Johnson & Johnson (NYSE:JNJ) Executive Vice President and Chief Financial Officer Joe Wolk said the company sees a path to growth above its previously stated 5% to 7% long-term range, supported by its pharmaceutical pipeline, medical technology portfolio and capital flexibility.
Speaking at a Deutsche Bank healthcare conference, Wolk said the company does not manage its business to a fixed mix between innovative medicines and medtech, despite innovative medicines representing roughly two-thirds of sales and medtech the remaining third. Instead, he said the company focuses on markets where it believes it can hold a leading position.
Growth Outlook and Loss of Exclusivity
Wolk said Johnson & Johnson remains committed to the 5% to 7% growth framework introduced at its 2023 investor day, but expects to present stronger growth expectations at its Dec. 8 investor day. He said the company has a “clear line of sight” to double-digit enterprise growth over the next several years and by the end of the decade.
He noted that 2026 will include an extra week of sales, representing an estimated 1.5 to 2 percentage points of growth. The company expects to face approximately $4 billion to $4.5 billion in product loss-of-exclusivity exposure during the year, including about $2 billion from XARELTO, roughly $1.5 billion from its pulmonary arterial hypertension franchise, and about $1 billion from SIMPONI and STELARA combined.
Still, Wolk said the company’s marketed portfolio and late-stage pipeline provide confidence that it can grow through those events. He cited the company’s experience managing biosimilar competition for REMICADE in 2018 and more recently for STELARA.
Wolk said growth assumptions are not based on pricing gains or acquisitions. He said the company has faced annual pharmaceutical price erosion of roughly 3% to 4% over the past seven to eight years, while medtech historically has had limited pricing flexibility.
Medtech Portfolio and OTTAVA Launch
In medtech, Wolk said Johnson & Johnson expects both the innovative medicines and medtech segments to grow faster than they do today. He said the company sees room to improve medtech profitability, although it does not expect medtech margins to reach pharmaceutical levels.
He pointed to surgery and vision as businesses with strong margins, while cardiovascular acquisitions Abiomed and Shockwave Medical also entered the portfolio with relatively attractive profitability. The company is evaluating its infrastructure as it separates its orthopedics business, a process Wolk said could create margin improvement and free up resources for research and development.
Wolk described the recently approved OTTAVA surgical robotics platform as a long-term opportunity rather than a material contributor this decade. The company intends to proceed cautiously with early launches, emphasizing what he called “white glove service” and physician feedback. Memorial Hermann in Texas was announced as the first account for the platform, he said.
He said OTTAVA is designed with integrated architecture, a digital-twin capability, Ethicon surgical instruments and an open-network approach intended to support workflow and data generation. Johnson & Johnson is targeting the next decade for the platform’s larger financial contribution.
In electrophysiology, Wolk said VARIPULSE has treated more than 100,000 patients globally. He said the company’s CARTO mapping installed base of about 6,300 systems and its clinical-account-specialist presence provide competitive advantages. VARIPULSE Pro has launched in Europe, and the company hopes to bring it to the U.S. market soon.
Wolk also said Johnson & Johnson expects to retain a leading position in intravascular lithotripsy following its Shockwave acquisition, despite anticipated competition. Regarding Abiomed, he acknowledged field actions and said the company is working with the Food and Drug Administration to resolve them while maintaining patient safety. He said results from the PROTECT IV study, expected next year, should provide a larger data set on utilization.
Oncology and Immunology Opportunities
Wolk said Johnson & Johnson’s $50 billion oncology sales target does not include acquisitions. He highlighted the company’s multiple myeloma franchise, including DARZALEX, CAR-T therapy and TALVEY, as well as development programs such as the trispecific candidate ramantamig.
He also cited opportunities in prostate cancer, lung cancer, head and neck cancer, colorectal cancer and bladder cancer. Wolk said the company’s oncology ambition should be viewed as a floor rather than a ceiling, with additional details expected at the December investor day.
In immunology, Wolk highlighted the early launch of icotrokinra for psoriasis. The product had been on the market for five months and reached 17,000 patients, with coverage from the three large providers, according to Wolk. He said the once-daily pill is reaching patients new to systemic therapy and is also being prescribed by general and advanced practitioners.
Other pipeline programs cited by Wolk included IMAAVY, or nipocalimab, for myasthenia gravis and warm autoimmune hemolytic anemia, with potential in Sjögren’s disease and lupus; pasrodimab in prostate cancer; and JNJ-4804 in refractory inflammatory bowel disease.
Capital Allocation and Legal Settlement
Wolk said the company expects to generate $21 billion in free cash flow this year, which he described as a potential high-water mark, and expects cash generation to rise substantially in the coming years. The company plans to continue supporting its dividend while retaining the flexibility to pursue strategically and financially sound acquisitions.
He said Johnson & Johnson is not opposed to share repurchases, noting its $33 billion repurchase associated with the 2023 consumer-health separation. However, he said management prioritizes investments that can strengthen the portfolio over the longer term.
On the talc settlement, Wolk said the company views the $5.5 billion settlement as below the prior bankruptcy settlement amount and said it does not expect further financial uncertainty once finalized. He said the matter has not prevented Johnson & Johnson from investing in the business, maintaining its dividend or pursuing portfolio additions.
About Johnson & Johnson (NYSE:JNJ)
Johnson & Johnson (NYSE: JNJ) is a global healthcare company that develops, manufactures and markets pharmaceutical and medical device products. Founded in 1886 and headquartered in New Brunswick, New Jersey, the company serves patients, healthcare professionals and institutions in markets around the world.
Johnson & Johnson operates through two primary business segments: Innovative Medicine and MedTech. Innovative Medicine focuses on prescription treatments in areas including immunology, oncology, neuroscience, cardiovascular and metabolic disease, infectious diseases, and pulmonary hypertension.
