Quarter 1
Q2 2026 Earnings Call — July 15, 2026
Chris Schott (J.P. Morgan): Thanks so much for the question and congrats on all the progress. Maybe just, Joe, if you could dive a little bit more into the $400 million increase in operational sales guidance. I guess I was just looking for a little bit more color of the balance of pharma versus the med tech components to this. I guess just bigger picture. Is it fair to think about pharma more? Moving higher here, maybe partially offset by a bit lower MedTech growth assumptions. Any directional color there would be helpful. Thank you.
Joe (Executive): Good morning, Chris, and thank you for the question. I would say that's probably a fair characterization. As you know, we always had a little bit better revenue growth projected in the second half of the year, irrespective of the extra week of sales that will occur in the fourth quarter. When you think about products that are really in their infancy with respect to Iketide and Lexo and just the emergence of Trendfire continuing to do well with the IBD indications that were received over the last 18 months, there was always that projection. I think really maybe to the heart of
your question is we do expect MedTech to grow better in the second half than the first half as well. We have tempered expectations around the AbioMed business with respect to that. So we see that recovery happening, but probably as we leave this year into next year. So not declines, but more modest growth until our Protect4 data comes out, which I'm sure Tim will have an answer to in a future question to expand upon. Hopefully that helps, Chris. Thank you.
Asad Haider (Goldman Sachs): Thanks for taking the question. Maybe for Jennifer, John, and Aichatide, just the launch seems to be progressing well. You noted 10,000 patients have now initiated therapy. Just wondering if you can provide any update on prescriber count relative to the last update of 4,500 prescribers that you called out in June. What can you tell us about sampling and free drugs that you're providing and where you are with formulary negotiations? And when can we expect to see you break out sales? And then maybe just a second part on that, you know, how are you positioning from FHIA and ICOTYPE together to the dermatologist community and psoriasis? Are there any synergies or advantages that you're seeing emerge from having both options? Thank you.
Jennifer (Executive): Well, thanks, Asad. Good morning, everybody. I really want to start with a big thank you to all of our innovative medicine colleagues around the world for an outstanding quarter of delivering for patients. So over $16 billion in sales, our first $16 billion quarter. 6.8% operational growth and it's also worth noting Stelaro was only 4% of our innovative medicine business in the second quarter and if you exclude that the 96% of our business, 96% actually grew over 14% and this really based on the strong growth across our main key brands as well as our must-win launches and the team has really done an outstanding job around the world on that. So glad to have the opportunity to talk about Iketide because we are really thrilled with the launch and how it's progressing. I think as we noted last time, we feel really good about the differentiated label that we got. Icatide is the first and only targeted oral peptide that precisely blocks the IL-23 inhibitor. If we talk about the U.S. launch and get into some of the details that you asked, it's really off to a strong start.
As a reminder, we were ready day one, and in fact, the first patient prescribed received Icatide on that launch day, and the early physician and patient enthusiasm has been really great.
If we get into numbers on it, to date over 18,000 prescriptions have been written for a total of now 11,000 patients, so that's an update from the 10 just shortly. There are 6,000 unique prescribers, and if you take a look at those, over 50% are actually advanced practice providers about 40% are dermatologists and the rest are our primary care physicians and others and so that tells us that there's really good confidence in the product in both the efficacy and safety profile as well as the simplicity of the simple once daily pill. We're already seeing a number of writers who are repeat. We're seeing patients getting repeat prescriptions. As we take a look at the payer coverage, within 90 days we already have over 50% of commercial coverage. That's actually a little bit ahead of our projections, so teams making really great progress on the payer coverage there. And so in total, we think the launch is going very well. You asked about Icatiid and Tremphia, and I think really, really important to note, we've got this great uptick in Icatiid. This has not slowed down Tremphia in psoriatic disease at all.
