Johnson & Johnson On Monday, it said it plans to reduce its stake by at least 80% in Kenvue, the consumer health company it founded as an independent company earlier this year, via a stock exchange offering.

J&J owns 89.6% of the common shares of Kenvue, which amounts to more than 1.72 billion shares.

The exchange offer, also known as a split, will allow J&J shareholders to swap all or a portion of their shares for Kenvue common stock at a 7% discount. It is expected to be tax deductible, J&J said in a statement.

The company indicated that the split is voluntary for investors and is scheduled to close on the third of August. 18, which is much earlier than expected.

J&J said it received a waiver denying the stock lock period associated with Kenvue’s initial public offering in May. This lockout agreement required J&J to wait 180 days to sell any of its stock.

“We believe now is the right time to distribute Kenvue shares, and we are confident that the split is the appropriate path forward to create value for our shareholders,” J&J CEO Joaquín Duato said in a statement.

Duato added that the split will increase J&J’s focus on its pharmaceutical and medical technology businesses — both of which helped the company beat second-quarter revenue and adjusted earnings last week.

J&J first announced its intention to launch a swap offering in its second-quarter earnings report Thursday, but the company provided few details on the plan. Kenvue shares tumbled after that announcement, despite second-quarter results that also beat Wall Street estimates.

When asked about J&J’s planned swap offering Thursday, Kenvue CEO Thibaut Mongon told CNBC’s “Squawk on the Street” that the company is “pleased with the way shareholders have been received for the IPO.”

“We see a great deal of alignment among our new investors in seeing Kenvue’s potential, but I can tell you we’re absolutely ready to leave as a completely independent company,” he said.

Most consumers have cut back on spending because inflation is squeezing their wallets, but they haven’t stopped paying for brand-name health and personal care products, said Kenvue CEO Thibaut Mongon.

Mongon told CNBC on Thursday that consumers are still willing to spend on the company’s branded products — even if they cut discretionary spending at retail stores and cut back on some essential items by changing their usual purchase size or switching brands at lower prices.

the Johnson & Johnson pop-up consumer Kenvue beat second-quarter revenue and adjusted earnings estimates on Thursday, helped by resilient demand for the company’s wealth from widely recognized brands like Band-Aid, Tylenol, Listerine, Neutrogena and Aveeno.

However, the company’s share price fell after J&J announced that it would launch an exchange bid to reduce its stake in Kenvue much earlier than expected.

Kenvo also noted that “private label” penetration into the consumer health products market was stable during the quarter. Private label refers to products that are manufactured and sold under a specific retailer’s name and are sold at a lower price and are intended to compete with branded products such as Kenvue.

These spending trends could bode well not only for Kenvue, but also for other companies in the consumer health, beauty, and beverage industries that may not see consumers turning to cheaper products as often despite higher prices.

“We are now living in a volatile environment with continued consumer uncertainty and continued inflationary pressures,” Mongon told CNBC. “But I think people are very focused on their health and well-being right now.”

“They want to make sure they are doing what it takes to improve their health,” he said. “They’re looking for reliable, scientifically backed, and effective solutions to take better care of their health, and that’s what we and our brands do. It’s what we’ve been doing for a long time.”

Kenvue expects continued strong demand in the coming quarters. The company expects 2023 sales to increase between 4.5% and 5.5% over last year.

RBC Capital analyst Nick Moody expressed confidence in Kenvue’s ability to “maintain its momentum,” highlighting consumer confidence in the company’s brands, health and personal care products in general.

He noted that trade reduction pressures have increased for some companies, based on their market share changes over the past few months. Meanwhile, Kenvue has gained market share, and will likely continue to do so despite the broader environment.

“If we were going to see a decline in trade with them, we would have started to see it already,” Modi said.

Like Kenvue, some beauty and beverage companies may not see the same kind of trade declines as some core consumer sectors during the current period of macroeconomic uncertainty, according to Modi.

He said beauty products such as makeup are increasingly seen as an “affordable luxury” even as inflation squeezes consumers’ budgets.

“They don’t want to feel bad about their situation and buy cheaper makeup,” Modi said.

companies like Hollandwhich sells cosmetics, skin and hair care, and other beauty products, has benefited from the flexibility of the beauty category.

