JNJ - Earnings call transcript Q1 2022

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Operator

Good morning, and welcome to Johnson & Johnson's First Quarter 2022 Earnings Conference Call. All participants will be in listen-only mode until the question-and-answer session of the conference. This call is being recorded. If anyone has any objections, you may disconnect at this time. [Operator Instructions] I would now like to turn the conference call over to Johnson & Johnson.

begin. may You

Joe Wolk

XXXX is Financial This for Executive President first Vice us XXXX full Good outlook. of Joe Johnson Chief quarter company's our Officer to you results & and and today year morning. discuss Wolk, financial Johnson. joining Thank

have the many has our much world last things While the Johnson. same since call, stayed for changed in Johnson &

evidenced for us pipeline, growth We generate meaningful positive dividend enabling deliver increase flow, our and purpose, in hope and rapid Guided of as increasing employees advance the reliable a current and crises XXth and to managing in to acknowledge year the and and to the continue cash by invest make consecutive on for global by China, our are continued the brought also our free to families. We affected through cases impact these important Today, impacting in. on by Ukraine. across safety credo the hardship those both. landscape the hearts war all recognize of moments are health living pandemic, surge our care. resolution we're our while we their It by we're to is, focused the remain of a the however, world that our a all take in current still grounded with events to the few

QX Jessica President, Investor Vice results. Moore, Relations, to to you Now, over like take through program I'd our the turn to

Jessica Moore

filings, the today's today's that cause website there note certain associated logistics review includes where the presentation, actual before uncertainties of of and including results of These change can our the comparable XXXX and description today's the marketplace with information acknowledges discussed be This Form at today's SEC of further is investor.jnj.com. means discussion dynamics. on factors found are the the made you and can is significant to most slide also section few the impact date. contemplated at those measures. and or and Please get COVID-XX risks, A the Investor other at factors reconciliations collaboration regarding, and based A being results to developed things, included through Johnson estimate presentation available could are being about among separation company's schedules. that our a materials, company's find strategic with financial cautionary business. and other This from today of pandemic Health additional the you results in non-GAAP encourage for of Johnson from time, as may Joe. other those the that utilized business partners and materials risks contemplated performance you, today's uncertainty forward-looking compounds accessible available COVID-XX the which is & particular, XX-K, investor.jnj.com, in the This anticipated Several and the identifies licensed best of along our statements including In any companies. the products outlook these impact to available measures also We the webcast, differ presentation Thank we into materially Consumer and details. via statement financial review future operating Relations GAAP in duration company's relationships. of on other projected.

and sales today's the for and agenda, P&L quarter first corporation will the three review segments. to Moving results I the

available time will financial and allocation our be will Following, of business commentary capital guidance sharing questions. for XXXX. position, your overview The additional an before remaining our and provide for updated Joe priorities cash

Worldwide and Q&A Mongon, Vice Vice Worldwide and Jennifer the portion Pharmaceutical. Health; Taubert, Executive Joe will Executive Consumer call, of and President Chair, Thibaut Executive Chair, Vice Ashley Chair, be During the and by, President McEvoy, Worldwide joined Medtech; President

quarter. and feedback your heard have We implementing enhancements this are few a

phase earlier on to select providing our your pharmaceutical clinicaltrials.gov. collection now clinical are streamline efforts we pipeline trial from data information First,

will business, than the detailed significant performance part summarize each leaving for sharing rather on of commentary business Second, business the time drivers, Q&A. I more

earnings in additional presentation. anticipate We XX You can to minutes. our last the find up segment will webcast detailed commentary

move were first US, impact the our quarter Operational X.X% had reported OUS growth Now, the US currency, results. points. the the XX.X%, of to X.X XXXX. US, was was increase XXXX, quarter $XX.X let's of of first X.X%. for X.X%. results outside regions increased sales points. X.X growth, X% In which a billion sales sales reported excludes outside currency currency as impacting of Worldwide effect by versus negative quarter of first an translational sales the increased the In our growth with negatively Operational the

operational impact X.X% net divestitures, adjusted worldwide, the US the US. was in sales and of acquisitions XX.X% X.X% and growth outside the Excluding

Turning earnings. now to

earnings billion, the For $X.X per earnings of quarter, share share year net diluted diluted ago. earnings per versus was were and a $X.XX $X.XX

to an effective MedTech. prior Beginning schedules X.X% the the to net XXXX have therefore Health. increased in adjusted roughly first were Excluding $X.X X.X% now operational to Consumer the increases Consumer Also, of compared per represent as Devices reported will represent of XXXX. X.X%. performance with decline On operational in segment under Consumer outside change percentages business supplemental a Worldwide quarter. certain products of diluted XXXX year diluted sales billion Please over-the-counter per Pharmaceutical million been asset US referred X.X% of for Medical to the impact of first quarter sales stated, previously was restatements. translation. of stated products I items Health $XXX reclassed highlights. sales respectively, growth and Unless sales expense is adjusted exclude refer adjusted special comment of our basis, the the currency US. on segment quarter These sales and Health. the segment billion comparison for X% earnings after-tax in Beginning quoted with and share $X.XX, increased XX-K, as intangible representing earnings amortization the January, in our XXXX, $X.X to the of both now otherwise per share earnings X.X%, quarter for periods, and and

