Q3 2025 Johnson & Johnson Earnings Call

Operator: Good morning and welcome to Johnson & Johnson's third quarter 2025 earnings conference call. All participants will be in a 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. If you experience technical difficulties during the conference, you may press star zero to reach the operator. I will now turn the conference call over to Johnson & Johnson. You may begin.

Good morning and welcome to Johnson & Johnson's third quarter 2025 earnings conference call.

Participants will be listed 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.

If you are experiencing technical difficulties during the conference, you may press star zero to reach the operator.

I will now turn the conference call over to Johnson & Johnson. You may begin.

Darren Snellgrove: Hello, everyone. This is Darren Snellgrove, Vice President of Investor Relations for Johnson & Johnson. Welcome to our 2025 third quarter review of business results and updated financial outlook. First, a few logistics. As a reminder, today's presentation and associated schedules are available on the Investor Relations section of the Johnson & Johnson website at investor.jnj.com. Please note that this presentation contains forward-looking statements regarding, among other things, the company's future operating and financial performance, market position, and business strategy. You are cautioned not to rely on these forward-looking statements, which are based on the current expectations of future events using the information available as of the date of this recording and are subject to certain risks and uncertainties that may cause the company's actual results to differ materially from those projected.

Hello, everyone. This is Darren Snow, Group Vice President of Investor Relations for Johnson & Johnson. Welcome to the Q3 2025 review of business results and updated financial outlook.

First, a few logistics. As a reminder, today's presentation and associated schedules are available on the investor relations section of the Johnson & Johnson website at investor.jnj.com.

Darren Snellgrove: A description of these risks, uncertainties, and other factors can be found in our SEC filings, including our 2024 Form 10-K, which is available at investor.jnj.com and on the SEC's website. Additionally, several of the products and compounds discussed today are being developed in collaboration with strategic partners or licensed from other companies. This slide acknowledges those relationships. Moving to today's agenda, Joaquin Duato, our Chairman and CEO, will discuss our business performance and growth drivers. I will then review the third quarter sales and P&L results. Joseph J. Wolk, our CFO, will then close by sharing an overview of our cash position and capital allocation priorities, followed by additional details on our intended separation of the orthopedics business. He will also provide an update on 2025 guidance, key milestones, and qualitative considerations for 2026.

Please note that this presentation contains forward-looking statements regarding, among other things, the company's future operating and financial performance, market position, and business strategy. You are cautioned not to rely on these forward-looking statements, which are based on the current expectations of future events using the information available as of the date of this recording, and are subject to certain risks and uncertainties that may cause the company's actual results to differ materially from those projected. A description of these risks, uncertainties, and other factors can be found in our SEC filings, including our 2024 Form 10-K, which is available at investor.gamestop.com.

Additionally, several of the products and compounds discussed today are being developed in collaboration with strategic partners or licensed from other companies. This slide acknowledges those relationships.

Moving to today's agenda, we're keen to discuss. Our Chairman and CEO will discuss our business performance and growth drivers.

I will then review the third quarter sales and P&L results. Don't walk. Our CFO will then close by sharing an overview of our cash position and capital allocation priorities, followed by additional details on our intended separation of the Orthopedics business.

Darren Snellgrove: Jennifer Taubert, Executive Vice President, Worldwide Chairman, Innovative Medicine; John Reed, Executive Vice President, Innovative Medicine Research and Development; and Tim Schmid, Executive Vice President, Worldwide Chairman, MedTech, will be joining us for Q&A. To ensure we provide enough time to address your questions, we anticipate the webcast will last approximately 60 minutes. With that, I will now turn the call over to Joaquin.

He will also provide an update on 2025 guidance, key milestones, and qualitative considerations for 2026.

Jennifer Talbott, Executive Vice President Worldwide, Chairman Innovative Medicine; John Reed, Executive Vice President, Innovative Medicine, Research and Development; and Tim Schmidt, Executive Vice President Worldwide, Chairman Medtech will be joining us for Q&A.

To ensure we provide enough time to address your questions, we anticipate the webcast will last approximately 60 minutes.

Joaquin Duato: Thank you, Darren, and hello, everyone. We are looking forward to sharing our very strong third quarter results with you. They are a clear sign Johnson & Johnson is in a powerful new era of growth. The success of our portfolio and pipeline is proof that our relentless focus on innovation is doing more than fueling progress; it is accelerating it. In the third quarter, we delivered operational sales growth of 5.4% across our business. In innovative medicine, we reported 5.3% operational sales growth and a second consecutive quarter of sales of more than $15 billion. Some were not convinced we could grow through the loss of exclusivity of Stelara, but we were confident, and we have now unequivocally answered that question. How did we accomplish that when other companies have failed?

With that, I will now turn the call over to Wain.

Thank you, Darren, and hello, everyone.

We are looking forward to sharing our very strong third-quarter results with you.

They are a clear sign that Johnson & Johnson is in a powerful new era of growth.

The success of our portfolio and pipeline is proof of our relentless focus.

On innovation, it is doing more than fueling progress; it is accelerating it.

In the third quarter, we delivered operational sales growth of 5.4% across our business.

In Innovative Medicine, we reported 5.3% operational sales growth and a second consecutive quarter of sales of more than $15 billion.

Joaquin Duato: In Q3, we did it by delivering double-digit growth across 11 brands, including Darzalex, Carvykti, Talvey, Tecvayli, Erleada, Rybrevant, Caplyta, Spravato, Remicade, and remarkable growth of 40% in Tremfya. In MedTech, operational sales growth was even stronger, accelerating to 5.6% with improvements across all businesses. As you have seen from this morning's news, we have announced the planned separation of our orthopedics business. This decision further sharpens our focus as a healthcare innovation leader and accelerates the shift of our MedTech portfolio to areas of greatest unmet need and higher growth, which includes cardiovascular and robotic surgery. I will touch more on this later, but one thing is clear: Johnson & Johnson's momentum is strong and our achievements are multiplying. I will now focus on the progress we are making across our six priority areas: oncology, immunology, neuroscience, cardiovascular, surgery, and vision.

Some were not convinced we could grow through the loss of exclusivity of Stelara, but we were confident, and we have now unequivocally answered that question. How did we accomplish that when other companies have failed?

In Q3, we achieved double-digit growth across 11 brands, including Darzalex, Carvykti, Talvey, Era, Drive, Revan, plus Last Clues, Capita, and a remarkable growth of 40% in 105.

Operational sales growth was even stronger, accelerating to 5.6% with improvements across all businesses. And, as you have seen from this morning's news, we have announced the planned separation of our Orthopaedic business.

This decision further sharpens our focus as a healthcare innovation leader and accelerates the shift of our Mietek portfolio to areas of greatest unmet need and higher growth, which includes cardiovascular and robotic surgery.

I will touch more on this later, but one thing is clear: Johnson & Johnson's momentum is strong, and our achievements are multiplying.

Joaquin Duato: These are areas where we have deep expertise and clear leadership positions. First, oncology, where Q3 operational sales grew nearly 20%. You have heard me say before that we are much more than a one-shot company, and our expertise in blood cancers and solid tumors in our oncology portfolio is a great example. Take multiple myeloma, where our competitiveness is unrivaled. No other company has the expertise or success in multiple myeloma that we do. We have treatments in every line of therapy, and Darzalex is the gold standard with more than 50% market share across all lines of therapy. Q3, operational sales of Darzalex grew by 20%, and its potential continues to build with the approval this quarter in Europe as a treatment for high-risk smoldering multiple myeloma, as well as promising new studies of Darzalex Faspro in combination with Tecvayli.

I will not focus on the progress we are making across our six priority areas: oncology, immunology, neuroscience, cardiovascular, surgery, and vision.

These are areas where we have deep expertise and clear leadership positions.

First oncology, where Q3 operational. Sales grew nearly 20%.

You have heard me say before that we are much more than a 1-shot company, and our expertise in blood cancers and solid tumors in our oncology portfolio is a great example.

Take Multiple Myoma. Where our competitiveness is unrivaled. No other company has the expertise or success in Multiple Myoma that we do. We have treatments in every line of therapy and...

Alex is the gold standard, with more than 50% market share across all lines of therapy.

Joaquin Duato: I also want to say a word about Carvykti, our CAR-T treatment for multiple myeloma. We have now treated more than 8,500 patients globally, making Carvykti the most successful CAR-T launch ever. With operational sales growing by more than 80% this quarter, we are increasingly confident in Carvykti's $5 billion peak year sales potential. Turning to solid tumors, we were thrilled to receive FDA approval for our bladder cancer treatment TAR-200 last month. TAR-200 highlights what is unique about Johnson & Johnson. Building on our unmatched capabilities in both innovative medicine and MedTech, it is the first and only drug-releasing system to provide sustained local delivery of a cancer treatment directly into the bladder. It is transformative for patients, and it is transformative for doctors.

Q3 operational sales of DX grew by 20%, and its potential continues to build with the approval this quarter in Europe as a treatment for high-risk smoldering multiple myeloma, as well as promising new studies of dark Alex FastPro in combination with Techvayli.

I also want to say a word about Carvykti, our CAR-T treatment for multiple myeloma. We have now treated more than 8,500 patients globally, making Carvykti the most successful CAR-T launch ever.

With operational sales growing by more than 80% this quarter, we are increasingly confident in Carvykti's $5 billion peak sales potential.

Turning into solid tumors, we were thrilled to receive FD approval for our bladder cancer treatment in Levo. Last month in Levo highlights, what is unique about Johnson & Johnson is building on our unmatched capabilities in both innovative medicine and medic. It is the first and only drug-releasing system.

Joaquin Duato: It will also contribute significantly to future growth with a targeted release platform projected to be another blockbuster treatment with at least $5 billion in annual peak year sales. Sourced through an early-stage deal, TAR-200 is also an example of our outstanding business development model. In fact, in the last 18 months alone, we have completed more than 60 deals of this kind. In lung cancer, we recently published results in the New England Journal of Medicine for Rybrevant plus chemotherapy, showing a statistically significant reduction in the risk of death compared to osimertinib. We are now seeing the potential for patients to live significantly longer than anyone thought possible. The combination of Rybrevant plus chemotherapy is another of our $5 billion peak year sales assets. Next, I want to talk about immunology, where we have been leaders for 25 years.

To provide sustained, local delivery of a cancer treatment directly into the bladder. It is transformative for patients, and it is transformative for doctors.

It will also contribute significantly to future growth with the targeted release platform. Projected to be another blockbuster treatment with at least $5 billion in annual peak gear sales.

Sourced through an early-stage deal, Anexo is also an example of our outstanding business development model. In fact, in the last 18 months alone, we have completed more than 60 deals of this kind.

And in lung cancer, we recently published results in the New England Journal of Medicine for Rymat. Plus, last clues showing a statistically significant reduction in the risk of death compared to oc merini. We are now seeing the potential for patients to live significantly longer than anyone thought possible.

The combination of private brand plus last clues is another of our 5 billion Peak Gear sales assets.

Joaquin Duato: From Remicade to Simponi and Stelara to Tremfya, some of our biggest blockbusters have come from our immunology portfolio. We have long talked about Tremfya as the next big innovation to follow the success of Stelara. Based on this quarter's performance, it looks like it could be both bigger and better, having delivered operational sales growth of 40%, driven by new indications in inflammatory bowel disease. Tremfya is the only IL-23 inhibitor to offer a fully subcutaneous regimen across ulcerative colitis and Crohn's disease. Even prior to the launch of our subcutaneous formulation, Tremfya was capturing approximately half of all new patients' starts for IL-23 ulcerative colitis treatments in the U.S., which we achieved within one year from launch.

Next, I want to talk about Immunology, where we have been leaders for 25 years, from Reik to Symphony and Stellar, to some of our biggest blockbusters that have come from our Immunology portfolio.

We have long talked about Raniyah as the next big innovation to follow the success of Stelara.

based on these quarters performance.

It looks like it could be both bigger and better, having delivered operational sales growth of 40%, driven by new indications.

Is the only IL-23 inhibitor to offer a fully subcutaneous regimen across disease.

Joaquin Duato: We are confident Tremfya will become a more than $10 billion asset. In typical Johnson & Johnson fashion, we are deep in development of our next immunology innovation, icosequimab, initially for moderate to severe plaque psoriasis. Historically, the most effective immunology treatments have been injectables. As the first oral peptide to selectively block the IL-23 receptor, icosequimab has the potential to revolutionize the treatment of plaque psoriasis with a once-a-day pill. We submitted icosequimab for plaque psoriasis to the FDA in July. This is just the beginning, as we have already presented data from our phase two trials in ulcerative colitis. Let's now turn to neuroscience, with Spravato operational sales growing an impressive 61% in Q3. Spravato remains the only approved standalone therapy for treatment of depression, a major depressive disorder with suicidal ideation.

We were capturing approximately half of all new patient starts for IS-23, alternative colitis treatments in the U.S., which we achieved within one year from launch.

We are confident in FAA; it will become a more than $10 billion asset.

And in typical G&G fashion, we are deep in development of our next immunology innovation, initially for moderate to severe plaque psoriasis.

Historically, the most effective immunology treatments have been injectables. As the first oral peptide to selectively block the IL-23 receptor, it has the potential to revolutionize the treatment of plaque psoriasis with a once-a-day pill.

We submitted, I got to Kindra for Plexes to the FDA in July.

And, you know, this is just the beginning, as we have already presented data from our Phase 2 trials in ulcerative colitis.