Earlier this year, Ulta said its 2022 revenue exceeded $10 billion, while annual net income exceeded $1 billion — both company records. Ulta also reported first-quarter earnings that beat expectations in May, largely driven by demand for its beauty products.

Oddity Tech, a beauty and wellness company that uses artificial intelligence to develop cosmetics, also appeared to be harnessing the power of the beauty category when it made its public market debut on Wednesday. Shares of the direct consumer platform rose 35%.

Beverage companies are also well positioned, Modi said, noting that big brand names such as Coca-Cola are not at great risk of private label penetration.

Coca-Cola’s first-quarter earnings beat expectations for higher demand for its beverages. But price increases for its products, which were implemented to mitigate the impact of inflation, also helped support results.

Monjon said consumers are turning to brands and products they “know and trust” during tough economic times.

The behavior — and a growing focus on health and well-being — is fueling demand for Kenvue products, which have been “in homes for years, decades, sometimes generations,” he said.

Modi agreed, adding that the Covid-19 pandemic has greatly increased consumers’ attachment to brands, especially those that help people take care of their health.

For example, demand for Tylenol soared and outpaced other pain relievers during the pandemic as people scrambled to stock up on essential health products.

“During the time frame of Covid, you were looking to save your family or get your kids through a difficult period of time with certain medicines and products, and I think that kind of emotional connection and sharing helped sustain the brand,” Modi told CNBC.

“Consumers tend to trust these brands during the most traumatic moments in their lives, so I think that’s why we’re seeing brands like Kinview remain so resilient despite the overall pressure,” he said.

The pandemic has made consumers more able to “take their health into their own hands at home,” added Navan Tai, an analyst at BNP Paribas Ixan.

This shift is likely to benefit Kenvue and others in the consumer health field, she said, and is “an additional differentiation from other consumer categories.”

I’ve noted that Kenvue isn’t “totally immune” from decline and private-label competition. But she said product recommendations by healthcare professionals offer “some protection”.

Third-party surveys of some healthcare practitioners in the United States from 2020 to 2022 found that Tylenol was the top adult pain medication recommended by physicians nationwide, according to an April Kenvue IPO filing.

Those surveys also found that neutrogena was the leading sunscreen and acne treatment brand in the united states, while listerine was the top dentist-recommended mouthwash.

Mongon noted during the company’s earnings call that these recommendations “ultimately foster a lifetime of loyalty to our brands, loyalty that is passed down from generation to generation.”

Uninsured Americans pay an average of nearly $98 for a bottle Eli Lillygeneric insulin, even after the company pledged to lower the product’s list price to $25 per vial, according to a report released Thursday by the senator. Elizabeth Warren.

Eli Lilly pledged earlier this year to lower the list price of the generic insulin, Lispro, from $82.42 per vial starting May 1. The Indianapolis-based pharmaceutical company is one of the largest insulin manufacturers in the world.

The Massachusetts senator’s report surveyed more than 300 pharmacy chains and independents in the United States between June 9 and 28 to determine whether the price reduction announced by Eli Lilly “translated into real patient relief.”

The survey found that a third of pharmacies charge uninsured patients $164 or more for a bottle of Eli Lilly’s Lispro.

Seven pharmacies charged $200 per bottle or more, and two sold the product for more than $300.

Chain pharmacies charged uninsured customers an average of $123 per vial for generic insulin, compared to an average of $63 at independent pharmacies.

Eli Lilly did not immediately respond to CNBC’s request for comment on the poll.

The study findings indicate that “Eli Lilly’s promises of affordable insulin have not been delivered to uninsured patients across the country,” Warren said in a statement.

She said the data also shows that Congress needs to take more steps to rein in excessive pricing, such as capping insulin fees at $35 per month for all patients, regardless of their insurance status.

President Joe Biden’s Inflation Reduction Act currently sets co-insulin amounts at $35 per month for people covered by Medicare.

“My new report confirms that far too many uninsured Americans do not have access or cannot afford to pay astronomical prices for life-saving universal insulin — lawmakers need to step up and take action,” Warren said in a press release.