Health worth and Beauty Worldwide external was as in growth impacted was primarily respiratory acquisitions primarily to business, OTC largely Consumer X.X%. industry-wide Excluding increased the XXX and ingredients and by labor points growth our basis points Consumer due worldwide in Adjusting approximately to well XXX Skin Health US. by as divestitures, sales. and shortages delivered constraints, basis results, of availability these supply above-market MOTRIN constraints, reflected impact driven for TYLENOL, packaging upper and product the negatively solid in Health due

growth our assets REMICADE to US. six ERLEADA competition by and XARELTO by due gains particularly in the growth strength DARZALEX segment. TREMFYA, and market therapy of enabling with patient of the lines and despite X.X% growth partially IMBRUVICA in driven growth above-market contributed increased IMBRUVICA X.X% US. was of US XX.X%, sales. to also IMBRUVICA novel DARZALEX, sales Pharmaceutical with broad across price market subcutaneous declined in XARELTO driven COVID-XX our Pharmaceutical offset X.X% and growth growth, declined very double-digit all XX.X% maintains in quarter. regions. worldwide US largely net Base operational strong in decrease of leadership in long-acting adjustment drive sales to products quarter. Growth outside meaningful $XX.X execution, us The unfavorable our to continues Base and vaccine from from from operational offset access, and was to pressures. adjusted on $XXX the of Moving STELARA, period the formulation Worldwide paired ZYTIGA, by partially portfolio. for all with cost in including commercial growth competitive the along of ongoing with and portfolio XX.X% oral deliver outside sales continued worldwide US, a paliperidone sales was business and position by billion increases sales Pharmaceutical to increased of continues both agents, million demand penetration strong by sales the approximately pressures its LOE driven prior increased with and share due drive growth. to

sales consecutive of in US. now $X in these to your above-market the confident segment. deliver XX.X% of ability growth Given and we outside with US growth I'll XXth XXXX. increased our remain the our growth of of turn sales MedTech results, adjusted X.X%, the in year Worldwide X.X% operational billion to MedTech attention

X.X%. strategies and commercial of most Excluding of platforms. or worldwide strong and impact acquisitions focused by enhanced sustained across new driving divestitures, was see performance We products in growth the differentiated recovery, QX the priority market share market XX driven

markets. various potential COVID-XX We across procedures driven continue resurgences to on monitor impacts elective by

and who delivering recovery. both technology primarily VELYS and VELYS continued launch, grew such of to we biosurgery related channel treatment increasingly scientific to MONARCH-enabled to may reflecting to CrossRoads I'd a of CUPTIMIZE, differentiated XXXX, XX.X% double-digit surgery as of delivered system. growth market-leading a Johnson the initiatives providing Health hammertoes surgery new The the Companies easy-to-use connected in in between new COVID-XX portfolio. ACUVUE electrophysiology, product commercial share. quarter and Before Extremity this the Johnson market hip were for Contact some softness and portfolio, recently is continued reflects and the growing its double-digit XX by was penetration breakthrough continued an demonstrate franchise elective continuing momentum that Innovative the solutions to a worldwide with will recovery MedTech of or products designed by US. that which execution platform portfolio XX.X%, and first X.X%, and ACUVUE segments arthroplasty customized US digital launches, in posting patient of in and our momentum solution lenses digital positive help XX.X% for in and penetration of pleased require a acquisitions world. the share to spine of address fueled success US in knee OASYS reimagining closure success selected and quarter, closed top at dislocation the market notable an MULTIFOCAL impact franchise cementless wound double-digit ankle spine ambulatory Eyhance FRESH. US adoption quarter. XX,XXX am technologies. and launched the the and higher-growth global robotic-assisted of growth, driven commitment Surgical tool motion total Worldwide our another due VELYS few innovation by worldwide ASCs; bunion gain vision Company surgeons strong and and commercial of delivered fast-growing pelvic TECNIS addition XX%, Partially financial stated Fast of segment, center offsetting Interventional ACUVUE and including market better in to technologies XX.X%, Synergy. solution as like digital with continued I market; enhancements abnormal Orthopedics the grew growth of TECNIS launched above this new surgery to aspirations and and recognizing in upon Most The World's regimens. both X%, products regions, patients The evidence exceed navigation, now OUS Two global entering the hip be tune in of as quarter continued DEFINE highlighting build of pelvis reduce the with in give Vision health growth its the risk in events market also of recently MedTech MONARCH and share performance where driven continue across & procedures and procedures tilt. the one OUS share to performance success growth Solutions to success since understand recovery, The growth the products, worldwide franchise to of foot MedTech's such growth

of segments As a reminder, additional on the all found slides. be for our can sales commentary

timing the points, I'd of and deleveraged marketing for by few the Consumer higher Now unfavorable in in last business. in driven quarter a statement driven deleveraged Sales, administrative of brand XXX have by year. by XX of business of of turning mix items highlight same our that brand and basis to Pharmaceutical segment. compared products Health marketing consolidated changed inflation to in points, sold noteworthy the Health like Cost expenses XXXX. basis to earnings commodity quarter the expenses by MedTech marketing and the Consumer first

the in at on development quarter. We XX.X% MedTech. In and development an year, increase research sales due of versus was $X.X prior investment X.X% levels, progression billion this portfolio and to continue to primarily research investing invest and reflects process, Pharmaceutical of strategically $XXX acquired in dermatitis The efficacy competitive of driven data. million associated This bermekimab with expense from compound development indications bermekimab, our atopic based for previous an the Inc. impairment for investigational XBiotech disclosed as by SEC of certain in impairment the termination filings. was

first compared and $XXX first was quarter in XXXX. gains line XXXX divestiture plans. million of million year to costs. income favorable The unrealized the other the of expense the in associated returns benefit in of income securities the of result Calyx net income net of This Doxil, lapping was by decrease employee prior XXXX, Consumer of on on $XXX This Health with was partially and and higher losses separation EBRA quarter offset our

