Shares of healthcare giant Johnson & Johnson (J&J) are experiencing a decline following concerns raised by Wells Fargo analyst Larry Biegelsen regarding the company’s future earnings growth. The main issue at hand is the imminent loss of exclusive U.S. rights to their highly lucrative drug, Stelara, set to occur in 2025.
Biegelsen recently downgraded J&J shares from Overweight to Equal Weight and adjusted his price target from $170 to $163. As a result, the stock has seen a 0.7% drop, trading at $153.98 as of now and experiencing a total decline of 13% this year.
In a research note published on Wednesday, Biegelsen expressed his belief that the company’s earnings per share (EPS) growth will be hindered over the next few years due to the upcoming loss of exclusivity for Stelara. J&J has yet to provide a response to requests for comment on this matter.
Stelara stands as one of J&J’s highest-revenue products, generating $9.72 billion in sales within fiscal year 2022, contributing to the company’s overall revenue of $94.94 billion.
The drug is expected to lose its exclusivity in Europe in the coming year, followed by the expiration of U.S. exclusivity in 2025. J&J CEO Joaquin Duato discussed the company’s plans during an analyst meeting held on December 5th, stating that they anticipate “to grow operational sales by more than 3% in 2025, which is the first year of Stelara biosimilar entrance in the U.S.” Duato also highlighted the rarity of this claim, given the size of the product and the looming competition from biosimilars.
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