Insured Americans usually pay a fraction of the list price of insulin. But uninsured people often have to pay the full cost, which could force them to ration or stop taking a life-saving diabetes treatment.

Nearly 30% of uninsured diabetics reported skipping insulin doses, taking less than prescribed or delaying purchases within the past year, Warren said, citing a 2022 study conducted by researchers from Harvard University and other institutions.

“No American should ever be forced to choose between life-saving medications, such as insulin, and their ability to pay for food, shelter, and their daily needs,” Warren said.

Earlier this year, Eli Lilly, Sanofi And Novo Nordisk is committed to reducing the list prices of the most commonly prescribed types of insulin by at least 70% later in 2023.

Eli Lilly and Sanofi also set monthly insulin costs at $35 for people with private insurance.

The three companies together control 90% of the global insulin market.

Their commitments were met with praise from lawmakers and Biden, who was pleased that the companies were finally heeding the calls to help make diabetes care more affordable in the United States.

But the Warren poll raises questions about the effectiveness of cost-cutting efforts.

About 37 million people in the United States, or 11.3% of the country’s population, have diabetes, according to the Centers for Disease Control and Prevention.

The American Diabetes Association said nearly 8.4 million people with diabetes are insulin dependent.

Pfizer On Monday, it said it would stop development of an experimental obesity and diabetes pill, called lutigliprone, because of elevated liver enzymes in patients who took the drug once daily in clinical studies.

These elevated enzymes often indicate damage to liver cells, but the pharmaceutical giant said no patients experienced liver-related symptoms or side effects.

Pfizer shares closed down 3.6 percent on Monday.

New York-based Pfizer said it would instead focus on its other oral obesity drug, danoglipron, which is in fully registered phase II clinical trials.

That study found that body weight decreased after patients with type 2 diabetes took high doses of danuglipron twice daily for 16 weeks, according to Pfizer results released last month.

The company expects to complete plans for a Phase 3 clinical trial program for danuglipron by the end of 2023. Pfizer added that it is also developing a version of danuglipron that patients take once a day instead of twice.

“We look forward to analyzing danuglipron’s Phase 2 results and selecting the dose and titration schedule that will maximize therapeutic benefits, safety, and tolerability,” William Sessa, Pfizer’s chief scientific officer for internal medicine, said in a press release.

Pfizer CEO Albert Bourla said the obesity pill could eventually bring in $10 billion each year for the company.

Lotiglipron, danuglipron, and Novo NordiskThe popular weight loss injections Ozempic and Wegovy are part of a class of medications called glucagon-like peptide-1 agonists.

They mimic a hormone produced in the gut called GLP-1, which sends signals to the brain when a person is full.

Medications can also help people manage type 2 diabetes because they stimulate the release of insulin from the pancreas, which lowers blood sugar levels.

Oral medications such as danuglipron from Pfizer can offer an advantage over frequent injections. Novo Nordisk and Eli Lilly They are also developing their own experimental pills for obesity and diabetes.

The new class of obesity drugs is sparking public interest and causing the weight-loss industry to go gold. But there is still uncertainty about its accessibility, and questions remain about how long patients need to take the drugs to shed unwanted weight.

Some people who stop taking medications complain of a return of weight that is difficult to control.

More than 2 in 5 adults are obese, according to the National Institutes of Health. About 1 in 11 adults is obese.

Analysts believe Eli Lilly’s pill has an edge over Pfizer’s danuglipron.

Pfizer’s decision to compete in the oral weight-loss drug space with danuglipron will be challenging given the strong data on Eli Lilly’s experimental pill orforglipron, Wells Fargo analyst Mohit Bansal said in a research note Monday.

Overweight or obese patients who took orforglipron once a day lost 14.7% of their body weight after 36 weeks, according to clinical trial results released by the company on Friday.

Bansal added that doctors generally prefer a one-a-day pill such as orforglipron over twice-daily danuglipron: “Depending on convenience, tolerability, and volume of weight loss, Forglipron is likely to be the factor to overcome,” Bansal added.

An advisory panel for the Centers for Disease Control and Prevention recommended Wednesday that adults 60 and older, after consultation with their physicians, receive a single dose of RSV vaccines from Pfizer And GSK.

