J&J shares slide on oncology miss as biotech deals and AI funding surge

Shares of Johnson & Johnson fell nearly 3 per cent on Wednesday, despite the company raising its full-year financial guidance. The decline followed a quarterly earnings report where the firm’s innovative medicines division posted a 6.8 per cent sales increase between April and June. This growth was driven by strong performances from cancer treatments such as Darzalex and Carvykti, the immune disease drug Tremfya, and depression medications Caplyta and Spravato.

The company now projects 2026 sales to reach between $100.8 billion and $101.4 billion, an upward revision from the previously forecast range of $100.3 billion to $101.3 billion. However, the market reaction was tempered by RBC Capital Markets analyst Shagun Singh, who noted that overall oncology sales missed Wall Street consensus estimates. Specifically, the prostate cancer medicine Erleada and blood cancer treatment Imbruvica both underperformed expectations, contributing to the share price dip.

In a significant move for the global oncology market, AstraZeneca agreed to pay Shanghai-based firm Dizal up to $1.5 billion for worldwide rights to Zegfrovy. The deal includes an upfront payment of $600 million for the lung cancer drug, which targets DNA insertions in the exon 20 region of the EGFR gene. Zegfrovy is already approved in the United States and China for non-small cell lung cancer patients with these alterations and generated approximately $85 million in sales during the 2025 fiscal year.

Spero Therapeutics also expanded its pipeline through a partnership with Chinese biotech Innovent Biologics. Spero licensed most rights to IBI355, an experimental antibody targeting the CD40L signaling protein involved in inflammation. Under the agreement, Innovent could receive up to $1.1 billion, including an unspecified upfront payment. Spero plans to advance IBI355 into a Phase 2 study for IgG4-related disease next year, marking a strategic pivot away from its previous focus on antibiotic development.

Venture capital activity remained robust across the sector, with AI drug discovery specialist Chai Discovery raising $400 million in a Series C round. The funding values the company at $3.8 billion and was led by Index Ventures, with participation from Dimension and Kleiner Perkins. This marks the second-largest venture financing of 2026 tracked by industry observers, supporting Chai’s efforts to build AI models for larger drugmakers, including existing partnerships with Pfizer, Eli Lilly, and Novartis.

Radiopharmaceuticals startup AdvanCell secured $315 million in Series D funding, led by Ally Bridge Group and including investors such as Eli Lilly and Sanofi’s venture arm. The capital will support late-stage testing for an experimental prostate cancer treatment and fund its broader pipeline of alpha particle-emitting radiopharmaceuticals. Meanwhile, Summit Therapeutics sold rights to its experimental antibiotic ridinilazole to Toronto-based Biossil, receiving $500,000 in guaranteed cash with potential payouts of up to $104.5 million.