# Tremfya shows significant reduction in joint damage for psoriatic arthritis

Johnson & Johnson's Tremfya demonstrated a statistically significant reduction in joint structural damage progression in psoriatic arthritis patients compared to placebo in the Phase 3b APEX study, with a 2.5-fold reduction at 24 weeks. Simultaneously, Leerink Partners downgraded JNJ from Outperform to Market Perform due to concerns about potential price controls on Darzalex Faspro, which could impact future earnings, while JPMorgan Chase's President Daniel Pinto has been elected to J&J's Board of Directors.

Analysis

Johnson & Johnson (JNJ) presented compelling Phase 3b APEX study data for Tremfya, demonstrating its significant ability to inhibit joint structural damage progression in active psoriatic arthritis patients by two and a half times compared to placebo at 24 weeks. Specifically, patients receiving Tremfya showed mean changes from baseline in the modified van der Heijde-Sharp score of 0.55 (Q4W) and 0.54 (Q8W), markedly better than the 1.35 observed in the placebo group, with 67% and 63% of Tremfya patients, respectively, experiencing no radiographic progression versus 53% for placebo. These results, positioning Tremfya as potentially the only IL-23 inhibitor in its class to show such structural damage inhibition according to study investigators, are further supported by strong ACR20 (67-68% vs 47% placebo) and ACR50 (>40% vs 20% placebo) response rates, with a safety profile consistent with previous findings. This positive clinical development, alongside promising updates for CARVYKTI (33% 5-year+ progression-free survival in multiple myeloma), JNJ-5322 (86.1% overall response rate in Phase 1 for a trispecific antibody), and icotrokinra (significant skin clearance in plaque psoriasis Phase 3), underscores the depth of JNJ's pharmaceutical pipeline. However, this optimism is tempered by Leerink Partners' decision to downgrade JNJ stock from Outperform to Market Perform, citing concerns over potential price controls on Darzalex Faspro which could impact future earnings. The appointment of JPMorgan Chase's President, Daniel Pinto, to JNJ's Board of Directors is also noted, potentially bringing additional financial expertise.

Key Decisions for Investors

• Investors should weigh the significant positive clinical trial results for Tremfya, which could enhance its market share and JNJ's immunology franchise revenue, against the specific risk of potential price controls on Darzalex Faspro highlighted by Leerink Partners.
• Consider the breadth of JNJ's pipeline advancements, including CARVYKTI, JNJ-5322, and icotrokinra, as potential long-term growth drivers, while remaining cognizant of the financial implications of the Darzalex Faspro concerns which led to the recent analyst downgrade.
• Monitor upcoming earnings calls and regulatory updates for further clarity on the Darzalex Faspro pricing situation and the commercial rollout and adoption rates of newly advancing pipeline candidates before making significant capital allocation changes.