The panel said older people should use “joint clinical decision making,” which involves working with their healthcare provider to determine how much they can benefit from a shot.

Outgoing CDC Director Rochelle Walensky will decide whether to finalize the recommendation.

The committee’s decision brings one step closer to making punches against respiratory syncytial virus available to the public this fall, when the disease usually begins to spread at higher levels.

The recommendation also comes weeks after the Food and Drug Administration approved both vaccines, making them the world’s first authorized shots against respiratory syncytial virus.

The virus is a common respiratory infection that usually causes mild cold-like symptoms, but causes more severe cases in the elderly and children. Each year, RSV kills between 6,000 and 10,000 older adults and a few hundred children under 5 years old, according to the CDC.

Pfizer and GSK on Wednesday submitted new clinical trial data to the panel, which provided the first glimpse of the picks’ durability after one season of RSV. The season usually lasts from October to March in the northern hemisphere.

A single dose of Pfizer’s shot was 78.6% effective in preventing lower respiratory tract infections with three or more symptoms during the middle of the second RSV season, according to new clinical trial results presented Wednesday. This is down from over 85% at the end of the first season in seniors.

Pfizer said efficacy dropped to 48.9% in the “mid-season 2” for less severe forms of the disease in that age group, down from about 66%.

The company said Wednesday that a single dose of the GSK shot was 78.8% effective against severe RSV disease after two seasons, compared to 94% after one season. Severe illness refers to conditions that prevent normal daily activities.

For less severe RSV disease, efficacy decreased to 67.2% during two seasons from 82% after one season.

doctor. Michael Melgar, the CDC medical officer who evaluated the data on both shots, noted during a public meeting that both Pfizer and GSK still lacked efficacy data for subgroups of the elderly population at high risk for RSV infection.

Melgar said adults age 75 and older with an underlying medical condition are underrepresented in Phase 3 clinical trials from both companies. He said that elderly people with weakened immune systems were excluded from the trials altogether.

Both companies said studies on this population are ongoing.

It’s still not clear how much the footage will cost. GSK said it would price its vaccine between $200 and $295. Pfizer said it will price it between $180 and $270.

The companies refused to guarantee pricing.

The picks will help the US battle the RSV season coming into the fall after an unusually intense RSV season last year.

Hospitals across the country have been overwhelmed by cases of the virus in children and the elderly, in large part because the public has stopped practicing Covid-sanitary measures that have helped keep the spread of RSV down.

Novo Nordisk Five spas and wellness clinics were sued Tuesday for allegedly selling cheaper, unauthorized versions of the company’s weight-loss drugs Ozempic and Wegovy.

The Danish drugmaker has filed lawsuits in federal courts in New York, Texas, Florida and Tennessee, according to complaints obtained by CNBC.

The lawsuits accused the spas and clinics of marketing and selling “combined” drug products claiming to contain semaglutide, the active ingredient in both Ozempic and Wegovy. Combination drugs are specially made versions of a treatment that have not been approved by the Food and Drug Administration.

Novo Nordisk is the sole patent holder of semaglutide and does not sell this ingredient to outside entities. It is unclear what spas and clinics are actually selling to consumers.

Novo Nordisk has asked the courts to issue orders to stop the sale of the unauthorized drugs and an unspecified amount of monetary damages.

“Illegal marketing and sales practices, including the use of Novo Nordisk’s trademarks in connection with these practices, have created high risks of consumer confusion and deception as well as potential safety concerns,” the company wrote in a press release Tuesday.

Spas and clinics named in the lawsuits include Pro Health Investments, Champion Health & Wellness Clinics, and Flawless Image Medical Aesthetics.

It also includes Effinger Health, which goes by the name Nuvida Rx Weight Loss, and Ekzotika Corp. , who works as Med Spa’s professional laser cosmetology spa. Recent Clinic Groupon is offering $30 off the “semaglutide weight management program” for one week.

The spas and clinics did not immediately respond to CNBC’s requests for comment.

The suits come amid shortages of Wegovy and Ozempic, which has led to a boom in synthetic alternatives claiming to be the popular injections.

Last month, the US Food and Drug Administration warned about the safety risks of unauthorized versions of Ozempic and Wegovy after reports emerged of adverse health reactions to synthetic versions of the drugs.

