4th Quarter 2015

Earnings Call Presentation

January 26, 2016

Louise Mehrotra
Vice President
Investor Relations

Note on Forward-Looking Statements

These presentations contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995 regarding, among other
things, future operating and financial performance, product development, market position, business strategy and restructuring plans. The viewer is
cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events. If underlying
assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and
projections of Johnson & Johnson. Risks and uncertainties include, but are not limited to, economic factors, such as interest rate and currency exchange
rate fluctuations; competition, including technological advances, new products and patents attained by competitors; challenges and uncertainties inherent
in new product development, including uncertainty of clinical success and obtaining regulatory approvals; uncertainty of commercial success for new and
existing products; impact of business combinations and divestitures; challenges to patents; the impact of patent expirations; the ability of the company to
successfully execute strategic plans, including on-going restructuring plans; any required consultation procedures relating to restructuring workforce
actions, the potential that the expected benefits and opportunities related to the restructuring may not be realized or may take longer to realize than
expected; market conditions and the possibility that the share repurchase program may be suspended or discontinued; significant adverse litigation or
government action, including related to product liability claims; changes to applicable laws and regulations, including global health care reforms; trends
toward health care cost containment; changes in behavior and spending patterns or financial distress of purchasers of health care products and services;
financial instability of international economies and legal systems and sovereign risk; manufacturing difficulties or delays, internally or within the supply
chain; product efficacy or safety concerns resulting in product recalls or regulatory action; increased scrutiny of the health care industry by government
agencies; and the potential failure to meet obligations in compliance agreements with government bodies. A further list and description of these risks,
uncertainties and other factors can be found in Johnson & Johnsons Annual Report on Form 10-K for the fiscal year ended December 28, 2014, including
Exhibit 99 thereto, and the companys subsequent filings with the Securities and Exchange Commission. Copies of these filings are available online at
www.sec.gov, www.investor.jnj.com, or on request from Johnson & Johnson. Any forward-looking statement made in these presentations speaks only as
of the date of these presentations. Johnson & Johnson does not undertake to update any forward-looking statements as a result of new information or
future events or developments.

Note on Non-GAAP Financial Measures

These presentations refer to certain non-GAAP financial measures. These non-GAAP financial measures should not be considered replacements for, and
should be read together with, the most comparable GAAP financial measures.
A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the accompanying
financial schedules of the earnings release and the Investor Relations section of the Companys website at www.investor.jnj.com.
3

Strategic Partnerships, Collaborations and

Licensing Arrangements
During the course of this mornings presentations, we will discuss a number of products and compounds developed in
collaboration with strategic partners or licensed from other companies. Following is an acknowledgement of those
relationships.
Neuroscience: INVEGA SUSTENNA/XEPLION includes technology licensed from Alkermes, Inc.; RISPERDAL
CONSTA developed in collaboration with Alkermes

Cardiovascular/Metabolism: XARELTO co-developed with Bayer HealthCare; INVOKANA/INVOKAMET licensed from

Mitsubishi Tanabe Pharma Corporation
Immunology: REMICADE and SIMPONI marketing partners are Schering-Plough (Ireland) Company, a subsidiary of
Merck & Co., Inc. and Mitsubishi Tanabe Pharma Corporation; sirukumab developed in collaboration with
GlaxoSmithKline PLC
Infectious Diseases & Virology: OLYSIO in US, GALEXOS in Canada and SOVRIAD in Japan developed in
collaboration with Medivir AB; PREZCOBIX / REZOLSTA fixed-dose combination and Rilpivirine +F/TAF FDC

developed in collaboration with Gilead Sciences, Inc.

Oncology: VELCADE developed in collaboration with Millennium: The Takeda Oncology Company; IMBRUVICA
developed in collaboration with Pharmacyclics, Inc.; DARZALEX licensed from Genmab A/S; ZYTIGA licensed from

BTG International Ltd.; YONDELIS developed in collaboration with Pharma Mar S.A.
Orthopaedics: MONOVISC/ORTHOVISC licensed from Anika Therapeutics, Inc.
4

4th Quarter 2015 Sales by Geographic Area

% Change

$ U.S. Billions, except EPS

TOTAL COMPANY

U.S.
Europe

Western Hemisphere
(ex U.S.)

