Dive Brief:

• Johnson & Johnson Tuesday reported fourth quarter medical device sales of $6.67 billion, down 4.4% year over year, with $27 billion in overall unit sales for 2018, representing 1.1% operational revenue growth compared to 2017.
• Within medtech, the company cited electrophysiology products in its interventional solutions business, contact lenses and surgical products in its vision business, wound closure products in its general surgery business, and endocutters and biosurgicals in its advanced surgery business as strong performers.
• Company officials also highlighted positive impacts from increased international operations, particularly in China and India, with yearly international sales for devices rising 2.8% compared to 0.1% growth domestically.

Dive Insight:

CEO Alex Gorsky said that growth catalysts moving forward will include robotic surgery and new opportunities in stroke care. Company leadership set 2019 full-year guidance for sales between $80.4 billion to $81.2 billion, considering expected operational growth up to 1% and expected adjusted operational growth in the range of 2% to 3%.

Medical device sales, which came in slightly below consensus, still "should bode well for the group at large and in particular for Interventional Solutions (Cardiology) and Surgery, which continue to be the primary drivers of growth for the segment," according to a Leerink research note.

J&J noted that this quarter's sales were impacted by divestiture of its LifeScan blood glucose monitor business, completed in October, which brought down worldwide operational sales growth by 1.4%.

Leerink analysts also pointed out that J&J's orthopaedics division delivered its first positive growth quarter since the second quarter of 2017. One weak area called out was vision, which came in $35 million below Wall Street estimates, Leerink said.

In addition to highlighting the recent partnership announced between J&J and Apple, Gorsky confirmed that J&J, in partnership with Verb Surgical, is likely on track to enter the "digital surgery" market in 2020, which the company predicts will deliver strong performance in the next 15 years. Company officials said the medical device unit will look to launch 20 to 25 new products in the next year, compared to 21 in 2018.

J&J's medtech business contributed to overall sales of $81.6 billion in 2018 sales, up 6.3% operationally over 2017. J&J's fourth quarter sales of $20.4 billion were up 1% despite a Reuters investigation released in December that found some cases of asbestos in J&J baby powder, a contributing factor to the company's $5 billion share buyback program.

J&J stock was down slightly Tuesday morning following the earnings call with investors.