Regarding losses XX.X% versus effective compared to on the rate last tax divestiture was due prior XX.X% bermekimab driven impairment The lower was primarily taxes the in the to decreased our year tax period quarter, US same IP rate gains. higher and of securities unrealized in R&D year. by income

additional review for our versus details same Excluding specific XX.X% first in last was tax I the XX-Q to encourage matters. on quarter year. special items, rate filing you upcoming the period effective XX.X% tax

your the per impact of income net earnings and box direct section amortization of tax, have slide intangible also to the adjusted our to items. Lastly, and earnings the I'll provided expense we before attention exclude where share, special

from driven gains margin driven to margins progression tax by Now general XX.X%, the let's adjusted to from product at of XX.X% mix, expenses MedTech enterprise in quarter mix. prior brand unfavorable XX.X% from percentage income divestitures. as primarily to declined timing before income to from our Pharmaceutical in increased comparisons progression declined inflation, R&D. sales marketing before In portfolio R&D portfolio for and marketing product XX.X% XX%, the due by year XX.X% brand by of decreased expense, first commodity segment. tax XXXX, and adjusted of a to look

over earnings Finally, Consumer to This pleased Johnson the Johnson from due of expenses. XX.X%, commodity Health portion to results. now & to declined margins Wolk. brand am and the back quarter Joe turn and first the higher XX.X% marketing call inflation sales concludes to I

Joe Wolk

headwinds, increased performance just challenges impacts and external as for mentioned, notable pressures rising of These costs. continuing multiple pervasive energy well solid include costs Health. across certain while availability but quarter, input higher & enterprise, in limited invest the including Johnson success, the overcoming in As for the prices most These Consumer for Jess macroeconomic transportation. long-term Johnson labor, business and posted are commodities; to the as inflationary and

We pressures expect these of to XXXX. the some degree remainder continue throughout will

external price partners. increases However, initiatives, and are mitigation efforts underway, contract improvement negotiations with including cost strategic supply

and and supply patients medicines committed are need. We sustaining products, to of the want and treatments that consumers

in to our quarter. the with events Turning and adjusted enterprise operational led segments performance MedTech X% our notable nearly sales growth.

pipeline business growth We We with the we and ATTUNE AFFIXIUM of continue announced launches forward innovation, through business, externally. stabilized XX bearing knee continue steady the but fluid, easing knee two is of product XXXX system. Transparency Pharmaceutical ATTUNE this are reflects to to the our increasing drive as which fifth Report, in by ATTUNE above-market deliver procedures despite this surgical Technology our parts with published MedTech consecutive decreases portfolio XDP in recognize across medial pleased our innovations which fixed Janssen evidenced price of by cementless monitoring. pressures. our COVID the quarter requires and major new to the In that volume we on inflationary US recently of restrictions addition value uptick a year the portfolio, world, to were internally the the new our driven situation more than of in Building XXXX, many see and

our to continue advance also We Pharmaceutical pipeline.

treatment This developed multiple approval a with Carvykti, together therapy FDA myeloma quarter, for our Biotech. received partner, we Legend CAR-T for the of

approach clinics has with feedback utilizing date begin the and to partnering dosing, positive. been phased are patient We to a

bispecific industry-wide the In potentially our FDA, on remain multiple performance have further. on our received also portfolio we EMA We in Consumer business, Health/Beauty priority over-the-counter antibody to navigating medicines and supply myeloma Skin business, XXXX focused delivering our constraints seeking our continuing above-market from approval, growth that impacted our primarily objectives, achieve business. also Teclistamab, Health expanding review we CDX our BCMA while filed

new about companies, & in we of Company. announcement Johnson Health the related We two Consumer made be the industry-leading and continue November excited on creation the the to new Johnson the to new activity

a Johnson, areas $X holding brands new the sales For well with in market-leading billion increased Company also across remain will new key innovation innovation. and markets continue The our franchises. annually, & and Johnson incremental Johnson XX is growth, over substantial & a financial Health differentiated therapeutic Consumer hallmarks company. separation strategy, independent will will have solutions. financial delivering deliver profile sharpen portfolio clinically company progress diversified digital be including also a agile same, to capital remain and Consumer and will positions execution new growth in realizing The The approach better to making a the inorganic new Johnson and the The balance the allocation to a to enhanced more potential through efforts Health positioned of to sheet, while well-defined opportunities science-backed disciplined strong drive establishing team model. related operating focus on strong consumer-centric creating in

disclose to mentioned, to new various previously order pathways. optionality we separation financial information Health the specific cannot in As Consumer on preserve

remain this path headquarters refined key to lines executive plan to coming the applicable new of provide XXXX, updated second We months, name the we around anticipate In as forward for time the dissynergies. cost in the company provide financial the middle appointments and standup location announcing Health the leadership new of half with unchanged. estimates and information potential year. such Company short-term Our and Consumer plans

consistent separation communications, in execute XXXX. we with the previous to Finally, expect

a for adhering You decisions provide updates on to basis. to ongoing have material commitment our framework transparent the timely regulatory

debt we of approximately the At and end of capital marketable of cash a cash $X billion and securities of of $X.X free for for the flow debt position We Turning $XX net approximately now to generated allocation. billion. $XX quarter, approximately first billion. had cash nearly and quarter billion the

allocation In innovation Our X% to unchanged. capital our to remains compared the priority. growth remain R&D increased by investment a the top of first future priorities approximately critical Internal XXXX. quarter we quarter, and first

continue to our in evaluate portfolio upon financial capabilities, to also play complement build higher-growth with current We that markets yielding portfolio address opportunities gaps or acquisitions the solid returns. while

mentioned were year per Directors for As that XXth share, to per $X.XX earlier, of $X.XX in announce to approved quarterly our Board increase pleased our the consecutive share I from an dividend X.X%. today we increase an of

