Johnson & Johnson

Good morning and welcome to Johnson & Johnson's second quarter 2026 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 Ryan Kors, Vice President of Investor Relations for Johnson & Johnson. I'm excited to be here today and to lead the Investor Relations team moving forward. Welcome to our company's review of business results for the second quarter of 2026 and our financial outlook for the full year. 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. They are subject to certain risks and uncertainties that may cause the company's actual results to differ materially from those projected. The description of these risks, uncertainties, and other factors can be found in our SEC filings, including our 2025 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 second quarter sales and P&L results. Joe Wolk, our CFO, will then close by sharing an overview of our capital allocation priorities and updated guidance for 2026. Jennifer Taubert, 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. With that, I will now turn the call over to Joaquin.

Thank you, Ryan, and welcome to your new role. I'm pleased to share the top-line results from our strong second quarter. We said 2026 would be a year of accelerated growth and impact for Johnson & Johnson, and with our Q2 bid on the top and bottom line and raised guidance, we are delivering. Across oncology, immunology, neuroscience, cardiovascular, surgery, and vision, the strength of our business is built on our unique combination of scientific expertise, scale, and disciplined execution. We have the strongest portfolio and pipeline in our 140-year history, with 28 products and platforms that each deliver more than a billion dollars in annual sales. In Q2, we reported operational sales growth of 5.6%. Excluding Stellara, we grew double digits in the quarter. With sales in the quarter of more than $25 billion, we are on track to meet our 2026 target of more than $100 billion in annual revenue for the first time in our company's 140-year history. We are pleased with the progress of our new launches, including IcoTide in Lexo and Ribramant, instilling confidence that momentum will accelerate into 2027 and beyond with line of sight to double-digit growth by the end of the decade. Nicotide, in particular, has significant early launch momentum with uptake accelerating and performance outpacing competitors at comparable points in their launches. Since launch, more than 10,000 patients have initiated therapy on Nicotide underscoring the unmet need for patients seeking first-line systemic treatment with a unique combination of efficacy, safety, and the simplicity of a once-daily pill. In innovative medicine, we delivered operational sales growth of 6.8% in the quarter with eight brands growing double digits. In oncology, Our commitment to transform patient outcomes has never been stronger. We are on track to be the number one oncology company by 2030, with sales projected to exceed $50 billion. Leading the way in Q2 is Darsalex, the foundational treatment for multiple myeloma, which continues to be our largest product. Once again, Darzalex delivers sales of more than $4 billion, growing close to 18%. When we talk about the depth of our portfolio, nowhere is that more evident than in multiple myeloma. We have treatments in every line of therapy, with 80% of patients receiving one or more of our medicines during their treatment journey. Cardicti, Tecvaili, and Talve continue to deliver high double digit growth. And we are not standing still with the new data this quarter showing the combination of Talve and Darzalex delivered deep and durable responses with more than 80% of patients progression free at two years and overall survival up to 89%. In solid tumors, we continue to see strong performance from Erlida and Ribramant, and we shared important new data for both Arasco that could change clinical practice. For Erlida, we opened the ASCO plenary with our phase 3 proteus study showing that treatment before and after surgery significantly reduces the risk of metastasis or death in high-risk localized prostate cancer. and with Riborband, we demonstrated durable responses in head and neck cancer and area with limited options and have submitted a filing to the FDA to build on existing lung cancer indications. While we are not yet reporting quarterly sales for Inlexo in bladder cancer, we are encouraged by the early momentum. During the second quarter, nearly one in three eligible patients started on an elixir regimen, and new patient insertions grew approximately 75% versus prior quarter. And building on our recent acquisition of Halda Therapeutics, we also announced plans to acquire Firefly Bio, adding another antibody platform that strengthens our leadership in next-generation oncology innovation. We expect the transaction to close during the third quarter. In immunology, we have built one of the deepest and most differentiated portfolios in the industry. Trenfaya remains the fastest-growing advanced therapy in both Crohn's disease and ulcerative colitis, delivering exceptional overall sales growth of 71% in the quarter. With the dual powerhouse of Trenfaya and Icodide in psoriasis, we now have a complementary portfolio of both first-line biologic and first-line systemic treatments. We continue to see strong apte gofimavi in generalized myasthenia gravis and recently received FDA priority review status in warm autoimmune hemolytic anemia. In neuroscience, we are developing treatments to transform care for complex brain and nervous system disorders. Spravato and Kaplaita both performed strongly in the quarter. Kaplaita new patient starts were up 122% versus prior year, significantly outpacing the market leader and with FDA approval for the prevention of relapse in schizophrenia, we achieved continued momentum. Now let's turn to MedTech where we delivered Q2 operational sales growth of 3.6%. In cardiovascular, we are the global leaders in electrophysiology, circulatory restoration, and heart recovery. VariPulse, our pulsed field ablation platform for atrial fibrillation, continues to build momentum with more than 85,000 AFib patients now treated worldwide. In Q2, our position was further strengthened with the debut of Carto Sound Sonata, bringing new AI-powered imaging and mapping capabilities to electrophysiology. We also received FDA authorization for our Dual Energy Thermo-Cool Smart Touch SF platform, which integrates pulse field and radio frequency energy in a single system to give physicians greater flexibility in tailoring ablation treatments for patients. In circulatory restoration, the Q2 global launch of SOCWave C2-RO expanded our ability to treat more complex coronary disease and broadens the reach of our intravascular lithotripsy platform. And in heart recovery, while a biomed growth slow in Q2 as a result of increased physician selectivity, weighing on procedural volumes, we are working to strengthen the confidence in our extensive clinical evidence and real-world experience. In surgery, we are unlocking a new era powered by robotics and digital innovation. We are progressing towards potential FDA authorization of Otava, the world's first stable integrated robotic surgical system. This is one of the most significant medtech innovations we will bring to market this decade. Otava's unique architecture, automated features, and next-generation robotic instruments help address surgeons and med needs, while integration with our polyphonic open digital ecosystem provides data-driven insights and analytics to better support surgical teams. This quarter, we also received CE Mark approval for the Ethicon 4000 stapler, the latest advancement in our line of surgical technologies. In vision, we have a bold ambition to make vision possible for more than 40 million people each year. In Q2, we announced the expanded US availability of TECNIS Pure C as we accelerate the rollout of this extended depth of focus intraocular lens. Our AccuView portfolio delivers strong quarterly growth across all regions. And as a part of our $55 billion U.S. commitment, we recently announced an investment of more than $1 billion to scale our U.S. fission manufacturing, packaging, and distribution capabilities as we expand capacity to meet growing demand for these products. Our progress in Q2 reflects what makes Johnson & Johnson unique, a company innovating across the full spectrum of healthcare, delivering strong performance today while building a pipeline that will transform care for patients tomorrow. As we look ahead, our confidence is rooted in the breadth of our innovation, from transformational medicines to next-generation medical technologies. That combination of science, scale, and disciplined execution is what uniquely positions Johnson & Johnson to lead the next wave of healthcare innovation. I will now turn the call back over to Ryan.