Joaquin Duato: Through Q3, we have now treated more than 180,000 patients, and I could not be prouder of the impact this team is having. Our leadership in neuropsychiatry was also strengthened by this year's acquisition of Intracellular Therapies with FDA approval for Caplyta in major depressive disorder, anticipated soon. Caplyta is already FDA approved for the treatment of schizophrenia, as well as depressive episodes associated with bipolar disorder one and two. We project Caplyta to reach $5 billion annually. Now, let's turn to MedTech, starting with our cardiovascular portfolio. In Q3, cardiovascular operational sales increased by approximately 12% as we fortify our leadership in the fastest growing cardiovascular intervention segments. With operational sales growth of over 20%, Shockwave's unique intravascular lithotripsy technology is helping treat more atherosclerotic cardiovascular patients than ever before. In fact, in the last quarter, Shockwave supported their one millionth patient.

Let's now turn to Neuroscience with the spread operational sales growing and impressive 61% in Q3 spread Remains the only approved Standalone therapy for 3 minutes and depression and major depressive disorder with suicidal. Ideation through Q3 we have now treated more than 180,000 patients and I could

Could not be prouder of the impact this team is having.

Our leadership in neuropsychiatry was also strengthened by this year's acquisition of Intracellular Therapies, with FDA approval for Caplyta in major depressive disorder anticipated soon.

Capita is already FDA-approved for the treatment of schizophrenia, as well as depressive episodes associated with bipolar disorder types 1 and 2. We project Capita to reach $5 billion annually.

Joaquin Duato: With the recent European approval of the Javelin peripheral intravascular lithotripsy catheter, we expect strong momentum moving forward. We anticipate Shockwave becoming our $13 billion MedTech platform by year end. In electrophysiology, we are industry leaders, and with the strength of our MAPI technology, that continues. In Q3, we again delivered close to 10% operational sales growth, and our position was further strengthened with real-world data showing variables achieved 99.7% acute effectiveness in nearly 800 patients with strong safety and no incidents of stroke. Our Abiomed business also continues to perform strongly, with more than 15% operational sales growth in the quarter. Our success reflects the impact that our Impella CP heart pump is having on the lives of patients, which you could see in the long-term survival data that was published in the New England Journal of Medicine this quarter.

Now, let's turn to metric starting with our cardiovascular portfolio in Q3 cardiovascular operational sales increased by approximately 12%. As we fortify our leadership in the fastest growing cardiovascular intervention segment with operational sales growth of over 20% shock waves unique. Intravascular lithotripsy technology is helping treat more atherosclerosis than ever. Before, in fact, in the last quarter show, web supported their 1 million patient. And with the recent European approval of the javelin peripheral, intravascular lithotripsy catheter. We expect a strong moment to move forward. We anticipate Shockwave becoming our 13th billion dollar metric platform by year end.

In electrophysiology, we are industry leaders. With the strength of our Mappy technology that continues in Q3, we again deliver close to 10% operational sales growth. Our position was further strengthened, with real-world data showing variables achieved 99.7% acute effectiveness in nearly 800 patients, with strong safety and no incidence of stroke.

Our ability business also continues to perform strongly, with more than 15% operational sales growth in the quarter.

Joaquin Duato: In the 10-year Danger Shock Study, routine use of Impella CP in patients who have had a heart attack with cardiogenic shock reduced mortality by 16.3% compared to the standard of care, with patients gaining an average of 600 additional days alive. It is a perfect example of what we mean when we say Johnson & Johnson is delivering groundbreaking innovation. In surgery, we are making progress on multiple fronts. Our surgical technologies are used in most operating rooms globally. In Q3, we delivered more than 9% growth in biosurgery and almost 7% in wound closure, driven by accelerating adoption of our latest innovations. We also continue to make positive progress with Ottava, as we anticipate FDA de novo submission in early 2026. Now to vision, where we grew more than 6% last quarter.

Our success reflects the impact that our Impella CP heart pump is having on the lives of patients, which you could see in the long-term survival data that was published in the New England Journal of Medicine this quarter in the 10-year dangerous study. Routine use of Impella CP in patients who have had a heart attack with cardiogenic shock reduced mortality by 16.3% compared to the standard of care, with patients gaining an average of 600 additional days alive.

It is a perfect example of what we mean when we say Johnson & Johnson is delivering groundbreaking innovation.

In surgery, we are making progress on multiple fronts. Our surgical technologies are used in most operating rooms globally, and in Q3 we delivered more than 9% growth in bio surgery and almost 7% in wound closure, driven by accelerating adoption of our latest innovations. We also continue to make positive progress with Ottava, as we anticipate FDA submission in early 2026.

Joaquin Duato: Our Tecnis intraocular lenses are the fastest growing in the markets where we have launched, fueling our 13.8% operational sales growth in surgical vision. After launching the world's first multifocal contact lens for people with astigmatism in the U.S. last quarter, we brought this latest member of the Acuvue Oasys Max One Day family to Europe and Korea in Q3, further strengthening our momentum. Finally, to this morning's orthopedics news. As you know, the healthcare industry continues to evolve rapidly, and we are constantly evaluating our overall business and portfolio to ensure Johnson & Johnson remains best positioned to truly lead where healthcare is going. We continue to invest at industry-leading levels in our pipeline and portfolio while making disciplined decisions to exit businesses that we believe will be better able to thrive outside of Johnson & Johnson. For our orthopedics business, the planned separation creates new opportunities.

Our techniques introduce lenses are the fastest growing in the markets. What we have launched is fueling our 13.8% operational sales growth in surgical vision, after launching the world's first multifocal contact lens for people with astigmatism in the U.S. Last quarter, we brought this latest member of the Acuvue Oasys Max 1-Day family to Europe and Korea in Q3, further strengthening our momentum.

Joaquin Duato: Operating as DePuy Synthes and led by Namal Nawana, it will be the largest, most comprehensive orthopedics company with leading market share positions across major categories and addressing a more than $50 billion and growing market opportunity. We expect DePuy Synthes to benefit from a more focused business model with greater flexibility to extend its market leadership, invest in its commercial capabilities, and capitalize on profitable growth opportunities. Following the completion of the planned separation, Johnson & Johnson will retain a leadership position in our six core growth areas across innovative medicine and MedTech: oncology, immunology, neuroscience, cardiovascular, surgery, and vision, and be able to place even greater focus in our investment towards higher growth areas where we can meaningfully extend and improve lives. We are positioning each business to win and deliver for our stakeholders.

And finally, to this morning's Orthopedics news. As you know, the healthcare industry continues to evolve rapidly, and we are constantly evaluating our overall business and portfolio to ensure Johnson & Johnson remains best positioned to truly lead. Our healthcare is growing. We continue to invest at industry-leading levels in our pipeline and portfolio while making disciplined decisions to exit businesses that we believe will be better able to thrive outside of Johnson & Johnson. For our Orthopedic business, the plan separation creates new opportunities, operating as the PUS Synthesis and led by Namal Nawana. It would be the largest, most comprehensive Orthopedics company with 3D market share positions across major categories, addressing a more than $50 billion and growing market opportunity. We expect the PUS Synthesis to benefit from a more focused business model with greater flexibility.

82, extend its market leadership, invest in its commercial capabilities, and capitalize.

Johnson & Johnson will retain a leadership position in our six core growth areas across innovative medicine and metric oncology in monology, neuroscience, cardiovascular, surgery, ambition, and be able to place even greater focus on our investment towards higher growth areas where we can meaningfully extend and improve lives.

Joaquin Duato: As we move forward in the separation process, we will provide additional information as appropriate, and Joe will share more details shortly. As I said at the start of the call, we are in a new era of accelerated growth at Johnson & Johnson. This is more than just another strong quarter. It is proof that our momentum is building and that our impact is accelerating. Thank you very much, and I will now turn the call back over to Darren.

We are positioning each business to win and deliver for our stakeholders.

As we move forward in the separation process, we will provide additional information as appropriate, and Joe will share more details shortly.

As I said at the start of the call, we are in a new era of accelerated growth at Johnson & Johnson. This is more than just another strong quarter; it is proof that our momentum is building and that our impact is accelerating.

Darren Snellgrove: Thank you, Joaquin. Moving to our financial results. Unless otherwise stated, the % quoted represent operational results and therefore exclude the impact of currency translation. Starting with Q3 2025 sales results. Worldwide sales were $24 billion for the quarter. Sales increased 5.4% despite an approximate 640 basis point headwind from Stelara. Growth in the U.S. was 6.2% and 4.4% outside of the U.S. Acquisitions and divestitures had a net positive impact on worldwide growth of 100 basis points, primarily driven by the Intracellular Therapies acquisition. Turning now to earnings. For the quarter, net earnings were $5.2 billion, with diluted earnings per share of $2.12 versus diluted earnings per share of $1.11 a year ago. Adjusted net earnings for the quarter were $6.8 billion, with adjusted diluted earnings per share of $2.80, both representing an increase of 15.7% compared to the third quarter of 2024.

Thank you very much. And I will now turn the call back over to Darin.

Thank you. I am moving to our financial results. Unless otherwise stated, the percentages quoted represent operational results and therefore exclude the impact of currency translation.

Starting with Q3 2025 sales results.

Worldwide sales were $24 billion for the quarter.

Sales increased 5.4%, despite an approximate 640 basis point headwind from Stelara.

Growth in the U.S. was 6.2% and 4.4% outside of the U.S.

Acquisitions and devices had a net positive impact on worldwide growth of 100 basis points, primarily driven by the Intracellular acquisition.

Turning now to earnings for the quarter, net earnings were $5.2 billion, with diluted earnings per share of $2.12 versus diluted earnings per share of $1.11 a year ago.

Darren Snellgrove: As a reminder, results in the third quarter of 2024 were impacted by the acquired IPR&D expense of $1.25 billion associated with the NM26 bispecific antibody. I will now comment on business sales performance in the quarter, focusing on the six key areas where meaningful innovation is driving our performance and fueling long-term growth. Beginning with Innovative Medicine, where our results demonstrate the depth of our expertise across oncology, immunology, and neuroscience. Worldwide sales of $15.6 billion increased 5.3% despite an approximate 1,070 basis point headwind from Stelara, illustrating the continued strength of our key brands and new launches. Growth in the U.S. was 6% and 4.3% outside of the U.S. Acquisitions and divestitures had a net positive impact of 160 basis points on worldwide growth due to the Intracellular Therapies acquisition.

Adjusted net earnings for the quarter were $6.8 billion, with adjusted diluted earnings per share of $2.80, both representing an increase of 15.7% compared to the third quarter of 2024.

As a reminder, results in the third quarter of 2024 were impacted by the acquired IP R&D expense of $1.25 billion associated with the NM 26 by specific antibody.

I will now comment on business sales performance in the quarter, focusing on the six keys where meaningful innovation is driving our performance and fueling long-term growth, beginning with innovative medicine. Our results demonstrate the depth of our expertise across oncology, immunology, and neuroscience.

Worldwide sales are $15.6 billion, increased 5.3%, despite an approximate 1,070 basis point headwind from Stelara.

Illustrating the continued strength of our key brands and new launches.

Darren Snellgrove: In oncology, starting with multiple myeloma, Darzalex growth was 19.9%, primarily driven by continued strong share gains of approximately 5.7 points across all lines of therapy, with nearly 9 points in the frontline setting as well as market growth. Carvykti achieved sales of $524 million, with growth of 81.4% driven by share gains and site expansion. This reflects continued strong sequential growth of 18.5% as our expansion outside the U.S. progresses. Tecvayli and Talvey growth was 29.9% and 59.1% respectively, bolstered by continued expansion into the community setting. In prostate cancer, Erleada delivered strong growth of 15.3% due to market growth and continued share gains, partially offset by the impact of Part D redesign. In lung cancer, Rybrevant plus Lasklus delivered sales of $198 million and growth over 100%, driven by continued strong launch uptake. We continue to see share gains in both first and second lines of therapy.

Had a net positive impact of 160 basis points on worldwide growth due to the intracellular acquisition.

In oncology, starting with multiple myeloma, Dazzle growth was 19.9%, primarily driven by continued strong share gains of approximately 5.7 points across all lines of therapy, with nearly 9 points in the Frontline setting, as well as market growth.

Carvykti achieved sales of $50,024 million.

With growth of 81.4% driven by share gains and site expansion, this reflects continued strong, sequential growth of 18.5% as our expansion outside the U.S. progresses.

Tech Val and Tal growth were 29.9% and 59.1%, respectively, bolstered by continued expansion into the community setting.

In prostate cancer, a leader delivered strong growth of 15.3% due to market growth and continued share gains, partially offset by the impact of Part D redesign.

Darren Snellgrove: Within immunology, Tremfya delivered very strong growth of 40.1%. We continue to see share gains across all indications, with particularly robust momentum from our IBD launch. Stelara declined by 42%, driven by the impact of biosimilar competition and Part D redesign, which is in line with our expectations. In neuroscience, Spravato grew an impressive 60.8%, driven by continued strong demand from physicians and patients. Caplyta, which was acquired in Q2 as part of the Intracellular Therapies acquisition, delivered sales of $240 million and reflects healthy sequential growth of 13.4%. Now moving to MedTech. Worldwide sales of $8.4 billion increased 5.6%, with growth of 6.6% in the U.S. and 4.5% outside the U.S., driven by strong performance in our three focus areas: cardiovascular, surgery, and vision. Acquisitions and divestitures had a net negative impact of 10 basis points on worldwide growth.

In lung cancer, Rybrevant plus Las Clues delivered sales of $198 million and growth of over 100%, driven by continued strong launch uptake. We continue to see share gains in both first and second lines of therapy.