Several states have also threatened legal action against combination pharmacies that manufacture or distribute unapproved Novo Nordisk weight loss treatments.

The Federal Trade Commission said Tuesday that it has filed a lawsuit to block the $27.8 billion acquisition of Amgen Horizon treat.

Horizon shares were down 15% in morning trading. Amgen stock is down about 1%.

The FTC argued that the deal would allow Amgen to “solidify monopolistic positions” in two of Horizon’s fast-growing drugs: the thyroid eye disease treatment Tepezza and the gout medicine Krystexxa.

The agency indicated that neither of the two drugs has any competition in the pharmaceutical market.

The FTC said Amgen would specifically be able to offer rebates on its existing drugs to pressure insurers and pharmacy benefit managers to favor Horizon products. The agency alleged that Amgen had a history of leveraging its drug portfolio to gain advantages over potential competitors.

“Today’s action — the FTC’s first challenge to a pharmaceutical merger in recent memory — sends a clear signal to the market: The FTC will not hesitate to challenge mergers that enable pharmaceutical conglomerates to consolidate their monopolies at the expense of consumers and fair competition,” said Holly Vidova, director of the Office of Competition. of the Federal Trade Commission, in a press release.

Sources familiar with the matter told CNBC reporter David Faber earlier Tuesday that Amgen is ready to defend the acquisition, and one source added that the company expects a “big win.”

Representatives for Amgen and Horizon Therapeutics did not immediately respond to a request for comment from CNBC. Bloomberg previously reported that the lawsuit may be filed on Tuesday.

Both drug companies said in February that the FTC sent them a second request for information about the acquisition as part of the agency’s review of the deal.

California-based Amgen Thousand Oaks closed a deal to buy Horizon Therapeutics in early December and said it expects to complete the sale in the first half of this year.

The move was an effort to boost Amgen’s drug portfolio as it prepares to face several patent expirations for key therapies over the next decade.

This includes a patent for a drug that treats psoriasis, an autoimmune condition that causes inflammation of the skin.

Horizon, based in Ireland, will enhance Amgen’s drug offerings with treatments for rare, autoimmune and severe inflammatory diseases.

senator. Elizabeth Warren, D-Massachusetts, in January expressed concern about the deal’s potential impact on competition in the drug market.

The then-proposed acquisition and merger of Indivior and Opiant could “cause further increases in the price of life-saving drugs and prevent affordable alternatives from entering the market,” Warren wrote in a letter to FTC Chair Lena Khan and two commissioners at the agency.

The Federal Trade Commission called for “intense scrutiny” of the two deals. The Indivior and Opiant deal subsequently closed.

Correction: This story has been updated to correct an individual’s spelling.

Johnson & Johnson Kenvue priced its initial public offering at $22 a share on Wednesday, near the high end of its announced range, in an enlarged deal that should fetch about $3.8 billion.

At this IPO price, the new company would be valued at approximately $41 billion. That makes Kenvue’s debut one of the largest IPOs in the US in over a year.

The company expected to price 151 million shares between $20 and $23 a share, according to a preliminary prospectus it filed with the Securities and Exchange Commission last week.

Proceeds from the show and any profits from related debt financing transactions will go to J&J, but Kenvue will keep $1.17 billion in cash and cash equivalents.

Goldman Sachs, JPMorgan Chase, and Bank of America are acting as lead underwriters for the IPO.

The shares will begin trading on the New York Stock Exchange on Friday under the symbol “KVUE”.

The spin-off, the largest IPO since Rivian’s November 2021 IPO, may not turn around the once-moribund IPO market, which plunged in 2022. But it could be a sign of life for IPOs in the states United

The debut of Kenvue also marks the largest restructuring in J&J’s 135-year history. J&J announced the split in late 2021 as an effort to streamline operations and refocus on its pharmaceutical and medical device divisions.

Meanwhile, Kenvue is full of household names familiar to investors and the larger public, like Tylenol, Band-Aid, Listerine, Aveeno, Neutrogena, and J&J’s namesake baby powder and shampoo.

Here’s everything else you need to know about this week’s Kenvue IPO.