Asia-Pacific, Africa
International
Worldwide (WW)

4Q 2015

4Q 2014

Reported

Operational*

$9.3

$8.6

8.0

8.0

4.0

4.6

(12.2)

0.8

1.4

1.8

(19.1)

2.8

3.1

3.3

(7.1)

0.9

8.5

9.7

(11.7)

1.2

$17.8

$18.3

(2.4)

4.4

* Excludes impact of translational currency

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4th Quarter 2015 Financial Highlights

$ U.S. Billions, except EPS
4Q 2015

4Q 2014

% Change

$17.8

$18.3

(2.4) Total
4.4 Ops*

GAAP Earnings

3.2

2.5

27.5

GAAP EPS

1.15

0.89

29.2

Adjusted Earnings**

4.0

3.9

4.0

Adjusted EPS**

1.44

1.37

5.1 Total
12.4 Ops*

Sales

* Excludes impact of translational currency

** Non-GAAP measure; excludes intangible amortization expense and special items; see reconciliation
6

Full Year 2015 Financial Highlights

$ US Billions, except EPS
2015

2014

% Change

$70.1

$74.3

(5.7) Total
1.8 Ops*

GAAP Earnings

15.4

16.3

(5.6)

GAAP EPS

5.48

5.70

(3.9)

Adjusted Earnings**

17.4

18.3

(4.8)

Sales

Adjusted EPS**

6.20

6.39

(3.0) Total
5.8 Ops*

Free Cash Flow***

15.9

14.8

7.4

* Excludes impact of translational currency

** Non-GAAP measure; excludes special items; see reconciliation
*** Non-GAAP measure; defined as operating cash flow less capital spending; estimated as of 1/26/16
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Consumer Highlights 4th Quarter 2015

Sales: $3.3B
Ops Change*: WW 1.8%, U.S. (4.9%), Intl 5.5%
CONSUMER
SEGMENT

TOTAL WW
SALES $MM

REPORTED
% GROWTH

OPERATIONAL
% GROWTH*

Baby Care

$484

(7.6%)

3.7%

Oral Care

408

(1.4)

8.2

1,045

(2.6)

8.2

Skin Care

871

(8.9)

(1.1)

Womens
Health

283

(8.1)

7.4

Wound
Care/Other

229

(30.8)

(26.7)

OTC

Total
Consumer

Key Drivers of Operational Performance*

Baby Care
New product launches partially
offset by soft sales in China
Oral Care
LISTERINE successful
marketing campaigns &
geographic expansion
OTC
U.S. ZYRTEC strong
consumption & re-launched
digestive health products
U.S. analgesics +3% share
growth partially offset by slow
start to flu season
U.S. adult $ share ~13.5%
U.S. pediatric $ share ~45.5%

$3,320

(7.9%)

1.8%

OUS growth driven by upper

respiratory including inventory
build & anti-smoking product
re-launches

Skin Care
U.S. negatively impacted by
timing of shipments and
inventory builds
OUS new products partially
offset by soft sales in China
Women's Health
OUS new products & sales
momentum
Wound Care/Other
Excluding divestitures +~6.5%
Total Consumer
Excl. net impact of Acq./Div.**,
WW growth +4.7%, U.S.
+1.7%, OUS +6.3%
Additional shipping days
contributed ~4% to J&J WW
growth

* Excludes impact of translational currency ** Non-GAAP measure; see reconciliation

Pharmaceutical Highlights 4th Quarter 2015

Sales: $8.1B
Ops Change*: WW 6.5%, U.S. 12.7%, Intl (0.9%)
Key Drivers of Operational Performance*
PHARMACEUTICAL
SEGMENT