Within immunology, Tren fire delivered very strong growth of 40.1%. We continue to see share gains across all indications, with particularly robust momentum from our IBD launch.

Stellar declined by 42%, driven by the impact of biosimilars, competition, and Part D redesign, which is in line with our expectations.

In neuroscience, spread through an impressive 60.8%, driven by continued strong demand from physicians and patients.

Later, which was acquired in Q2 as part of the intracellular acquisition, delivered sales of $240 million and reflects healthy sequential growth of 13.4%.

Now, moving to Medtech.

Worldwide sales of $8.4 billion increased 5.6%, with growth of 6.6% in the U.S. and 4.5% outside the U.S., driven by strong performance in our three focus areas: cardiovascular, surgery, and vision.

Darren Snellgrove: In cardiovascular, electrophysiology delivered growth of 9.7% versus prior year, driven by procedure growth, commercial execution, Varipulse and other new products, and strength in competitive mapping. Abiomed delivered growth of 15.6%, with continued strong adoption of Impella technology, and Shockwave increased 20.9%, driven by double-digit growth globally in both coronary and peripheral. Surgery grew 3.3% despite divestitures negatively impacting results by approximately 50 basis points. Performance was primarily driven by technology penetration in wound closure, the strength of the portfolio, and commercial execution in biosurgery, as well as a one-time reserve adjustment in the quarter. Growth was partially offset by competitive pressures in energy and the negative impact of China VPP across the portfolio. In vision, contact lenses and other products grew 3.5%, driven by market growth, strong performance in the Acuvue Oasys One Day family of contact lenses.

Acquisitions and devices had a net negative impact of 10 basis points on worldwide growth.

In cardiovascular electrophysiology, we delivered growth of 9.7% versus the prior year, driven by procedure growth, commercial execution, Vapors and other new products, and strength in competitive mapping.

Abiomed delivered growth of 15.6% with continued strong adoption of impella, technology and Shockwave increase 20.9%. Driven by double-digit growth globally in both coronary and peripheral

Surgery grew 3.3%, despite the vestiges negatively impacting results by approximately 50 basis points. Performance was primarily driven by technology penetration in wound closure, the strength of the portfolio and commercial execution in BIO Surgery, as well as a one-time reserve adjustment in the quarter.

Growth was partially offset by competitive pressures in energy and the negative impact of China, VPP across the portfolio.

Darren Snellgrove: This includes the recent launches of Oasys Max One Day multifocal for astigmatism and Max One Day for astigmatism, as well as continued strategic price actions. Surgical Vision had another strong quarter with growth of 13.8%, driven by new product innovations such as Tecnis PureC, Odyssey, and iDesign, robust demand, and strong commercial execution. These results further solidify our leadership positions in Vision. As Joaquin noted, we have today announced our intent to separate the orthopedics business. Orthopedics growth this quarter is gaining momentum and increased to 2.4%. Importantly, hips and knees returned to growth this quarter, delivering 5.1% and 5.6% growth, respectively. Now turning to our consolidated statement of earnings for the third quarter of 2025. I'd like to highlight a few noteworthy items that have changed compared to the same quarter a year ago.

In Vision, contact lenses and other products grew 3.5%, driven by market growth and strong performance in the Acuvue Oasys 1-day family of contact lenses. This includes the recent launches of Oasys Max 1-day multifocal for astigmatism and Max 1-day for astigmatism, as well as continued strategic price actions.

Surgical Vision had another strong quarter with growth of 13.8%, driven by new product innovations such as Technus, Puree, Odyssey, and IH, robust demand, and strong commercial execution.

These results further solidify our leadership position in vision.

As we've keenly noted, we have today announced our intent to separate the orthopedic business.

Orthopedic growth this quarter is gaining momentum and increased to 2.4%.

Importantly, hips and knees are returning to growth. This quarter, we are delivering 5.1% and 5.6% growth, respectively.

Now, turning to our consolidated statement of earnings for the third quarter of 2025.

Darren Snellgrove: Cost of products sold leveraged by 60 basis points, driven by a reduction in amortization expense and favorable currency in the Innovative Medicine business, as well as the non-recurring fair value inventory step-up related to Shockwave in 2024. This was partially offset by unfavorable product mix in Innovative Medicine, along with MedTech macroeconomic factors. Selling, marketing, and administrative expenses deleveraged by 40 basis points, driven by increased investment in the recent Intracellular Therapies acquisition for Caplyta and promotional spend across the Innovative Medicine business, partially offset by expense leveraging in MedTech. Research and development expenses leveraged by 670 basis points, primarily driven by the expense of $1.25 billion to secure the global rights to the NM26 bispecific antibody recorded in 2024. We continued our strong investment in research and development with $3.7 billion, or approximately 15% of sales in Q3.

A year ago cost of products sold leveraged by 60 basis points. Driven by a reduction in amortization expense and favorable currency in the Innovative medicine business,

As well as the non-recurring fair value, inventory step-up related to Shockwave in 2024.

This was partially offset by an unfavorable product mix in Innovative Medicine, along with MedTech macroeconomic factors.

Selling, marketing, and administrative expenses deleveraging basis points, driven by increased investment in the recent intracellular acquisition for Cap, Lighter, and promotional spend across the Innovative Medicine business, partially offset by expense leveraging in MedTech.

Research and development expenses leveraged by 670 basis points, primarily driven by the expense of $1.25 billion to secure the global rights to the NM26 by Specific, an antibody recorded in 2024.

Darren Snellgrove: Interest income and expense was a net expense of $18 million as compared to $99 million of income in the third quarter of 2024, primarily driven by a higher average debt balance and a lower average cash balance. Other income and expense was net income of $0.5 billion compared to an expense of $1.8 billion in the prior year, primarily driven by a talc litigation charge in 2024 and higher gains on the sales of securities in 2025, partially offset by the monetization of royalty rights recorded in 2024. Regarding taxes in the quarter, our effective tax rate was 31.2% compared to 19.3% in the same period last year. The increase is primarily driven by the one-time, $1 billion remeasurement of deferred tax balances, which are required to reflect the changes in statutory tax rates associated with the enactment of the One Big Beautiful Bill Act in the third quarter.

We continue to strengthen our investment in research and development with $3.7 billion, or approximately 15% of sales, in Q3.

In the third quarter of 2024, Johnson & Johnson reported a net expense of $18 million compared to $99 million in income. This was primarily driven by a higher average debt balance and a lower average cash balance.

Other income and expense was net income of $0.5 billion compared to an expense of $1.8 billion in the prior year. This was primarily driven by a talc litigation charge in 2024 and higher gains on the sales of securities in 2025, partially offset by the monetization of royalty rights recorded in 2024. Regarding taxes in the quarter, the effective tax rate was 31.2% compared to 19.3% in the same period last year.

Darren Snellgrove: More information can be found in the company's Form 10-Q. Lastly, I'll direct your attention to the box section of the slide, where we have also provided the company's income before tax, net earnings, and earnings per share adjusted to exclude the impact of intangible amortization expense and special items. Now let's look at adjusted income before tax by segment for the quarter. Innovative medicine margin improved from 37.9% to 44.3%, primarily driven by the one-time expense of $1.25 billion to secure the global rights of the NM26 bispecific antibody recorded in 2024, partially offset by increased investment in commercial spend in 2025 and the non-recurring monetization of royalty rights in 2024. MedTech margin declined from 24.1% to 21%, driven by macroeconomic factors and cost of products sold, partially offset by expense leveraging in SM&A.

The increase is primarily driven by the one-time, $1 billion remeasurement of deferred tax balances, which are required to reflect the changes in statutory tax rates associated with the enactment of the One Big Beautiful Bill Act in the third quarter. More information can be found in the company's Form 10-Q.

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

Now, let's look at adjusted income before tax by segments for the quarter.

Innovative medicine margin improved from 37.9% to 44.3%, primarily driven by the one-time expense of $1.25 billion to secure the global rights of NM 26 by specific antibody recorded in 2024.

Partially offset by increased investment in commercial spend in 2025, and the non-recurring monetization of royalty rights in 2024.

Darren Snellgrove: This concludes the sales and earnings portion of the call, and I will now turn the call over to Joe.

Medtech margin declined from 24.1% to 21%, driven by macroeconomic factors in cost of products sold, partially offset by expense leveraging in SMA.

Joseph J. Wolk: Thanks, Darren. Hello, everyone, and thank you for joining us today. In the third quarter, we sustained momentum across our in-market portfolio, delivering upon the heightened financial expectations we guided to last quarter. In innovative medicine, we continue to grow through the Stelara loss of exclusivity, as we said we would. The progression of our pipeline, evidenced by significant regulatory milestones, adds further depth to our three focus areas of oncology, immunology, and neuroscience. We are well positioned for the balance of the decade. In MedTech, we improved adjusted operational sales across key areas of the business. As Joaquin mentioned, we are sharpening our focus on high-growth, high-margin markets where we can improve patient outcomes, as this morning's announcement regarding the DePuy Synthes business indicates. In a moment, I will build upon Joaquin's comments regarding that announcement.

This concludes the sales and earnings portion of the call, and I will now turn the call over to Joe.

Thanks, Darren. Hello everyone, and thank you for joining us today. In the third quarter, we sustained momentum across our in-market portfolio, delivering upon the heightened financial expectations we guided to last quarter.

In innovative medicine, we continue to grow through the stellar loss of exclusivity. As we said, we would see the progression of our pipeline, evidenced by significant regulatory milestones that add further depth to our three focus areas of oncology, immunology, and neuroscience. We are well positioned for the balance of the decade.

Joseph J. Wolk: The foundation we have set, combined with the progression of our pipeline, strongly positioned the company for accelerated growth. It also reinforces our conviction to deliver on the upper end of our long-term growth targets. Let me provide a brief update on the Daubert motions pending in the TAOC litigation. As you are aware, this is the judicial process by which the court will reexamine the junk science that the mass tort plaintiffs' bar concocts to fuel baseless claims against Johnson & Johnson, as well as many American businesses. We look forward to and expect to secure favorable rulings on the Daubert motions, which should be rendered by the first quarter of 2026. Now turning to cash and capital allocation, we generated $14 billion in free cash flow through the first nine months of the year.

In Medtech, we improved adjusted operational sales across key areas of the business. As mentioned, we are sharpening our focus on high-growth, high-margin markets where we can improve patient outcomes, as this morning's announcement regarding the Dais Synthesis business indicates. In a moment, I will build upon Win's comments regarding that announcement.

The foundation we have set, combined with the progression of our pipeline, strongly positions the company for accelerated growth. It also reinforces our conviction to deliver on the upper end of our long-term growth targets.

Let me provide a brief update on the Dow motion pending in the talc litigation.

A mass tort plaintiff sparks concoctions to fuel baseless claims against Johnson & Johnson as well as many American businesses.

We look forward to and expect to secure favorable rulings on the doubt, which should be rendered by the first quarter of 2026.

Now, turning to cash and capital allocation.

Joseph J. Wolk: We ended the third quarter with approximately $19 billion in cash and marketable securities and $46 billion of debt, for a net debt position of $27 billion versus the $32 billion of net debt reported in the second quarter. We continue to utilize our free cash flow generation and strong balance sheet to invest in innovation and return capital directly to shareholders. We are often asked about our appetite for acquisitions to meet financial targets. I can be very clear on this. We rely on a thoughtful, long-term approach to growing through any loss of exclusivity and won't carelessly deploy capital on speculative transactions out of desperation. Our current portfolio and pipeline have momentum, and with the Stelara loss of exclusivity increasingly in the rearview mirror, we do not need to rely on large transactions to drive our growth.

$14 billion in free cash flow through the first 9 months of the year.

We ended the third quarter with approximately 19 billion dollars in cash and marketable, security and 46 billion of debt for a net debt position of 27 billion. Versus the 32 billion of net debt. Reported in the second quarter, we continue to utilize our free cash flow generation and strong balance sheet, to invest in Innovation, and return, Capital directly to shareholders.

We are often asked about our appetite for Acquisitions to meet Financial targets. I can be very clear on this. We rely on a thoughtful long-term approach to Growing through any loss of exclusivity and won't carelessly. Deploy capital on speculative, transactions out of desperation.

Joseph J. Wolk: We intend to remain disciplined, opportunistically pursuing strategic high-value opportunities that utilize our expertise and capabilities that deliver an appropriate return for the risk that we bear on behalf of shareholders. Regarding the planned separation of our orthopedics business, as Joaquin noted, the separation is expected to enhance the strategic and operational focus of each company and drive value for our shareholders and other stakeholders. Given that we are early in the process, there are limited details available, but we are committed to providing you with information on a timely basis. While we will, of course, communicate material developments, we don't expect to have anything newsworthy to convey until mid-next year. What can we say at this moment? First, the separation will further strengthen our overall MedTech business and increase Johnson & Johnson's top-line growth and margins.

Our current portfolio on Pipeline has momentum. And with the Stelara loss of exclusivity increasingly in the rearview mirror, we do not need to rely on large transactions to drive our growth. We intend to remain disciplined, opportunistically pursuing strategic, high-value opportunities that utilize our expertise and capabilities to deliver an appropriate return for the risk that we bear on behalf of shareholders.

Regarding the plan separation of our Orthopaedic business.

As noted, the separation is expected to enhance the strategic and operational focus of each company and drive value for our shareholders and other stakeholders.

Given that we are early in the process, there are limited details available, but we are committed to providing you with information on a timely basis.

Why we will of course, communicate material developments. We don't expect to have anything newsworthy to convey until mid next year.