J&J will control 91.9% of Kenvue after the IPO — or 90.8% if the underwriters exercise their options to purchase additional shares, according to a prospectus filing.

J&J plans to distribute the remaining shares of common stock to its shareholders later this year.

Until then, Kenvue will qualify as a “regulated company” under the New York Stock Exchange’s corporate governance rules, the filing says. This would allow Kenvue to avoid some of the listing criteria, including the requirement that the company’s board of directors be made up of a majority of independent directors.

J&J will generally be able to control matters over which shareholders vote, such as the election of Kenvue board members, according to the lawsuit.

“Johnson & Johnson will continue to control the direction of our business, and concentrated ownership of our common stock may prevent you and other shareholders from influencing important decisions,” Kenvey said in the filing.

In the filing, the company said Kenvue is profitable and expects modest growth over the next few years.

Annual sales growth through 2025 is expected to be around 3% to 4% globally, according to the filing.

Kenvue reported sales of $14.95 billion for 2022 and net income of $1.46 billion on a pro forma basis. For the first quarter, which ended April 2, Kenvue estimated that it had sales of $3.85 billion and net income of about $330 million. First quarter results are preliminary.

Ten Kenvue brands generated nearly $400 million or more in sales last year.

Overall, Kenvue said 2022 sales were “well balanced” across the company’s three business divisions.

The company’s self-care unit, which includes eye care, cough and cold products, and vitamins, had net sales of $6 billion for 2022, accounting for 40% of total revenue.

Skin health and beauty products accounted for $4.4 billion in net sales last year, or 29% of all revenue. Among these products are shampoos, conditioners, hair loss treatments, and skin care.

Products in the Essential Health division, including baby products, mouthwashes, dentifrices, health protection and wound care, saw net sales of $4.6 billion, accounting for 31% of total revenue.

The company said in the filing that each of the three divisions was profitable on an adjusted operating income basis.

Kenvue noted that its global footprint is “geographically well balanced,” with nearly half of its 2022 net sales coming from outside North America.

According to the filing, the company’s net debt will be $7.75 billion.

Kenvue rounded up several J&J executives to harm the company, according to the report.

Thibaut Mongon, J&J’s executive vice president and global head of consumer health, will be CEO of the new public company. He will also sit at the board.

Paul Roh, J&J’s Chief Financial Officer of Consumer Health and former CEO of PepsiCo, will serve as CFO, and Meredith Stephens, J&J’s global vice president of the company’s consumer health supply chain division, will serve as COO.

Kenvue’s Chief People Officer, Chief Corporate Affairs Officer, Chief Technology and Data Officer, Chief Scientific Officer and group heads for various regions around the world are also from J&J.

The executives will lead a team of more than 22,000 employees in 165 countries and 25 in-house manufacturing sites, according to the preliminary prospectus.

Kenvue’s global headquarters will be in Summit, New Jersey.

J&J faces thousands of claims that baby talcum powder and other talcum products caused cancer. Some of these products fall under the company’s consumer health business.

But Kenvue will only have liabilities for those that arise outside the United States and Canada, according to its initial public offering filing as of January.

“As stated unequivocally and unequivocally, Johnson & Johnson has agreed to retain all talc liabilities — and to reimburse Kenvue for any and all costs — arising from litigation in the United States and Canada,” Eric Haas, vice president of litigation for Johnson & Johnson, said in a statement. statement last week.

But Kenvey said in the filing that “this compensation may not be sufficient” to protect the new company from the full amount of the liabilities.

J&J will continue to fight talc claims in bankruptcy court.

A federal bankruptcy judge in April paused nearly 40,000 lawsuits through mid-June. This decision was part of J&J’s second attempt to settle talc claims in bankruptcy proceedings.

The temporary suspension will give J&J time to try to get court approval for the proposed $8.9 billion settlement with the plaintiffs in the talc cases.

CNBC channel Leslie Baker Contribute to this report.

merck It reported Thursday that first-quarter revenue fell 9 percent from the same period last year largely due to a sharp decline in sales of the antiviral Covid treatment molnopivir.

Sales of molnopiravir fell to $392 million during the period, down 88% from $3.2 billion reported in the first quarter of 2022. Merck said the decline is primarily a result of lower sales in the United States, United Kingdom, Japan and Australia.

