J&J (JNJ) Hits New 52-Week High: What's Driving The Stock?

Shares of Johnson & Johnson (NYSE:JNJ) hit a new 52-week high of $148.32 on Jan 17 and eventually closed the day at $146.98. The stock hit the new high probably on a Reuters news which states that some Chinese bidders are planning to buy a J&J’s diabetes care unit in the country in a deal which could be worth $4 billion

As it is, J&J stock has had a great run in the past year. Shares of J&J have rallied 28.1% over a year while the industry has registered an increase of 21.5%.

Promising data from several pivotal studies and rapid progress with its pipeline and line extensions over a year kept the stock on a growth trajectory. This positive trend is likely to continue in 2018 as well.

The company received approvals for two new drugs last year — Guselkumab/Tremfyain the United Statesas well as in the EU for plaque psoriasisand thefirst dual treatment for HIV, Juluca (dolutegravir + rilpivirine)in partnership with GlaxoSmithKline (NYSE:GSK) in the United States. Juluca is under review in the EU.

J&J also received FDA approval for several line extensions — a lower dose of Xarelto, two new indications of Simponi Aria, use in adolescents for Stelara, combination use of Darzalex with Celgene Corporation’s (NASDAQ:CELG) multiple myeloma drug Pomalyst and the sixth indication for Imbruvica, among others. Investors should note that J&J markets Imbruvica in partnership with AbbVie, Inc. (NYSE:ABBV) .

The line extensions can expand the eligible patient populations of these drugs and drive sales.

Sales of the company’s Pharma segment accelerated in the third quarter and the trend is likely to continue in the fourth quarter as well asin 2018. We believe that new products in all segments, label expansion of drugs like Imbruvica, Xarelto, Stelaraand Darzalex and contribution from recent acquisitions — mainly Actelion — will support top-line growth.

This year J&J expects to file for approval of depression candidate, esketaminewhile apalutamidefor pre-metastatic prostate cancerand Symtuza, a darunavir-based once-daily single-tablet regimen for HIVcould be approved by the FDA.

With several pivotal data readouts and regulatory milestones expected in 2018, the bullish run of the stock is likely to continue in 2018.

Zacks Rank

J&J has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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