Joseph J. Wolk: To give that some directional context, if we just look at normalized year-to-date 2025 results, MedTech's top-line revenue growth and operating margin would both improve by at least 75 basis points. Next, we are targeting completion of the separation within 18 to 24 months, subject to the satisfaction of certain conditions. Given it is the most resource-intensive and likely longest duration, we are prioritizing and have begun the separation, assuming a spin-off with the intention for that to qualify as a tax-free separation for U.S. federal income tax purposes. However, we will consider other avenues that optimize shareholder value. We do not expect any change to the Johnson & Johnson dividend and are mindful of any impact from stranded costs that are typically present in these types of transactions.

What can we say at this moment? First, the separation will further strengthen our overall MedTech business and increase Johnson & Johnson's topline growth in margins to give that some directional context. If we just look at normalized, year-to-date 2025 results, MedTech's topline revenue growth and operating margin would both improve by at least 75 basis points.

Next, we are targeting completion of the separation within 18 to 24 months subject to the satisfaction of certain conditions.

Given that it is the most resource-intensive and likely longest duration, we are prioritizing and have begun the separation. Assuming a spin-off with the intention for that to qualify as a tax-free separation for U.S. federal income tax purposes, we will consider other avenues that optimize shareholder value.

Joseph J. Wolk: Finally, following the separation, we would expect DePuy Synthes to have a strong capital structure that would allow the orthopedics business to build on its long history of innovation and extend leadership positions through enhanced organic investment and strategic growth accretive M&A. As we pursue this separation, the orthopedics unit will operate in alignment with the business's current strategy, continuing to make investments in growth, margin improvement, and innovation. Turning now to full-year guidance for 2025. We are increasing operational sales guidance for the full year by approximately $300 million, resulting in operational sales growth for the full year in the range of 4.8% to 5.3%, with a midpoint of $93.2 billion, or 5.1%. Excluding the impact from acquisitions and divestitures, our adjusted operational sales growth is now expected to be in the range of 3.5% to 4.0% compared to 2024.

We do not expect any change to the Johnson and Johnson dividend and are mindful of any impact from Stranded costs that are typically present in these types of transactions.

Finally, following the separation, we would expect that the new entity will have a strong capital structure that will allow the Orthopedics business to build on its long history of innovation and extend leadership positions through enhanced organic investment and strategic growth, including M&A.

As we pursue this separation, the orthopedic unit will operate in alignment with the business's current strategy, continuing to make investments in growth, margin Improvement, and innovation.

Turning now to full-year guidance for 2025.

We are increasing operational sales guidance for the full year by approximately $300 million, resulting in operational sales growth for the full year in the range of 4.8% to 5.3%, with a midpoint of $93.2 billion or 5.1%.

Joseph J. Wolk: As a reminder, we started the year guiding to a midpoint for 2.5% for adjusted operational sales. As you know, we don't speculate on future currency movements, and last quarter we utilized the euro spot rate relative to the U.S. dollar of 1.17. The U.S. dollar has stayed relatively flat to the euro spot rate, and as a result, we now expect reported sales growth between 5.4% to 5.9%, with a midpoint of $93.7 billion, or 5.7%. Turning to other notable items on the P&L, we are reiterating our operating margin guide of an approximate 300 basis point improvement for the full year, assuming what we know today as it relates to tariffs. For net interest expense, we are now projecting between $0 and $50 million, an improvement from the previous guidance, primarily driven by higher cash balances.

Excluding the impact from Acquisitions and devest are adjusted. Operational. Sales growth is now expected to be in the range of 3.5% to 4.0% compared to 2024. As a reminder, we started the year guiding to a midpoint for 2.5% for adjusted operational sales.

As you know, we don't speculate on future currency movements. And last quarter, we utilize the Gyro Spot rate relative to the US dollar of 1.17 the US dollar has stayed relatively flat to the Gyro Spot rate. And as a result, we now expect reported sales growth between 5.4% to 5.9% with a midpoint of 93.7 billion or 5.7%.

Turning to other notable items on the p&l, we are reiterating our operating margin guide of an approximate 300 basis, point Improvement for the full year. Assuming what we know today as it relates to tariffs

Joseph J. Wolk: We are expecting a higher effective tax rate to be in the range of 17.5% to 18% for the full year, with the increase largely due to the recently enacted One Big Beautiful Bill Act. We feel strongly that U.S. tax policy has enabled Johnson & Johnson to increase our manufacturing footprint in the U.S. We have more manufacturing facilities in the United States than in any other country, and we remain committed to investing $55 billion in U.S.-based innovation and manufacturing over the next four years. In March, we broke ground at our Wilson, North Carolina, facility, and in August, we announced a $2 billion commitment to further increase our presence in North Carolina with a more than 160,000 square foot dedicated manufacturing facility at Fujifilm's new biopharmaceutical manufacturing site in Holly Springs. Our overall U.S.

50 million and improvement from the previous guidance, primarily driven by higher cash balances.

we are expecting a higher effective tax rate to be in the range of 17.5% to 18% for the full year with the increase largely due to the recently enacted 1 big beautiful, bill act

We feel strongly that us tax policy has enabled Johnson and Johnson to increase our manufacturing footprint in the US.

Joseph J. Wolk: investment plans also include three additional new advanced manufacturing facilities, as well as the expansion of several existing sites. Turning to earnings per share, you may recall we started the year guiding to adjusted EPS of $10.60. Today, we stand much higher, even after including dilution of $0.25 from the Intracellular Therapies acquisition. Today, we are reaffirming our elevated July earnings per share outlook, which also absorbs a higher annual effective tax rate and fourth quarter investments that will further position the business for long-term success. As such, our expected adjusted earnings per share guidance remains $10.85, or 8.7% at the midpoint, with a range of $10.80 to $10.90. Our adjusted operational earnings per share guidance is $10.68, or 7% at the midpoint.

We have more manufacturing facilities in the United States than in any other country, and we remain committed to investing 55 billion in us-based, Innovation and Manufacturing over the next 4 years. In March, we broke ground at our Wilson. North Carolina facility. And in August, we announced a 2 billion dollar commitment to further increase our presence in North Carolina with a more than 160,000 square foot. Dedicated manufacturing facility at fujifilm's. New biofarm manufacturing site in Holly Springs.

Our overall us investment plans also include 3 additional new Advanced manufacturing facilities as well as the expansion of several existing sites.

Turning to earnings per share. You may recall. We started the year guiding to adjusted EPS of $10.60.

today we stand much higher even after including dilution of 25 cents from the intercellular acquisition

Today we are reaffirming our elevated July earnings per share Outlook, which also absorbs a higher annual effective tax rate and fourth quarter Investments. That will further position the business for long-term success.

Such are expected adjusted earnings per share guidance.

Joseph J. Wolk: Looking beyond our financial commitments for the year, we are on track to add to the already impressive number of milestones that we achieved across our pipeline in 2025. In innovative medicine, we anticipate U.S. FDA approval for subcutaneous Rybrevant for non-small cell lung cancer, as well as for Caplyta in adjunctive major depressive disorder. We recently filed for a label expansion on Tremfya in psoriatic arthritis and plan to present data for Rybrevant in head and neck cancer at ESMO in the coming week. In MedTech, we continue to make progress with our clinical trial for our Ottava robotic surgical system. In our cardiovascular portfolio, we are planning regulatory submissions for the dual energy ThermoCool SmartTouch SF catheter for cardiac arrhythmia in the U.S., and in vision, we will continue to roll out Acuvue Oasys Max for astigmatism.

Remains $10.85 or 8.7% at the midpoint with a range of 10.80 to $10.90 our adjusted operational earnings per share. Guidance is $10.68 or 7% at the midpoint.

Looking beyond our financial commitments. For the year, we are on track to add to the already impressive. Number of Milestones, that we achieved across our pipeline in 2025.

In innovative medicine, we anticipate U.S. FDA approval for subcutaneous Rybrevant for non-small cell lung cancer, as well as for Spravato in adjunctive major depressive disorder.

We recently filed for a label expansion on trim. FIA in psoriatic arthritis and plan to present data for riber van in head and neck, cancer at esmo in the coming week,

Joseph J. Wolk: As we are close to year end and with the strong caveat that we are still finalizing plans for next year and macro factors can change quickly, let me provide some preliminary thoughts to inform your modeling for 2026. For innovative medicine, we remain very confident in our ability to deliver accelerated growth despite Stelara loss of exclusivity. This will be driven by our in-market brands and continued progress from our recently launched products, including Tremfya in inflammatory bowel disease, Rybrevant plus Lasklus in non-small cell lung cancer, and Talvey in bladder cancer. We currently anticipate a 2026 approval for icosequimab in psoriasis. In MedTech, we continue to expect accelerated growth off this year's levels, driven by focus on higher growth markets, as well as the continued adoption of newer products across all MedTech platforms.

In Medtech, we continue to make progress with our clinical trial for our ottava robotic surgical system. In our cardiovascular portfolio. We are planning regulatory submissions for the Dual energy thermal cool. Smart Touch SF catheter for cardiac arrhythmia in the US and envision. We will continue to roll out ACU Oasys Max for a stigmatism.

As we are close to year end and with a strong caveat that we are still finalizing plans for next year and macro factors can change quickly. Let me provide some preliminary thoughts to inform your modeling for 2026.

For Innovative Medicine, we remain very confident in our ability to deliver accelerated growth despite Stellar's loss of exclusivity.

This will be driven by Our in-market Brands and continued progress from our recently. Launched products including trumpa and inflammatory bowel disease, ryber Vamp plus lash clues in non small cell, lung cancer. And Alexa in bladder cancer, we currently anticipate a 2026 approval for ichor Kendra in psoriasis.

Joseph J. Wolk: We also anticipate the launch of Shockwave C2 AeroCoronary IVL catheter, the Tecnis PureC intraocular lens in the U.S., as well as regulatory submission for the Ottava robotic surgical system. Again, while early, I like the way 2026 is shaping up. In fact, based on my last look at your 2026 models, it appears the current revenue consensus of 4.6% growth in your models for 2026 is lower than we project, which we believe in total will exceed 5%. Similarly, with the expectation that adjusted earnings per share is commensurate with sales growth, there appears to be some upside to the current adjusted earnings per share consensus of $11.39, perhaps as much as $0.05. This commentary considers investments we will be making behind many of the new product launches I just highlighted, but you can also expect some margin improvement.

In Medtech, we continue to expect accelerated growth off this year's levels, driven by a focus on higher growth markets, as well as the continued adoption of newer products across all Medtech platforms.

We also anticipate the launch of Shockwave, C2 Aeroc coronary IVL catheter, the Technis, Pure C interocular lens in the U.S., as well as regulatory submission for the Ottava robotic surgical system.

Again, while early, I like the way 2026 is shaping up.

Let's look at your 2026 models.

appears the current revenue consensus of

A 6% growth in your models for 2026 is lower than we project, which we believe will, in total, exceed 5%.

Similarly, with the expectation that adjusted earnings per share is commensurate with sales growth. There appears to be some upside to the current adjusted earnings per share consensus of 11.39 perhaps, as much as 5 cents.

Joseph J. Wolk: It also reflects our understanding of the present legislative landscape, tariffs, foreign exchange rates, and procedural volumes. We look forward to sharing further details regarding our official guide for 2026 during our Q4 earnings call in January. In summary, the strength of our business model, with a focus on where we can have the greatest impact for patients, will enable Johnson & Johnson to deliver against our strategic objectives and financial commitments. We are as confident as we have been in recent memory about the future. I'd like to end my remarks by thanking our colleagues around the world for their continued hard work and steadfast dedication that serve our patients and who make these financial results possible and sustainable. With that, we are happy to take your questions. Kevin, will you please open the call for Q&A?

This commentary considers investments. We will be making behind many of the new product launches I just highlighted, but you can also expect some margin improvement.

Are official guide for 2026 during our Q4 earnings call in January.

In summary, the strength of our business model with a focus on where we can have the greatest impact for patients will enable Johnson, and Johnson to deliver against our strategic objectives and financial commitments. We are as confident as we have been in recent memory about the future.

I'd like to end my remarks by thanking our colleagues around the world for their continued hard work and steadfast dedication that serve our patients and make these financial results possible and sustainable.

[Operator]: Certainly. Ladies and gentlemen, if you'd like to ask a question at this time, please press star, then one on your telephone keypad. If you'd like to withdraw your question, please press star, then two. We ask that you please limit yourselves to one question only. Our first question is coming from Alex Hammond from Wolfe Research, your line is now live.

With that, we are happy to take your questions. Kevin, will you please open the call for Q&A?

certainly, ladies and gentlemen, if you'd like to ask a question at this time, please press star, then 1 on your telephone keypad,

If you'd like to withdraw your question, please press Star then 2.

[Analyst 1]: Good morning, and thanks for taking the question. On the orthopedics spin-out, I'd be interested to understand the why now, and also, could we expect similar separations for other divisions in the future? As a quick follow-up, how should we think about the long-term guidance in light of the separation? Could we expect Johnson & Johnson to revisit these forecasts in the near term?

We ask you, please eliminate yourselves to 1 question only. Our first question is coming from Alex Hammond from Wolf. Researcher Line is now live.

Good morning and thanks for taking.

Question on the orthopedic spin-out. I'd be...

Joaquin Duato: Thank you, Alex. Let me take the first question. Why now? Why the orthopedic separation? It's been a hallmark of Johnson & Johnson to be a good steward of our capital and to make decisions in our portfolio to prioritize where we think breakthrough innovation can come through. That's exactly what we are doing. We're moving Johnson & Johnson into high-growth markets with significant medical need, and at the same time, we have the foresight to recognize when a standalone company could be better and could be in a better position to drive growth, innovation, and better margins. That's exactly what we are doing with our orthopedic separation.

