Johnson & Johnson is hoping its new psoriasis drug will become its next big cash cow. Investors want to know if it can live up to the hype. Icotide was introduced to the market after the Food and Drug Administration approved it for the treatment of moderate to severe plaque psoriasis in mid-March. The once-daily drug is the first and only oral treatment that targets the same IL-23 receptor as common injectable drugs such as J&J’s Tremfya, which is also indicated for psoriatic arthritis, ulcerative colitis, and Crohn’s disease. IL-23 inhibitors (such as AbbVie’s Skyrizi) are biologics used to treat chronic inflammatory diseases. “Icotide has the potential to be one of the biggest products in our history,” Johnson & Johnson CEO Joaquín Duato said during an April earnings call. Together, J&J aims to strengthen its immunology portfolio with Tremfya and now Icotyde to offset and exceed the sluggish sales of Stelara, which peaked in 2023 with annual sales of nearly $11 billion. Stelara lost exclusivity last year, paving the way for biosimilars to enter the market. This year’s revenue is estimated to be just $2.36 billion, and that revenue will decline even further in the coming years. Tremfya’s sales have steadily increased since Stelara’s peak, increasing from $3.15 billion in 2023 to an estimated $7.13 billion in 2026. It’s too early to tell how much Icotyde will add to that, but when J&J reported first-quarter results last month, it said about 1,500 prescriptions had been written within 30 days. J&J, which is also researching icotide for Crohn’s disease and ulcerative colitis, believes the new pill is a much-needed alternative. Tremfya and Icotyde are what Duato called a “complementary category-shaping portfolio” to address different patient needs and preferences in the psoriasis market. Historically, topical medications have been the first treatment for many patients before injections. J&J estimates that approximately 8 million people in the United States have plaque psoriasis. “We know that a significant number of our patients continue to cycle while receiving repeated topical treatments,” Jennifer Taubert, head of J&J’s pharmaceutical division, said during an April earnings call. Now, recent changes in prescribing guidelines have made it easier for these patients to qualify for systemic therapy and advanced treatments, she said. “So we think Icotyde fits right into this sweet spot as a first systemic option.” Bank of America analyst Jason Garbery questioned whether the pill’s convenience was strong enough to become the standard. “Given how far behind IL-23 biologics are, the value proposition is not entirely clear,” he told CNBC. “Some may argue that quarterly injections are better than taking a pill every day, especially if you’re used to taking biologics, as is the case for many existing psoriasis patients.” This skepticism isn’t necessarily new. Garbery highlighted Sotiktu as an important comparison. The drug, Bristol-Myers Squibb’s first oral TYK2 inhibitor, was given the green light by the FDA in September 2022 for the treatment of moderate to severe plaque psoriasis. The drug failed to gain much traction, highlighting how difficult it is for pill-based psoriasis treatments to gain traction against biologics. “Investors are going to want to know at some point that this is a drug that can live up to the potential for significant peak sales,” said Garbery, who rates J&J equivalent to hold and has a price target of $254. Leerink analyst David Reisinger said in an interview with CNBC that payer access, the process of ensuring coverage and reimbursement, is critical to the adoption of new drugs, and Icotide is no exception. “We hope that J&J will have broad payer access by this summer,” Reisinger said. J&J is running a program to help patients pay for Icotyde. Rival shots Tremfya and Skyrizi cost about $100,000 a year. “We expect Ikotide to be taken by patients new to treatment who may be considering less effective psoriasis medications,” Reisinger said last week, referring directly to Sotiktu and Amgen’s Otezla. Leerink upgraded J&J stock on Wednesday, raising its price target to $265 from $252, suggesting an upside of about 17% from Friday’s closing price. Reisinger now projects that Icotyde’s sales will reach $10.5 billion in 2032, well above the Wall Street consensus of $7.4 billion. For Icotide to reach its full marketing potential, it needs to secure approval for additional diseases that fall under the inflammatory bowel disease category, such as Crohn’s disease and ulcerative colitis. Duato said in January that IBD was found to account for 75% of Stelara’s sales, and that Tremfia was able to take advantage of these conditions to accelerate growth. The same may ultimately be true for Icotyde. Reisinger said in the upgrade that a “huge opportunity” in IBD should unlock for Icotyde in 2028. “Icotide’s potential in psoriasis, psoriatic arthritis and inflammatory bowel disease remains underestimated,” Duato said on an April earnings call. Bottom line Johnson & Johnson got off to a strong start in 2026, delivering a beat-and-raise quarter led by its most important growth drug. Icotyde’s potential in the coming months and years, as well as key milestones that could pave the way for FDA approval of J&J’s investigational robotic surgical system Ottava, are some of the exciting things to come. Robotic surgery has long been dominated by Intuitive Surgical’s da Vinci system. J&J stock has increased 9.55% since the beginning of the year, compared with an 8.2% increase in the S&P 500 index. This is a very good number considering that healthcare is the second worst sector on the S&P 500 this year, down 6.5%. Only the financial sector has fallen further, down 6.8%. The not-so-good news is that J&J has gone in the wrong direction since its shares opened at just under $240 on April 8th. We have been buying along the way to improve our average cost basis and currently have an unrealized loss of 3.2%. Johnson & Johnson is a leading company known for consistently delivering solid earnings and forecasts, even as the overall pharmaceutical sector remains out of favor as Wall Street shifts into artificial intelligence businesses related to the data center boom. J&J’s 2025 sales will be approximately $94 billion, with approximately two-thirds of that coming from its pharmaceutical division, known as Innovative Medicine, and the remaining one-third from its medical products division, known as MedTech. Management has recently asserted that it has “forecasts” for double-digit sales growth by the end of the decade. We will wait patiently. Johnson & Johnson has a price target of $265 and a Buy rating of 1. (Jim Cramer’s charitable trust is long JNJ. 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