So Tremphia in psoriatic disease, psoriasis and PSA, that growth in market share gains has actually continued well above the market and notable in the second quarter that we got approval for inhibition of structural damage for Tramphaia in PSA. And then in terms of really co-positioning, Icotide is the first choice systemic treatment. All those patients who've been cycling on topicals, who really need to have advanced therapy, we think Icotide fits right in that sweet spot as that first choice systemic. For Tremphia, we think it's the first choice biologic, particularly for patients that have potential for or have any psoriatic arthritis involvement. And many, many patients, a significant percentage with psoriasis actually progressed to psoriatic arthritis as well. So we think really distinct and unique positions for both and well reflected in the results that we saw in the quarter with both products doing really well. Additionally, we are investing to win on Icati. This is one of our must-win launches, and so in addition to what you've seen, we actually also started our direct-to-consumer advertising yesterday.
Those of you who are watching World Cup or baseball had a chance to see that, and so we think this is even going to further bring more patients in to talk to their providers about new options for psoriasis.
John (Executive): We do expect to have pivotal data later this year for icotide in psoriatic arthritis. And as Jennifer pointed out, there's overlap in the psoriasis and psoriatic arthritis populations. Psoriasis, the skin manifestations are often a comorbidity for patients with psoriatic arthritis. And then our phase three studies in ulcerative colitis and Crohn's are in full steam now. So we're moving Icati forward as a possible frontline therapy there as well. Thank you.
Larry Bielsen (Wells Fargo): Good morning. Thanks for taking the question. Tim, I'm sure you know there continue to be concerns about procedure growth in the U.S. What did you see in Q2, and how are you thinking about procedure growth the rest of the year? And regarding J&J, I heard Joe say the second half J&J MedTech growth would be better than the first half, which was 4.2%, I believe. Do you still expect MedTech to grow faster in 26, excluding the extra week? Thank you.
Tim (Executive): Larry, thank you so much for the question, and let me, before I get into procedure volume, and certainly given the News we've heard from hospital providers this week. I know it's a hot topic, but I'd like to put really our second quarter performance in context for you and for others. When we step back and we look across the full portfolio, the underlying picture remains solid. Procedure volumes continue to be stable and we're not seeing evidence of a broad-based slowdown in demand. And to be clear, Larry, three of our four businesses, surgery, vision and orthopedics, all accelerated in the quarter and performed above expectations. Surgery growth was driven by continued strong performance in wound closure and almost double-digit growth in biosurgery. Vision, you would have noticed, delivered meaningful acceleration in contact lens and continued momentum in IOLs. And in orthopedics, as you heard already from Joe, we continue to see that business go from strength to strength, reflecting stronger execution and the impact of multiple new products.
I would like to turn quickly to CV, and let me first acknowledge that our Q2 growth is not where you wanted it, and frankly, it's not where we wanted it. That said, we know what happened, and we know exactly what we're doing about it. In full transparency, CV growth was more muted this quarter in both EP and heart recovery, partially offset by continued double-digit growth in shockwave. In EP, as you already heard, we continue to see strong underlying demand. However, we did have an inventory dynamic in China which impacted our growth by about 400 basis points that would have taken global growth up to north of 7% and in heart recovery due to a recent neutral clinical trial in the UK Impella usage has slowed. We see this as a near-term dynamic and we're actively engaging physicians and their teams to reinforce appropriate patient selection leveraging the significant depth of our clinical evidence base. So again, to put it all in context, three out of our four businesses performed well, and we're confidently addressing the fourth, and nothing we see changes our conviction in the long-term growth thesis for both our CV business as well as J&J MedTech at large.
To your question about procedure volumes, from our perspective, when we look across the breadth of our portfolio, we see that volumes are generally in line with market trends, and we're not currently seeing any evidence of a broad-based slowdown in activity. Demand remains consistent with what we would expect, given the fundamentals of these markets, which, as you know, continue to be driven by themes such as aging populations, increasing disease prevalence and ongoing innovation that is expanding our access to more patients. We are acutely aware of the recent data that has been provided by a number of large US hospital operators highlighting pressure on certain procedure volumes, particularly in more elective areas of care. And while we're monitoring these trends very closely, they are not reflected in what we're seeing across our portfolio today. As you know our business is diversified across a broad range of categories many of which are less dependent on discretionary elective procedures and from our perspective overall procedure trends remain consistent in the quarter with our expectations.