Could we expect similar separations for other divisions in the future and as a quick follow-up? How should we think about the long-term guidance in light of the separation? Could we expect JJ to revisit these forecasts in the near term?

Joaquin Duato: We are fueling the innovation within Johnson & Johnson, focused on our six priority areas, continue to invest as we are doing in cardiovascular with the acquisitions of Abiomed, Shockwave, and also in pharmaceuticals with the acquisition of Intracellular Therapies, and creating a standalone company that is going to be a champion within the context of the orthopedics sector. Orthopedics is a growing market, $50 billion market. It's fueled by the aging of the population, and we have commanding market shares in the most important segments of the orthopedics business. The company is going to be called DePuy Synthes. It's going to be led by Namal Nawana, who is an industry veteran, and I have no doubt that they are going to be better positioned to succeed, to drive innovation, to drive growth, and to become what they are, the largest orthopedics company in the world.

Thank you Alex. And let me take the first question. Uh why now why the orthopedic separation? Uh, it's been a Hallmark of Johnson and Johnson to be a good Steward of our capital and to make decisions in our portfolio to prioritize. What we think breakthrough Innovation can come through and that's exactly what we are doing. We're moving uh, Johnson and Johnson into high growth, markets, with significant and made medical need. And at the same time, we have the foresight to recognize when a standalone company could be better and could be in a better position to drive growth Innovation and better margins. That's exactly what we are doing with our Orthopedic separation. We are fueling The Innovation within Johnson and Johnson focus on our 6. Priority areas continue to invest as we are doing in cardiovascular with the Acquisitions of Aid, a show wave and also in Pharmaceuticals with acquisition of intracellular and creating a standalone company. That is going to be a champion within the cont

Of the Orthopedics sector Orthopedics, is a growing Market 50 billion dollar market. Uh, it's fueled by the Aging of the population and we have commanding market shares in the most important segments of the Orthopedics business, uh, the company is going to be called the Pew synthesis is going to be led by namal nawana, who is an industry veteran. And I have no doubt that they are going to be better, positioned to succeed to drive Innovation to drive growth. And to be

Joaquin Duato: Overall, this is a clear move to be able to manage our portfolio, to position Johnson & Johnson to be able to deliver breakthrough innovation and the results that you are seeing so far with a very, very strong quarter. I want to underline this is not only a very strong quarter, it's also an indication, a signal that Johnson & Johnson is in an accelerated cycle of growth, which we expect is going to last the balance of the decade. Moving in the right direction, I'm sure investors are going to be happy to see that Johnson & Johnson is an active portfolio manager.

Joseph J. Wolk: Yeah, Alex, maybe just to build on Joaquin's comments, thanks for the question. There were two other parts that I thought I heard from you. This is not a precursor to anything else. We look at what we have now and the clarity of our portfolio, three strongholds in innovative medicine serving unmet needs with transformational innovation that elevates the standard of care in oncology, neuroscience, and immunology, and likewise now in MedTech, where we have market-leading positions, cutting-edge technology that is improving care for patients in surgery, eye health, and cardiovascular. We are going to be real pleased with the portfolio, and we think orthopedics is set up for success going forward based on their profile and their ability to compete against other singularly focused orthopedics companies. With respect to guidance revisions, as we mentioned in the scripted commentary, this will take 18 to 24 months.

What they are the largest Orthopedics company in the world. Overall, this is a clear move to be able to manage our portfolio to position Johnson and Johnson to be able to deliver breakthrough Innovation. And the results that you are seeing so far. With a very, very strong quarter. I want to underline. This is not only a very strong quarter. It's also a, a, an indication, a signal, that Johnson. And Johnson is in an accelerated cycle of growth, which we expect is going to last the balance of the decade. So I'm moving the right direction. I'm sure investors are going to be happy to see that Johnson, and Johnson is an active portfolio manager.

Yeah, Alex maybe just to build on win's comments. Uh, thanks for the question. Uh, so there's 2 other parts that I thought I heard from you. This is not a precursor to anything else. Uh, we look at what we have now in the clarity of our portfolio, 3 strongholds in Innovative medicine, serving unmet needs with transformational Innovation that elevates, the standard of care in oncology neuroscience and Immunology, and likewise. And now, in Medtech where we have Market leading positions, Cutting, Edge, technology, that is, uh, improving care for patients in surgery, I health and cardiovascular. Uh, so we're going to be real pleased with the portfolio. And we think Orthopedics is set up for Success going forward based on their profile and their ability to compete against other singularly, focused Orthopedics companies, um, with respect to guidance or revisions. So, as we mentioned in the

Joseph J. Wolk: Anything we say about 2026 will likely include the orthopedics business in our outlooks. We would expect maybe some material developments middle of next year, but we commit to keeping this audience particularly advised on a timely basis should anything material unfold.

Scripted commentary: This will take 18 to 24 months. So anything we say about 2026 will likely include, uh, the Orthopedics business in our outlooks. We would expect maybe some material developments in the middle of next year, but we commit to keeping, uh, this audience particularly, uh, advised on a timely basis should anything material unfold.

[Operator]: Thank you. Next question, today's coming from Danielle Antalpy from UBS. Your line is now live.

[Analyst 2]: Hey, good afternoon, guys. Thanks so much for taking the question. Just a question.

Okay, next question, today's coming from Danielle and Ty from UBS, your line is now live.

[Operator]: Joe, your commentary around potential margins post DePuy Synthes spin, 75 bps. I don't want to get too greedy, but that feels a little light to me. Just curious about why, you know, given the mix of the business, it's high growth cardio, surgical, which I think should be relatively high margin, and vision. Feels like maybe it could be a little bit more than that. I just want to make sure I understand the puts and takes to that 75 bps number, appreciating that's just, you know, a very early target.

[Operator]: Yeah, thanks, Danielle. That's an insightful question. I think it really depends on the time period by which you're measuring. If we were just to take 2025, you're absolutely right. It would be probably closer to 100 bps, both on top and bottom, or margin improvement. What I would say is we looked out a couple of years, given this will take a couple of years to go through the process. As Abiomed, Shockwave, and the other businesses have higher growth profiles, margin improvements, initiatives that are already underway under Tim's leadership, it will have a more muted impact as it goes forward. I think on today's math, you're probably closer to being right. It's OK. I don't consider it greedy. Tim might, but I don't.

Um, just a question on Joe. Your commentary around potential margins post—that were those been 75 bips. I don't want to get too greedy, but that feels a little light to me. So, just curious about why, you know, given the mix of the business. It's high growth cardio surgical, which I think should be relatively high margin, and vision feels like maybe it could be a little bit more than that. So, just want to make sure I understand the puts and takes to that 75 bips number, appreciating that's just, you know, a very early target.

[Operator]: I think as you look out a little bit further with some of the stronger profile businesses from a financial perspective, it'll have more of a muted impact.

[Operator]: Yeah, and Danielle, maybe just building on Joe's comments, as I'm sure there'll be a lot of questions on this topic, we'd like to try and get them out of the way so we can focus on the broader business. I wanted to highlight why this makes sense for JNJ-2113. As you've heard from Joaquin and Joe, this is all about our commitment to continuous portfolio optimization and value creation. As you know, we've been on a journey over the last couple of years to really aggressively move our portfolio into higher growth markets. Adding attractive assets such as Abiomed and Shockwave in high growth markets like cardiovascular are good examples of the bold moves we already made. This decision to separate DePuy Synthes is the next major step in that direction. DePuy Synthes is a great business, but frankly, one that participates, as you know, in lower growth markets.

Yeah. Thanks Dan. Danielle that's an insightful question. And I think it really depends on the time period by which you're measuring if we were just to take 2025, you're absolutely right. It would be uh probably closer to 100 dips both on top and bottom or margin Improvement. Um what I would say is we looked out a couple years given this will take a couple years to uh, go through the process and as abiomed Shockwave and the other businesses have higher growth, Pro profiles margin improvements uh initiatives that are already underway under Tim's leadership. Uh it will have a more muted impact as it goes forward. So I think I'm on today's math. You're probably closer to being, right? It's okay. Uh, I don't consider it greedy, Tim might, but I don't. Um, and uh, but I think, as you look out a little bit further with some of the the stronger profile businesses from a financial perspective, uh, it'll have more of a muted impact.

Yeah, and Daniel, maybe just building on uh, on Joe's comments. As I'm sure there'll be a lot of questions on this topic and we'd like to try and get them out of the way, so we can focus on the broader business. But I wanted to highlight why uh, this makes sense for for Johnson and Johnson Medtech. And as you've heard from Wain and Joe, this is all about our commitment to continuous portfolio.

Optimization and value creation. As you know, we've been on a journey over the last several years to aggressively move our portfolio into higher growth markets and add attractive assets, such as Airbnb and Shockwave, in high growth markets like cardiovascular. These are good examples of the bold moves we have already made. This decision to separate Author is the next major step in that direction; it is also a great business.

[Operator]: This is all about shrinking to grow faster for MedTech. Last time I looked, you're not rewarding size, but really rather best-in-class performance. That's the path that we're on. As you already have heard, we expect the separation would increase our top line growth and margins following the completion. This allows us in MedTech really to focus on the businesses that will remain, which are our priorities of cardiovascular, surgery, and vision.

Operator: Thank you, Ana. I want to reiterate, as I told you, day one when I became CEO, that I am fully focused, determined to make our MedTech sector the best-in-class MedTech group in the industry. That's a total priority for me. It's a priority for Johnson & Johnson. We are fully committed to deliver on that, and we are on track to become the best MedTech sector in the industry.

But frankly 1 that participates as you know, in lower growth markets, uh this is all about shrinking to grow faster for Medtech. And last time I looked you're not rewarding size but really rather best-in-class performance and that's the path that we're on. You know, as you already have heard, we expect the separation would increase our Topline growth and margins you know, following the complete the completion. Um and this allows us in Medtech could really to focus on the businesses that will remain which is our priorities of cardiovascular surgery and vision. Thank you and I look I want to rate it as I told you day 1 when I became CEO that I am fully focused, determined to make our mistakes sector, the best in-class group. In the industry, that's a total priority for me is a

"Priority for Johnson & Johnson, and we are fully committed to delivering on that. We are on track to become the best tech maker."

In the industry.

[Operator]: Thank you. Our next question today is coming from Chris Schott from J.P. Morgan. Your line is now live.

Darren Snellgrove: Great. Thanks so much. Maybe just a question for Joaquin. There seems like there might be a framework for MFM agreements with the administration that's emerging across the space focused on new launches in Medicaid. Can you just talk about how you're thinking about MFM, tariffs, et cetera, and Johnson & Johnson's approach to some of these kind of policy dynamics that are floating around out there? Thanks so much.

Thank you. Our next question is coming from Chris Shop from JP Morgan. Your line is now live.

Operator: Thank you for the question. We have been talking with this administration with an open dialogue since day one, even before day one. We are always looking, as we have done at JNJ-2113, for common ground to build in the administration priorities that are similar to ours. Priorities like making sure that American patients have access to innovation in an affordable and timely way. Priorities like making sure that foreign entities do not free ride on American innovation. Making sure that we are able to maintain the overall leadership that this country has in life sciences. Finally, making sure that we continue to invest in manufacturing in this country to build good, middle-class jobs. We are delivering on that. We announced our plan to invest $55 billion in the U.S.

Uh, great. Uh, thanks so much. Uh, maybe just a question for Walkin. Uh, there seems like there might be a framework for MFN agreements with the administration that's emerging across the space focused on new launches and Medicaid. Can you just talk about how you're thinking about MFN, tariffs, etc., and J&J's approach to some of these kind of policy dynamics that are floating around out there? Thanks so much. Thank you for the question. And, uh, we've been talking with this administration with an open dialogue, uh, since day one, even before day one. And, uh, we are always looking, as we have done at Johnson & Johnson, for common ground to build in the administration's priorities that are similar to our priorities, like making sure that American patients have, uh, access to innovation in an affordable and timely way. Priorities like making sure that foreign entities do not free ride on American innovation, making sure that we are able to maintain the overall leadership that this country has in...

Operator: in the next four years, which essentially is going to make it so that all our advanced medicines that are used in the U.S. are going to be manufactured in the U.S. As far as the discussions, those are ongoing. I don't have anything to share today, but I am optimistic that we are going to land in a place which is going to create common ground between the administration and ourselves.

Sciences and finally making sure that we continue to invest in manufacturing this country to build good middle-class jobs. So we are delivering on that. Uh, we announced our plan to invest 55 billion in the US in the next 4 years which essentially is going to make it. So that all our Advanced medicines that are using, the us are going to be manufacturing. The us as far as the discussions. Uh those those are ongoing

I don't.

have anything to share today, but

optimistic that we are going to land in a place, which is going to create Common Ground between the administration and ourselves.

[Operator]: Thank you. Our next question today is coming from Larry Biegelsen from Wells Fargo. Your line is now live.

Joaquin Duato: Good morning. Thanks for taking the question. Joe, you talked about the accelerating sales growth in both innovative medicine and MedTech next year. Is the 5% plus, I heard you say earlier, on a reported or adjusted operational basis? I think FX is a tailwind. How are you thinking about the extra week next year? I guess I'm trying to understand if growth will accelerate next year on an adjusted operational basis, excluding the extra week. The same for EPS. Is that on a reported or operational basis? Thank you.

