Johnson & Johnson's (NYSE:JNJ) fourth-quarter financials this week suggest that cancer drugs will be the biggest driver of the company's success in 2017. Can cancer drug sales continue to soar? Here's why cancer drugs could be Johnson & Johnson's most exciting opportunity in 2017.

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Making headway

Global spending on cancer drugs eclipsed $100 billion two years ago, and aging and longer-living populations worldwide have IMS Health projecting that global spending on cancer medicine could hit $150 billion in 2020.

Demand in the U.S. is expected to grow significantly due to aging baby boomers, and advancing technology that's providing greater insight into the relationship between our genes and the disease is allowing drugmakers like Johnson & Johnson to develop increasingly more useful and targeted therapies.

Thanks to its big commitment to cancer drug development in the past, Johnson & Johnson markets four top-selling cancer medicines, two of which are enjoying rapid demand growth.

After the FDA OK'd its use alongside Revlimid in second-line patients in November, sales of Johnson & Johnson's multiple myeloma drug Darzalex jumped to an $800 million annualized sales pace in the fourth quarter. That's impressive given the drug's only been on the market since late 2015.

The company's leukemia and lymphoma drug, Imbruvica, which it co-markets with AbbVie, Inc., is also seeing robust sales growth. Thanks to label expansions that boosted its addressable patient population, Imbruvica sales climbed 47.2% year over year to $346 million.

In addition to Darzalex and Imbruvica, the company also markets the billion-dollar blockbuster drugs Velcade, which is used to treat multiple myeloma, and Zytiga, which is a commonly used prostate cancer drug. In Q4, Velcade's and Zytiga's sales were $274 million and $519 million, respectively.

Overall, Johnson & Johnson's oncology sales grew 14.8% year over year to $1.46 billion last quarter. If momentum for Darzalex and Imbruvica carry over into 2017, then this company could end up producing over $6 billion in oncology revenue this year.

Expanding its position

Johnson & Johnson's got a number of intriguing studies under way that could expand the use of its existing cancer drugs and lead to new therapies.

For example, the company is conducting studies on Imbruvica that it thinks could lead to seven FDA filings for its use in new indications. Among those seven are four that Johnson & Johnson thinks could each be worth $500 million or more in annual sales.

The company's apalutamide (ARN-509) is one of the most intriguing cancer drugs in the company's research pipeline that could reach the market soon. If it does, it could shore up the company's leadership position in prostate cancer.

Currently, Johnson & Johnson's Zytiga battles for market share against Xtandi, a fast-growing competitor. Lately, Xtandi's sales have been growing more quickly than Zytiga, but Xtandi could lose some momentum if apalutamide trials pan out. That's because apalutamide is arguably a second-generation Xtandi developed by the same researchers who developed Xtandi. 

Also, Johnson & Johnson could further strengthen its prostate cancer position if trials evaluating niraparib in the indication pan out. Johnson & Johnson licensed rights to develop niraparib for prostate cancer last April from Tesaro. A PARP inhibitor that can prevent repair to damaged cancer cells, Johnson & Johnson thinks nirparib's unique mechanism of action could differentiate it. As part of this deal, Johnson & Johnson also took an equity stake in Tesaro, which gives it back-door exposure to a potential approval of niraparib in breast cancer this year.

Looking forward

Johnson & Johnson is a global and diversified company with $33 billion in full-year pharmaceutical sales, and $72 billion in total global sales across all of its businesses. The company's size gives it big advantages over its peers, including the ability to spend heavily on research and invest in promising upstarts.

Investments like those will be increasingly important to Johnson & Johnson investors this year, because the company's multibillion-dollar rheumatoid arthritis drug, Remicade, began facing off against biosimilars in the U.S. in November. While Johnson & Johnson's oncology franchise might not overcome all of Remicade's headwinds, I think growth for the company's cancer drugs is one of the most exciting reasons to own this stock in 2017.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.