Johnson & Johnson has raised its 2025 sales forecast by $700 million to $92 billion at the midpoint, despite projecting a $400 million impact from tariffs. The revised outlook reflects the integration of Caplyta (lumateperone) following J&J's $14.6 billion acquisition of Intra-Cellular Therapies.
The pharmaceutical giant has adjusted its financial projections, lowering its adjusted operational earnings per share (EPS) growth to 6.2%, down from the previously forecasted 8.7%, citing dilution effects from the recent acquisition. However, the company maintained its adjusted reported EPS growth at 6.2%, consistent with guidance initially provided in January 2025.
Regulatory Milestones Strengthen Product Portfolio
The first quarter of 2025 brought significant regulatory wins for J&J's key therapies. The U.S. Food and Drug Administration (FDA) granted approval for Tremfya (guselkumab) in the treatment of Crohn's disease, expanding the drug's indications beyond its established use in psoriasis and psoriatic arthritis.
Simultaneously, the European Commission (EC) approved Rybrevant (amivantamab-vmjw) for specific lung cancer indications, strengthening J&J's oncology portfolio in the European market. These regulatory achievements are expected to contribute to the company's projected revenue growth.
MedTech Division Shows Mixed Performance
J&J's MedTech division reported operational sales growth of 4.1% in the latest quarter, with particularly strong performance in cardiovascular and general surgery segments. However, the orthopedics business demonstrated weakness, especially in spine and sports medicine categories, potentially reflecting ongoing challenges in elective procedure volumes.
The company did not provide specific details on strategies to address underperforming segments within the MedTech division.
Ongoing Legal Challenges
Despite positive financial projections, J&J continues to face significant legal hurdles. In April 2025, a Texas court blocked the company's attempt to resolve talc-related liabilities through a bankruptcy filing by its subsidiary, Red River Talc.
J&J has consistently maintained that the talc-related claims are "meritless" and "premised on junk science," according to company statements. The pharmaceutical giant has expressed its intention to defend against these claims and potentially recover up to $7 billion from legal reserves previously set aside for talc litigation.
Acquisition Strategy and Market Position
The acquisition of Intra-Cellular Therapies represents a significant expansion of J&J's neuroscience portfolio. Caplyta, approved for schizophrenia and bipolar depression, is expected to complement J&J's existing psychiatric medications and potentially drive growth in this therapeutic area.
While the acquisition has necessitated a downward adjustment in EPS growth projections for 2025, the increased sales forecast suggests confidence in the long-term value of the transaction. The company has not disclosed specific integration plans or sales projections for Caplyta.
Tariff Impacts on Global Operations
The projected $400 million tariff impact highlights the growing challenges pharmaceutical companies face in the current global trade environment. J&J has not specified which products or markets will be most affected by these tariffs, nor has it detailed any mitigation strategies being implemented to address these additional costs.
The company's ability to raise its sales forecast despite these headwinds suggests confidence in its overall portfolio performance and market position for the remainder of 2025.
