Johnson & Johnson Raises 2025 Sales Guidance, Navigates Tariff Challenges

Johnson & Johnson (J&J) has updated its 2025 sales forecast, projecting operational sales of $91.6 billion to $92.4 billion, a $700 million increase from its January estimate. This boost comes on the heels of J&J's recent $14.6 billion acquisition of Intra-Cellular Therapies, which brought the schizophrenia and bipolar disorder medication Caplyta into its portfolio.

Pharmaceutical Growth and Tariff Impact

Despite the optimistic outlook, J&J is preparing for potential headwinds from the Trump administration's tariffs on imports and retaliatory measures from other countries. The company expects a $400 million impact from tariffs in the coming year, primarily affecting its medtech division.

Joseph Wolk, J&J's finance chief, detailed the tariff situation during an analyst call:

"At this point, it's based on the programs that have been announced and the timing that correlates with those programs. So that would be inclusive of Mexican and Canadian import tariffs that are not excluded out of USMCA. It will include—to a very small degree—some of the steel and aluminum tariffs that impact some of our products."

Wolk added that Chinese tariffs and retaliatory measures account for the most substantial portion of the projected $400 million cost.

CEO's Stance on Manufacturing and Tax Policy

J&J CEO Joaquin Duato emphasized the company's preference for tax incentives over tariffs to boost domestic manufacturing. Duato stated:

"Tariffs can create disruptions in the supply chain, leading to shortages. If what you want is to build manufacturing capacity in the U.S., both in medtech and in pharmaceuticals, the most effective answer is not tariffs, but tax policy."

Duato highlighted J&J's plan to invest $55 billion in the U.S. over the next four years, attributing this decision to the 2017 corporate tax rate reduction rather than recent tariff policies. He noted that upon completion of this investment plan, "essentially all our advanced medicines that are used in the U.S. will be manufactured in the U.S."

Q1 2025 Performance and Drug Portfolio Updates

J&J reported a 4.2% operational sales growth to $21.9 billion for Q1 2025, despite facing biosimilar competition for its blockbuster drug Stelara. While Stelara sales declined by nearly 34% compared to Q1 2024, J&J's innovative medicine division showed overall growth of 4.2%.

The company's oncology portfolio performed particularly well, with drugs like Darzalex, Erleada, and the CAR-T cell therapy Carvykti driving a 20% sales increase to $5.68 billion in the first quarter. J&J's cardiovascular-metabolic and immunology divisions also posted double-digit growth, while neuroscience, pulmonary hypertension, and infectious disease segments showed more modest gains.

As the pharmaceutical industry continues to evolve, J&J's strategic moves and adaptability in the face of changing economic conditions underscore its position as a key player in the global healthcare market.