Immunology

Infectious Diseases

Neuroscience

TOTAL WW
SALES $MM

$2,771

REPORTED
% GROWTH

7.5%

OPERATIONAL
% GROWTH*

11.7%

801

(25.6)

(20.4)

1,601

(3.0)

3.9

Oncology

1,273

5.0

14.8

Cardiovascular/
Metabolism/ Other **

1,618

9.2

13.0

$8,064

0.8%

6.5%

Total Pharma

Immunology
Strong U.S. immunology market
growth and increased penetration
of SIMPONI ARIA
OUS - Strong results for STELARA
due to increased penetration of PsA
indication partially offset by lower
sales to distribution partner for
REMICADE and SIMPONI

Infectious Diseases
Lower sales of hepatitis C products
due to competitive launches
Increased sales of HIV products with
introduction of PREZCOBIX

Neuroscience
Long-acting injectable products
growth of +13% WW ;+30% U.S.;
uptake of INVEGA TRINZA
CONCERTA positive impact of
reclassification of generic competitor
products in U.S.

Oncology

* Excludes impact of translational currency

** Previously referred to as Other

*** Non-GAAP measure; see reconciliation

Sales of IMBRUVICA due to

strong patient uptake, additional
country launches; US share leader
2nd line CLL & MCL

Oncology (cont.)
Strong launch of DARZALEX
ZYTIGA strong U.S. market growth
partially offset by share decline
OUS - strong sales in Asia
Pac/Africa; Canada and LA partially
offset by lower sales in Europe due to
increased competition

Cardiovascular / Metabolism /
Other**
INVOKANA/INVOKAMET achieved
6.5% TRx share in defined U.S. T2D
market and ~13%TRx share with
endocrinologists
XARELTO continued novel oral
anticoagulant U.S. market leadership;
16.1% TRx share of broader oral
anticoagulant market

Total Pharmaceutical
Excl. net impact of Acq/Div and Hep C
sales***, WW growth +11.1%, U.S.
+21.0% and OUS -0.2%
Additional shipping days contributed
~4% to J&J WW growth

Medical Devices Highlights 4th Quarter 2015

Sales: $6.4B
Ops Change*: WW 3.4%, U.S. 6.7%, Intl 0.6%
MEDICAL DEVICES
SEGMENT

TOTAL WW
SALES $MM

REPORTED OPERATIONAL
% GROWTH
% GROWTH*

Key Drivers of Operational Performance*

Cardiovascular

Cardiovascular

$439

(21.3%)

(16.4%)

Diabetes

480

(6.6)

2.2

Diagnostics

24

71.4

N/M

2,423

(0.7)

4.5

Hips

354

1.1

6.4

Knees

405

1.0

5.5

Trauma

644

0.8

6.3

1,020

(2.9)

2.4

2,413

(2.5)

4.7

870

2.5

9.7

General

1,147

(8.5)

(1.0)

Specialty

396

5.9

12.4

648

0.3

8.4

$6,427

(3.3%)

3.4%

Orthopaedics

Spine & Other

Surgery

Advanced

Vision Care
Total Med Dev

* Excludes impact of translational currency

WW electrophysiology +19%; driven

by strong growth of THERMOCOOL
SMARTTOUCH Contact Force
Sensing Catheter
Impacted by divestiture of Cordis
business in 4Q 2015

Diabetes

Orthopaedics (cont.)

Results OUS were negatively impacted

by softer demand and a reduction in
inventory levels primarily in China

Pricing pressure across major categories

partially offset by mix for Trauma & Spine

Surgery

Advanced endocutters +15%,

biosurgicals +9%, energy +5%

General Lower sales of womens health

& urology partially offset by growth in
sutures & topical adhesives

Specialty growth driven by ASP &

Mentor products

ANIMAS VIBE

strong double digit

growth & SMBG volume growth
partially offset by lower price

Diagnostics

Divestiture of Ortho-Clinical
Diagnostics in June 2014

Orthopaedics

Hips - driven by primary stem platform

Knees - strong sales of ATTUNE
Knee System
Trauma global launch of TFNA nail
Spine & Other - ORTHOVISC
/MONOVISC strong contributor to
growth; WW Spine (2%), U.S. +3%,
OUS (9%),

