Quick overview

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Johnson & Johnson announced that it has received U.S. approval for a groundbreaking medical device designed to treat bladder cancer. The company anticipates that this unique product, called Inlexzo, will generate significant profits.

Inlexzo is a mechanical tube that is inserted into the bladder; it folds into the shape of a pretzel and delivers a medication that targets and kills tumors over the course of three weeks.

While analysts have a “Buy” consensus on the stock, their average price target of $176.43 indicates only modest growth, reflecting cautious optimism. Some analysts, such as those from Citigroup, have set target prices as high as $200, signaling confidence in J&J’s fundamentals, while others, like Barclays, suggest a more conservative target of $176. As earnings rise, the company’s forward price/earnings ratio stands at 16.33, suggesting potential value. After closing at $178.13, the stock has dipped 0.66 percent to $176.96.

J&J has seen a year-to-date increase of 22.55 percent, with stock prices ranging from $140.68 to $181.16. The one-month outlook posted a 6 percent gain, reflecting recent upward momentum.

In a significant clinical trial, 51 percent of patients treated with Inlexzo remained disease-free for at least a year, while 82 percent showed no detectable cancer within four months.

Sia Daneshmand, a urologist at the University of Southern California Keck School of Medicine and overseer of the J&J-funded trial, stated that these outcomes are the best recorded for patients with a particular type of bladder cancer that did not respond to conventional treatments.

He emphasized that, without Inlexzo, these patients would typically face the option of complete bladder removal, a procedure that carries significant risks and can lead to disfigurement.

J&J has positioned Inlexzo as a key element of its future growth strategy, projecting peak annual sales of over $5 billion. The company’s internal revenue estimates are roughly three times higher than those projected by Wall Street. J&J reports that the device has been approved for approximately 2,000 U.S. patients each year who are diagnosed with high-risk bladder cancer that has not spread and has not responded to treatment.

Moreover, the company is conducting additional clinical trials to explore the benefits of Inlexzo for the estimated 85,000 Americans diagnosed with bladder cancer annually. J&J has frequently highlighted Inlexzo as an example of its expertise in combining pharmaceuticals with medical devices, even as it faces pressure to separate its pharmaceutical business from its slower-growing device division.