I will also point to there has been a bunch of chatter about the potential impact of the ACA subsidy removals. Based on what we're seeing, we haven't observed any meaningful impact on procedure volumes across our portfolio related to the ACA. And while we expect that the expiration of the Affordable Care Act subsidies may create some affordability pressures for a small cohort of patients, we do not expect this to translate into a material impact on demand for MedTech and procedures. And so to be clear, we would not attribute our MedTech performance in Q2 to a systemic slowdown in procedures. As already mentioned, we do expect an acceleration of our performance in the second half, driven by continued performance of our businesses in vision, in orthopedics, and in surgery and certainly improvement on the back of our efforts to drive greater performance within cardiovascular. Thanks, Larry, and looking forward to seeing you next week at SRS. Thank you.
Terrence Flynn (Morgan Stanley): Great. Thanks so much for taking the questions. Congrats on the quarter. I was just wondering, Jennifer, if you could expand on what you're seeing with Tech Valley. Obviously, you know, some important new data that's been added to the label recently. So just wondering how that's impacting the growth dynamics and then maybe you could expand on what you're seeing in terms of academic versus community use. Thank you.
Jennifer (Executive): Good morning, Terrence. We had a great quarter for Tech Valley with sales of $260 million, up 56% versus prior year, and really that was driven by significant launch uptake and share gains across the earlier lines of therapy based on the approval that we got in the U.S. for Tech Valley plus Darzalex. And also continued expansion in the community setting. So we're real excited about the approval of the combination regimen there. It's the first and only steroid free readily available immediate immunotherapy option that really has that best in class efficacy and the potential for cure for patients in that second line setting.
As a reminder on that data because we think it's truly extraordinary, it's three years 83% of patients remained alive and progression-free.
And so this is really resonating with physicians. In terms of U.S. uptake, we're seeing really strong early U.S. demand following the rapid approval that we had for Tecvali plus Darzalex. And so if you take a look quarter to quarter, like first quarter to second quarter, we saw a 29% increase in sequential growth there and that's in terms of patients that were initiated in TEC and this is really due to new account adoption and increasing depth of prescribing. So furthermore, the vast majority of patients now with TEC-DARA are starting in that second to third line setting and we continue to see increases in community site really set up and expansion in the U.S. They had a 25% quarter over quarter increase in community sites expansion there. And so we're feeling really good about what we're seeing in terms of Tech Valley and Tech Valley growth along with Darzalex in that second and third line setting. Thank you.
Joanne Wunsch (Citibank): Good morning and thank you for taking the question. You have a fairly robust robotics portfolio that should be rolling out over the next couple of quarters and you did mention SRS. Could you please sort of give us an update of the lay of the land and what we might expect next week? Thank you.
Management: Thank you for the question and certainly your interest in our robotics program. As you know, we have been worldwide leaders in open and laparoscopic surgery, and certainly we are excited and very much committed to being a major player in the area of surgical robotics. I think you know that we are eagerly awaiting approval of OTAVA, which we submitted late last year. We are actively working on our second clinical trial, specifically focused on inguinal hernia, and we will provide much more detail around our exciting launch plans once approvals have been secured. That said, we are committed to the launch of two, assuming approvals come our way, which we're very confident about. We are committed to two large robotic launches this year, both the launch of Otava, which we believe is truly differentiated from against the existing incumbent, and, of course, the launch of Monarch for Urology, which will be a first-of-kind opportunity in that particular area. And so we will provide more information about those two launches at some more information next week.
We'll also provide some updates certainly on the FORTE trial, which was our clinical trial, which was actually presented at the ASMBS conference about a month and a half ago. And I actually had the opportunity to attend a meeting out in California with about 70 world actually world-renowned robotic surgeons and got to see firsthand our surgeons not only listen to the specialists about the trial but also to actually drive the robot and frankly just seeing the looks on their faces the feedback we received gives me even more confidence that we have a device that will absolutely compete against the current incumbent. And so more to come on that. Thank you again, Joanne.
