In May 2023, Johnson & Johnson (JNJ -0.27%) finalized the spin-off of its healthcare division, now called Kenvue. The decision to do so was largely motivated by management's desire to focus the company's efforts toward advancing its pharmaceutical segment. Narrowing its focus to pharmaceuticals and medical technology products has seemed like the right call. As of this writing, Johnson & Johnson's share price is up 55.5% over the past year compared to the S&P 500's 20.7% return.
That strong stock price performance is tied to momentum related to strong performances from some of its newer drugs, optimism about recent FDA approvals and clearances, and an improved outlook. It's likely to continue, as J&J management recently offered an 11-word phrase during its 2026 second-quarter earnings call that hinted at bullish news in the year ahead.
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New drugs, new revenue opportunities
Johnson & Johnson is building a portfolio of new drugs to help offset the loss of some patent protections for Stelara, which is approved to treat multiple ailments. That blockbuster drug accounted for 11.7% of its total sales in 2024, generating $10.3 billion in revenue for the company. Biosimilar versions of Stelara were approved for entry into the European and United States markets in 2025, and Stelara sales plummeted to roughly $6 billion in 2025.
The second quarter of 2026 showed some progress in offsetting the decline in Stelara sales with other drugs. The company reported that revenue climbed 6.6% from the prior-year period to $25.3 billion. Sales growth was primarily driven by its innovative medicines segment (often called its pharmaceutical unit), with reported revenue of nearly $16.4 billion.
Tremfya, a drug for inflammatory bowel disease and psoriasis, saw sales increase 72.5% year over year to $2 billion. Darzalex, used to treat patients with a rare form of blood cancer, reached $4.2 billion in sales.
NYSE: JNJ
Key Data Points
An important 11-word message
Based on the company's Q2 earnings call, management was especially happy about three newer drugs.
"We are pleased with the progress of our new launches including Icotyde, Inlexzo and Rybrevant instilling confidence that momentum will accelerate into 2027 and beyond with line of sight to double-digit growth by the end of the decade," CEO Joaquin Duato said during the conference call for the second-quarter earnings report. Duato's comments included an 11-word phrase, noting that the company had a "line of sight to double-digit growth by the end of the decade."
That holds a lot of promise for the company's future as well as the stock's. Sales from newer products can offset the losses experienced when an older drug loses patent protection.
In their own right, these new treatments could be massive sales drivers; one analyst projected that Inlexzo, designed to treat adults with non-muscle-invasive bladder cancer, could reach $2.4 billion in sales by 2028. With a steady pipeline of drugs also in development, Johnson & Johnson has real potential to keep offering strong performance.
That's reassuring news for long-term J&J shareholders.