COVID-XX with start our guidance. I'll full only key Moving year January essentially from our updates vaccine on items comments to and the considerations. impacts, exchange XXXX and guidance foreign with

As demand vaccines is supply enable hesitancy COVID-XX have the to suspend value COVID-XX challenged core in investors all for of market and our vaccine made on businesses, for the currently we the of investors. for sales which and future global by vaccine. drive developing will surplus decision to focus performance markets, This current guidance our

from operational the share maintaining adjusted need earnings are We the vaccine. impact modest income if we guidance be, total COVID-XX January, in absorbing, per the provided

Regarding related on as The currency last to billion we foreign on don't unfavorable at the give reported X.XX, $X.XX Health, week line sales guidance. exchange, calculation the we which per unfavorable an as $X.XX communicated per be earnings relative US guidance, $X.X remain is share adjusted January. full our are provide in providing billion potential share impact in the understand reported update of the of In $X.X there extent but constraints year you versus adjusted is your and unfavorable second the To to we find adjusted the sales year that movements. spot have impact items of you to to We dollar now you and other same to January's qualitative incremental but guidance throughout we reported considerations per maintaining share. same don't to impact projected on offer All guidance. currency full reported as on as year models. for continue you an predictions expect half. But quarterly currency for the the sense euro results, or reported not earnings rate may know, supply do guidance value in us utilizing Consumer operational reiterate, on provide earnings a some

the half over that a will back we result, improve performance first half. anticipate As the

quarter demonstrated cases first intact. than ever-changing monitoring We the recovery than we products the the anticipated, COVID stronger our year market Consumer half. particularly from full remain to dynamics, be and the recovery while fairly and in the surging expect anticipate faster are MedTech, Health, second China. For launched first expectations recently we Similar half continued uptake to

of efforts Thibaut dedication global on of Mongon now I reminder, team, summary, executive gratitude. the Ashley support another And remain on I'd you delivering and Their strongest address the like in can pleased with we unwavering relatively & growth the healthcare stakeholders. and continued rates, quarter The start remainder to behalf same. to of As to second like the solutions line to macroeconomic Taubert, the year. XXX,XXX Johnson had the our a would our anticipate consistent our Worldwide remain open focused Chairs of business provide colleagues questions. to our Q&A? please in delivering above-market McEvoy, to throughout the We and our quarter XXXX. the was recognize the sales inspire. for Kevin, operational to innovative for Jennifer instructions growth extend for the growth despite am adjusted expectations I base Johnson year respect credo MedTech to a Pharmaceutical call, managing and your In business. our confident solid with welcome continue headwinds, year the to

Operator

today Instructions] coming Larry question [Operator Fargo. first Our from Wells is Biegelsen from

now live. Your line is

Larry Biegelsen

Good for taking Thanks question. the morning.

But places with go. to I'll Joe, different So start M&A. many

You especially to know, that deploy for you're cash the tape M&A, devices. comments on your stating eager to

of top for peer maybe your can the the consider? more types about in you the or you've to talked know, to Is seem devices. deal and to So reaching there thinking color you You of large opportunities small taking set add Ashley, the the way about move to a series for relatively it? a medium-sized or Thanks would require that of a to to think fair That needle. question. deals

Joe Wolk

Yes.

compliment And specific want Ashley on report topic I and Devices. answer, But exchange fantastic foreign Larry, back, guys your industry. really for the I'll -- in start, it's I for a on what was It was I'll Larry, really to job some just Medical April thoughts it That device issued XX. you it before for assessing So you medical grasp. to that think the guys was it fantastic do turn then you over report. team a I to did tough a meant and

So are well cash, respect us done. levels very net With lowest to debt. heard January, in we as reaching our active. we you And of remain

and ideas You Ashley, could Thibaut, they talk to that with respect Jennifer to are bringing forth.

We resides. then really to pipeline. with our smaller and size. saying and have and to Johnson, locked small frankly, through dynamic historically. continue creation mean respect to got internal adds currently principles built overly we've that there's compensate larger scale to the I And to same And our get so. quite fit. acquisitions, make I or have is we & the Johnson risk their that, get that want merit strategic expertise. not into it's had a locked capabilities. number risk do we scientific sure But value We when it we've got that than want bearing for by don't the Perhaps look to simply value we're acquisitions. just these been really financial shareholders behalf of the at on make too big already and we that in a the asset would we that are compensate something then sure too -- more where adding to We've portfolio outliers strategic

want if to... don't I you know Ashley,

Ashley McEvoy

increasingly results of Larry, quarter. the not market of the systems is some And & thoughts a COVID -- on to wave. frankly, just around becoming as Yes. We while equipped more is the pandemic, the quite in health world saw the each recovery. disappeared, maybe before manage No, Johnson. I get M&A, of with we Johnson kind I'm signs the more and know, world Clearly, pleased with is has positive so passing MedTech the resistant macro are lot quarter. to

to really We see one billion of that this them at most XX, maintain all all referenced growth four we we kind $X path you of our robust So And across maintaining quarter or scale, continue regions. in encouraged growth of to four of is that saw our if performance. a sales growing share. to above-market franchises our platforms, will, in

Care, see Some really and both vision share, performance growing standout, in encouraging and both fueled by Vision surgery TECNIS. market double-digit to ACUVUE innovation and

some electrophysiology, has enhanced significant are of sites and portfolio. up I biosurgery. category XX%, almost really world leader significantly We double-digit business really that joints We've consecutive then strong under and had finally, our XX a had and years enthusiastically, was world We're by performance we care by the The gain. in say clinically really hips in driven ASCs, differentiated with knees. leader And share a penetrating penetration. performance new of in still like the both