The company reported total revenue of $14.5 billion for the quarter, down nearly $1.5 billion from the same period last year. But excluding the Covid drug, Merck said its revenue grew 11%.

Here’s what Merck reported compared to Wall Street’s expectations, based on a survey of analysts conducted by Refinitiv:

• Earnings per share: $1.40 adjusted, compared to an expected $1.32
• he won: $14.49 billion, compared to an expected $13.78 billion

The pharmaceutical giant reported net income of $2.82 billion, or $1.11 per share. That compares to net income of $4.31 billion, or $1.70 per share, for the same period last year. Excluding certain items, Merck’s adjusted earnings per share were $1.40 for the period.

Rahway, based in New Jersey, now expects 2023 sales of $57.7 billion to $58.9 billion, slightly above the $57.2 to $58.7 billion guidance provided in early February. The raised guidance includes nearly $1 billion in sales of molnopiravir.

The company also raised its full-year adjusted earnings forecast to $6.88 to $7.00 per share, from a previous forecast of $6.80 to $6.95 per share.

The company noted that the outlook does not reflect any financial impact from Merck’s proposed acquisition of biotech company Prometheus Biosciences earlier this month. Merck said the deal is expected to close in the third quarter of 2023.

Merck’s treatment molnupiravir first hit the market after the Food and Drug Administration authorized the pill for some adults in December 2021. Once hailed as a game-changing treatment for Covid-19, Merck signed several contracts to supply millions of courses of the drug to the US government. and other countries.

But Merck and pharmaceutical companies like PfizerAnd accident And Johnson & Johnson He was bracing for a decline in Covid-related sales this year as the world emerges from the pandemic and relies less on blockbuster vaccines and treatments.

Molnupiravir impacted sales of Merck’s Pharmaceuticals, which fell 10% to $12.7 billion compared to the first quarter of 2022. Excluding molnupiravir, drug sales grew 14%.

Merck said diabetes treatments also led to lower sales. Sales of sitagliptin and a related diabetes treatment decreased 29% to $880 million during the quarter, primarily due to general competition in several international markets and lower demand and pricing in the United States.

But Merck’s drug unit saw sales of its flagship antibody treatment Keytruda soar, which increased 20% to $5.8 billion during the quarter. Keytruda is used against several types of cancer, including certain types of breast cancer and skin cancer.

Gardasil, Merck’s vaccine that prevents cancer from HPV, also grew 35% to $2 billion. The company said the growth reflected strong demand outside the United States, particularly in China.

Merck will hold an earnings conference call at 9:00 AM ET.

Johnson & JohnsonThe consumer health business is worth $40 billion ahead of its initial public offering later this year, according to a report from The Wall Street Journal.

People familiar with the matter told the magazine that soon-to-be Kinview aims to raise $3.5 billion or more in the bid.

“The stock sale will be by far the biggest of what has yet been a quiet year for IPOs,” the paper noted.

Sources told The Journal that Kinview plans to meet with potential investors as early as Monday.

When asked about the newspaper report, J&J spokesperson Tessia Williams told CNBC, “Unfortunately, I don’t have any information to provide.”

J&J previously said it expected to complete the separation from Kenvue by mid-to-late 2023.

The consumer goods giant also said it would retain majority ownership in Kenvue, with plans to dilute the rest of its stake later in the year.

Kenvue stock will be traded on the New York Stock Exchange under the ticker KVUE.

J&J revealed its plan to spin off its consumer health business in late 2021. This division makes Band-Aid bandages, skin care products under the Neutrogena and Aveeno brands, the pain relief drug Tylenol, and J&J’s baby powder.

J&J still faces thousands of claims that baby powder and other talcum products caused cancer.

A federal bankruptcy judge last week stopped nearly 40,000 lawsuits as of mid-June. This decision was part of J&J’s second attempt to settle talc claims in bankruptcy proceedings.

The temporary suspension will give J&J time to try to get court approval for the proposed $8.9 billion settlement with the plaintiffs in the talc cases.

Kenvue will assume responsibilities related to those originating outside the United States and Canada, according to the IPO filing.