On the company’s Q4 earnings call where an eyepopping $88.8 billion in full-year sales were revealed, leaders shifted focus away from enormous takeovers to single-digit billion buy outs.
After making a big JPM week splash with the $14.6 billion acquisition of neurology biotech Intra-Cellular Therapies, Johnson & Johnson CEO Joaquin Duato insisted his business development team will keep things small for the rest of 2025.
“You have to think that larger acquisitions, like the case of Shockwave or Intra-Cellular, are more outliers when going forward,” Duato said on J&J’s fourth quarter earnings call Wednesday morning, referring to the $13.1 billion purchase of cardiology medtech manufacturer Shockwave Medical in spring 2024.
Rather than deals valued in the double-digit billions, Duato pointed to J&J’s history of purchasing smaller companies or individual assets, both on the medicine and medtech sides. He mentioned the purchase of cardiology medtechs Laminar for $400 million in November 2023 and V-Wave for $600 million in October 2024.
“[J&J has always] been focused on these smaller opportunities,” the CEO added.
On the medicine side, those smaller opportunities include J&J’s $850 million buy of Proteologix for a dermatitis asset last year, a 2017 commitment of up to nearly $1 billion for an investigational Crohn’s disease treatment from Protagonist Therapeutics, or the acquisition of private bladder cancer company TARIS Biomedical for an undisclosed amount.
On Wednesday’s earnings call, Duato noted that Protagonist’s asset and TARIS “are more than $5 billion opportunities. That’s where we are able to create value. External innovation has always been a very important part of our capital allocation for Johnson and Johnson,” Duato said.
In Intra-Cellular, J&J picked up assets like Caplyta, a pill approved for schizophrenia and bipolar depression and proposed for major depressive disorder. J&J CFO Joseph Wolk referred to the neuroscience portfolio as one of its “throughbreds within the stable,” which also includes oncology and immunology. The company is bolstering the mental health franchise with four different formulations of the antipsychotic Invega, Spravato for major depression and Caplyta.
Spravato, Oncology Drive Earnings
Meanwhile, J&J reported fourth-quarter sales of $22.52 billion—beating analyst consensus—and full-year revenue growth of 4.3% to $88.8 billion, a number likely to maintain its spot as the highest grossing pharmaceutical company. Earnings per share for the full year were $5.79 with adjusted EPS of $9.98.
Sales of Spravato, which just earned FDA approval as a monotherapy for adults with major depressive disorder, jumped 56% over 2023, with annual sales surpassing $1 billion last year. That brings J&J’s list of blockbuster drugs to 26, Duato said during the call.
Jefferies said that the sales numbers put Spravato at the low end of a predicted $5 billion peak sales potential. Quarter-over-quarter 45% growth “supports the notion psychedelics can become commercially viable for mental health,” the firm said in a Wednesday morning note.
John Reed, executive vice president of Innovative Medicine and R&D, said that Spravato’s new indication allows for the esketamine spray to be used without standard of care, meaning patients can avoid the side effects associated with traditional antidepressant agents.
“We had received priority review from the FDA for that submission,” Reed said. “That’s the second time Spravato had received a priority review—the only antidepressant ever to do so—and Spravato is also the only antidepressant to ever receive breakthrough designation from the FDA.”
For the third straight quarter, J&J saw sales exceeding $14 billion in the innovative medicines section, as 10 key brands grew by double-digit percentags. The growth was primarily driven by the oncology portfolio, which includes Darzalex, Erleada and Tecvayli.
J&J issued operational sales guidance of 2.5% to 3.5% for 2025, with adjusted operational EPS of $10.75 to $10.95.
