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Jiao Sheng's fourth-quarter revenue surged to US$22.5 billion, and cancer drugs have become the biggest driver. Can I buy them now?

Johnson & Johnson's fourth-quarter financial report exceeded expectations, with revenue reaching $22.52 billion. The cancer drug Darzalex performed strongly, and the medical device business contributed significantly. Despite being affected by exchange rate fluctuations, it still maintained steady growth.

Jiao Sheng

What are the highlights of Jiao Sheng's fourth-quarter earnings report?

Johnson's fourth-quarter revenue reached US$22.52 billion, an increase of 5.3% from the same period last year and exceeding analysts 'expectations of US$22.42 billion.Cancer drugs performed strongly, especially the multiple myeloma drug Darzalex, with quarterly sales of US$3 billion, a 20.9% increase over the same period last year, becoming an important driving force for performance.In addition, cardiac equipment maker Shockwave Medical's business also contributed a lot, with quarterly sales reaching US$258 million.

However, the company's adjusted earnings per share were $2.04, slightly higher than analysts 'estimates of $2.01, but fell nearly 11% from the same period last year, mainly due to V-Wave's acquisition-related expenses.

How does Jiaosheng's M & A strategy support future growth?

In recent years, Jiaosheng has actively engaged in mergers and acquisitions to expand its pharmaceutical and medical equipment business.The latest acquisition of psychiatric drug manufacturer Intra-Cellular Therapies for US$14.6 billion has injected new momentum into its neurodrug portfolio.The company expects the deal to have an impact on earnings per share this year by 30 to 35 cents.

Prior to this, Johnson also acquired cardiac equipment maker Shockwave for $13.1 billion, demonstrating its strengthening strategy for its medical equipment sector.In the future, the company expects a compound annual growth rate of its drug and equipment sales to reach 5%-7%, with special emphasis on the launch of new products to resist market competitive pressure.

How big is the impact of exchange rate fluctuations on Jiao Sheng?

Exchange rate issues became the biggest negative factor in this earnings report.Due to the strengthening of the US dollar, the company's full-year earnings will be cut by US$0.25 per share, which is higher than the market expected impact. This also caused the company's share price to fall nearly 2% to close at US$145.23.

CFO Joe Wolk said that if the impact of exchange rates is excluded, the company's performance is far better than the market consensus. In particular, international sales accounted for 43.4% of total revenue, making it the main victim of exchange rate fluctuations.

Is Stelara's decline in sales a concern?

Sales of star drug Stelara (psoriasis drug) continue to be under pressure from generic competition. Fourth-quarter revenue fell 14.7% from the same period last year to US$2.35 billion. Full year revenue was US$10.36 billion, which fell short of market estimates.$10.59 billion.

Several Stelara's biosimilar drugs are already available in Europe and Canada and are expected to enter the U.S. market this year, with the company launching new drugs to fight competition.

How should investors view Jiaosheng's future prospects?

Despite the short-term pressure caused by exchange rate factors, Jiao Sheng's performance in cancer drugs, medical equipment and M & A strategies is still worthy of recognition. Darzalex's annual sales reach US$11.67 billion, exceeding market expectations and becoming the company's best-selling drug. The stable cancer drug business is expected to support the company's future growth.

For Taiwanese investors, short-term exchange rate fluctuations may trigger stock price fluctuations, but Jiao Sheng's business foundation is solid and remains attractive for investment in the long run.

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