Healthcare giant Johnson & Johnson (J&J) said Tuesday (Oct. 18) that strong pharmaceutical sales and a recovery in medical procedures helped offset economic headwinds and currency-related losses from the strong US dollar.
In discussing its third quarter earnings, which saw total revenues rise just 1.9% to $23.7 billion, J&J executives also noted the outsized 7.7% gains in domestic sales of surgical hardware, versus a nearly 3% decline for international side where forex factors reduced top line growth by 6%.
Worldwide MedTech sales of $6.8 billion increased by 2.1%.
The company said growth drivers for its MedTech business “include procedure recovery as well as focused commercial strategies and differentiated new products.” That includes strength returning to elective procedures. Bariatrics was an example cited there.
On the MedTech front, executive vice president and chief financial officer Joe Wolk said, “we expect our investments in innovation and commercial capabilities to continue to enhance our competitiveness. At this time, we anticipate positive procedure trends with the caveats that COVID-19 continues to be a dynamic situation regionally.”
Ashley McEvoy, executive vice president, worldwide chairman, MedTech said the company is still contending with challenged with factors including hospital staffing, inflation and the aftereffects of the pandemic, but said she was encouraged by the fact that procedure volume is on the rise again.
See also: Global HealthTech Sector Continues to Grab Investor Interest In 2022
“In the United States, we started to see surgical procedures tick up predominantly [in] the latter part of the quarter,” McEvoy said. “We do see diagnostic procedures more in the mid-single digits, so colonoscopies as an example in quarter three. We’re expecting that to continue.”
Noting that J&J is tapping into new trends in nontraditional healthcare delivery, she said, “there’s been a huge initiative on behalf of Johnson & Johnson and the industry to kind of move to site to care that patients are really preferring. And those areas like ambulatory surgery centers in the United States, our team, predominantly in joints as well as sports, [have] grown market share 20% over the past two years in those emerging channels.”
J&J’s improving outlook on elective procedures can be taken as a good sign in a troubled time after the COVID-19 pandemic saw elective healthcare crater for over two years.
In late 2021 as the Omicron variant caused yet more delays, PYMNTS reported on a Goldman Sachs analysis that said to “expect relative underperformance to continue until at least the Spring, when a resetting of numbers and reduced hospital constraints could foster a recovery,” the analysts Amit Hazan and the team wrote. They predict that there could be more visibility by mid-2022 when “vaccines, natural immunity, antivirals and better overall management experience with COVID should increase the likelihood of recovery for this healthcare sector.”
See also: Goldman: COVID Surge Could Reduce 2022 Demand for Elective Medical Procedures
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More