Vision Care

Strong growth in U.S. due to new product

introductions & trade inventory build

Total Medical Devices

Excl. net impact of Acq./Div.**, WW

growth +5.8%, U.S. +8.0%, OUS +3.9%

Additional shipping days contributed ~4%

to J&J WW growth

** Non-GAAP measure; see reconciliation

10

Important Developments in 4th Quarter 2015

Pharmaceutical:

U.S. Food and Drug Administration (FDA) approval of DARZALEX (daratumumab) for the treatment of double refractory
multiple myeloma
U.S. FDA approval of YONDELIS (trabectedin) for the treatment of patients with unresectable or metastatic liposarcoma or
leiomyosarcoma
European Commission approval of EDURANT (rilpiravine) in combination with other anti-retroviral agents, for treatment-nave
adolescent patients aged 12 to 18 years with human immunodeficiency virus-1 (HIV-1) infection
U.S. FDA New Drug Application (NDA) submitted for INVOKAMET XR, a once-daily therapy combining fixed doses of
canagliflozin and metformin hydrochloride extended release for the treatment of adults with type 2 diabetes
U.S. FDA and European Medicines Agency (EMA) submissions for STELARA (ustekinumab) for the treatment of adult patients
with moderately to severely active Crohn's disease
U.S. FDA and EMA submissions for IMBRUVICA (ibrutinib) for patients with relapsed or refractory chronic lymphocytic
leukemia (CLL) or small lymphocytic lymphoma in combination with bendamustine and rituximab; EMA submission for patients
with relapsed/refractory mantle cell lymphoma
European Extension Marketing Authorization Application submitted for IMBRUVICA (ibrutinib) for treatment-nave chronic
lymphocytic leukemia
Completion of the acquisition of Novira Therapeutics, Inc.

Medical Devices:

U.S. FDA approved the pediatric indication for the Animas Vibe insulin pump
Completion of the acquisition of Coherex Medical, Inc.
The company announced the restructuring of certain Medical Devices businesses
11

Alex Gorsky
Chairman of the Board
&
Chief Executive Officer

12

13

Our Responsibility to Help Lead

the Way to A Better Future
Growing Global Challenge:
Aging population
Rising costs in health care
Growing middle classes
in emerging economies
Access to quality health care

14

Our Broad-Base Advantage

PARTNER OF
CHOICE

BROAD GLOBAL
FOOTPRINT

ENTERPRISE
CAPABILITIES &
EFFICIENCIES

BREAKTHROUGH
INNOVATION

STRONG
FINANCIAL
PERFORMANCE

15

Creating Value Through Global Reach

& Local Focus
Building on a strong position

BROAD GLOBAL
FOOTPRINT

to reach more consumers

and patients

2015 Sales: $70.1B

New operating models

Strong relationships with local
governments/health systems;
medical communities

20%
Emerging

51%

49%

US

OUS

80%
Developed

Robust investments in
market appropriate portfolios
and R&D centers
Strategic acquisitions and
partnerships with local players
to further accelerate growth

16

Johnson & Johnson as the Partner of Choice

CUSTOMER
SOLUTIONS

Early-Stage
Innovators

Johnson & Johnson

Differentiators:
Public
Health
Organizations

Hospital
Systems

Scale and depth

Financial flexibility
Breadth of business and
health care expertise

Information
Technology
Companies

17

Driving Innovation with Cross-Segment

Collaborations

BREAKTHROUGH
INNOVATION

Insulin Glucagon
Somatostatin DAPI

China Lung
Cancer Center
Developing a holistic
approach to treat lung
cancer in China

PHARMACEUTICAL

Cell Therapy for AMD

Eye Health

Obesity / Diabetes

Bringing together
novel pharma / vision
technologies for an
innovative therapy
treatment for agerelated macular
degeneration

