J&J Posts Innovative Medicine Growth in 2025 Amid Stelara Patent Loss

Johnson & Johnson JNJ has one of the most diverse revenue streams in the industry within its pharmaceuticals division, called Innovative Medicine. The company has several multi-million-dollar drugs covering a broad range of areas such as neuroscience, cardiovascular and metabolism, immunology, oncology, pulmonary hypertension (PH) and infectious diseases.

J&J’s Innovative Medicine segment’s sales rose 5.3% on an operational basis
(excluding the impact of currency) to $60.4 billion in 2025. On an organic basis, sales rose 4.1% despite the loss of exclusivity (“LOE”) of the multi-billion-dollar product, Stelara, and the negative impact of the Part D redesign.

The segment recorded three consecutive quarters of sales of more than $15 billion despite the LOE of Stelara. The segment, for the first time, generated more than $60 billion in full-year sales in 2025, with13 brands growing in double digits.

Higher sales of key products such as Darzalex, Tremfya and Erleada due to strong market growth and share gains drove the segment’s growth.  New drugs like Carvykti, Tecvayli, Talvey, Rybrevant and Spravato contributed significantly to growth. The sales growth was partially dampened by lower sales of Imbruvica and generic/biosimilar competition to drugs like Stelara and Zytiga.

Stelara’s LOE negatively impacted the Innovative Medicines segment’s growth by 1110 basis points and total revenue growth by 620 basis points in 2025. Stelara sales declined 41.3% to $6.08 billion in 2025.

J&J lost U.S. patent exclusivity of Stelara in 2025. According to patent settlements and license agreements, Amgen AMGN, Teva Pharmaceutical Industries, Samsung Bioepis/Sandoz and some other companies launched Stelara biosimilars in 2025. However, excluding Stelara, J&J’s total revenues rose in a double-digit range.

Sales of blockbuster multiple myeloma treatment, Darzalex, rose 23.0% year over year to $14.35 billion in 2025. Erleada generated sales of $3.57 billion in 2025, up 19.2% year over year, while Tremfya recorded sales of $5.2 billion, up 40.5%.

In 2026, J&J expects accelerated growth in the Innovative Medicine segment despite the Stelara LOE impact. The growth is expected to be driven by its key products, such as Darzalex, Tremfya, Spravato, Carvykti and Erleada, as well as new launches like Rybrevant plus Lazcluze in non-small cell lung cancer and Caplyta in major depressive disorder (MDD). J&J expects a more pronounced impact from new products in 2026 than in 2025, as it gained approval for new products like Inlexzoh and Imaavy (nipocalimab) in 2025.  It expects the Innovative Medicine business to grow 5% to 7% from 2025 to 2030.

However, as regards generic impact, in 2026, J&J expects Stelara LOE impact to be more pronounced. In addition, J&J expects generic impact for both Simponi and Opsumit to begin in 2026 as the drugs lose patent protection.

Overall, J&J’s Innovative Medicines unit demonstrated notable resilience in 2025, successfully offsetting the sharp decline from Stelara’s LOE with strong performance from key brands and newer launches. While generic and biosimilar pressures are set to intensify in 2026 with additional patent expirations, the company’s broad portfolio, accelerating contribution from newer products and expectations for sustained mid-single-digit growth position the segment to navigate upcoming headwinds and maintain momentum over the long term.

J&J Key Competitors

Immunology and oncology are J&J’s key areas. Other large drugmakers with a strong presence in the oncology market include Novartis, AstraZeneca AZN, AbbVie ABBV, Amgen, Merck, Bristol-Myers, Roche and Pfizer. In immunology, AbbVie, Amgen, Sanofi, AstraZeneca and Pfizer hold a strong position.

J&J Stock Price, Valuation and Estimates

J&J’s shares have outperformed the industry in the past year. The stock has risen 55.6% in the past year compared with an 18.0% increase of the industry. 

From a valuation standpoint, J&J is slightly expensive. Going by the price/earnings ratio, the company’s shares currently trade at 20.63 forward earnings, higher than 18.76 for the industry. The stock is also trading above its five-year mean of 15.65.

The Zacks Consensus Estimate for 2026 earnings has risen from $11.48 to $11.54 over the past 30 days, while that for 2027 has gone up from $12.24 per share to $12.40 per share over the same timeframe.

J&J has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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