This One Biopharma Made the 10 Richest Companies in the U.S. List
December 1, 2016
By Alex Keown, BioSpace.com Breaking News Staff
NEW BRUNSWICK, N.J. – Johnson & Johnson is the oldest and one of the 10 biggest U.S. companies by market cap, according to a list compiled by The Motley Fool. It was the only life sciences company on the list.
The 120-year-old Johnson & Johnson came in at number eight on the list, with a market cap of $310 billion. The company showed a 17.9 percent gain over the past year, according to the Fool. J&J’s market cap is almost half of Apple’s market share, which is listed at $596.1 billion, down about 5.3 percent for the year.
Johnson & Johnson is reportedly in talks to bring Swiss pharma company Actelion Pharmaceuticals under its umbrella. However, if the $20 billion deal goes through, it appears that Actelion, a rare disease company, would remain somewhat independent with J&J as a major stakeholder, BioSpace reported on Nov. 30.
While J&J may be one of the 10 biggest companies, at least one analysts at the Motley Fool has suggested investors may want to look at selling off their shares in the company – despite the stock having been a proven performer over past years. Analyst Keith Speights said the company is expected to see limited growth over the next few years, despite sales of its cancer drug Imbruvica. As a pharma company, J&J’s biggest selling drug is the arthritis medication Remicade. The drug generated $6.6 billion in sales last year, however biosimilar competition could cut in on its market share. Speights said J&J is expected to see about 5 percent growth, but suggested there are better growth stocks in the pharma industry, particularly pointing to Celgene, which is expected to see 23 percent growth.
In contrast though, Fool analyst Sean Williams called J&J “rock solid” when it comes to investments.
“J&J offers its products throughout the world, and its revenue is split pretty evenly between consumer health products, medical devices, and pharmaceuticals, leading to predictable cash flow and profitability. Furthermore, since consumers can't control when they get sick or what disease or disorder they contract, J&J's products are always in demand,” Williams wrote last month.
Johnson & Johnson, a highly diversified healthcare products company, has been making a number of collaborative moves with other large companies, including a new venture with Google’s life sciences spinoff Verily Life Sciences to create an independent surgical solutions company, Verb Surgical Inc. In March 2015, JNJ’s Ethicon, Inc. (JNJ), a medical devices company, announced a strategic collaboration with Google Life Sciences. The focus of that collaboration was to develop robotic surgery platforms that integrated advanced technologies. The new company, Verb, will do the same thing.
Although not a full life sciences company, Alphabet, formerly known as Google, also made the list. Coming in at number two, Alphabet, the parent company of Verily, has a market cap of $537.8 billion.