Johnson & Johnson has issued an optimistic outlook for 2021 based on strong sales of pharmaceuticals and a bounce back in medical procedures, as the distribution of Covid-19 vaccines should help patients return to hospitals.
Alex Gorsky, chief executive of the world’s largest healthcare company, said J&J’s scientists stand ready to consider “potential scenarios” if a Covid-19 vaccine needs to be adapted to new virus variants.
J&J’s phase 3 trial data for its vaccine will be released by early next week, and it may show whether the jab works just as well against the virus variant that emerged in South Africa, because J&J has trial sites in the country.
He said he was hopeful that the current data showed a “durable” and “sustainable” response, following positive results in earlier trials.
“We’ll get out information as soon as we can, regarding some of the variants. Obviously we’re watching that closely, based on some of the regional, geographical differences that we’ve seen,” he said.
The vaccine could be the first approved as a single shot, making it more convenient than the already authorised jabs. The company is also testing two doses, but that data will not be available until later in the year.
Shares in J&J rose 2.7 per cent to $170.33. Excluding potential revenue from the Covid-19 vaccine, J&J expects operational sales of between $89bn and $90bn this year, and adjusted diluted earnings per share of between $9.40 and $9.60.
In the fourth quarter, J&J reported $22.5bn in revenue, up 8.3 per cent year on year, and higher than the $21.7bn consensus forecast. Cancer drugs helped pharmaceutical sales soar 16 per cent.
Medical device revenue bounced back in the second half of the year, to be down only 0.7 per cent in the quarter, as hospitals resumed elective procedures that had been postponed by the pandemic.
“We continue to monitor and work with healthcare systems around the globe, as they balance surges in Covid-19 cases with treatment for non Covid-19 patients,” said Joe Wolk, J&J chief financial officer.
“We are also encouraged by the recent availability of Covid-19 vaccines that will provide added reassurance to people in need of medical procedures.”
On a non-gaap basis, earnings per share were $1.86, above the average analyst estimate of $1.82. But net income fell 57 per cent to $1.7bn, mainly because of acquisition-related contingencies.
Research and development spending hit an all-time high of $12.1bn in 2020, $800m more than the year before.