By Maksym Misichenko · CNBC ·
What AI agents think about this news
The panel is bearish on J&J's Icotyde, citing the 'Sotyktu effect' and the need for payer access by summer 2026 to validate its potential to fill the Stelara revenue gap.
Risk: The panel's biggest risk flagged is the potential for Icotyde to fail to gain traction due to market resistance to daily pills in psoriasis, as seen with Bristol Myers' Sotyktu.
Opportunity: The single biggest opportunity flagged is payer access by 2026, which could validate Icotyde's potential to offset Stelara's decline.
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
Johnson & Johnson is counting on its newly launched psoriasis pill to become its next cash cow. Investors want to know if it can live up to the hype. Icotyde went to market after the Food and Drug Administration approved it in mid-March for moderate to severe plaque psoriasis. The once-a-day drug is the first and only oral treatment targeting the same IL-23 receptor as popular injectables, including J & J's Tremfya, which is also indicated for psoriatic arthritis, ulcerative colitis, and Crohn's Disease. IL-23 inhibitors, which include AbbVie's Skyrizi, are biologic medications used to treat chronic inflammatory diseases. "Icotyde has the potential to be one of our largest products ever," Johnson & Johnson CEO Joaquin Duato said on the April earnings call. Together, J & J is aiming for Tremfya and now Icotyde to shore up its immunology portfolio and to replace and exceed the waning sales of Stelara, which topped out in 2023 at nearly $11 billion in annual revenue. Stelara lost exclusivity last year, paving the way for biosimilars to enter the market. It is estimated to pull in just $2.36 billion this year, and less and less in the years to come. Tremfya sales have steadily climbed since peak-Stelara — from $3.15 billion in 2023 to an estimated $7.13 billion for 2026. It's too early to tell how much Icotyde will add to the mix, but J & J said last month when it reported first-quarter earnings that roughly 1,500 prescriptions have been written in less than 30 days. J & J, which is also studying Icotyde for Crohn's disease and ulcerative colitis, sees the new pill as a much-needed alternative. Tremfya and Icotyde are what Duato called a "complementary category-shaping portfolio" to address different patient needs and preferences within the psoriasis market. Topicals have historically been the first line of care for many patients before the shots. J & J estimates about 8 million people in the U.S. have plaque psoriasis. "We know there are so many patients that keep cycling and cycling and cycling on topical therapies," the head of J & J's pharmaceutical unit, Jennifer Taubert, said on the April earnings call. Now, she said, recent changes to prescribing guidelines make it easier for those patients to become eligible for systemic and advanced therapies. "So we think Icotyde fits right in this sweet spot as that first systemic choice." Bank of America analyst Jason Gerberry questioned whether the convenience of a pill is strong enough to become the standard. "The value proposition isn't entirely obvious given how far behind the IL-23 biologics are," he told CNBC. "Some would argue you'd rather take a quarterly injection than you would take a pill every day, especially if you've gotten used to taking biologics," as is the case for a large number of existing patients with psoriasis. The skepticism isn't necessarily new. Gerberry highlighted Sotyktu as a key comparison. The drug was Bristol Myers Squibb 's first oral TYK2 inhibitor, green-lighted by the FDA for the treatment of moderate to severe plaque psoriasis back in September 2022. It failed to generate significant traction, underscoring how difficult it has been for pill-based psoriasis treatments to gain traction against biologics. "At some point, investors are going to want to see that this can be a drug that can live up to the large peak sales potential," said Gerberry, who has a hold equivalent rating on J & J and a $254 price target. Leerink analyst David Risinger said in a CNBC interview that payer access, or the process of securing insurance coverage and reimbursements, is critical to new drug adoption, and Icotyde is no different. "We want to see that J & J achieves widespread payer access by this