When it comes to health care companies, there's no bigger name than the largest firm in the business: Johnson & Johnson (NYSE:JNJ).
What doesn't J&J produce? From pharmaceuticals to consumer care goods to medical devices, this major medical player has it all. That can make it tough on investors trying to understand this highly diversified company, however: With so many parts, what do you need to keep an eye on? To get a grip on this colossus of the health care sector, let's take a look at Johnson & Johnson and the company's top pharmaceuticals powering its revenues today.
Rising to the top
Anything related to J&J's pharmaceuticals has to start with Remicade. The anti-inflammatory biologic is the engine to this company's drug sales, pulling down more than $6 billion in 2012 alone at year-over-year growth of nearly 12%. This drug has crushed expectations and keeps on rising.
Merck (NYSE:MRK), J&J's partner on Remicade, turned over the marketing rights to the drug in certain geographic areas back in 2011, fueling J&J's share of the revenue. Remicade doesn't face a patent expiration until 2018 in the U.S. and 2014 in Europe and Japan; its status as a biologic, rather than a chemical compound, should also impede generic drugmakers from stepping in to launch competition too quickly. Remicade might not be able to keep this level of growth up with such high sales, but it's a safe bet to keep powering the foundation of J&J's pharmaceutical revenue for the next few years.
Johnson & Johnson's pharmaceuticals are more than just Remicade however, even if the drug takes the spotlight today. Fellow immunology drug Stelara has put on a show worthy of any growth investor's attention recently as sales swelled nearly 39% in 2012 to exceed the $1 billion mark. This drug, used to treat severe plaque psoriasis, was estimated early last year to hit peak sales of more than $1.5 billion by 2016, but its surge could send sales far over that mark.
Stelara has also shown effectiveness in combating symptoms of Crohn's disease in clinical trials. While the drug's still being evaluated as a treatment option, if Stelara is ever approved to fight Crohn's -- an inflammatory bowel disease afflicting more than 1 million people -- J&J could see the drug's sales soar.
Some of J&J's former blockbuster heavyweights are on the way down due to generic competition, such as neurology drugs Concerta and Risperdal. However, new blockbuster arrivals have risen to take their place. Oncology drugs Velcade and Zytiga both grew significantly last year -- the latter by a whopping 319% to $961 million. Zytiga has picked up expanded approval as a pre-chemo prostate cancer drug from the FDA recently, and peak sales could hit up to $1.8 billion. While Zytiga's facing tough competition -- Medivation's (NASDAQ:MDVN) own prostate cancer drug and rival Xtandi is predicted to reach peak sales of up to $2.2 billion -- the drug still should help J&J stay on track.
Leading the sales of today
With Remicade as its foundation, Johnson & Johnson's pharmaceuticals business is in good hands in the near future. Promising growth stories like Stelara and Zytiga offer blockbuster power in coming years, and with a pipeline full of tomorrow's cash cows, J&J's drugs are on the right track.