ACUVUE contact with when I'm So FDA I forward, of drug-eluting first lens. like innovation, in organic look on the encouraged approval the by Theravision, the the likes agenda that we see

high-growth catheter. shoring As then of balloon in fixed the knees Joe really and two segments with mentioned really earlier, EmboGad, around with the up the CERENOVUS in launch bearing,

surgery. continue So to advance digital and robotics

and over X,XXX us talk cases. VELYS hear completing with You'll cases new a of pipeline big indications, MONARCH then about XX,XXX

So to of going really digitize future Larry, think we're the the patient tuck-ins experience. do M&A, about to continue when to I and

You heard adding customize about us precise really around an to improve talk to as outcomes. example a hit delivery navigation

are an in see we been to billion positioned like we segments to continue neurovascular, be what XX% as intend $X or but well we example, end highest have growth to penetrate our markets. make You're to sure do the deployment more, capital that state going in to fast-growing us has

Operator

Thank you.

from Our question coming is next Chris today Schott from JPMorgan.

Your line is live. now

Chris Schott

seeing on that the just It your the kind on are MedTech of Ashley, of really on seeing to comments. some Great. going of forward. Can then see And outlook some given to was here there? starting just dynamics specifically, impact of prescriptions in like you're lockdowns I'm China and erosion. following terms core IMBRUVICA. my question market your the specifically Thanks you business up that we're trying the expecting so to seems understand for much. some Maybe you're comment currently

market, start see so US a prescription the are in of maybe could erosion those do start that that Or you Thanks especially -- continues? you bit? place dynamics in much. we some this this to stabilize to is So see expecting trends

Ashley McEvoy

Chris. sure, Yeah,

would in So one first, are China. in strong world very have, I say, a we we We're China. and business the – healthy in MedTech number

anticipate We to surgery March surge viruses an did well the particularly month But interventional from through recent probably to May. do lockdowns, in Shanghai back regions. a experience might due have it portfolio think as now faster, We a China of to like impact and very happening and too. that the frame continue orthopedics and we've seen, vision. diversified come the We of other but comes time to in down the I faster, the as bit in April

We question. strong there, I'll care. that a of it Jennifer to lot patients there maybe about have talk turn your are need second to and leadership very

Jennifer Taubert

on lot. on comments Great. few business, A and to Thanks the a Hi, and Chris then hello, question IMBRUVICA. Pharmaceutical I'll the everybody. get

this achieved Pac First, strong pharm sixth our growth business, in the quarter proud sales We're And And growth as that was billion. exceeding globe, Latin across in worldwide for X.X%. definitely billion our adjusted worldwide growth our operational of I where is really sales. above-market $XX we regions, delivered Asia was based we and I across America. in the really EMEA, with portfolio particularly the broadly $XX.X look

new expanded The indications data our label II indications on in virologically the FDA the and of two be evaluating [indiscernible], And arthritis, patients a which number being really FDA of TREMFYA our ERLEADA, During important growth we six well for milestones, HIV was presented in of multiple our first teclistamab suppressed we them, approval also our adolescents. AndiDurent is myeloma. across the key first of where UC. we're and continued Crohn's the from adults value in Privado approved as administered with cell of Phase we CABENUVA The including treatment every the studies, strong double-digit approved the for filing mentioned. months to Carvykti, maximize the therapy brands, Disease relapsed course refractory TREMFYA or and as for also great [ph]. EU in and so in of psoriasis quarter, DARZALEX, And product the psoriatic to had of

if and US US, competitors US, at more was take look number in both as the a Outside competitive of well market for the with this sales new really performance we did a quarter, X.X%. softness. IMBRUVICA as specifically, factors market by grew IMBRUVICA story. our the decline X.X%, actually impacted was the So a In sales

haven't that rebound fully seen yet. market levels the pre-COVID to We

eight As we a of progression-free really other IMBRUVICA at take a follow-up. only of care look survival demonstrated has up to safety overall the BTKI CLL at and And adults for B-cell is IMBRUVICA, survival the with it years and high standard malignancies. years changed five that’s rate with of

over product. worldwide. we confident with the market and most It's BTKI really patients the continues and studied of comprehensively be and So, efficacy remain XXX,XXX the profile safety prescribed leader the in share to

taking line the through new we So further see we first we're [ph] continue We do EU. look at growth indications develop forward. asset. to a IMBRUVICA to really work in at new also the as opportunities to take that venetoclax bring We're introduction that filed to trying CL and combination therapies, the and of look develop and plus and we working a

continue be market. I that there in competition will can So anticipate strong to you think

We continue to in IMBRUVICA. believe in and invest

Operator

you. Thank

from Our coming question from next Citi. is Joanne Wuensch

is now line live. Your

Joanne Wuensch

factors. are this you think What about about pull? to it? levers on multiple to with your you the I'd How headwinds key managing taking each think how raising of time divisions? Good prices thank like spend middle do of for for the about a morning of And in environment bit the the question. do income talking you all of little and those statement the

Joe Wolk

to promotion morning, the more little it's of the really, the would and hopes our that of progression should standpoint first pharmaceutical -- I say, quarter, the promotion topline heart full on good adopt getting digital a is front front-end R&D, of benefit year of a tend question. in to simply pipeline, advertising year. well think, respect to for surgery. And little do margins approach Yes, year, say lift we the question, at robotic your overall, this which throughout from I bit aggressive bit of loaded as the of Joanne. as I With operating the the the and also Thanks to an

