Johnson & Johnson (NYSE:JNJ) reported a 6.6% increase in second-quarter sales to $25.31 billion, but nearly all of that growth came from just two pharmaceutical products, Tremfya and Darzalex, according to a review of the healthcare conglomerate's latest financial results.
The company's adjusted earnings came in at $2.90 per share for the quarter ended June 30, 2026. J&J also raised its full-year sales outlook midpoint to $101.1 billion from $100.8 billion, and boosted its adjusted earnings midpoint to approximately $11.68 per share from $11.55.
Despite the top-line beat, the market reaction was muted. Shares traded near flat at $253.68 as of 9:52 a.m. EDT, after dropping roughly 2% in premarket trading. A stronger performance from the pharmaceutical segment helped offset ongoing concerns about the medical device business.
Detailed analysis of the quarterly results shows that Tremfya contributed an additional $860 million in year-over-year sales, while Darzalex added $668 million. Combined, these two drugs accounted for $1.528 billion of J&J's total $1.567 billion reported sales increase—representing 97.5% of overall growth. The rest of the company's product portfolio contributed just $39 million, or 2.5%.
The accelerated replacement of Stelara, which has been losing sales to biosimilars, continues. Tremfya's growth offset 94% of Stelara's $913 million year-over-year decline in the second quarter, up from a 67% replacement rate in the first quarter. When including other immunology drugs, the newer portfolio more than filled the gap left by Stelara. However, overall immunology revenue still declined by $149 million, dragged down by shrinking sales of Simponi and Remicade.
Despite the progress in replacing Stelara, profit margins in the pharmaceutical segment have not yet improved. The adjusted pretax margin at Innovative Medicine edged down to 42.5% from 42.7%, while the adjusted gross margin fell by half a percentage point. Selling, marketing, and administrative expenses jumped 12.2%, outpacing the 7.8% sales growth for the segment, indicating that J&J continues to invest heavily in its new drug franchises.
CEO Joaquin Duato expressed confidence that the company is on track to achieve its 2026 goal of surpassing $100 billion in annual revenue. First-half free cash flow was approximately $8.7 billion, up from $6.21 billion in the same period last year, based on an early estimate as of July 15.
The medical technology (MedTech) segment remained a key concern. The unit posted sales of $8.93 billion, missing the analyst consensus of $8.97 billion. U.S. demand for Impella heart pumps fell 2% in the quarter, a sharp deceleration from the 14% growth seen in the first quarter. CFO Joseph Wolk noted that a UK study had raised new doubts about Impella's use in certain high-risk heart procedures, but emphasized that J&J is not “dependent on one asset.” MedTech head Tim Schmid said that “procedure volumes continue to be stable,” and that additional Impella data is expected in the first half of next year.
The quarter demonstrates that J&J is nearly filling the revenue gap left by Stelara and is doing so at a faster pace than in the prior quarter. However, with nearly 98% of growth dependent on just two drugs, any setback for either could significantly impact results. To solidify profit growth, the company will need broader gains across its pharmaceutical portfolio and a recovery in its medical device business.
