Sales of electrophysiology products, contact lenses, wound closure products and knees helped drive growth in Johnson & Johnson’s medtech business.
Ashley McEvoy, J&J’s worldwide chairman of MedTech, said procedures are “well in recovery mode” during a Tuesday investor call.
“When I look at all of the math for the quarter, what I'm most pleased about is really the balanced growth,” McEvoy added.
Looking at knees in particular, U.S. operational sales increased by 12.4% and worldwide operational sales grew 11.3%, excluding the effect of foreign exchange rates. Stifel analyst Rick Wise wrote the increase “reflects global procedure recovery” and is a “positive early indicator for other orthopedic MedTech companies.”
J&J reported a net loss in the quarter, largely due to a $6.9 billion charge related to a settlement of thousands of lawsuits claiming its baby powders containing talc cause cancer. J&J plans to offer $8.9 billion over 25 years to resolve all of the lawsuits.
Although baby powder products are part of J&J’s consumer business, which is slated to spin out this year, CFO Joe Wolk said a bankruptcy filing for a subsidiary created to hold the lawsuits will not affect the separation, and the talc liabilities in the U.S. and Canada will remain with J&J.
J&J’s $16.6 billion acquisition of heart-pump maker Abiomed, which closed in December, was also a significant contributor to the 41.9% growth in its interventional solutions franchise.
Abiomed got a “solid start” under the J&J umbrella, growing about 20% worldwide, excluding the impact of foreign exchange rates, Wise wrote. The company brought in $324 million in revenue during the quarter.
Pulsed field ablation update
McEvoy also gave an update on J&J’s pulsed field ablation (PFA) technologies, which use electric fields to treat atrial fibrillation. The company currently has a 5,000-plus installed base for cardiac ablation, and “we do see the promise of PFA,” McEvoy said.
She declined to share a specific timeline, but noted the company had completed enrollment in two of four clinical trials.
The bottom line for us is we actually think access to radiofrequency [ablation], which has 20-plus years of safety and efficacy, coupled with the newer generation of PFA, is really going to be the winning combo for electrophysiologists,” McEvoy said. “It's really why we are in clinic right now with a dual-energy solution, because we think it could offer the relative safety of the PFA and really the proven durability of radiofrequency.”
J&J raised its forecast for 2023. It now expects revenue of $97.9 billion to $98.9 billion, an increase of about $1 billion from its previous estimates. The forecast would represent 5.5% to 6.5% growth from 2022 sales.
The company expects diluted earnings per share of $10.60 to $10.70 for the year, an increase from previous estimates of $10.45 to $10.65.
J&J’s share price fell about 2.6% to $161.42 after market open on Tuesday.