January uptick the into first think four year is guidance. able progression. What in inflation faster the launch moving a may of I about Carvykti. being to than vaccine, inflationary think have about P&L was our nice teams say, this an amount Teclistamab in of of a the those as as -- little or pharmaceuticals, nipocalimab, in built our had be well impact anticipated, seen let's months in So There very XX%. RSV bit we that healthy XX% our

attention. the second some quarter we in as as in more hopefully that will this as but sure accordingly make not manageable. needs the doesn't, year. a still keep in well certainly anticipate expectations. commodity resources have subside something we inflationary short-term pressure then heard will the of only of remarks, scarcity performance prepared Again, that little second So long-term it also it's you and adjust pronounced our the to creation, the bit of half very And meet that that we to value meet If

very this something very it's point for think manageable granted. We're we're all cost in not being initiative at that we it's So active time, programs. with taking but

we at companies, the that technology, will are on the separate we to leverage look to streamline P&L. processes, looking to As things ways lead two

Operator

Thank you.

today question Sachs. coming Chris next from is Goldman from Shibutani Our

is line now Your live.

Chris Shibutani

some then i.e., more at the dynamics? and dynamics the the in the Two on of various how in one of the Perhaps Good a commentary XARELTO. Pharmaceutical products and terms little the Thank what impact derm Could of elaborate growth Jennifer. your the you. of being STELARA, the elaborate you prepared IBD on further on, segment on perhaps and access. little segment outlook focus a you across seeing Appreciate you commercial morning. part about just STELARA other for the patient opportunity. With like XARELTO, indications, there? mentioned that expect was directed discussed in terms could the perhaps versus bit trends an And underlying Thank you're to bit I'd and for you.

Jennifer Taubert

the Thanks question. Sure. for

start with off STELARA. let So me

quarter, growth. product Omicron a care, what the we to billion the an had more the And GI growth. that XX% number Ex-US, due staffing lot X% strength were where impact So growth impact the one. on the US, to, and sales had that and see variant $X.XX saw and first in what really had due saw a was it In this around that X.X%. nearly of delivery in US of impacted we you the STELARA And was particularly actually of was STELARA. to in areas we resource-intensive resources definitely offices was continue

and strong a share our remain look Colitis, very share CD positive Ulcerative take Crohn's momentum. in in colitis. actually Disease gained and strong positions and we points share We at ulcerative with five As over points six

TREMFYA there the psoriatic expectations. psoriasis, -- So sales And line really anticipated very expected that's arthritis, psoriasis as in strong growth with start and and strong growth and tailing off, in in STELARA and with a momentum. with to our we

and strong TREMFYA, a colitis, So XX.X% very CD through really quarter. at likewise, continue in growth. saw outlook a rest Crohn's realizing the to the have we you growth psoriasis the and for of year where look take psoriatic going in -- we And the me, Crohn's in and in positive excuse STELARA been arthritis we've ulcerative when

really, performance So nice there. really XARELTO. Question together, on

has did by period was in unfavorable we decline. the took That adjustment. net in most actually driven a So XXXX. US, adjustment place a been that this largely sales see And prior of XARELTO positive

it So was the when you do negative. comparable,

and we really but CAD nice level that. across was whether at across share about the newest set, indications, AFib And also and we're growth so talking due PAD, that continue really and indication to the Xarelto, see VTE. to vast of a the gains prescription With majority

And channel and the well of so it and some of PPA some shifting around in lower-priced little into with unfavorable of the the net mix as bit mix really XXXB Medicaid was a channels.

Operator

Thank you.

Cantor Chen Louise from coming is today question Fitzgerald. from next Your

now live. is line Your

Louise Chen

question. Hi. my taking for Thanks

you about associated to US ability So And able you online how you'll to ask with CARVYKTI? the think CARVYKTI. potentially the you. this capacity globally your manufacturing in you both Thank what in well? much And gives confidence of I wanted bring and year, some complexity meet do be to as

Jennifer Taubert

Thanks for the question.

proud is So our We're real is can on pleased. it to-date our going with CARVYKTI. What and I on that well and we're approval is expectations. track say it our launch real about

got treatment the a of supply then is this the goes the ultimately chain that patient the to the literally patient. a around cells, therapy where back and period shipment in about center. from processing four return five to and you final infusion the the product collection the know, built As is manufacturing of each customized week We've the week at and

for centers. before to for a in approach the a this We ensure are have we to mentioned this tried and scaling learn the phased a a in other experience treatment patients the really As really and launch, reliable launches predictable the and area. to we from taking market thoughtful

far, start to And feedback back so off we're been really with the there and pleased getting customers. we're good that from a have very our

we has -- that back our activated broadly help the We're have we US we for throughout the the who trials and clinical patients manufactured to and centers. now have access. ensure and were also of from folks been slots our treatment dispersed shipped well-experienced did this infusion all back patients. the working been And actually round through So the initial of orders based and that's shipped very have product and very patient on into

to thoughtful United and the to approach US as going do the planned So in and we well States responsible continue as we're in outside the as both well. as -- we throughout world a scaling, this scale

first-line in demand, ultimate that there to also relapsed/refractory setting internal Now our we around here. in discussed lentivirus, be to meet investing be now goal lentivirus. our as capabilities initial are move setting that scale industry-wide something shortage an both launches all to able to Because the as well to working we before and of is able of is the into our in

an so And have that as on internal control we would well.

So answers hope this question. your

Operator

Thank you.

