Both Johnson & Johnson and Pfizer are gearing up to release third-quarter results. While J&J continues to display resilience with its diverse portfolio, Pfizer continues to face challenges with waning demand for its COVID-19 therapies.

To date, Pfizer’s stock is down by roughly a third so far this year, reflecting concerns over its ability to maintain the sky-high revenue levels driven by its COVID-19 portfolio. Also reflecting this trend is moderate volatility in its stock price

J&J, on the other hand, has seen a more modest dip in its stock price so far in 2023 — 8.82% to $162.47. Unlike Pfizer, J&J’s diverse portfolio, spanning consumer health, pharmaceuticals, and medical devices, provides it with a more balanced revenue stream. The company has also been active in addressing challenges, from legal issues to the loss of exclusivity for key drugs like Stelara. The company recently unveiled a new rebranding campaign, jettisoning its Janssen branding for its pharma segment, replacing it with Johnson & Johnson Innovative Medicine.

Despite being new to the market, the consumer spinoff Kenvue has had high trading volumes, but with some volatility.

Pfizer’s antidote to waning COVID-19 vaccine sales: Pipeline diversification

Last year, the Comirnaty COVID-19 vaccine generated close to $56 billion for Pfizer and its partner BioNTech. The company projects that the bulk of vaccination will occur in fall and winter. The demand for the vaccine boosters this year could help the company project future demand, which will mimic flu shots in their cadence. 

In its last earnings call, Pfizer executives acknowledged the challenges in projecting future revenues related to its COVID-19 portfolio. To deal with the uncertainty the company plans to adjust its 2024 total cost base to align with various future COVID-19 revenue scenarios. 

To deal with the prospect of flagging COVID vaccine demand, the company is looking to its pipeline to fuel growth. Its drug candidate roster includes the promising antibody marstacimab for hemophilia and a potential vaccine for maternal immunization against Group B Streptococcus (GBS). 

During the pandemic, Pfizer aggressively reinvested proceeds from its COVID-19 portfolio. Earlier this year, it announced its plan to spend $43 billion to acquire Seagen. The company has completed the acquisition of Arena, ReViral, Biohaven, and Global Blood Therapeutics. Pfizer expects the completed acquisitions to collectively drive roughly $10 billion of revenues in 2030.

Pfizer’s plan to scoop up Seagen also points to the company’s strategy growing emphasis on oncology. The move, if approved by regulators, would give it access to Seagen’s antibody-drug conjugate (ADC) technology, which can offer targeted therapies that could minimize off-target toxicities.

J&J also looking to oncology for growth

One of J&J’s traditional strengths is its diversified portfolio, which spanned across consumer health, pharmaceuticals, and medical devices. Now that it has spun out its consumer segment, time will tell if its growth trajectory will be more volatile. For the record, Pfizer’s stock has been relatively volatile over the years.

One hurdle in that vein relates to the loss of exclusivity for the blockbuster Stelara (ustekinumab), which has seen steady growth over the years. Competitors Amgen and Alvotech are poised to launch their versions of the drug in 2025. The company also has faced the  loss of exclusivity for the prostate cancer drug Zytiga.

On the brighter side, J&J’s oncology portfolio continues to show promise. The company’s successful launch of Tecvayli highlights the company’s track record in the segment. In a similar vein, earlier this year, the company unveiled positive results from the phase 3 Papillon study evaluating Rybrevant in lung cancer patients. It also revealed promising phase 2 data for JNJ-2113, a potential blockbuster in psoriasis treatment.