Thank you. Our next question. Today is coming from Larry beles. I'm from Wells. Fargo, your line is now live.

[Operator]: Yeah, Larry, very simply, since consensus is based on reported for both top line as well as EPS, that was the comparator I used. There is a slight tailwind, as you mentioned, for FX. I assume, and I know, Larry, you and your team are very astute at capturing the FX impact. I would assume that's already baked into the 4.6% top line growth that I saw consensus have for 2026, similarly with the earnings. It is a lift, I would say, across the board, but on a basis by which the analysts, yourself included, look at it.

Good morning. Thanks for taking the question. Hey Joe, you talked about the accelerating sales growth in both uh uh Innovative medicine and Medtech. Next year is the 5%. Plus I I heard you say earlier on a reported or adjusted operational basis, I think FX is a Tailwind. How are you thinking about the extra week next year? I guess I'm trying to understand if growth will accelerate next year, on an adjusted operational basis, excluding the extra week and, and in the same for EPS, is that on a reported or or operational basis. Thank you. Yeah. Larry, uh, very simply since consensus is based on reported for both Top Line, as well as EPS, that was the comparator I use. So there is a slight Tailwind as you mentioned for FX, but I assume and I know Larry, you and your team are very astute at capturing the FX impact. I would assume that's already baked into the 4.6%. Top Line growth that I saw consensus have for 2026 uh similarly with with the earnings. So it is uh, a lift I would say across the board but on

Uh, a basis by which um, the analysts yourself included. Look at it.

[Operator]: Thank you. Our next question today is coming from Asad Haider from Goldman Sachs. Your line is now live.

Joseph J. Wolk: Good. Thanks for taking the question. Just a big picture question. You'll be exiting this year in a clear position of strength, where a number of headwinds from the Stelara loss of exclusivity are fading into the background. The base business is strong, and you've got new product cycle momentum accelerating through the innovative medicines portfolio. You're also seeing a second half improvement in MedTech. In that context, and with the announcement this morning to spin off DePuy Synthes, can you just maybe double-click a little bit more on how you're going to be balancing capital allocation priorities to sustain acceleration in innovative medicines and push MedTech sustainably towards the 5% to 7% operational sales growth targets? In the innovative medicines business, the sales growth acceleration in 2026, like you said, Joe, that's not getting modeled by consensus.

Thank you. Our next question is coming from Assad Hater from Goldman Sachs. The line is now live.

Joseph J. Wolk: What are the biggest disconnects there that you're able to highlight today specifically for next year? Thank you.

Great. Thanks for taking the question. Just a big picture question. Uh, you'll be exiting this year in a clear position of strength where a number of headwinds from the Stellar eloe are Fading Into the background, the base businesses, strong and you've got, uh, new product cycle. Momentum accelerating through the Innovative medicines portfolio and you're also seeing a second half Improvement in Med deck. So, in that context and with the announcement of uh, this morning to spin up, Dupri, can you just maybe double click a little bit more on how you're going to be balancing Capital allocation priorities to sustain acceleration and Innovative meds and push med tech sustainably towards the 5 to 7% Erb targets. And then related, uh, in the Innovative medicine business, the sales growth acceleration, uh, in 2026 like you said, Joe that's not getting modeled by consensus. So what are the biggest disconnects there that you're able to highlight today is specifically for next year? Thank you.

Operator: First, look, we are in a favorable position as far as capital allocation means. We have a number of important opportunities to invest within our pipeline and portfolio. That is our number one priority now as far as capital allocation. We are in the middle of the launch, and Tim and Jennifer will discuss about that, of major, major blockbuster products. On the innovative medicine side, we're launching Tremfya in inflammatory bowel disease, Rybrevant and Lascuse in lung cancer, in Lexo in localized bladder cancer. We continue with the growth of Carvykti and Spravato. We just filed for icosequimab in plaque psoriasis. We have a wealth of opportunities to drive significant growth in our pharmaceutical business that Jennifer will describe. Just to give you an idea of the strength of our pharmaceutical business, excluding Stelara, our pharmaceutical business in the third quarter grew a whopping 16%.

So, first look, uh, we are in a favorable position as far as capital location. Um, uh means, uh, we have a number of important opportunities to invest within our Pipeline and portfolio so that is our number 1 priority. Now, as far as capital location, we're in the middle of the launch and team and Jennifer will discuss about that of Mayor mayor Blockbuster products on the Innovative medicine side. We are launching Taya in inflammatory, but we will receive in lung cancer in lexo. In localized, bladder, cancer. We continue with the growth of Caribbean and aespa.

Operator: That is a very big business, more than $50 billion business growing at 16%. We have multiple opportunities to drive capital allocation in the pharmaceutical business, as well as in our pipeline there. I mean, we're working bispecific for prostate cancer, trispecific for multiple myeloma, a wealth of opportunities to drive capital allocation. On the MedTech side, I mean, we're in the middle of major things in the MedTech side. On one hand, you know, we are committed to remain leaders in the electrophysiology segment with the launch of Varipulse, our dual energy catheter. We continue to work in improvements in our CAR-T system. We are determined to invest there to remain the leaders as we have been. We are working to expand our heart pumps.

To add, we just filed for Icoral Implex, so we have a wealth of opportunities to drive significant growth in our pharmaceutical business, as Jennifer will describe. Just to give you an idea of the strength of our pharmaceutical business, excluding Stelara, our pharmaceutical business in the third quarter grew a whopping 16%. So that's a very big business.

Operator: You guys all know about the New England Journal of Medicine published publication showing the DANSH study in patients with acute myocardial infarction that had cardiogenic shock that showed a 600 days improvement over a 10-year period. Impressive breakthrough innovation there. We have a lot of opportunities in Shockwave with the Javelin peripheral catheter and the AeroSystem in coronary that we are launching. If I move into the second priority, which is our robotic surgery expansion, we are about to file with the FDA in the first half of the year our Ottava soft tissue robotic system. We are also determined to be a major player in robotics. I'm always telling you, we are determined to be major players in robotics. We continue to have opportunities for capital allocation in both businesses. Our priority now is to be able to fuel the growth in our portfolio and our pipeline.

More than 50 billion dollar business growing at 16%. So we have multiple opportunities to drive to drive, uh, Capital location in the pharmaceutical business, as well as in our pipeline there. I mean, we're working at by a specific for prostate cancer. Try a specific for multiple Myoma, a, a wealth of opportunities to drive Capital location on the, on the uh, MedEx side. I mean, we're in the middle of major things in, in the MedEx, I don't 1 hand. You know, we are a committed to remain leaders in the electrophysiology segment with the launch of variables, our dual energy catheter. We continue to work in improvements in our CTO system. And we are determined to invest their to remain the leaders. As we have been, we are working to expand our heart pumps. Uh, you guys all know about the New England Jewel of medicine, uh, public

publication showing the dangerous study in patients with acute marital infection that had.

Go. As

Improvement.

Innovation, there, we have a lot of opportunities in Shockwave with the javelin peripheral catheter and the area system in coronary that we are launching. And, you know, if I move into the second,

Which is our robotic surgery expansion? We are about to.

Operator: As Joe mentioned before, we are in a position, just to be clear, that we do not need large M&A to deliver in the high end of our growth targets. Let me repeat that. We do not need large M&A to deliver in the high end of our growth targets. We are going to be looking at opportunities, as we always do. We are in a position in which our number one capital priority is going to be to fuel our pipeline and our portfolio.

[Operator]: Yeah, I think, Asad, the only thing I would add to that is just the number of smaller deals we do that don't make headlines on the day of the transaction. I think 60 over the last two years. Those lead to products like Talvey, which we acquired in 2019 for a couple hundred million dollars. Through really passion for their craft, as well as passion for meeting patients' unmet needs, Dr. Chris Cootie, Dr. Charles Drake were able to find, and their teams were able to find a bladder cancer treatment that is revolutionary. Nothing's been new in the last few decades with respect to not only ease for the patient, but also ease for the administrating physician. It's deals like that.

Be clear that we do not need large m&a to deliver in the high end of our growth targets. Let me repeat that we do not need larger money to deliver in the high end. In our growth targets, we are going to be uh looking at opportunities as we always do. But we are in a position in which our number 1, Capital priority is going to be fuel our Pipeline and our portfolio.

[Operator]: We look at next year's product for icosequimab, where we're expecting, again, a couple hundred million dollar investment will turn out to be a billion dollar platform for us. Because that's where our competitive advantage lies, is the scientific expertise that we're able to recognize early on, bringing forth a label that is most expansive, most complete, and in record time.

That is just the the number of smaller deals. We do that. Don't make headlines on the day of the transaction. Uh, I think 60 over the last 2 years. Um, and and those lead to uh, products like in lexo, which we acquired in 2019 for a couple hundred million dollars and through really, uh, passion for their craft, as well as, Um, passion for meeting patients, unmet needs. Um, doctors Kris coody Dr. Uh, Charles Drake were able to find and their teams were able to find a bladder cancer treatment that is revolutionary. Nothing's been new in the last few decades with respect to not only ease for the patient but also um ease for the administ administrating physician uh it deals like that. You we look at next year's product, for I coach for Kendra where we're expecting again. A couple hundred million dollar investment will turn out to be a billion dollar platform for us.

[Operator]: Thanks. Good morning, everybody. I'd love to double down on the fact that it really was a great quarter in Q3. For 90% of our business, we actually grew 16%. That's really driven by 11 key brands that grew double digits, brands like Darzalex, Erleada, Spravato, Carvykti, and so on, as well as the strength that we're seeing in our new launches. Most notable there is Tremfya in Crohn's disease and ulcerative colitis with 40% growth. That is 4-0. We've got a lot of strength in the business right now. Those growth drivers that are growing double digits are not only now and just this year. These really are our growth drivers throughout the rest of the decade, as well as the pipeline assets that are coming in and the great growth that we're seeing, most notably Tremfya.

because that's where our competitive Advantage lies is, the scientific expertise that we're able to recognize early on bringing forth a, a label that is most expansive most complete and in record time

Thanks and and good morning everybody. So, um, I'd love to to double down on the fact that it really was a great quarter in 3Q and those numbers that for 90% of our business, we actually grew 16% and that's really driven by 11 key brands that grew double digits, um, Brands like darzalex eritus bravado carvykti, uh, and so on, as well as the strength that we're seeing in our new launches and most notable there is tra in Crohn's disease and all sort of colitis with 40% growth. That is 40. Uh and so we've got a lot of strength in the business. Right now, those growth drivers that are growing double digits are not only now and just this year, these really are our growth drivers throughout the rest of the decade as well as the pipeline assets that are coming in. Um,

[Operator]: If we take a look versus your models in the areas where we are even more bullish, a few areas to note. First is Tremfya. We think that there's a lot of strength with Tremfya. Already, we're seeing in ulcerative colitis about 50% share of the IL-23s. This was actually before we got the subcutaneous induction dose, which we just got approval for. We're seeing really, really strong uptake there. I think things bode real well for Tremfya. As a reminder for Stelara, about 75% of Stelara sales were in Crohn's and ulcerative colitis, so in IBD. We think that that's entirely likely or may even be stronger for Tremfya. We think that there's a lot of growth opportunity there. We believe Spravato, there is a bit of a disconnect.

And then the great growth that we're seeing and and most notably Trump fee. If we take a look versus your models, um, in the areas where we have even or we're even more bullish, a few, uh, areas to note. So first is Trump fiia and we think that there's a lot of strength with Trump fee already. We're seeing in ulcerative colitis about 50%, share of the eel 23s. And this was actually, before we got the subcutaneous,

[Operator]: We are more bullish there, as well as we continue to expand into new treatment centers, as we continue to expand globally. That product is offering so much value for patients with treatment-resistant depression. I'll throw in Rybrevant for non-small cell lung cancer. We're anxiously anticipating our launch of the subcutaneous dosage form. We think that there is a lot of runway there as a $5 billion plus asset. We're also anticipating new data coming out in head and neck cancer and also colorectal cancer. Great growth. Joaquin and Joe mentioned TAR-200, formerly known as Taris. We just got approval and are in the process of launching for bladder cancer. This is one of our next $5 billion plus assets. Last but not least, icosequimab, which we have filed and are also in the midst of showing new data both in psoriasis as well as in ulcerative colitis.

Ious induction dose, which we just got approval for. Um, we're seeing really, really strong uptake there. And I think things bowed real well for Trump fire as a reminder for Stellar about 75% of Stellar sales were in Crohn's and ulcerative colitis. So in IBD, we think that that's entirely likely or may even be stronger for for trim FIA. So we think that there's a lot of growth opportunity there. Um, we believe bravado, there is um, a bit of a disconnect. We are more bullish there as well as we continue to expand into new treatment centers as we continue to expand globally. That product is offering so much value for patients with treatment resistant. Depression, I'll throw in ryber event last Clues uh for non small cell, lung cancer. Um we're anxiously anticipating our launch of the subcutaneous dosage form. We think that there is a lot of Runway there, as a 5 billion dollar plus asset. We're also anticipating

New data is coming out in head and neck cancer, as well as colorectal cancer, indicating great growth. Joe mentioned Lexo, formerly known as TerSera, and we just received approval and are in the process of launching for bladder cancer. This is one of our next $5 billion plus assets. Last but not least, I want to update you on Coach Kendra, for which we have filed and are also in the midst of showing new data, both in S.

[Operator]: When we take a look at the business both now as well as these future growth drivers, we've got a lot of bullishness there. Those are really the major areas for disconnection.