Jennings from question Your is Josh Cowen. coming from next

live. now is line Your

Josh Jennings

point over so day you Joaquin went that's in our team. Thanks investment Devices some even on stepped commentary Ashley north lot morning. years? XXXX don't drive to we the from opportunities. of Hi. plant data that your in M&A D pharma team just Ashley allocated just to last should internal is focus of have But related we when – and of the investment initiatives, will Joe, level on spend devices couple a $XX to the been made the since about commitment with her mean, one do of fuel that from Good devices. Mega taking out business But up the the XX%. step public did for billion $X.X not XXXX to of be of has pharma billion acceleration in Devices And growth break this to percentage how clear, the R&D the his revenue I of think unit, franchise? But question. growth level R& support the question just to expense the up And You further? has

Joe Wolk

have the the businesses But growth be on that check P&L. innovation, differentiated, investment the they've transcript been to would and as was their supports with moving about Ashley R&D. that, They've here, needs way products We think are that that going Joaquin I'm sure. is realize sitting more across I hear, actually and innovation. to their current Josh, matter to of standard the of going as calling all to just he is when our beyond want her team that all card of managed into have to and conscious franchises what credit I listen, are we respect meeting well. you consumer care we're our that for

a be considered a product this going year. meaningful. new probably saw close very We're launches that of are very record year to number plus XX to You number last similar

terms understood will taken got we've And be is the want levels ago well so of almost and would don't investment or because there approach play more, if I you where that upon. advantage strategic the continued has to want their say but add much credit in P&L. lot of throughout we a anything decade of that to that certainly, is very competitive when but the very Ashley, to focus did know, support, goes same I managing capitalized a the her portfolio think team I Ashley a Pharmaceuticals and

Ashley McEvoy

we the would competitive investing pleased at I'm Josh, are with Joe. I that mean, and execution. I state level, Thanks, really of a say

right ago That in number our have, We years projects. we eNPV pipeline are now, was six. – XX, three $XXX million-plus

to medium we're really they segments and XXXX. growth the good start off execute to So focus and continue pipeline to in a higher on

Joe Wolk

the gives I when using would itself add creation. the as value to presents opportunity go well fit of the is that inorganic strategic underscore in confidence too opportunities and criteria financial us maybe out as

a the markets. So internal hopefully in pipeline that stronger acquisition gets success out

Jennifer Taubert

XX-K, by our the Just of R&D to an we do breakout reference. provide reference segment for basis on annual

Operator

Thank you.

is Our Stanley. Terence today Flynn coming from from question next Morgan

live. now is Your line

Terence Flynn

Great. much so just could staffing Thanks for the the taking you Jennifer, little on questions. COVID wondering touched I Gap]? [Audio I segment. elaborate bit know a trip recovery on on was more you the in if gas issues the Pharma

Jennifer Taubert

Yeah.

Terry's really US understand I comment COVID. we're was So around terms the of and what in seeing

entered into the January as got Omicron before, see in did business. we really impact variant People did we the so exited February, we really, saw really this go able work. what into year, frame the many time So staffing people weren't to because year already see we US mentioned there shortages and last December sick. and And as

of in higher terms and are What delayed seeing intensive towards we the And so in patient we're April, in some the is a early – seeing there. and new of slowdown resource settings visits in now we end looking markets, March of recovery did see more we're starts. nice

US look year and more beginning to the end does at hopefully specific of to this this and so the of the the just to really, And really than was any something of be it other year, markets. last

Joe Wolk

segment maybe XXXX the was tumultuous But Obviously, are impacting. Thibaut, what of start XXXX. Jennifer. is this on insight, in consumer say, year? the it early more how COVID and and you much give I'd too, some seeing to Thanks.

Thibaut Mongon

the continue differentiated the life consumers. impact has And category. Look, our clearly, impact an of the we COVID to see on that of -- impact by

digital evolves situation specifically We space now consumer What are I would that shifted has very digital China COVID really at and to say the to see looking behavior right solutions. there. how

e-commerce in more it of continued And so our of we business. see growth representing and and the more -- channel, our

channels a provident to to to how need something makes around what all that, that's us Having So evolves on showing continue monitor the in situation that more we well world. multiple resilient is said count is ability is the environment.

Operator

you. Thank

question today from coming is Credit next Suisse. Miksic from Matt Our

line Your is now live.

Matt Miksic

Thanks. Thank for much so the question. taking

hoping trajectory on in med a provide maybe bit I devices the and for So QX was could March. you Ashley. exiting color more little

impressive you the like cardio markets are advanced say, be seen the the with the so on there? in You you Japan orthopedics or out board, potentially As surgery those recovering overseas on the segments might color to often are seeing inpatient difference and between any investors just trying different recovery well what Europe could provide Thanks. as growth at to and had congrats developed compared how trends US? or think pretty rates across in US? figure that. And we've But how,

Ashley McEvoy

battling to we hitting procedures was looking exited about performing. Encouragingly, double bounced in the Matt to But And I talking question. Omicron of April acknowledgment momentum. Asia at procedures our the And the XXXX, back go for exception surgical we It care how in procedures. China health really we're two within look April I up as tick to still were north March, was when still would for US EMEA just huge digit diagnostic US single I the at nicely and bariatrics surgical see high by workers surgery. of performing in procedures to data are of tell down had near month see Thanks, through about digit, this, it's procedures trough in cardiac diagnostic flattening as quarter back, flat ablation, cardio down surgical the in and our a and one. so started this. I pretty who at of would at were the also we procedures, US see in example. you, really with are really January, we XX%. probably US colorectal recently driven then it broad-based levels, EMEA. gained I diagnostic points say, start then the in like, XXXX US how and always an expect bounced look and

Operator

you. Thank

coming of Bank is America. from today Meacham question Geoff next Our from

Your now line is live.

