Continued Stability for Johnson & Johnson (NYSE:JNJ)

November 30, 2016

Portfolio Manager Matt Hayner of Madison Investment Holdings says Johnson & Johnson (NYSE:JNJ) should have continued stability despite Pfizer’s (NYSE:PFE) biosimilar launch.

Johnson & Johnson is a big health care conglomerate, if you will. They have a large pharmaceutical business that’s the most important and proportionally largest part of their income, also a really nice global consumer franchise and then lastly a medical device business. And their pharmaceutical business continues to do well. They’ve had well-above-average success with their business.

Their largest product actually is susceptible, and there will be a biosimilar launch here in November. Pfizer’s Celltrion business — it’s a division of Pfizer — is going to launch a biosimilar drug to Johnson & Johnson’s biggest drug, REMICADE. And so a lot of attention has been given that dynamic, and that will certainly be something that investors are watching. It could impact 2017.

We tend to be in the camp that it’s going to be relative stability for Johnson & Johnson, even if they do see some pressure from that biosimilar, because the rest of their portfolio is performing well and should make up any competitive pressure from that platform.