Johnson & Johnson

Good morning and welcome to Johnson & Johnson's third quarter 2019 earnings conference call. All participants will be in listen-only mode until the question and answer session of the conference. This call is being recorded. If anyone has any objections, you may disconnect at this time. If you experience technical difficulties during the conference, you may press star zero to reach the operator. I would now like to turn the conference call over to Johnson & Johnson. You may begin.

Good morning. This is Chris DeLorfis, Vice President of Investor Relations for Johnson & Johnson. Welcome to our company's review of business results for the third quarter of 2019. Joining me on today's call is Joe Wolk, Executive Vice President, Chief Financial Officer. Additionally, during our Q&A session, Joe and I are pleased to be joined by Ashley McEvoy, Executive Vice President, Worldwide Chairman, Medical Devices. Thibaut Mangon, Executive Vice President, Worldwide Chairman, Consumer, and Jennifer Talbert, Executive Vice President, Worldwide Chairman, Pharmaceuticals. A few logistics before we get into the details. This review is being made available via webcast, accessible through the investor relations section of the Johnson & Johnson website at investor.jnj.com, where you can also find additional materials including today's presentation and associated schedules. Please note that today's presentation includes forward-looking statements. We encourage you to review this cautionary statement regarding such statements included in today's presentation, as well as the company's Form 10-K, which identifies certain factors that may cause the company's actual results to differ materially from those projected. Our SEC filings, including our 2018 Form 10-K and our most recent 10-Q, along with reconciliations of the non-GAAP financial measures utilized for today's discussion to the most comparable GAAP measures, are also available at investor.jnj.com. 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, Joe will first provide some perspective on our overall results for the third quarter. I will then review the sales and P&L results for the corporation and the three business segments. Joe will conclude by providing insights about our cash position, capital allocation deployment, and our updated guidance for 2019, along with some considerations for the balance of this year and initial high-level thoughts for next year. The remaining time will be available for your questions. We anticipate the webcast will last about 75 minutes. I'm now pleased to turn the call over to Joe Wolk.

Great, Chris. Good morning, everyone. Thank you for your interest in Johnson & Johnson. As you might suspect, we're very pleased to discuss our strong third quarter results. Our performance positions us well to exceed the 2019 outlook we provided at the start of the year, providing us with a solid foundation for the future. During the quarter, we delivered strong revenue and earnings growth while also making investments that advance our innovative pipeline across all three segments. We remain committed to advancing solutions that enhance the lives of patients, consumers, employees, and communities while also delivering value to our shareholders. In a moment, Chris will provide details on our results, but before he does, let me offer some general observations and context about the performance in the third quarter. While there are many headlines surrounding our company as well as the industry, we continue to deliver life-saving and life-enhancing products to patients and consumers, which translates into solid financial performance. We must recognize that businesses in the U.S. are working in a very litigious environment, but the fundamentals of Johnson & Johnson's business are strong. We remain confident in our ability to navigate challenges and deliver results, focused on our mission, as we have done for 133 years. For the quarter, Our pharmaceutical business, even in the face of significant generic and biosimilar competition, once again delivered above-market performance across a broad base of therapeutic areas, led by double-digit growth in 10 key products. We are particularly pleased by the progress in the quarter of regulatory approvals and submissions, notably the FDA's approval of Erleada for the treatment of metastatic castration-sensitive prostate cancer based on the Titan data, and the approval of Stelara in ulcerative colitis in the EU, additional indications for both of those products. In our consumer health business, third quarter performance reflects continued strength in areas we prioritized earlier this year, beauty and over-the-counter medicines. These businesses are fueled by new product innovations and recent acquisitions in large markets experiencing higher growth, which positions the consumer business to grow competitively with the market while also improving the profitability of this segment. Our medical device business continues to accelerate growth. We had some tailwinds that Chris will outline, but the adjusted operational sales growth was the best quarterly growth we posted since 2015. Interventional Solutions delivered yet another quarter of double-digit growth, surgery improved, and orthopedics progress continues. We successfully executed multiple launches in the quarter, and we believe we are well-positioned to continue the momentum. Let me turn the discussion back to Chris for details on the third quarter sales drivers and notable line items in our P&L. I will return prior to the Q&A to provide comments on our cash position and guidance.