Joaquin (Executive): To be clear, Joanne, we see our robotics platform, both Otava and Monarch, being a meaningful contributor to MedTech growth by the end of the decade. Thank you.
Vamo Devan (Guggenheim Securities): Great. Thanks for taking my question. Maybe following up on similar to the other question on Icotide, we're hoping to get a little more color on in Lexo and the progress you're making there. And you said sort of one in three eligible patients now receiving it and inflation's up, I think you said 75%. Maybe you need to get a little more color on sort of where you're seeing digitalization to differentiate between the community setting, academic setting, what sorts of patients are getting the products, and I don't know if you can share anything around patient numbers or prescriber numbers. And then the other part was just around You have the Sunrise 5 data coming out later this year. Maybe you can sort of set expectations on what you're hoping to see from that data. Thank you.
Jennifer (Executive): Good morning. Thanks for the question on Nlexo.
As a reminder, bladder cancer is the sixth most common type of cancer.
There's over 600,000 new patients that are diagnosed globally each year and another 400,000 that are recurrent, so for a total of a million patients. And so this really helps us have great confidence this is an extraordinary opportunity for us. With Inlexo and then ultimately with our ertifitinib device as well. So the launch of Inlexo is going really well in the U.S. We have got the J-code now, and so I think that's probably what you're interested in hearing how it's going post-J-code. In the U.S., Inlexo is outperforming all of the recent competitive launches. And as you noted, one in three eligible patients are now starting on an anlexa regimen and this is an uptick versus first quarter. It was one in four last quarter. It's now one in three and it's leading all of the novel agents in terms of new patient share. In terms of new patients and new patient insertions, those grew 75% quarter over quarter, and this was post the permanent J-code, so giving a lot of confidence to providers in terms of that reimbursement.
Importantly, NLEXOs included in the CCN guidelines with a Category 2A designation, and they've been updated to expand the opportunity to include the papillary population, which represents about 80% of the BCG unresponsive patients. While we don't report sales on this yet, please know that we confidently beat consensus for the quarter, and we more than doubled sales in second quarter versus first quarter. So we believe that we're really on a very, very good track with this. You mentioned, I'll turn it to John in a second, we do have our Sunrise program right now, and Lexo is based on the Sunrise 1 population and BCG unresponsive patients. That's about 3,000 patients in the U.S. Sunrise 5 is the BCG experienced patients, largely high-risk papillary. That's about 10,000 to 15,000 patients. And then the biggest opportunity is the Sunrise 3 population. That's the BCG naive. That's about 40 to 50,000 patients in the U.S. So that's our program and that's before we even get to the ertifitinib piece.
John (Executive): Yeah, and I think Jennifer covered the Sunrise program well, recognized that the approval in this so-called cis or carcinoma in situ population. That's only about 5% of the eligible population, so we really see a lot of growth potential ahead as we round out to the papillary cancers and then move from the second line BCG experienced into the front line with our ambitious head-to-head program. I would just remind again that Inlexo delivered the highest complete response rates that had ever been seen in this population, this second line BCG, non-responsive population with high risk muscle, non-muscle invasive bladder cancer. So really a lot of excitement around it. And right on the heels of that is coming our ertifitinib, a targeted therapy in a novel device that offers not three weeks, like in Lexo, but three months of sustained delivery of the medicine. And that's being positioned for the intermediate risk non-muscle invasive bladder cancer, which is a very large population and is targeted at the FGF receptor mutant cancers, which is the most common genetic lesion in bladder cancer. Really excited about where the portfolio is going in the near term and then beyond that we expect to have other payloads and other devices that will continue to elevate the standard of care for patients struggling with bladder cancer to keep their bladder. So very excited for that million patients a year that are diagnosed with non-muscle invasive bladder cancer. Thank you.
Alex Hammond (Wolf Research): Thanks for taking the question. If you want no vaccine, so can you remind us of your confidence level in AFib? I guess given the size and breadth of the Labrexia program, it seems like there's potentially a wide set of outcomes between a clean win and miss. And is the trial still on track for later this year? I did not see it on the slide deck. Thank you.
