Johnson & Johnson (NYSE:JNJ) released its second quarter reports Tuesday, and noted an impressive 9 percent increase in revenue and a 13 percent boost in profit; the drugmaker reported $19.5 million in sales. The second quarter results are even better than the quarter previous, and easily beat consensus estimates.
The company’s success — and its weakness — during the second quarter can be attributed in part to the company’s hepatitis C treatment, Olysio, which is expected to face increased competition as rival drugmakers own hepatitis C treatments are released onto the market alongside Sovaldi and Olysio. Sales of Olysio were expected to get a boost this past quarter, and indeed, the drug’s sales doubled, reaching $725 million in Q2. Forbes notes that the drug has already achieved blockbuster status, and generated more than $1 billion in revenues for the first half of 2014.
Though Olysio has seen impressive success, investors were largely underwhelmed by the company’s heavy reliance on the drug as a driver of growth. Some investors, it seems, are skeptical of J&J’s sustainability given the likelihood that Olysio will face stiff competition.
Despite what may or may not happen in the not-too-distant future, J&J’s second quarter results are worth exploring; the company’s CEO, Alex Gorsky, credits the drugmaker’s “diversified business model,” and the “continued success of J&J’s new product launches,” as some of the main catalysts behind the company’s success this quarter.