Johnson & Johnson

Good morning and welcome to Johnson & Johnson's third quarter 2024 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.

Hello, everyone. This is Jessica Moore, Vice President of Investor Relations for Johnson & Johnson. Welcome to our company's review of the third quarter results and our full year financial outlook for 2024. A few logistics before we get into the details. As a reminder, you can find additional materials, including today's presentation and associated schedules, 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. A description of these risks, uncertainties, and other factors can be found in our SEC filings, including our 2023 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 DeWato, our chairman and CEO, will kick us off with opening remarks and highlight key catalysts within the segments. I will review the third quarter sales and P&L results for the enterprise, as well as highlights related to our two businesses. Joe Walk, our CFO, will then provide an overview of our pipeline advancements, cash position, capital allocation priorities, and guidance for 2024, as well as qualitative considerations for 2025. Jennifer Taubert, John Reed, and Tim Schmid, our innovative medicine and medtech leaders, 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. I will now turn the call over to Joaquin.

Thank you, Jess, and hello, everyone. As you will hear, we delivered strong results in the third quarter with 6.3% operational sales growth. Our performance once again reflects the unique breadth of our business and our commitment to delivering the next wave of healthcare innovation to patients around the world. It also reflects the work we have done to shift our pipeline and portfolio to high innovation and high growth markets. That work continues, which you saw with the recently completed acquisitions of Shockwave and V-Wave in Medtech and Ambrix Proteologics and the NM26 biospecific antibody in Innovative Medicine. And we are pleased with the progress we are making. In innovative medicine, we reported a second consecutive quarter of sales exceeding $14 billion with 11 key brands growing double digits. Darsalex became the first product in our portfolio to reach $3 billion in sales in a single quarter. And as you will hear, our pipeline of high innovation, high growth potential assets is advancing rapidly with five major U.S. and EC approvals in the quarter. This includes FDA approval of Vribravan plus Lascus as first-line treatment for EGFR-mutated advanced lung cancer, a transformational step forward for patients, and FDA approval of Trenfaya for active ulcerative colitis, which represents a significant opportunity for Johnson & Johnson, given 75% of stellar assails today come from inflammatory bowel disease. And with filings and reviews underway for many of our innovative medicines that have the potential to generate $5 billion in peak year sales, we are increasingly confident in our near and long-term growth trajectory. In MedTech, you can see the impact of our portfolio shift to high-innovation, high-growth markets, particularly in cardiovascular. With the recent acquisitions of Shockwave and AvioMed, we are now category leaders in four of the largest and highest-growth cardiovascular intervention MedTech markets, which in Q3 translated to another quarter of double-digit growth across the cardiovascular portfolio. And with the full market launch of Shockwave E8 peripheral IVL catheter, we are seeing an immediate impact of the Shockwave acquisition. In vision, growth is accelerating, and we expect that to continue with the recent full market release of Technis Odyssey in the U.S. and Acuvue Oasis Max one-day contact lenses. We are also excited about the future of our surgery business. As you will recall, in November 2023, we committed to submitting the Otava Robotic Surgical System for an Investigational Device Exemption, or IDE, to the US FDA in the second half of 2024 to initiate clinical trials. I'm pleased to announce that we have met that milestone with the IDE application submitted in Q3. Looking across the enterprise, our high innovation, high growth strategy is working. And our progress this quarter speaks to the strength of our commercial and innovation capabilities. We have increased adjusted operational EPS guidance pre-M&A for the third quarter in a row. We have invested $18 billion in high innovation, high growth M&A this year. And based on this quarter's results, we are confident in our expectations for 2025 through the end of the decade and beyond. And with that, I will turn the call back to Jess.