Management: On Milvexian? Yeah. Okay. Sorry, I misunderstood part of the question, but on Milvexian, you know, this is, these are event-driven studies. They're fully recruited. So we really can't give you very much insight into when they might read out. Could be towards the end of this year, beginning of next year, but because they're event-driven, we'll just have to wait for the events. We remain confident that for the atrial fibrillation indication, which is the largest of those opportunities that we have the right dose and schedule based on the careful work done in phase two, based on the biomarker we're following, the TPP that gives us confidence that we've achieved a healthy level of anticoagulation. Our data monitoring committee continues to look at the data. They keep saying go full steam ahead. So we're cautiously optimistic but are waiting for the endpoints to the events to occur so that we can read out the full study results. Alice, we're really excited about the Milvexian opportunity. We think there is significant opportunity in the market for a product that's got a better bleeding profile than the current anticoagulants that are out there today. So maybe
as a reminder, about 40% of ACID patients who are eligible are currently not receiving oral anticoagulants as they should or at the right level because there's concerns about potential bleeding.
And so we think that a product that represents the potential of the Milvexian profile and what we're hoping to demonstrate really could be a game changer for patients and significant opportunity in the market. So we're really excited to see the results of the study when they come. And as John noted, it's event-driven studies, so we're going to have to wait and see what they are. But once we know, you guys will know too, right? The right time you'll know.
Jason Bedford (Raymond James): Good morning, and thanks for taking the question. Maybe just for Tim, on the Abiomed business, sounds like the softness was in reaction to the data presented at ACC. I'm still just a little unclear as to what you're doing to reverse the 2Q softness outside of just waiting for Protect 4. And I think prior view was this was a mid-teens grower. What is the new growth expectation for the Abument business? Thanks.
Tim (Executive): Jason, thank you. And you're right. We believe that the slowdown is in relation to specifically a neutral study published out of the UK focused on the area of high-risk PCI. And I think it's important, firstly, to really reinforce that the impact is behavioral. It's really driven by physician caution as they really interpret this new data rather than anything structural and there's no change in the underlying need access or reimbursement these are the sickest patients many of whom have very few choices and so we clearly see this as a near-term dynamic we've seen this before and we are actively engaging with physicians and their teams to really reinforce appropriate patient selection leveraging both. You know that scientific perspectives will continue to evolve, and that's exactly why we remain committed to really investing in robust clinical research, including the study you just referenced, which is PROTECT4, which is a highly powered study, almost 1,300 patients focused specifically on high-risk PCI, which we expect to read out in 2027.
I do think it's also worth mentioning that Impella has supported more than 400,000 patients and appears in almost 2,600 peer-reviewed publications and also I think specific to the study in the UK which covered only 300 patients. We have studied more than 40,000 high-risk PCI patients and that evidence base combined with our two decades of clinical experience continues to support the role of Impella in appropriately selected patients. So we remain very confident the long-term potential for Impella, supported by the significant runway for growth, no current commercialized competitors which is a key point, opportunities for further geographic expansion and the large and growing global burden of heart disease. To your question around recovery as already mentioned by Joe, we do expect this to take some time but we absolutely expect that our performance in the back half will be stronger than the first and we see gradual improvements in performance.
Joe (Executive): It's also important to put this into context. Heart Recovery is one of 28 platforms of more than a billion dollars that we have within Johnson & Johnson. And while we see the situation that Tim described as temporary and fully addressable, I have to be clear, it does not affect in any shape or fashion our growth trajectory as we have described. So as I said at the beginning, we see the second half of the year is stronger, that momentum is carried into 2027, and we continue to see double-digit growth by the end of the decade. Thank you, Jason.
Mike Notokovic (TD Cal): Hi, thank you so much for the question. My question is on Trimfiya. In GI, Trimfiya seems to have an edge over SkyRizzy, yet SkyRizzy is holding its own. So my question is, to what do you attribute SkyRizzy's ability to hold share? Thank you.
