Johnson & Johnson Rallies After Strong Q2 and Raised Outlook; MedTech, Cancer Pipeline Drive Optimism
Johnson & Johnson (JNJ) shares jumped 5% Wednesday after the healthcare giant reported a robust second-quarter performance and lifted its full-year guidance.
The better-than-expected results were driven by healthy gains in both its pharmaceutical and medical technology divisions, even as the company navigates biosimilar competition for its blockbuster drug Stelara.
Revenue rose 5.8% year over year to $23.74 billion, with adjusted earnings per share coming in well above estimates. Importantly, the company raised its full-year EPS and revenue guidance, projecting a stronger second half as new product launches gain traction and pipeline momentum builds.
Innovative Medicine Holds Ground Despite Stelara Pressure
Sales in the Innovative Medicine segment, formerly known as Pharma, grew 4.9% to $15.2 billion—marking the first time the division has topped the $15 billion mark in a quarter. While Stelara, which treats autoimmune conditions like psoriasis and Crohn’s disease, is facing competition from biosimilars, J&J emphasized that it managed to grow through the exclusivity loss—an uncommon feat in the industry.
The segment was buoyed by double-digit growth across 13 key brands, including the multiple myeloma drug Darzalex. The company now treats roughly 80% of myeloma patients and reiterated its goal of becoming the top oncology firm globally by 2030, aiming for $50 billion in oncology sales.
MedTech Accelerates, Cardiovascular Leads the Charge
MedTech revenue climbed 7.3% year over year to $8.54 billion, a sharp pickup from the previous quarter’s modest gains. Growth was powered by strong demand in cardiovascular devices, surgical vision, and wound closure technologies. J&J highlighted leadership in high-growth areas such as heart recovery and circulatory restoration—markets with substantial unmet needs.
Looking ahead, management expects stronger operational sales growth in both divisions during the second half of 2025. For Innovative Medicine, that forecast bakes in continued erosion from Stelara but accelerating momentum from other therapies. On the MedTech side, J&J anticipates wider adoption of new products, particularly in cardiovascular surgery and vision care.
Tariff Hit Softens, Outlook Brightens
Adding to investor confidence, J&J cut its estimate for 2025 tariff-related costs on its MedTech business to $200 million, down from the previous $400 million. The company said it sees no expected tariff impact on the pharmaceutical side. That revision, combined with the raised financial outlook, contributed to the day’s rally in the stock.
Conclusion
Johnson & Johnson delivered a convincing second-quarter rebound, showcasing resilience in its core pharma franchise and accelerating growth in MedTech. While the Stelara patent cliff remains a headwind, the company’s diversified portfolio, expanding cancer pipeline, and improved tariff outlook suggest a stronger back half of the year. Investors responded accordingly, pushing JNJ shares to their best single-day gain in months.
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