Goldman Sachs maintains a Buy rating on Johnson & Johnson, with KOL survey supporting Icotyde's psoriasis growth potential

Overview

This report focuses on Johnson & Johnson's recently approved oral psoriasis drug Icotyde. Goldman Sachs assessed Icotyde's early launch progress, patient positioning, prescription drivers, and long-term revenue potential through a proprietary survey of 26 dermatologists. The report concludes that the survey results support Icotyde's growth potential in moderate-to-severe plaque psoriasis and reinforce the view that it is a key component of the new product cycle for JNJ's immunology business.

Core views

The core view is that Icotyde's prescription share could rise rapidly from the current low single digits to approximately 8%-10% after one year and 15%-20% after five years. Its primary opportunity comes from new patients entering branded systemic therapy and existing patients switching from branded oral drugs, rather than from massive share diversion from injectable IL-23 or IL-17 therapies. If Icotyde reaches the 15%-20% market share implied by the KOL survey, peak sales could exceed $10bn, above Goldman Sachs' estimate of $7.7bn and Visible Alpha consensus of $7.1bn. Additional upside could come from indications such as PsA, UC, and CD.

Analysis framework

Goldman Sachs used a proprietary KOL survey methodology, interviewing 26 dermatologists. Each surveyed physician treats at least 100 patients with moderate-to-severe psoriasis and has prescribed multiple branded systemic therapies in the past year. The survey covered current and future Icotyde prescription shares, target patient populations, treatment choices for new patients, willingness of existing patients to switch, insurance coverage and access, the impact of the 30-minute fasting requirement, and prescription decision factors.

Methodology notes

• Expert SurveyKOL Survey

  Survey of dermatologists' prescribing intentions

  Feedback from 26 dermatologists with experience treating moderate-to-severe psoriasis was used to assess Icotyde's current penetration, future prescription trajectory, patient sources, and clinical positioning.

• Valuation methodsP/E Valuation

  P/E-based target price methodology

  Goldman Sachs applied a 20x P/E multiple to Q5-Q8 EPS to derive a 12-month target price of $275.

• Product PositioningMarket Expansion vs Share Shift

  Assessment of market expansion versus share substitution

  The report concludes that Icotyde is more likely to attract patients upgrading from topical therapies or switching from branded oral drugs, thereby expanding the systemic treatment market rather than materially eroding the share of existing injectable IL-23 therapies.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Johnson & Johnson (JNJ.N)

  Covered company and primary beneficiary

  Strengths

  Owns immunology assets including Icotyde and Tremfya; the number of early Icotyde prescribers is growing rapidly; KOL feedback indicates significant long-term penetration upside.

  Weaknesses

  The current target price implies only 2.9% upside; product-level sales have not yet been disclosed separately; Icotyde remains in the early launch phase.

  Comparison

  Compared with oral drugs such as Otezla and Sotyktu, Icotyde is considered to offer greater efficacy while remaining oral; compared with IL-23 injectables such as Skyrizi and Tremfya, Icotyde offers oral differentiation, although its efficacy remains below that of leading injectables.

  Risks

  Slower-than-expected new-product uptake, talc litigation payouts exceeding expectations, and macroeconomic and tariff-related pressure on valuation and earnings expectations.

• AbbVie / Skyrizi

  Important comparable and potential competitor in the same treatment market

  Strengths

  Injectable IL-23 therapies remain preferred by physicians for approximately half of new patients, while willingness among stable patients to switch is low.

  Weaknesses

  Icotyde's oral convenience could expand the advanced systemic therapy market and compete for some new-patient selections.

  Comparison

  The survey indicates that Icotyde is more likely to expand the market than materially divert share from injectable IL-23 therapies such as Skyrizi.

  Risks

  If oral IL-23 peptide drugs continue to improve in long-term efficacy and access, they could affect the share of new patients captured by some injectable therapies.