[Operator]: Asad, maybe just building on Jennifer and Joaquin's comments for MedTech, a couple of things that I'd really highlight. Joaquin mentioned our continued confidence and commitment to winning over the long term in electrophysiology. We had a standout quarter, and what really marked it was our continued improvement, especially here in the U.S., which will continue to be the largest and most attractive market. We saw a doubling of our growth rate in this quarter, and we continue to build momentum. Vision, which we haven't touched on also, had a standout quarter, 6.1% growth, 14% growth in the IOL category with significant share gains against our major competitors there. Surgery, our largest business, around 3.3% growth, was really bolstered by strong performance in wound closure at 7% and biosurgery. That launch of Ottava next year is going to really bolster our performance there.

Biases, as well as ulcerative colitis. And so, when we take a look at the business, both now as well as these future growth drivers, we've got a lot of bullishness there. Um, and so those are really the major areas for disconnection.

Decide maybe just building on Jennifer and wain's comments for Medtech. Um, a couple things that I'd really highlight, uh, what he mentioned, our continued confidence and commitment to winning over the long term and electrophysiology, you know, we had a standout quarter and what really marked it was our continued Improvement especially here in the US which will continue to be the largest and most attractive Market. We saw a doubling of our growth rate in this quarter.

[Operator]: I think also what made us more proud and excited about this quarter versus last is that we had performance across the board. Ortho, back to growth with significant improvements in spine, knees, trauma, and broader. Thank you.

[Operator]: Thanks, Tim. Just before we take the next question, we will actually run a little bit longer than the 60 minutes we planned, given the announcement that we had leading to longer script remarks. Next question, please.

Vision, which we haven't touched on also which had a standout quarter 6.1% growth, 14% growth in the iol category, with significant share gains, uh, against our major competitors there. And then surgery our largest business, you know, around 3.3% growth but really bolstered by strong performance in wound closure at 7% and bio surgery. And once again that launch of ottava next year is going to really bolster our performance there. And then I think also what made us more proud and excited about this quarter versus last is that we had performance across the board. Ortho back to growth with significant improvements in spine, knees, trauma, and and uh, and broader. Thank you.

Thanks Tim and just before we take the next question, uh we will actually run a little bit longer than the 60 minutes. We plan just given the announcement that we had leading to longer script remarks

[Operator]: Thank you. Next question is coming from Shagun Singh from RBC. Your line is now live.

[Analyst 1]: Great. Thank you so much. Joaquin and Joe, congratulations on all the operational progress at Johnson & Johnson. I think a key message that I'm hearing is the acceleration in sales growth. In your prepared comments, you did indicate the higher end of the 5% to 7%. I guess my question is, a lot of your businesses are growing very impressively in the double digits. What gets you to exceed those levels? As we think about 2026, why is 5% a good number, given that you have easy comps? Could you do better? What would drive that? Thank you for taking the question.

Question, please. Thank you. Next. Question is coming from shagun, Singh from RBC. Your line is now live.

Uh great. Thank you so much. Uh, win and Joe. Congratulations on all the operational progress at J&J. Um, you know, I I think a key message that I'm hearing is the acceleration and sales growth and in your prepared comments, you did indicate the higher end of the 5 to 7%. I guess, my question is and and a lot of your businesses are growing uh, very impressively in the double digits. So what gets you to exceed those levels and as we think about 2026, you know, why is 5%? Um, uh, you know, a good number given that you have easy comps, could you do?

[Operator]: Yeah, Shagun, thanks for the recognition. It's a great job by the entire JNJ-2113 team across the globe. I think towards the 5% to 7%, obviously, we made that commitment back in 2023. We've seen significant progress with our portfolio. We've added some acquisitions that fortify that number. We are striving for something better than that. Don't misconstrue our ambitions here. What I would say for next year specifically, we are still going to face significant erosion with respect to Stelara. There will be additional discounting in the innovative medicine portfolio. We will still have the orthopedics business, and we will continue to make progress with electrophysiology, going back to market leadership with the PFA platform. There are things that we will obviously look to improve upon those numbers. When I glimpsed at your models for 2026, I did see a clear disconnect.

Better. And what would drive that? Thank you for taking the question.

[Operator]: I'll provide more details when it comes to January. We feel very confident in not just how we're going to conclude 2025, not just the backdrop for 2026, but really the balance of the decade. As Joaquin has said both on media interviews as well in today's call, this is a new era of growth, accelerated growth for JNJ-2113. We feel very good about not just our in-market portfolio, but all the new products within our pipeline that will come to launch over the next one to two years.

Yes again thanks. Uh for the recognition. Uh it's a great job by the entire Johnson and Johnson team across the globe. You know, I I think uh, towards the 5 to 7%, obviously we made that commitment back in 2023. We've seen significant progress with our portfolio. We've added some Acquisitions that fortify that number. Um, we are striving for for something better than that. That don't don't, uh, misconstrue our Ambitions here. Um, what I would say, for next year's specifically, we are still going to face significant erosion. With respect to our there will be additional discounting, um, uh, in the Innovative medicine portfolio. Um, and we will still have, uh, uh, you know, the Orthopedics business and we will continue to make progress with electrophysiology, um, uh, going back to Market leadership, uh, with the PFA platform. So there's, uh, things that we will, obviously look to, uh, improve upon those numbers. But when I Glimpse that your models for 26,

I did see a clear disconnect, and I'll provide more details when it comes to January. But we feel very confident in not just, um, you know, how we're going to conclude 2025, not just the backdrop for 2026, but really the balance of the decade. As Wina said, both on media interviews as well as in today's call, this is a new era of growth—accelerated growth—for Johnson & Johnson. And we feel very good about not just our in-market portfolio.

But all the new products within our pipeline that will uh come to launch over the next 1 to 2 years.

[Operator]: Thank you. Next question is coming from Terrence Flynn from Morgan Stanley. Your line is now live.

Darren Snellgrove: Great. Thanks for taking the questions. Congrats on all the progress. This one's for John. I know at our health care conference, you talked about some upcoming data you're going to have for your anti-Tau antibody, which is in phase two. Just was wondering if you could help frame that data for us, what you're hoping to see there. Could that trial actually be used to support an accelerated approval? Will you need a phase three? Thank you.

Thank you. Next question, is coming from Terence Flynn from Morgan, Stanley, your line is now live

Joaquin Duato: Hey, thanks, Terrence. We expect to have the data on the phase two study in-house within this year. We would then be in a position to share those at a medical congress sometime first half of next year. The endpoints in that study include, first and foremost, cognitive endpoints that are traditionally used for regulatory approvals for medicines in terms of looking for effects and efficacy in Alzheimer's. In addition, we'll also have important neuroimaging data looking at Tau spread using PET imaging. That will be an important piece of the data as well. Based on the quality of those data, that will be a decision-making point for us in terms of go/no-go. We have designed our antibody to attack a specific epitope in Tau that's differentiated from what some others have exploited. We feel confident in the ability to prevent the spread of Tau based on the preclinical data.

Great. Uh, thanks for taking the questions. Congrats on all the progress. Uh, this 1's for John, I know at our Healthcare conference, you talked about some upcoming data, you're going to have for your anti antibody, which is in Phase. 2 just was wondering. If you could help, um, frame that data for us, what you're hoping to see there and could that trial actually be used to support an accelerated approval, or will you need a phase 3? Thank you.

Hey, thanks Sharon. Um, we expect to have the data on the phase 2 study in-house within this year and would, then be in a position to share those at a medical Congress sometime. Uh, first half of next year, the end point in that study include first and foremost, uh, cognitive endpoints. That are traditionally used for regulatory approvals for medicines, uh, in terms of looking for effects and efficacy in Alzheimer's. But in addition, we'll also have important Neuro Imaging data, looking at tal spread using PET Imaging. So that'll be a important piece of the data as well, and based on the quality of those data that will be, uh, decision making point for us and

Joaquin Duato: Of course, the data will be the data, as we say, when we get the clinical results. We'll be eagerly awaiting those results and look forward to communicating in the fullness of time.

In terms of, uh, go, no go. Um, you know, we have designed our antibody to attack a specific epitope Intel. This differentiated from what some others have exploited and um you know feel confident in the ability to prevent the spread of towel based on the pre-clinical data, but of course, you know, the data will be the data as we say when we get the, uh, clinical results. So we'll be

Waiting those results. And uh, and look forward to communicating in the fullness of time.

[Operator]: Thank you. Next question today is coming from Jason Bedford from Raymond James. Your line is now live.

Darren Snellgrove: Good morning. Congrats on the progress. Maybe just a quick one for Joe or Tim. Just trying to gauge the underlying growth in MedTech. It looks like there was a reserve adjustment that helped MedTech growth, perhaps offset by this go-to-market change in energy. Is there a way to quantify the net impact of these adjustments as it relates to the 5.7% adjusted operational growth in MedTech?

Thank you. Next question. Today is coming from Jason Bedford from Raymond James. Your line is now live.

Uh, good morning and and congrats on the the progress. Maybe? Just a quick 1 for for Joe or Tim. Uh, just trying to uh, gauge the underlying growth in Medtech. It looks like there was a reserve adjustment that that helped Medtech growth, perhaps offset by. This is go to market change. In energy, is there a way to quantify the net impact of these adjustments, as it relates to the what 5 5.7% adjusted operational growth in Medtech.

[Operator]: I'm happy to take one. We do not believe that the one you're referring to has any significant materiality and shouldn't impact, we would say, moderate, certainly not material from an overall performance perspective.

Any significant materiality and shouldn't impact? Uh, we would say moderate certainly not Material uh, of from an overall, the performance perspective.

Darren Snellgrove: Thank you. Next question is coming from Vamil Divan from Guggenheim Securities. Your line is now live.

Thank you. Next question is coming from Bamboo Deon from Googleheim Security. Your line is now live.

[Analyst 2]: Great. Thanks so much for taking my questions. I have on Lexo a really a two-part question. One is sort of the near-term uptake. Just curious if you can comment on sort of what the initial feedback is from doctors. It is this buy and bill model. Just curious if you're seeing doctors already sort of step in and purchase the product or are they waiting for the permanent J-code. Second is more of a longer-term question on this. It's just what should we expect in terms of updates, both clinical data-wise or regulatory-wise, in the next, say, 12 to 18 months to just expand the addressable population here to other patients with bladder cancer and also outside the U.S. I think people are getting excited about the outlook for this product. I know before you mentioned that there's a big disconnect between your internal expectations and where consensus is.

Great, uh, thanks so much for taking my questions. Um, so I give an anexo had a really a 2-part question, so 1 is sort of the near-term. Uptake, just curious if you can comment on sort of what initial feedback is from doctors and it is this buy and build model, just curious, if you're seeing doctors already serve step in and purchase the product or are they waiting for the permanent J code and then

The second is more of a longer-term question on. This is just...

[Analyst 2]: I think that suggests you guys think this will be a $2 billion plus product by 2028. Just trying to get a sense of how you expect to build from the initial launch to that level. Thanks.

[Operator]: Sure. Thanks so much for the question. Yes, we did just get approval for TAR-200. The teams are out in full launch mode, and we have a lot of confidence that this is one of our $5 billion plus assets for JNJ-2113. The receptivity has been very strong. We like to say that this product was really designed by urologists for urologists and really is addressing a high unmet need. There hasn't been much advances in the way of bladder cancer for a very, very long time. In the initial launch, it's in BCG unresponsive, high-risk non-muscle invasive bladder cancer. We've been able to demonstrate the highest complete response rates without a need for reinduction, and over half of responders are still cancer-free at one year. These are really, really transformational results.

What should we expect in terms of updates, both clinical data wise or regulatory wise in the next 8? 12 to 18 months to just expand the adjustable population here, uh, to other patients with bladder cancer and also outside the US, I think, uh, I think people are getting excited about. Yeah, I'll look for this product but just I know before you've mentioned that there's a big disconnect between your internal expectation, then we're consensus is and I think that suggests you guys think this will be a so 2 billion dollar plus product by 2028. So, just trying to get a sense of how you expect to build on the initial launch to to that level. Thanks.

Sure, thanks so much for the question. So, yes.

[Operator]: The product was designed to seamlessly fit into urology practice and be, relatively speaking, easy on the patient compared to other therapies, and, like I said, seamlessly work into practice. So far, the response from clinicians has been very positive. For our Executive Committee, we actually had one of our top investigators come and spend time with us last week and show us on models the demonstration and talk about why he's so excited about it, both as a clinician as well as for his patients. We've already had a number of insertions based on the high level of unmet need. As you note, we're also anticipating the J-code for reimbursement come April of next year. We think that will be an important catalyst for uptake, as is normal and common in routine buy and bill type products. We're excited about that.

We did just get approval for Alexa and the teams are out um in full launch mode. And we have a lot of confidence that this is 1 of our 5 billion dollar plus assets for Johnson and Johnson. Um the receptivity has been very strong. Um we like to say that that this product was really designed by your holistic for urologists and really is addressing a high unmet need. There hasn't been much advances in the way of bladder cancer um it for a very, very long time and so in the initial launch its in BCG unresponsive high-risk, non-muscle invasive, bladder, cancer. And we've been able to demonstrate the highest complete response rates without a need for re-induction and uh over half of responders are still cancer-free at at 1 year and so really, really transformational results.

[Operator]: John, maybe you want to talk a little bit particularly about SunRISe-3 and what's coming, as well as TAR-210.

