Johnson & Johnson's (JNJ) stock fell more than 3% Wednesday morning, trading at $143 per share despite a beat in earnings for the fourth quarter and full-year 2024. Several headwinds are impacting the company, including generic competition for its blockbuster drug Stelara, the ongoing talc lawsuit (which could see a final decision in the first half of the year), and softer demand for medical devices in China, among others. 

CFO Joe Wolk told Yahoo Finance that he understands the investors' risk-averse outlook but thinks the issues are "very, very manageable. In fact, where most companies would be saying we're going to contract, in terms of the top-line and bottom-line growth, we're actually calling 3% [growth] and 9% on an operational basis. And then ... talc is a risky item, but we know we can cover it with our financial resources," Wolk said.

Investors are also waiting to see how generic competition shakes out for Stelara. Using AbbVie's (ABBV) Humira as a guide, the company and analysts alike see potential for a muted impact. Humira remained a top-selling drug despite several competitive entrants in the first year of losing its patent, maintaining 96% market share even with more than a half dozen competitors on the market.

ASSOCIATED PRESS

Stelara also has an additional headwind in the Medicare prices set last year in the first-ever round of negotiations between the agency and drug companies as part of the Inflation Reduction Act. With its loss of patent exclusivity, investors are wondering what J&J has in store to fill the anticipated loss of revenue.

To that end, J&J has been building out in the neuroscience space, with a focus on products that could compete in the slow but growing Alzheimer's market, currently led by Biogen (BIIB) and Eisai. The company also announced a $14.6 billion deal to buy mental health disorder drugmaker Intra-Cellular (ITCI) this month.

"We've really built out, I think, the neuroscience franchise where we hope to have a No. 1 position over the coming years," Wolk said.

Anjalee Khemlani is the senior health reporter at Yahoo Finance, covering all things pharma, insurance, care services, digital health, PBMs, and health policy and politics. Follow Anjalee on social media platforms X, LinkedIn, and Bluesky @AnjKhem.

For the latest earnings reports and analysis, earnings whispers and expectations, and company earnings news, click here

Read the latest financial and business news from Yahoo Finance