Johnson & Johnson

Strong Q2 performance; guidance raised (core “good” takeaway) - Q2 worldwide sales: $25.3B, +5.6% operational (reported growth pressured by ~460 bps STELARA headwind). - Adjusted EPS $2.90 (+5.7% adjusted net earnings; EPS +4.7% YOY). - Management emphasized a pipeline/portfolio strength: 28 products/platforms each > $1B annual sales and operational growth across Innovative Medicine.

2026 outlook improved: operational sales growth +$400M (expect faster H2 growth) - Company raised 2026 operational sales growth to 6.5%–7.1% (midpoint $100.6B), reflecting stronger 2H performance from new launches (e.g., ICOTYDE/INLEXZO/TREMFYA). - Reported sales growth now 7.0%–7.6% (mid $101.1B, +7.3%) with estimated ~$100M negative FX impact vs prior guidance. - Pre-tax operating margin improvement now ~75 bps (vs earlier 50 bps), benefiting from operating efficiencies and expected tariff cost recoupment, while considering costs from the 53rd week and the U.S. agreement to improve patient access/lower costs. - Adjusted operational EPS raised to $11.50–$11.65; reported EPS $11.60–$11.75.

Innovative Medicine momentum (key opportunities driving confidence) - Q2 Innovative Medicine sales: $16.4B (+6.8%), despite ~760 bps STELARA headwind; management noted 96% of Innovative Medicine business excluding STELARA grew >14%. - Major growth highlights: - DARZALEX: >17.6% (share gains; strong frontline). - CARVYKTI: +47.7%; TECVAYLI: +56.1%; TALVEY: +62.6%. - RYBREVANT (+61.6%) via launch uptake and share gains. - TREMFYA (+71%) led by IBD; also received approval tied to structural damage inhibition in psoriasis/PsA. - SPRAVATO (+40%); CAPLYTA (+70.9%). - Launch progress: ICOTYDE in psoriasis—~11,000 patients initiated, >18,000 prescriptions, 6,000 unique prescribers (including >50% advanced practice professionals, ~40% dermatologists). ~50%+ commercial payer coverage within 90 days. - Longer-term “surprise but positive”: ICOTYDE uptake is strong and not slowing TREMFYA; co-positioning is clear (systemic oral first-choice vs biologic first-choice, especially with PsA overlap).