With the excitement of Pharma Giant Johnson & Johnson (NYSE:JNJ) still high after beating earnings, CEO Joaquin Duato said on Tuesday that the company’s popular obesity drugs, GLP-1 agonists–which are used alongside bariatric surgeries against obesity–may lose steam in the near future. Joaquin said a drop in demand will force the company to funnel its bariatric business elsewhere.
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Despite big estimates from firms like Goldman Sachs for weight-loss drugs, Joaquin said the GLP-1 agonists could be impacted as patients turn away from surgery and opt for treatments. “We’re seeing some impact in our bariatric business in the short term as some patients are reconsidering surgery, expecting to get treatment,” Duato said.
However, the company said the shift to medications will only be for a while, citing surgeons. Indeed, Duato added, “And many of the patients—about 30% of them—are not going to be tolerating these medications. So there would be another funnel for our bariatric business.” Thus, a boost in surgeries will only increase demand for GLP-1.
Is JNJ a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on JNJ stock based on five Buys, 10 Holds, and zero Sells assigned in the past three months, as indicated by the graphic above. Furthermore, the average JNJ price target of $177.45 per share implies 13.89% upside potential.