Um, the product was designed to seamlessly fit into Urology practice, um, and be relatively speaking easy on. Um, the patient compared to other therapies and like I said, seamlessly work into practice. And so, so far the the response from clinicians has been very positive for our executive committee. We actually had 1 of our top investigators come and and spend time with us last week and show us on models. Uh, the the demonstration and talk about, why he's so excited about it. Um, both as a clinician, as well as for his patients. So um, so we've already had a number of insertions, um, you know, based on, you know, the high level of unmet need. But as you note, um, we're also anticipating the J Code. Um, for reimbursement, come April of next year. So we think that that will be an important Catalyst for uptake as is normal and common in, uh, in routine, you know, buy and Bill type products. So we're excited about that. Um, John maybe you want to talk a little bit, um, particular

Joaquin Duato: Yeah, thank you so much for the question. We have a broad development program underway with several phase three studies to address the non-muscle invasive bladder cancer population high risk. That's about half of all the non-muscle invasive bladder cancer patients. Our studies include both the patients who are BCG experienced and the first approval that was for BCG non-responsive. We also have studies in BCG relapsed. We also have head-to-head frontline studies against BCG, really covering a broad landscape there. Just to remember that there are about 600,000 patients every year who are newly diagnosed with bladder cancer. 75% of those have the non-muscle invasive localized. Another 20% have localized, but it is muscle invasive. There too, we're also doing studies.

Particularly about Sunrise 3 and what's coming as well as tart 210. Yeah, thank you so much for the question. We have a broad development program underway with several phase 3 studies to address the non-muscle invasive, bladder, cancer population. Uh high-risk that's about half of all the non-muslim invasive bladder cancer patients and our studies include both um the patients who are BCG

Joaquin Duato: In fact, at the ESMO conference in a couple of days, we'll present data where in the neoadjuvant context we've used Talvey in combination with our PD-1 antibody, Cetrelimab. We'll report the data there showing that we're able to render a much higher percentage of patients completely free of any evidence of disease that you can find histologically or by other methods, what's called pathological complete response. Therefore, voting for better outcomes for these patients who already have muscle invasive disease and are having surgery to remove their bladder as a result of that risk. We really see a broad opportunity for Talvey, particularly in the non-muscle invasive across all lines of therapy, in that high-risk non-muscle invasive, which is about half of all of those patients, as well as in some subpopulations of patients with the muscle invasive as well.

75% of those have the non-muslim invasive localized and then another 20% have localized, but it is muscle invasive there too. We're also doing studies and in fact at the esmo conference in a couple days we'll present data

Joaquin Duato: I would just give a shout out that you know that's not going to be a one-trick pony for us. We have TAR-210 coming rapidly on the heels. This is a next-generation device that releases, instead of a chemotherapy, a targeted therapy, or an erdafitinib drug that inhibits a receptor tyrosine kinase that is commonly mutated in bladder cancers. It's actually the most common, do you think, mutation that occurs in bladder cancers. There we've seen response rates, complete response rates north of 90%. Our next-generation device for that releases the medicine at a steady rate, not just for three weeks like Talvey, but for three months. More to come. Really excited about this platform for addressing the great unmet need of bladder cancer.

Where in the Neo addivon context, we've used in lexo, in combination with our pd1, antibodies satella map, and we'll report the data there showing that we're able to render a much higher percentage of patients, uh, completely free of any evidence of disease that you can find histologically, or by other methods, what's called pathological, complete response, and therefore, boating for better outcomes, for these patients who already have muscle invasive disease and are um having surgery to remove their bladder as a result of that risk. So um really see a broad opportunity for in lexo. Particularly in the non-muslim invasive across all lines that therapy in that high risk non-muslim invasive which is about half of all those patients as well as in some Sub sub. Some some populations of patients with the muscle invasive as well uh and then I would just give a shout out that, you know, that's not uh

Going to be a 1 tricks. We have tar, 210 coming rapidly on the heels. This is a Next Generation device. That releases instead of a chemotherapy, a targeted therapy nib drug that inhibits. A receptor tyrosine kinase. That is, uh, commonly mutated, uh, in bladder, cancers, it's actually the most common genetic mutation that occurs in bladder, cancers. Uh, and there we've seen response rates complete response rates north of 90%.

And our next Generation device for that releases, the medicine at a steady rate, not just for 3 weeks like in lexo. But for 3 months, so more to come really excited about this platform for addressing the great unmet need of bladder cancer.

[Operator]: Thank you. Next question is coming from Matt Nixic from Barclays. Your line is now live.

[Analyst 3]: Hey, thanks so much. Just a couple of follow-ups. One on just the sequential strength in the quarter. A little bit unusual for a summer quarter. How much of that do you feel like is these, and I'm speaking of MedTech mostly here, you know, even though pharma was pretty strong also. Just the sequential improvements from, do you think the market feels stronger? Was this predominantly you sort of leaning back into competition in some of your core MedTech markets? Just a follow-up on all the discussion about the spin. If we should think of, you know, holding on to MedTech, concentrating on the key businesses that you mentioned.

Thank you. Next question is coming from Matt. Mix from Barclays. Your line is now live.

Hey thanks so much. Um, so just 1 couple of follow-ups, 1 on just the, uh, sequential strength in the quarter. Um, a little bit unusual for a, for a seller quarter. So how much is that? Do you feel like is these uh, I'm speaking of Medtech mostly here, you know, even though the farmers was was was pretty strong also, but just the sequential improvements from you think the market feels stronger or was this predominantly used or reading back into competition and some of your core met Tech markets and then just a follow-up on all the discussion about the spin. Just if it's um, if we should think of, um,

[Analyst 3]: Does this also open the door to sort of, you know, I guess, loosen up the capital structure and balance sheet in such a way to start adding to some of those areas as you get closer to or through this spin? Thanks so much.

[Operator]: Matt, thank you for the question. Let me take the first one. You know, what was really attractive about this quarter and built on the tremendous performance in the second quarter was the solid performances across all businesses. Where you saw that sequential improvement, if you'll recall, our ortho business struggled in the first and second quarter. We saw a nice improvement in Q2. Q3, we returned that business to growth with tremendous performances in categories like hips with 5.1%, knees 5.6%, strong performance in trauma, and actually returning to growth in spine. Ortho was a major contributor to that performance. Of course, we had continued tremendous performances in our fastest growing category in cardiovascular, solid performances in surgery, and acceleration within vision, as I mentioned earlier, driven by our performance primarily in the intraocular space.

You know, holding on to Medtech, you know, concentrating on the key businesses that you mentioned. Uh, this is also open the door to sort of, you know, I guess, uh, loosen up the the capital structure and balance sheet such a way to, to start adding to, to some of those areas as you get closer to or through this spin, uh, thanks so much.

Thank you for the question. Let me take the the first 1, you know what? What was really attractive about this quarter and and built on the tremendous performance in the second quarter was the solid performance across all businesses and so where you saw that sequential Improvement. If you'll recall our Ortho business struggled in the first and second quarter, we saw a nice Improvement in Q2 Q3. We returned that business to, to growth with tremendous performances and categories. Like hips with 5.1% knees, 5.6, uh, strong performance in trauma and actually returning to growth in spine. And so Ortho, was a major competitor or a major contributor to that performance. And then of course we had continued tremendous performance in our fastest, growing cath category, and cardiovascular solid performances in um

Tim Schmid: Thank you. Overall, as we discussed at the beginning of this call, our focus and priority within MedTech is around our three areas, which are vision, cardiovascular, in which we already have acquired a number of companies, and also robotic surgery, where we are focusing on being able to submit our Ottava soft tissue robotic system to the FDA in the first half of 2026. I will continue to look for opportunities there in order to enhance our portfolio and be able to make our MedTech group the best MedTech group in the industry, which is a clear goal for me and for JNJ-2113.

In surgery and acceleration within our vision. As I mentioned earlier, driven by our performance primarily in the intraocular space.

Thank you. And overall, as we discussed at the beginning of this call, our focus and priority within Mietek is around our three areas, which are Vision cardiovascular, in which we already have acquired numbers.

[Operator]: Thanks, Matt. We have time for one last question.

Of companies and also robotic surgery, we are focusing on being able to submit our Ottava soft tissue robotic system to the FDA in the first half of 2026. I will continue to look for opportunities there in order to enhance our portfolio. I aim to make our ME group the best metric group in the industry, which is a clear goal for me and for Jessica Moore and Johnson & Johnson.

Darren Snellgrove: Certainly. Our final question today is coming from David Reisinger from Leerink. Your line is now live.

Thanks, Matt. We have time for 1 last question.

Sorry, your final question today, is coming from David Risinger from lyric Line is now live.

[Analyst 4]: Yes, thanks very much. Congrats on the performance. My question is on icosequimab. I'm curious about how you plan to position it relative to Tremfya, given the similar indications for the two therapies. Thank you very much.

[Operator]: Great. Thanks. Good morning. We are really excited about the opportunity for icosequimab and see this as one of our next big, you know, $5 billion plus brands. Why are we excited about it? We believe it's really going to set the new standard of care in the treatment of plaque psoriasis. That will be the first indication, you know, unprecedented combination of complete skin clearance and a favorable safety profile with the simplicity of an oral pill. We're really, really confident in what we've seen. Not only are we studying it versus other orals, we're actually studying it head-to-head versus Stelara. No oral agents have been able to really compete with that combination of both biologic-like efficacy and that known safety profile. We're really bullish.

So my question is, is on icora. I'm curious about how you plan to position it relative to trim fire given the similar indications um, for the 2 therapy. Thank you very much.

Great. Thanks. Good.

[Operator]: If you take a look at the market, despite today's treatments, there's still less than 30% of eligible patients who have moderate to severe psoriasis who are receiving advanced treatments. We think there is a significant market expansion opportunity to be able to bring patients into advanced therapies into that frontline setting. We think there's a big opportunity there. We think as we move closer to the launches with the way the profiles are differentiating, there will be a unique and distinct position for icosequimab and also a distinct and unique position for Tremfya that will allow us to have both really continued significant growth on both assets, particularly given the high level of unmet need in the market. More to come on that. I'm not going to give away everything on the positioning. We think that there are really distinct places that they're going to play.

As 1 of our next big, you know, 5 billion dollar plus Brands and so, why are we excited about it? So we believe it's really going to set the new standard of care and the treatment of plaque psoriasis. Um, and that will be the first indication, you know, unprecedented combination of complete skin clearance and a favorable safety profile with the Simplicity of an oral pill. Um, we're really, really confident in what we've seen and so not only are we studying it versus other orals. We're actually studying it head-to-head versus stellar and no oral agents. Have been able to really compete with that combination of both you know biologic like efficacy. Um and that known safety profile. And so we're really bullish. Um, you know if you take a look at at the market does

Bite today's treatments, there's still less than 30% of eligible patients who have moderate to severe psoriasis who are receiving Advanced treatments. And so, we think there is a significant Market expansion opportunity to be able to bring patients into advanced therapies into that Frontline setting. So, we think there's a big opportunity there. We think, as we move closer, um, to the launches, with the way the profiles are differentiating, there will be a unique and distinct position for icora Kendra and also a distinct and unique position for Trump. FIA that will

Allow us to have both continued significant growth on both ASA assets, particularly given the high level of unmet needs.

[Operator]: ICO is going to be a really significant asset for us. You can see how well Tremfya is doing with the 40% growth that we achieved this quarter.

Joaquin Duato: David, keep your eyes open. We have more publications coming out on our icosequimab data. Two back-to-back papers impressed at the New England Journal of Medicine describing the placebo-controlled studies, and then a paper impressed at The Lancet showing our head-to-head against the leading TIK2 inhibitor in psoriasis. Exciting times for that really novel targeted oral peptide for the autoimmune diseases where the IL-23 class plays.

To come on that, I'm not going to give away everything on the positioning, but we think that there are really distinct places that they're going to play. Ieko is going to be a really significant asset for us, and you can see how well Trumpi is doing with the 40% growth that we achieved this quarter.

And David uh keep your eyes open. We have um, more Publications coming out on our ecotric, Kendra data, 2 back-to-back papers impressed at the New England Journal of Medicine. Uh, describing the placebo control studies and then a paper impressed at the Lancet, showing our head-to-head against the leading tick, 2 inhibitor in psoriasis. So uh, exciting times for that really novel Target.

[Operator]: Thanks, David. Thanks to everyone for your questions and interest in Johnson & Johnson. Please reach out to the Investor Relations team with any remaining questions you have. I will now turn the call over to Joaquin for some brief closing remarks.

Into World peptide for the autoimmune diseases, where the aisle 23 class plays.

Tim Schmid: Thank you, all of you, for joining the call today. As you heard, we have had a very strong third quarter. We have sharpened focus around our six priority areas of oncology, immunology, neuroscience, cardiovascular, surgery, and vision. We are in a period of accelerated growth with innovation and pioneering treatments that are going to transform lives. Thank you for your interest in JNJ-2113. Enjoy the rest of your day.

Thanks, David, and thanks to everyone for your questions and interest in J&J. Please reach out to the Investor Relations team with any remaining questions. I will now turn the call over to Win for some brief closing remarks.

Thank you, all of you, for joining the call today. As you heard, we have had a very strong third quarter. We have sharpened our focus around our six priority areas: oncology, immunology, neuroscience, cardiovascular, surgery, and ambition. We are in a period of accelerated growth.

[Operator]: Thank you. This concludes today's Johnson & Johnson Q1 2025 Earnings Conference Call. You may now disconnect.

With the innovation and pioneering treatments that are going to transform lives, thank you for your interest in Johnson & Johnson. Enjoy the rest of your day.

Thank you. This concludes today's Dr. Johnson Johnson's third quarter 2025 earnings conference call. You may now disconnect