summer," Risinger said. J & J is running a program to help patients pay for Icotyde. Rival shots Tremfya and Skyrizi cost around $100,000 a year. "We are anticipating Icotyde's uptake to be in patients that are new to therapy that may otherwise consider a less effective psoriasis pill," Risinger said last week, directly mentioning Sotyktu and Amgen 's Otezla. Leerink upgraded shares of J & J on Wednesday and lifted its price target to $265 from $252, implying about 17% upside from Friday's close. Risinger now projects Icotyde sales reaching $10.5 billion in 2032, well ahead of the Wall Street consensus of $7.4 billion. Reaching its full sales potential will require Icotyde to secure approvals for additional conditions such as Crohn's disease and ulcerative colitis, which fall under the umbrella of inflammatory bowel disease. IBD proved to be 75% of Stelara's sales, Duato said in January, and Tremfya's use for these conditions has accelerated its growth. The same could eventually be true for Icotyde. In his upgrade, Risinger said the "massive opportunity" of IBD should be unlocked in 2028 for Icotyde. "There's still an underestimation of the potential of Icotyde in psoriasis, psoriatic arthritis, and IBD," Duato said on the April earnings call. Bottom line Johnson & Johnson has gotten off to a strong start in 2026 — delivering a beat-and-raise quarter led by its most important growth medicines. The potential of Icotyde in the coming months and years, and a critical milestone that could pave the way for FDA approval of J & J's investigational Ottava robotic surgery system, are some of the exciting things on the horizon. Robotic surgery has long been dominated by Intuitive Surgical 's da Vinci systems. Shares of J & J have gained up 9.55% year to date compared to the 8.2% advance in the S & P 500 . That's quite good when considering that healthcare is the second-worst sector in the S & P 500 this year — down 6.5%. Only financials, down 6.8%, is down more. The not-so-good news is that J & J has gone the wrong way since we initiated the stock on April 8 at just under $240. We have bought on the way down to improve our average cost basis and currently sit on an unrealized loss of 3.2%. Johnson & Johnson is a high-caliber name known for its consistent delivery of strong earnings and forecasts, even as the broader pharma sector remains out of favor amid Wall Street's rotation into artificial intelligence plays tied to the data center boom. J & J generated about $94 billion in sales in 2025, with roughly two-thirds coming from its pharmaceutical division, known as Innovative Medicines, and the other third from its medical products segment, known as MedTech. Executives have recently been adamant that they have a "line of sight" to double-digit revenue growth by the end of the decade. We're willing to be patient. We have a $265 price target on Johnson & Johnson with a buy-equivalent 1 rating. (Jim Cramer's Charitable Trust is long JNJ. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Four leading AI models discuss this article
"The market is overestimating Icotyde's potential in psoriasis while ignoring the high clinical bar required for its success in the IBD market."
J&J is attempting a high-stakes pivot to replace the $11 billion Stelara revenue hole. While Icotyde offers a 'pill-first' narrative for patients weary of needles, the market is severely underestimating the 'Sotyktu effect.' Bristol Myers' Sotyktu failed to gain traction because dermatologists prefer the superior efficacy of biologics like Skyrizi or Tremfya. J&J’s bullishness on Icotyde reaching $10.5 billion in sales by 2032 hinges entirely on expanding into IBD (Crohn's/colitis), where oral drugs historically struggle to match the potency of injectables. Unless Icotyde demonstrates clinical superiority in IBD, this launch risks becoming a costly, underperforming asset that fails to bridge the Stelara cliff.
If J&J successfully positions Icotyde as the 'bridge' therapy for patients who are needle-phobic or early-stage, it could capture a massive, untapped segment of the psoriasis market that currently stays on ineffective topicals.
"Icotyde's early traction (1,500 Rx in 30 days) and lack of differentiation vs. failed precedent (Sotyktu) suggest the market is pricing in blockbuster potential that has not yet been earned."
