Industry Trend Analysis - J&J's Oncology Will Grow Amid Other Stalling Pharmaceutical Segments - JUNE 2017

BMI View: Oncology is a driving force in Johnson & Johnson ' s Pharmaceutical division as other segments face declining revenues. The area will be a focus of investment and continue to grow as Darzalex and Imbruvi c a continue to gain market share. However, the strong growth in oncology will not be enough to continue offsetting losses in other therapeutic areas.

Johnson & Johnson (J&J) registered an increase in revenues of 1.62% y-o-y to USD17.6bn in its Q117 financial results. All divisions posted growth; however, the pharmaceutical division only showed modest growth at 0.8% y-o-y to USD8.2bn. Within the pharmaceutical division, certain therapy areas were dampened by generic and biosimilar competition, with immunology only just growing, up by 0.6% y-o-y. Oncology, however, was a bright spot for the pharmaceutical division, with substantial growth of 19.3% y-o-y. This highlights the importance of the oncology division, and it will be reflected in further investment.

Oncology is the second largest segment of J&J's pharmaceuticals division, and as immunology continues to struggle, oncology will increase its contribution. It now accounts for 19.3% of the pharmaceutical division, up from 16.6% in Q116. As newer oncology products, such as Darzalex (daratumumab) and Imbruvica (ibrutinib), gain traction this segment will increase in significance for J&J.

Oncology Growth Outpaces Rest Of Pharma Division
J&J Pharmaceutical Y-O-Y Growth (%), Q117
C/M/O = cardiovascular, metabolic and other. Source: Johnson & Johnson, BMI

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