is less exposed to the US market than some of its peers, with around 50% of its revenues coming from the US, and 50% non-US markets, and its US revenues split evenly between commercial insurance schemes and government-funded cover including Medicare Part B, Part D or Medicaid.