Johnson & Johnson and AbbVie are navigating significant patent expirations for their blockbuster drugs, Stelara and Humira, respectively. Both pharmaceutical powerhouses are implementing aggressive strategies, including pipeline development, strategic acquisitions, and diversification, to sustain growth and maintain market leadership amid these challenges and broader industry shifts.

Healthcare Giants Navigate Patent Expirations: Strategic Responses of Johnson & Johnson and AbbVie

U.S. equities in the healthcare sector have been closely watching the strategic maneuvers of Johnson & Johnson (JNJ) and AbbVie (ABBV) as these pharmaceutical behemoths confront the critical challenge of patent expirations for their top-selling drugs. Both companies are demonstrating proactive approaches, leveraging robust pipelines, targeted acquisitions, and market diversification to mitigate revenue erosion and secure future growth trajectories.

The Patent Cliff Challenge and Strategic Responses

Johnson & Johnson is currently navigating the loss of U.S. patent exclusivity for its immunology blockbuster, Stelara, which began facing biosimilar competition in 2025. This has led to a notable impact on sales, with Stelara experiencing a 38.6% sales decline in the first half of 2025 and a 43% year-over-year decrease in the second quarter, representing a more than $1.2 billion reduction from its 2024 performance. Despite this, J&J reported a total companywide sales haul of $23.7 billion for the second quarter, nearly a 6% increase from the same period in 2024, buoyed by the strong performance of its innovative medicines segment.

In response, J&J is emphasizing its diversified portfolio and pipeline. The company’s innovative medicines segment recorded over $15 billion in sales for the second quarter, with 13 brands showing double-digit growth. Key drivers include oncology drugs like Darzalex, which saw sales grow 23% to $3.5 billion, Carvykti at $439 million, and Erleada, rising 23% to $908 million. Tremfya, another immunology drug, achieved $1.2 billion in sales, marking a 31% increase. Jennifer Taubert, J&J's Executive Vice President of Innovative Medicine, highlighted these as "growth drivers for today and tomorrow." Looking ahead, CEO Joaquin Duato reiterated the company's ambition to become the "number one oncology company by 2030 with sales of more than $50 billion." J&J also recently completed its acquisition of Intra-Cellular Therapies, a move expected to accelerate 2025 sales growth by approximately 0.8%, contributing about $0.7 billion in incremental sales, though it is projected to dilute adjusted earnings per share (EPS) by approximately $0.25 in 2025.

AbbVie, conversely, has largely successfully navigated the patent expiration of its former top-seller, Humira, which faced biosimilar competition in the U.S. starting in 2023. The company has effectively transitioned its immunology franchise to newer growth drivers, Skyrizi and Rinvoq. These two drugs are projected to achieve combined sales exceeding $31 billion by 2027, with expectations of approximately $24.7 billion in 2025. In the first quarter of 2025, Skyrizi and Rinvoq collectively generated $5.1 billion in sales, demonstrating over 65% growth.

A significant development for AbbVie was the extension of Rinvoq’s patent protection until 2037 through settlements with generic drug manufacturers, a four-year extension from previous expectations. This news led to a 4% rise in AbbVie’s stock, reaching a record high. Matt Phipps, an analyst at William Blair, considered this a "positive development" with potential to increase Rinvoq’s peak sales by $2 billion with new approvals. JPMorgan analyst Chris Schott emphasized that this extension provides AbbVie with valuable time for new drug development before key patents expire in the mid-2030s.

Broader Context and Market Implications

Both J&J and AbbVie are actively pursuing mergers and acquisitions (M&A) and focusing on pipeline expansion to sustain long-term growth. AbbVie has executed over 30 M&A transactions since early 2024, particularly bolstering its immunology, oncology, and neuroscience pipelines, and has also entered the obesity space through a licensing deal. J&J