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J&J can weather new biotech threat: Analyst

How biotechs are affecting J&J's business
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How biotechs are affecting J&J's business

Cheaper biotech drugs are headed to the U.S., threatening big pharma companies like Johnson & Johnson. However, JPMorgan analyst Mike Weinstein thinks J&J can weather the storm.

The drugs are called biosimilar, which means they are not generic copies but instead are similar. The medications are manufactured using living cells and because it is so complicated, copycat versions can't be identical.

The first biosimilar drug was approved in the U.S. in March. However, legal battles have prevented it from hitting the market yet.

J&J's $5 billion arthritis drug Remicade could see competition within the next few years, Weinstein said Wednesday in an interview with CNBC's "Power Lunch." While it could happen before Remicade comes off patent, he thinks it will likely occur after the patent expires in late 2018.

Andrew Harrer | Bloomberg | Getty Images

He's convinced the company is prepared for when that happens.

"They're developing a pipeline, both internally and externally, that can help them manage through some of those challenges … as we go out to '18, '19, '20," Weinstein said.

Johnson & Johnson said Wednesday it plans to file for approval of 10 new medicines by 2019. Each drug has the potential to bring in more than $1 billion in revenue.

Read More J&J: 10 new drugs by 2019, each with $1B potential

Weinstein noted that J&J's pharma business is 43 percent of its sales and 55 percent of its profit.

"The big driver of the company's performance historically and the stock is the pharmaceutical business," he said. "Over the last few years it's done exceptionally well."

Weinstein believes the business can grow in the 6 to 8 percent range over the next three to four years.

He also doesn't think the company needs to make a big acquisition to get that growth.

"If you look at their track record over the last 10 years, last 20 years, they've actually done a fantastic job of business development in pharmaceuticals," Weinstein said, noting it found opportunities in licensing compounds and buying smaller companies.

"They haven't needed to do a large deal in order to get the growth in the pharma that they're getting."

He thinks J&J can continue along the same course.

Read MoreBiotech investors: These are the key names to know

—CNBC's Meg Tirrell contributed to this report.