Bringing together novel

pharma / surgical / cell
based therapies and
vision care insights
and technologies for
a comprehensive
approach

Leveraging innovative
device, pharma and
consumer capabilities
to treat and / or
prevent obesity and
diabetes

MEDICAL DEVICES

Cell Therapy
for Diabetes
Developing a
combination biologicdevice product with
insulin producing cells
encapsulated in an
immune-isolation device

CONSUMER
18

Enterprise Capabilities to Enable

Our Business
Our Strategy
Enable business growth
through supply chain
innovation
Make quality a competitive
advantage, focused on
prevention
Set new benchmarks for
medical safety

Leverage Enterprise
Standards
and Productivity to drive
business growth

ENTERPRISE
CAPABILITIES &
EFFICIENCIES

Our Actions and Results

One Johnson & Johnson
Supply Chain
Implemented the Johnson &
Johnson Quality Policy and
quality standards across our
Family of Companies
Clinical research transparency:
Johnson & Johnson / Yale Open
Data Access agreement

Achieving operational savings to

support our growth: Targeting $1B
by 2018

19

A Strong, Consistent, Sustainable Business

STRONG
FINANCIAL
PERFORMANCE

* Non-GAAP measure; excludes intangible amortization expense, special items and the impact of translational currency
** Inclusive of the April 2015 dividend declaration
*** Non-GAAP measure; defined as operating cash flow less capital spending; estimated as of 1/22/16
20

Performance Driven Strategy

GROW SALES
FASTER
THAN THE
MARKET

GROW EARNINGS
FASTER THAN
SALES

CREATE VALUE
THROUGH
STRATEGIC
ACQUISITIONS &
PARTNERSHIPS

GENERATE
STRONG
DIVIDEND YIELD

COMPELLING
LONG-TERM
TOTAL
SHAREHOLDER
RETURNS

21

Our Near-Term Priorities

ENTERPRISE

PHARMACEUTICAL

CONSUMER

MEDICAL DEVICES

Delivering on our financial and quality commitments

Continuing to build on our launch excellence

and robust pipeline

Expanding market leadership in key segments within OTCs,

Oral Care, Baby and Beauty

Accelerating growth through innovation and transforming

our go-to-market models

22

A Market Leader Across All Segments

2015 Sales: $70.1B*

Market Leadership
Pharma

Consumer

$13.5B
$14.7B
$28.1B
$31.4B
Medical
Devices

$25.1B
$28.5B

One of the largest and fastest

growing Pharmaceutical companies in
the world
Most comprehensive Medical Devices
business in the world
Market-leading Consumer Health
Care company, with trusted brands
endorsed by professionals globally

* The sum of the segments do not equal the total due to rounding
23

Pharmaceutical

Industry-Leading Pipeline and Commercial Excellence

Our Strategy
Focus innovation on
five therapeutic areas
Deliver continued growth with
our current core billion-dollarplus products
Maximize our existing
in-market portfolio, which
includes seven products
launched since 2009 that have
multi-billion dollar potential
Invest in our future with 10
new products we plan to file by
2019, each with billion-dollarplus potential

Our Actions and Results

16 new product launches
since 2009, driving cumulative
sales of ~$41B
6 new products1 achieved
>$1B in sales in last 12 months
U.S. approval for DARZALEX,
the first human monoclonal
antibody, 4 months ahead
of schedule
More than 70 novel compounds
in early development and
approximately 150 ongoing
discovery projects

Products launched since 2009

24

Pharmaceutical

Key Pipeline Events for 2016

Potential Approvals*

Potential Clinical Data Presentations

DARZALEXTM

Double Refractory Multiple Myeloma (EU)

Phase 3

IMBRUVICA

CLL Frontline (US/ EU)

DARZALEXTM

Relapsed/Refractory Multiple Myeloma

MCL Relapsed (EU)

Guselkumab

Psoriasis

CLL 2nd Line No prior Bendamustine (US/ EU)

