J&J's Strong Q2 Oncology Performance Fuels Future Growth Hopes

Oncology accounts for nearly 29% of the company's total revenues and about 45% of Innovative Medicine sales. In the second quarter of 2026, oncology revenues increased 16.1% to $7.4 billion on an operational basis, fueled by continued momentum for Darzalex and prostate cancer treatment Erleada, although weaker demand for Imbruvica partially offset these gains.

In the second quarter, Darzalex, once again, delivered sales of more than $4 billion, growing close to 18% year over year, while Erleada sales increased 9.5% to $995 million. Imbruvica sales declined 18.6% to $599 million due to continued rising competitive pressure in the United States.

J&J’s new cancer drugs, Carvykti, Tecvayli, Talvey and Rybrevant/Lazcluze are contributing significantly to top-line growth driven by market share gains. Combined, they generated $1.38 billion in sales in the second quarter of 2026.

J&J claims that it is on track to be the #1 oncology company by 2030, with sales projected to exceed $50 billion. Though quite bullish, J&J seems quite confident that it can meet the target, citing strong growth in its marketed cancer drugs and new launches like Rybrevant and Inlexzo. 

J&J’s newly launched therapy, Inlexzo, delivered a strong second quarter, with sales more than doubling sequentially from the first quarter number of around $30 million. Sales comfortably exceeded consensus expectations, although J&J did not disclose the exact sales figure. The launch continued to gain momentum in the United States, supported by permanent J-code reimbursement, with one in three eligible patients now starting an Inlexzo regimen, up from one in four in the first quarter.

J&J believes its new cancer drugs, Talvey, Tecvayli, Inlexzo and Rybrevant plus Lazcluze, have the potential to deliver peak sales of $5 billion.

J&J has also significantly strengthened its oncology pipeline in recent years, particularly in colorectal and head and neck cancers. Earlier in 2026, the FDA approved the combination of Tecvayli and Darzalex Faspro for patients with relapsed or refractory multiple myeloma, a regimen that could redefine treatment in earlier stages of the disease.

J&J is also expanding its oncology portfolio through acquisitions, including 2025's Halda Therapeutics deal for a clinical-stage prostate cancer candidate and this year's Firefly Bio acquisition, which added a next-generation antibody platform.

Competition in the Oncology Space

Other large players in the oncology space are Pfizer PFE, AstraZeneca AZN and Merck MRK, among others.

Oncology sales comprise around 26% of Pfizer’s total revenues. Its oncology revenues grew 7% in the first quarter of 2026, driven by higher sales of drugs like Lorbrena, the Braftovi-Mektovi combination and Padcev, which made up for declining sales of Ibrance, Xtandi and others. Pfizer also has a robust pipeline of cancer candidates with a focus on multiple modalities, including small molecules, ADCs and immuno-oncology biologics. Pfizer will report second-quarter results tomorrow.

Oncology sales now comprise around 46% of AstraZeneca’s total product revenues. Sales in its oncology segment rose 15% at constant exchange rate (CER) to $7.3 billion in the second quarter of 2026. AstraZeneca’s strong oncology performance was driven by medicines such as Tagrisso, Lynparza, Imfinzi, Calquence and Enhertu (in partnership with Daiichi Sankyo).

Merck’s key oncology medicines are the PD-L1 inhibitor Keytruda and the PARP inhibitor Lynparza, which it markets in partnership with AstraZeneca. Keytruda, approved for several types of cancer, alone accounts for around 50% of Merck’s pharmaceutical sales. Keytruda recorded sales of $8 billion in the first quarter of 2026, up 8% year over year. Merck will report second-quarter results tomorrow.

JNJ’s Price Performance, Valuation and Estimates

J&J’s shares have outperformed the industry over the past year. The stock has risen 23.9% so far this year compared with 10.0% appreciation of the industry. 

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From a valuation standpoint, J&J is expensive. Going by the price/earnings ratio, the company’s shares currently trade at 20.78 forward earnings, higher than 18.51 for the industry. The stock is also trading above its five-year mean of 15.65.

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The Zacks Consensus Estimate for 2026 earnings has risen from $11.58 per share to $11.66 per share over the past 30 days, while that for 2027 earnings has gone up from $12.65 per share to $12.81 over the same time frame.

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J&J has a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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