Geoff Meacham

quick disruption the share separation, forward, impact flow When morning. Jennifer, plans are of perspective? Good for the just see larger DARZALEX for I had in the so market M&A degree but And expectations you from REVLIMID broader or going standard M&A this BD with Joe. generic follow-up soon. a then P&L market, myeloma impact pricing what does question. And on about scale Thanks inform care, a the or either combinations cash the to a realize for a from either guys. couple. your what we'll Hey, or consumer Thank Pharma? I are a much that you. or think or front for MedTech for

Jennifer Taubert

thanks portfolio to question. for about our So your response to opportunity myeloma multiple the in talk

so heterogeneity So date as the unmet take market we advances still despite there, underlying therapies, the of to the myeloma there a much the need look is in given disease. at

-- of portfolio a treatment effected that actually there to And strong we're shoot choices. so really have highly effective it's treatments trying what is really important do for And are a highly ultimately cure. to and

with take we're And so this a in as as market right myeloma. -- a DARZALEX now, foundational the at seeing look we DARZALEX multiple FASPRO therapy really

that. of add really of become things multiple What a relapsed/refractory with lot ultimately will for change and noted, others irrespective it's DARZALEX FASPRO. and things, you you myeloma. patients for so this of CARVYKTI approved, was as think then those therapy not myeloma. the treatment recently a we opportunity excited mentioned, preferred LOE And is does and And combination also types that really I'm like in triple about and that fundamentally for refractory multiple we That

option we're of mentioned outcomes. is stopping in CDX we or for patients Talquetamab, don't be potentially first filing first-ever bispecific not great this teclistamab help eligible this be be really and in potentially a combined on that and also this are transform would We for triple-class there. we the then And have and could GPRCXD working And sequenced CARVYKTI really and going And think access. to think really to are BCMA also specific. the future, not We're who the the best-in-class is that exposed teclistamab. off-the-shelf who

we myeloma future transform additive older think assets are as our versus and any going at we so that really are each multiple versus important are that to really going And that portfolio, where a the forward they the these other. and really think therapies. of take advances cannibalizing And something the complementary in we be help would these look

Joe Wolk

cash I think parts. that with Geoff, And to answer I'll in respect flow and two M&A,

need short rating firepower think have it. the we more I term, credit warrant certainly to we should

north couple As of maybe you have generation has to or ticked flow just years last over levels, $XX of cash from observed, our billion billion a the around when ago. we $XX few up $XX years were billion new

with consumer As cash segment, company flow be both receivables. managing the liberating able sales the P&L cash think I be flow growth, as higher think We improve level growth management we'll our similar move to going But have for a operates, sides. we generate still to opportunities and inventory to with a that's we actually to higher appropriately. of

able right Consumer large for to Thibaut the opportunities to. be got segment to we'll being through acquisitions their spoke small, to fit a lens digitized do confidence generation focus cash particular itself. they'll liberating their that also because be able flow it's medium every I that and for Health should So think in purpose opportunity environment the I've scale present value-creating

position got for we cash utilize that very question? which one to So think a whether I good today's or maybe it's we're tomorrow. generate should time long-term, and more we've hopefully near-term in Kevin,

Operator

Certainly.

is from from question Leerink. Danielle final coming Antalffy today Our SVB

line live. now Your is

Danielle Antalffy

grow you growth And the just so where from perspective? of increasingly over is in where a question your can the Ashley, penetration. driver Hi. becomes care in. much. ASC And guys you so think around for as you for you commentary curious, years? next the me important, are the This that few I'm is Ashley. meaningful much ASC squeezing Good morning, everyone. Thanks market a recent Thanks site to think the be will penetration And success relative

Ashley McEvoy

still capital-efficient using setting. work of less to if se, of make is a digital per in in spine a it happening care assets personalization ASCs, model patient case we've management, will, Obviously, than later. sentiment into We've modify patient-friendly the on our flow, In of experience seen complicated. less you hospital done trauma to a a recently procedures model early Tier a XX%, say inventory a your in US, to you, ASCs but of the kind the lot And the Well, think X fastest more I hospital in We of are experience or and US what post-op I relatively COVID have know. you I US, in lot the tell, well friction. question the cities I'd penetration, wanting gone thank as macro are think, care. growing Tier of to we're to go the really hope to as experience Danielle. the than evolve environment, doing there it's addresses a would safe, we X and less setting. Appreciate low not still your business well. -- in less it's as migraine hips we're Certain we a and taking sooner -- and deliver the full pre-op from that China knees, create

So think really channel we this I think start a evolve. model sustainable we're competitiveness we forward. have making and continue that optimistic you. we that I'm sure that there, Thank do will going to business

Jessica Moore

don't Thank Relations to to will hesitate continued our the team you, your couldn't turn in and everyone your for I Danielle, We back to to remarks. of brief some Investor Joe interest time, out to the reach thanks needed. closing as but those call who and to for we get because now company. questions apologize

Joe Wolk

for we appreciate meeting Health you week's have to an everybody an Jess we engage which our goals. update I'd on Thank On for in a Great. opportunity to, great XXXX like remind the our you. is certainly ESG. Humanity lookout issuing we time Johnson. Johnson interact April on Thanks, day. June in-depth Have on close our be with & do for we we as next commitments to questions your Also the and to will making the be interest chance that review on your as XX. to annual Jess. at are your the alluded progress shareholders do X, with And Report, and on

Operator

Thank you. Johnson's call. XXXX conference first quarter This concludes today's Johnson & earnings

disconnect. may You now

Johnson & Johnson (JNJ) 19 Apr 222022 Q1 Earnings call transcript