SIMPONI /
SIMPONI ARIA

AS, PsA and UC

INVOKAMET

Initial Therapy Fixed Dose with Metformin (US)

Sirukumab

Rheumatoid Arthritis

INVOKAMET XR

Fixed Dose Combo with Metformin XR (US)

STELARA

Crohns Disease

INVEGA TRINZA

Schizophrenia

ZYTIGA

Prostate cancer

3-Month Paliperidone
Palmitate
Schizophrenia (EU)
STELARA

Crohns Disease (US)

EDURANT STR
Single tablet regimen for HIV (US/ EU)
(Rilpivirine + F/TAF FDC)

Planned Submissions
Sirukumab

Rheumatoid Arthritis (US/ EU)

Guselkumab

Psoriasis (US/ EU)

DARZALEXTM

Relapsed/Refractory Multiple
Myeloma (US/EU)

Phase 2
3DAA FDC (AL-335 + odalasvir + simeprevir) Hepatitis C
IMBRUVICA

Refractory Follicular Lymphoma

* Based on submissions in 2015

25

Consumer

Iconic Brands and Unparalleled Consumer Insights

Our Strategy

Our Actions and Results

Focus on key
consumer need states
and 12 megabrands

Delivered double-digit
growth in key emerging
markets like Russia, India and
Brazil*

Leverage new marketing

models and brand-building
competitive advantage
Develop insight-led
innovation grounded in
science, endorsed by
professionals
Improve margins by
reducing costs and
complexity

Exceeded market share

in Oral Care, Feminine Care
and US OTC
Nearly all OTC products
returned to shelves with
additional sizes and flavors
to be introduced during 2016
FDA notification that all of our
US OTC manufacturing
facilities are in conformity

* Operational growth vs. full year 2014

26

Medical Devices

Comprehensive Portfolio and Accelerated Growth Strategy

Our Strategy

Our Actions and Results

Drive growth in priority

platforms through innovation
and launch excellence

Strong sales performance in

endocutters, biosurgicals and
electrophysiology*

Sustain our leadership in

foundation platforms

Shifting more resources to

priority platforms and key markets

Leverage our breadth and

scale through novel
commercial models

Ethicon and DePuy Synthes Joint

Reconstruction and Spine, now
co-selling in over 1200 accounts

Invest in areas of significant

unmet need

Acquisition of Coherex Medical

in the area of atrial fibrillation and
surgical robotics collaboration
with Verily

* Operational growth vs. full year 2014

27

Key Takeaways
Focusing on near-term priorities
Delivering on our financial and quality commitments
Building on pharmaceutical launch excellence
& robust pipeline
Accelerating our growth in Medical Devices
through innovation and by transforming our
go-to-market models
Expanding our market leadership in key consumer
segments: OTC, Oral Care, Baby and Beauty

Positioned well for the future

Broad base in health care a competitive advantage
Optimistic about opportunities in
health care
28

Dominic Caruso
Vice President, Finance
&
Chief Financial Officer

29

Full Year 2015 Condensed Consolidated Statement of Earnings

(Unaudited; Dollars and Shares in Millions Except Per Share Figures)

30

4th Quarter 2015 Condensed Consolidated Statement of Earnings

(Unaudited; Dollars and Shares in Millions Except Per Share Figures)

31

Adjusted Income Before Tax by Segment*

% to Sales

$22.8B

$22.0B

$12.8

$12.3

2015

2014

Pharmaceutical

39.1%

39.6%

Medical Devices

35.6%

32.0%

Consumer

14.3%

15.4%

Total

31.4%

30.7%

Pharmaceutical

$8.8

$8.9

Medical Devices
Consumer

$1.9
($1.1)

2015**

$2.2
($1.0)

2014

Expenses Not Allocated

to Segments

* Non-GAAP measure; excludes amortization expense and special items; see reconciliation at www.investor.jnj.com
** Estimated as of 1/26/16.
32

Save the Date

Consumer and Medical Device

Business Review
Wednesday, May 18, 2016
Hyatt Regency, New Brunswick

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