Johnson & Johnson topped quarterly profit and sales forecasts, powered by gains in immunology and oncology, while reaffirming earnings guidance amid higher taxes. The company also announced plans to spin off its orthopedics unit within two years as it pivots toward faster-growing, innovation-led segments.
BNN Bloomberg spoke with Matt Miksic, senior analyst for medical supplies and devices research at Barclays, who said Tremfya and other immunology drugs underpinned the results and that the orthopedics separation reflects a strategic shift toward higher-margin markets.
Key Takeaways
- Johnson & Johnson beat earnings and sales forecasts with US$24 billion in revenue, led by immunology and oncology drugs
- Tremfya and Darzalex drove growth as Stelara faced patent expirations in Europe and the U.S.
- The company plans to spin off its DePuy Synthes orthopedics business within 18 to 24 months to focus on innovation-led segments
- J&J is expanding U.S. manufacturing to align with the Trump administration’s push for domestic drug production
- Less than one per cent of growth comes from price increases, reflecting the firm’s reliance on new therapies rather than pricing power
Read the full transcript below:
MERELLA: We have new earnings from Johnson & Johnson today. The company beat expectations on both profit and sales. Let’s start there with Matt Miksic from Barclays. Thanks for joining us.
MATT: Thanks for having me.
MERELLA: Some of us still think of Johnson & Johnson as baby oil and baby shampoo, but they do extensive research in pharmaceuticals as well. Can you tell us a bit more about what Johnson & Johnson includes today?
MATT: Sure. After spinning off the consumer business a couple of years ago, Johnson & Johnson is now roughly two-thirds pharmaceuticals. Within that, it’s focused mainly on immunology — things like rheumatoid arthritis, psoriasis and irritable bowel syndrome — and oncology, which is another major franchise. They’ve also been investing in neuroscience recently, so overall it’s a strong, disease-driven pharma business targeting areas of high unmet need. On the device side, they’ve built a broad portfolio over the past few years.
MERELLA: What segments are driving sales growth right now?
MATT: This quarter, the main driver was immunology. Tremfya, which competes with drugs like Skyrizi, is replacing Stelara, which recently lost patent exclusivity — first in Europe last year and then in the U.S. earlier this year. Their immunology franchise goes back to Remicade and the Centocor acquisition years ago, but Tremfya is the key next-generation product.In oncology, newer drugs like Darzalex have been big growth engines, especially in multiple myeloma, a major cancer indication.
MERELLA: Has the company been affected by President Trump’s tariffs on pharmaceuticals?
MATT: Not yet. The “most favoured nation” policy discussions are still circling the pharmaceutical group, and no one’s sure how they’ll land. The company has said it’s investing heavily to ensure most of its innovative medicines for the U.S. market are also manufactured domestically. That’s a commitment they’ve reiterated over several quarters — part of an effort to align with the administration’s goal of reshoring production of key drugs.
MERELLA: What about lowering prices?
MATT: That’s a tough one. The company has said that less than one per cent of its growth comes from price. That said, many of its therapies are highly innovative — especially in cancer — and those treatments are expensive. So, the broader question of how much is too much to pay for life-extending or remission-inducing drugs is still very much open. But generally speaking, Johnson & Johnson’s growth doesn’t rely on pricing increases.
MERELLA: The company also plans to separate its orthopaedics business. What do you think of that idea, since it is a profitable division?
MATT: It is, and it’s an interesting distinction they’re making now within their device segment. In the past, they wanted to be in all the large, important markets — and orthopaedics is certainly one of them. It generates a lot of cash and has funded investments in new therapies and acquisitions. But the company is now pivoting toward faster-growth, more innovation-driven areas — what you might call the steeper part of the S-curve. That aligns with recent investments in cardiovascular and shock-wave technologies, signalling a shift toward higher-growth, higher-margin markets.
MERELLA: All right, Matt, we’ll leave it there. Thanks for joining us. Matt Miksic is senior analyst for medical supplies and devices research at Barclays.
This BNN Bloomberg summary and transcript of the Oct. 14, 2025 interview with Matt Miksic are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
