Will J&J Be Able To Overcome Its Legal Troubles In 2020?
Zacks Investment Research | Dec 29, 2019 09:12PM ET
Johnson and Johnson (NYSE:JNJ) has the most diversified revenue stream among large-cap pharma companies. The company’s portfolio comprises several blockbuster drugs approved for a broad range of diseases as well as medical devices and consumer products.
However, with such a diverse revenue stream, the company also faces several legal issues across its verticals. Although the company posted strong quarterly sales and profits, raised sales guidance thrice and saw rapid pipeline progress, it witnessed share price Large Cap Pharmaceuticals industry in the past year. Moreover, the company’s sound cash resources are expected to help it absorb any costs related to legal issues.
J&J’s anticipated growth in 2020 is also backed by its strong fundamentals. The company registered sales growth across all its divisions in the first nine months of 2019. Sales growth is expected to continue as the company has been raising its guidance every quarter this year. The company expects its Pharmaceutical unit to deliver above-market growth in 2020 on the back of strong performance of its core products including Imbruvica, Darzalex, Stelara and others. It is also developing several of its marketed drugs for new indications or treatment settings. J&J announced promising data from several pivotal studies and made rapid progress with its pipeline and line extensions in 2019. J&J gained FDA approval for two new drugs and line extensions for several drugs in 2019. These approvals are likely to drive sales in 2020 as well.
The company is also working on turning around its Medical Devices business by developing innovative products, expanding global presence and implementing novel commercial models. Sales in the segment improved in 2017 and 2018 from 2016 levels. J&J is optimistic that this segment will deliver above-market growth by 2020 driven by innovation, strategic partnerships, portfolio management and new business models.
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