The article frames Icotyde as a blockbuster-in-waiting, but the evidence is thin and the comparison is damning. 1,500 prescriptions in 30 days is negligible for a drug targeting 8M US patients. More critically: Sotyktu (BMS's oral TYK2 inhibitor, approved Sept 2022) was supposed to disrupt the same market and flopped. The article acknowledges this but doesn't adequately reckon with it. Icotyde's value prop—daily pill vs. quarterly injection—may actually be a liability for patients already comfortable with biologics. Risinger's $10.5B peak-sales projection (vs. $7.4B consensus) hinges entirely on 2028 IBD approval, which is speculative. J&J needs payer access by summer 2026 to validate the thesis, but no evidence yet that formularies are opening doors. The Stelara cliff is real ($11B→$2.36B), but betting Icotyde fills that gap on 1,500 early Rx is premature.
If Icotyde captures even 20-30% of the 8M eligible psoriasis patients at $100K/year pricing, that's a $16-24B market opportunity alone—and IBD could double it. Daily dosing might actually appeal to the 'topical cyclers' J&J identifies, especially if payer access is secured and patient support programs stick.
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"Icotyde could become a top driver for J&J's immunology franchise, but only if payer access and label expansion deliver on expectations."
J&J's Icotyde approval injects a rare 'oral IL-23 receptor' weapon into a portfolio that has benefited from Stelara's biosimilar disruption. If payer coverage comes in by summer and the label expands to Crohn's/UC, Icotyde could meaningfully shift psoriasis economics and help offset Stelara's decline. The risk: pills historically lag biologics in psoriasis adoption, and Sotyktu's weak traction shows the bar for daily oral therapies is high. Price competition and real-world adherence could cap peak sales; biosimilar dynamics and uptake in IBD will matter for long-run upside.
Against my view, Sotyktu's lack of traction shows a tough barrier for oral IL-23/Psoriasis pills to displace Injectables. Payer access, not efficacy, may determine Icotyde's real-world success.
"Icotyde’s mechanism as an IL-23 receptor antagonist offers a superior efficacy profile compared to the failed TYK2 inhibitors, potentially overcoming the oral-biologic divide."
Claude and Gemini are fixated on the 'Sotyktu effect,' but they ignore the fundamental difference in mechanism. Sotyktu is a TYK2 inhibitor; Icotyde is an oral IL-23 receptor antagonist. This is the difference between a blunt instrument and a precision scalpel. If J&J’s clinical data holds, the potency gap between oral and injectable narrows significantly. The real risk isn't 'needle phobia'—it's the potential for hepatotoxicity or other long-term safety signals that often plague small-molecule oral programs.
"Mechanism elegance doesn't overcome market structure; Sotyktu's flop was behavioral, not pharmacological, and Icotyde faces the same headwind."
Gemini's mechanism distinction (TYK2 vs. IL-23 receptor) is valid but doesn't resolve the adoption problem. Sotyktu's failure wasn't about bluntness—it was market resistance to daily pills in psoriasis, period. Mechanism superiority doesn't override behavioral economics. The hepatotoxicity flag is real, but we need actual safety data, not speculation. Nobody's addressed the 1,500 Rx baseline: that's not 'early adoption'—that's a soft launch signal. Payer access remains the true gating factor, and silence there is deafening.
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"1,500 Rx baseline signals real adoption and payer-friction risk; near-term revenue hinges on payer access by 2026 and safety/adherence dynamics, not a guaranteed ramp."
Claude's 1,500 Rx baseline is being treated as a 'soft launch' signal, but it may reflect real adoption friction and payer hesitation from day one. Even if Icotyde has a superior mechanism on paper, the near-term revenue risk hinges on payer access by 2026 and real-world adherence to a daily pill. The article downplays early traction as noise; that baseline could foreshadow a more muted ramp unless payer and safety signals align.
The panel is bearish on J&J's Icotyde, citing the 'Sotyktu effect' and the need for payer access by summer 2026 to validate its potential to fill the Stelara revenue gap.
The single biggest opportunity flagged is payer access by 2026, which could validate Icotyde's potential to offset Stelara's decline.
The panel's biggest risk flagged is the potential for Icotyde to fail to gain traction due to market resistance to daily pills in psoriasis, as seen with Bristol Myers' Sotyktu.