• Otezla / Sotyktu

  Oral branded-drug competitors and sources of switching patients

  Strengths

  Have established a usage base in the oral psoriasis treatment market.

  Weaknesses

  Doctors expect approximately half of existing branded oral-drug patients could switch to Icotyde because of its higher efficacy and similar dosing convenience.

  Comparison

  Icotyde is positioned as a higher-efficacy alternative to existing branded oral drugs.

  Risks

  If insurance coverage and patient access for Icotyde continue to improve, existing oral branded drugs could face greater switching pressure.

Key data

• 12-month target price$275.00Based on a 20x P/E multiple and Goldman Sachs' Q5-Q8 EPS.
• Current price$267.24Price disclosed on the report cover.
• Expected upside2.9%Based on the target price relative to the current price.
• Survey sample26 dermatologistsEach physician treats at least 100 patients with moderate-to-severe psoriasis and has prescribed multiple branded systemic therapies in the past year.
• Current Icotyde prescription penetrationMean 3% / median 2%Among eligible patients with moderate-to-severe psoriasis.
• Expected Icotyde prescription penetration after 1 yearMean 10% / median 8%The report summary describes this as approximately 8%-10%.
• Expected Icotyde prescription penetration after 5 yearsMean 19% / median 15%The report summary describes this as approximately 15%-20%, with the 75th percentile reaching 29%.
• Potential peak revenue$10bn+Assuming Icotyde reaches the 15%-20% market share implied by the KOL survey.
• Goldman Sachs Icotyde peak sales estimate$7.7bnThe report describes upside relative to the KOL scenario.
• Visible Alpha consensus$7.1bnMarket consensus data used for comparison in the report.
• Early prescriber countApproximately 4,500JNJ disclosed this at the Goldman Sachs healthcare conference on June 9, a significant increase from the more than 1,000 prescribers mentioned at the 1Q26 earnings call on April 1.
• Early patient prescriptions1,500 patientsJNJ disclosed at the 1Q26 earnings call that prescriptions had been issued to 1,500 patients.
• Market capitalization and trading dataMarket capitalization $650.4bn; enterprise value $678.2bn; 3-month average daily trading value $1.9bnKey Data on the report cover.

Impact & implications

If Icotyde launches in line with the survey expectations, JNJ's new product cycle in immunology will receive stronger support, helping the company achieve management's target of double-digit revenue growth by the end of this decade. From an investment perspective, Icotyde's actual prescription ramp, improvements in insurance access, and subsequent indication expansion are key variables determining whether JNJ's target price and growth expectations can be revised upward further.

Risks

• Icotyde and other new products may ramp more slowly than Goldman Sachs expects, preventing them from fully offsetting declines in mature products.
• Uncertainty related to talc litigation could result in higher-than-expected payouts and suppress valuation multiples.
• Macroeconomic conditions and tariff-related external pressure could create downside risks to earnings forecasts.
• Product-level Icotyde sales have not yet been disclosed separately; early prescription data may be incomplete, and underlying demand still requires further validation.
• If insurance coverage, reimbursement approvals, or patient access improve less than expected, prescription conversion could be constrained.
• If injectables maintain strong competitiveness through higher efficacy and less frequent dosing, Icotyde's long-term share could fall below KOL survey expectations.

What to watch

• Icotyde's first full-quarter launch metrics in JNJ's 2Q26 results, including prescription volume, prescriber count, and management commentary on product progress.
• Whether public prescription data from IQVIA and other sources gradually provides a more complete reflection of Icotyde demand.
• Whether insurance coverage success rates and the conversion of prescriptions still under review improve.
• Clinical and regulatory progress for Icotyde in indications such as PsA, UC, and CD.
• Whether physicians' actual acceptance of the 30-minute fasting requirement continues not to constitute an obstacle.
• Changes in prescription shares among new patients for injectable IL-23 and IL-17 therapies versus Icotyde.