JNJ bets on Tremfya and newly approved Icotyde to drive immunology growth as Stelara faces biosimilar pressure.
Johnson & Johnson $JNJ's JNJ Immunology franchise remains one of its most important businesses, even as it undergoes a transition amid biosimilar competition targeting its multi-billion-dollar product, Stelara. J&J lost U.S. patent exclusivity for Stelara in 2025. It was a key top-line driver for J&J, accounting for around 18% of J&J’s Innovative Medicine unit’s sales in 2024. Several biosimilar versions of Stelara were launched in the United States in 2025 as the drug lost patent exclusivity.
Immunology accounted for roughly 22% of the Innovative Medicine segment’s revenues and 14% of J&J’s total revenues in the first quarter of 2026. That makes it one of J&J’s largest therapeutic franchises, alongside oncology.
For the first quarter of 2026, J&J’s Immunology segment generated $3.4 billion in sales, down about 12% year over year (on an operational basis), primarily due to the loss of Stelara exclusivity. Even so, management still believes that Immunology is a core growth pillar because newer drugs—especially Tremfya and Simponi—are helping offset the Stelara LOE impact.
Tremfya had another very strong first quarter with sales up 64% to $1.6 billion. J&J says that Tremfya is the fastest-growing IL-23 therapy in the United States and is now the share leader for new patient starts in inflammatory bowel disease. J&J is expecting Tremfya to exceed $10 billion in peak-year sales. Sales of another key drug, Simponi/Simponi Aria, declined 5.7% to $647 million in the quarter.
Meanwhile, J&J also has some new products and key pipeline candidates in immunology, which can drive growth in the long term. In 2025, it gained approval for Imaavy (nipocalimab) for treating generalized myasthenia gravis. Nipocalimab is in mid-and late-stage development for several other rare autoantibody-driven diseases and has the potential to create a pipeline in a product.
The approval of J&J and partner Protagonist Therapeutics’ PTGX Icotyde (icotrokinra), the first and only IL-23 targeted oral peptide for the first-line treatment of plaque psoriasis in the United States in March, could be a game changer for J&J’s Immunology segment. J&J believes that Icotyde/icotrokinra has the potential to revolutionize the treatment of plaque psoriasis by offering a convenient once-daily pill. J&J is also evaluating additional indications for Icotyde, like ulcerative colitis, psoriatic arthritis and Crohn’s disease. It has the potential to be J&J’s largest product ever, with $10 billion in sales potential. J&J believes that together, Icotyde and Tremfya create a “complementary category-shaping portfolio.”
JNJ-4804 is another key candidate in its immunology pipeline, which is in mid-stage development for Crohn’s disease, ulcerative colitis and psoriatic arthritis. JNJ-4804 also has blockbuster potential.
Overall, J&J’s immunology business is still very important, but its role is evolving. It is no longer driven primarily by one mega-blockbuster like Stelara. Instead, the investment case increasingly depends on whether Tremfya, Icotyde and other new drugs can grow fast enough to make up for lost Stelara sales.
Large drugmakers that have a significant immunology drug portfolio and pipeline are AbbVie, Eli Lilly $LLY LLY, Amgen $AMGN, Sanofi and Pfizer $PFE PFE.
AbbVie is one of the world’s largest immunology players despite the decline of former blockbuster Humira, once the top-selling drug globally. AbbVie’s next-generation immunology growth is now driven by Skyrizi and Rinvoq.
Lilly has rapidly expanded its immunology business with key drugs like Taltz, Omvoh and Ebglyss. Lilly is also investing heavily in immunology pipeline programs targeting dermatology and gastrointestinal inflammatory diseases.
Amgen’s immunology portfolio, focusing on inflammation and rare autoimmune disorders, includes drugs like Otezla, Enbrel and Uplizna.
Sanofi has become a leading immunology company largely through its partnership with Regeneron $REGN. Dupixent, their partnered drug, is one of the fastest-growing immunology drugs globally.
Pfizer has maintained a sizable immunology business through drugs like Xeljanz, Cibinqo and Velsipity.
J&J’s shares have outperformed the industry over the past year. The stock has risen 49.2% in the past year compared with 19.9% appreciation of the industry.
Image Source: Zacks Investment Research
From a valuation standpoint, J&J is slightly expensive. Going by the price/earnings ratio, the company’s shares currently trade at 18.55 forward earnings, higher than 16.37 for the industry. The stock is also trading above its five-year mean of 15.65.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 earnings has risen from $11.54 to $11.57 over the past 30 days, while that for 2027 earnings has gone up from $12.45 per share to $12.58 over the same time frame.
Image Source: Zacks Investment Research
J&J has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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