Johnson & Johnson (NYSE:JNJ) is preparing to release its fourth-quarter and full-year 2025 results on Jan. 21, and all eyes are on the performance of its JNJ Innovative Medicine segment. Despite notable headwinds—including the loss of exclusivity (LOE) for Stelara and the financial impact of Medicare Part D redesign—the segment has demonstrated resilience throughout 2025. With blockbuster therapies, new drug launches, and expanding market share, investors have much to evaluate heading into earnings.
Below is a detailed breakdown of the factors expected to influence JNJ Innovative Medicine in Q4.
Steady Growth Despite Stelara LOE
The JNJ Innovative Medicine division posted a 3.4% organic sales increase over the first nine months of 2025, an impressive feat given the LOE of its multibillion-dollar immunology drug Stelara. The segment also maintained two consecutive quarters above $15 billion in revenue, demonstrating the durability of J&J’s broader portfolio.
However, the full weight of biosimilar competition for Stelara is expected to show up more materially in Q4. Throughout 2025, biosimilar versions from Amgen (NASDAQ:AMGN), Teva Pharmaceutical Industries (NYSE:TEVA), Samsung Bioepis, Sandoz (NYSE:SDZ), and others entered the U.S. market. In Q3, Stelara’s LOE created a 1,070-basis-point drag on segment growth—and that figure is likely to be even higher in Q4 as competition intensified.
Key Growth Drivers: Darzalex, Tremfya, Erleada, and New Launches
While Stelara faces erosion, several other therapies within the JNJ Innovative Medicine segment continue to expand rapidly.
Darzalex, Tremfya, and Erleada are expected to drive the bulk of Q4 growth. These drugs benefit from strong market expansion, robust clinical data, and rising physician adoption. Additional positive contributions are likely from Xarelto, Simponi/Simponi Aria, and fast-growing new therapies such as:
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Carvykti
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Tecvayli
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Talvey
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Rybrevant
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Lazcluze
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Spravato
These newer launches are crucial components of J&J’s long-term growth strategy and help offset declines elsewhere in the portfolio.
Headwinds: Biosimilars, Imbruvica Weakness, and IRA Part D Changes
Despite several strong-performing brands, the JNJ Innovative Medicine segment faces meaningful pressure:
1. Stelara Biosimilars
Biosimilar rivals continue to erode sales at a faster pace. With multiple entrants by late 2025, J&J is navigating an increasingly competitive immunology environment.
2. Weak Imbruvica Sales
Imbruvica, once a cornerstone revenue driver, continues to lose momentum due to emerging oral competitors. Market share erosion remains a drag on oncology revenues.
3. Medicare Part D Redesign
Under the Inflation Reduction Act (IRA), HHS now influences pricing for select high-cost drugs. This redesign impacts several J&J therapies, including Stelara, Imbruvica, Erleada and select pulmonary hypertension medications. These reforms weigh on revenue and may reshape payer dynamics into 2026.
Watchlist: New Approvals Imaavy and Caplyta
One of the most watched developments for JNJ Innovative Medicine this quarter is the early launch progress for newly approved treatments.
Imaavy (nipocalimab) earned U.S. approval in April 2025 for generalized myasthenia gravis, followed by an EU approval in December. Investors will look for initial uptake and prescribing patterns as this first-in-class therapy enters global markets.
Caplyta, acquired via the recent merger with Intra-Cellular Therapies, secured a major depressive disorder approval in November. With a massive demand pool, early revenue contributions could become meaningful.
J&J projects a long-term CAGR of roughly 5% for its Innovative Medicine unit—dependent on the success of these and other new treatments.
Competitive Landscape Remains Intense
The JNJ Innovative Medicine segment competes in some of the most crowded categories in global pharmaceuticals. Rival oncology players include:
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Novartis (NYSE:NVS)
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AstraZeneca (NASDAQ:AZN)
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AbbVie (NYSE:ABBV)
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Amgen (NASDAQ:AMGN)
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Merck (NYSE:MRK)
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Bristol-Myers Squibb (NYSE:BMY)
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Roche (OTC:RHHBY)
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Pfizer (NYSE:PFE)
In immunology, competition is equally fierce as AbbVie, Amgen, Sanofi (NASDAQ:SNY), AstraZeneca and Pfizer maintain strong positions across autoimmune disease categories.
Valuation, Price Performance and Consensus Estimates
Investors have rewarded J&J’s stability. Shares have risen 45.9% over the past year, significantly outpacing the industry’s 18.4% gain.
Valuation remains elevated: J&J trades at 18.03 times forward earnings—above the industry’s 17.54 and its own five-year average of 15.65. Still, the Zacks Consensus Estimate for 2026 EPS has inched higher, moving from $11.47 to $11.49 over the past 60 days.
Bottom Line
The JNJ Innovative Medicine segment enters Q4 earnings with solid momentum but meaningful challenges. Strength in oncology and immunology, combined with promising new launches, should help offset pressures from Stelara biosimilars and IRA-related pricing headwinds. Investors watching J&J’s results will focus on how well the company balances these opposing forces—and whether 2026 guidance signals continued resilience.
Featured Image: Megapixl
