Johnson & Johnson posts strong sales despite setback

Drugmaker awaits ruling on whether use of vaccine can resume.

Johnson & Johnson posted stronger than expected first-quarter sales, as the drugmaker awaits a ruling from U.S. health regulators on whether use of its coronavirus vaccine can resume.

For the full year, J&J said it expects adjusted earnings per share of $9.42 to $9.57, narrowing guidance of $9.40 to $9.60 given in January, compared with the average Wall Street estimate of $9.50. First-quarter revenue was $22.32 billion, outpacing the average analyst estimate of $21.98 billion.

The U.S. paused use of J&J’S coronavirus vaccine last week after reports that six women had developed serious but rare blood clots in the brain after receiving the shot.

On Friday, a panel of medical experts reviewing data on the adverse events could vote on whether the hold should end. As of April 15, 7.7 million people in the U.S. had received the shot.

J&J Chief Financial Officer Joseph Wolk told Bloomberg in January that the company would likely project full-year revenue for its coronavirus vaccine in April.

Though J&J reported sales of the vaccine to the tune of $100 million in the U.S. in the first quarter, it didn’t forecast sales for 2021.

The company didn’t provide a full-year forecast for vaccine sales because of uncertainty around the pause in its use, Wolk said in an interview Tuesday. J&J is offering the shot on a not-for-profit basis, at no more than $10 a dose, for the duration of the pandemic.

“We don’t want to be presumptuous and perhaps maybe even offend regulators, we want that process to play out and make sure that we’re being respectful of it,” Wolk said. “Since it’s a not-for-profit construct, it’s not going to have a material impact on earnings.”

Wolk said he remained optimistic about the vaccine’s future. “In the next couple of days we will have a very solid path forward, and we’re going to do all we can to make sure that’s a positive outcome,” he said.

Once the pandemic is over, Wolk said, J&J would price the vaccine using a tiered model it employs for its other products. “We’ll be reasonable in our pricing, we want to make sure we do maintain access,” he said.

J&J also boosted its dividend Tuesday by 5%, from $1.01 a share to $1.06 a share. In premarket trading, J&J shares slipped 0.6% to $161.80. Since the start of this year, the stock had climbed 3.4% through Monday.

The company’s pharmaceutical unit continues to account for more than half its sales, and revenue in the division jumped 10% to $12.2 billion in the first quarter. Sales of blockbuster immunotherapy drug Stelara surged 18% to $2.2 billion.