Dive Brief:
- Johnson & Johnson is lowering its forecast for COVID-19 vaccine sales, announcing Tuesday it will has suspended its guidance of $3 billion to $3.5 billion in revenue this year. The drugmaker said “global supply surplus and demand uncertainty” drove its decision to withdraw the previously given forecast.
- The change comes as vaccinations have plateaued in many wealthy and middle-income countries across North and South America and Europe, while some lower-income nations in Africa and Asia have yet to vaccinate significant portions of their citizens. Worldwide, about 11.5 billion doses have been administered, according to data compiled by Bloomberg News.
- The faltering vaccination campaigns have affected the financial outlooks of other drugmakers as investors look elsewhere. Shares in messenger RNA vaccine developers Moderna and BioNTech have dropped in value by roughly one-third since the beginning of 2022.
Dive Insight:
Just over a year ago, the average number of daily COVID-19 vaccinations administered in the U.S. peaked at about 3 million doses. While hundreds of thousands of shots are still being given every day, uptake of boosters has been slower than with initial vaccination regimens.
When J&J announced full-year 2021 earnings in January, company executives also gave outlooks for its business in 2022 both with and without vaccine sales, which were then expected to total $3.5 billion this year.
That latter estimate is now suspended. “This will enable investors to focus on the performance of our core business,” CFO Joseph Wolk said of the decision during a Tuesday call with Wall Street analysts.
The company is now forecasting sales of up to $96 billion, a total that’s affected by fluctuations in currency value — namely, a decline in the value of the euro, which is now worth $1.09 compared with $1.14 in January.
AS J&J is typically the first large pharmaceutical company to publish earnings each quarter, its financials are closely watched as a bellwether of what other drugmakers might also report, and will likely set expectations for other COVID-19 vaccine makers.
Pharmaceutical revenue of $12.9 billion missed the consensus Wall Street estimate of $13.6 billion, Mizuho Securities analyst Vamil Divan wrote in an April 19 note to clients.
Among the products underperforming were cancer drug Imbruvica, which faces stiff competition from AstraZeneca’s Calquence and BeiGene’s Brukinsa, and the anticoagulant Xarelto, which is in a fight for market share with Bristol Myers Squibb and Pfizer’s Eliquis, Divan wrote. Also missing expectations was J&J’s autoimmune drug Stelara, sales of which have declined due to competition from newer products from AbbVie.
Those struggling products were partially offset by stronger-than-expected growth from two other cancer drugs, Darzalex and Erleada.
Meanwhile, J&J continues to report falling sales for its once top-selling rheumatoid arthritis drug Remicade and its red blood cell booster Procrit, both of which face biosimilar competition.
Shares of J&J rose by more than 3% in morning trading Tuesday.