Management: Good morning. Thanks so much for the question. I'm thrilled to have the opportunity to talk about Tramphia. So Tramphia's sales for the quarter were $2 billion, our first $2 billion quarter, and over 70% growth, which we're really proud of. I mentioned before that we continue to see growth and share gains in psoriatic disease, but I've got to tell you the major driver here is really our performance in ulcerative colitis and in Crohn's disease. And so if you take a look at new patient starts or induction share in both ulcerative colitis and Crohn's disease, we currently are the share leader in both. So for example, in ulcerative colitis, 58% share of induction share for the IL-23s. That includes the other competitive IL-23s. For Crohn's disease, we've got over 50% share of those inductions. So again, market leadership. And so physicians are really seeing the profile as differentiated for Tramphya versus the other competitive set. I'll say that is even further underscored by the new data that we just released, our fusion data that was presented at DDW, which is the first positive study in over 20 years in adults with active perianal fistulizing Crohn's. This is one of the most severe and underserved forms of IBD, and TRUMP-I is the only IL-23 to demonstrate efficacy in this study. Thank you for joining us, and believe that we have got an awful lot of growth potential ahead for Tramphaia and IBD. And
as a reminder, back when we had really Stellari here, over 75% of Stellari sales were actually in IBD.
There is absolutely no reason why Tramphaia can't do that or even more. We're also hearing more and more about how the sub-Q induction that we can offer is really a great attraction for the patients and for the healthcare providers. They don't have to get two different prior authorizations, for example, and our sub-Q presentation is a simple at-home auto-injector, a pen, so very convenient for the patients to get started. Thank you, Mike, and thanks to everyone for your questions and continued interest in our company.
Joaquin (Executive): I will now turn the call over to Joaquin for some brief closing remarks. Thank you for joining us. Johnson & Johnson today is a medical innovation powerhouse. Thank you very much. Our ambition to have double-digit growth by the end of the decade. The operating leverage that that sustained top-line growth is going to create. I see Johnson & Johnson, when I consider those factors, as one of the most compelling and transparent growth stories in healthcare today. You will hear more about that in our Enterprise Business Review later in the year. Thank you for your continued interest in Johnson & Johnson and enjoy the rest of your day.
Management: This concludes today's Johnson & Johnson second quarter 2026 earnings conference call. You may now disconnect.
Quarter 2
Q1 2026 Earnings Call — April 14, 2026
Terrence Flynn (Morgan Stanley): Your line is now live. I had a two-part one on Iketide. I was just wondering if you can remind us of how you're positioning that drug in the market now that we have full details on the label and pricing, and also how should we think about the ramp of reimbursement coverage there and any sampling plans? Thank you.
Executive Name (Title): Well, good morning, Terrence. Hello, everyone. And just wanted to start with a big thanks to the entire Innovative Medicine team throughout the world. Really strong results in the first quarter with over $15 billion in net sales, 7.4% operational growth. Really importantly, 11 key brands delivering double-digit growth. And if you take a look at what is now 96% of our business that is not including Stellara, we actually grew at 16.6%. So really nice accelerating growth there across the portfolio. So I'm thrilled to talk about Icotide, really one of our outstanding products. And I've got to tell you, it's off to a very fast start. The product was approved back in March. And we're really, really happy with what we believe is a very differentiated label for the product as the first and only targeted oral peptide that precisely blocks the IL-23 receptor. Icotide, maybe
as a reminder, delivers complete skin clearance, favorable safety, and the simplicity of a once-daily pill.
And we think it's got the potential to become one of our biggest products. So we were day one launch ready for the product. And in fact, first patient was actually on medication within 24 hours of approval. We're seeing very strong early enthusiasm from both physicians and patients that reinforce our confidence in the potential for this product. A number of us were out at the AAD meeting as well, and the KOL receptivity to the strength and the simplicity of the label has been really encouraging. Things like no lab monitoring, the TB language that reflects the physician clinical judgment, you know, no black box or drug interactions really is giving us good confidence that this is going to be really the preferred choice and first choice for systemic therapy.
In terms of early uptake, we're seeing so far about 1,500 patients already that prescriptions have been written for that are going into our Access and Patient Support Service Center, so already 1,500. already over 1,000 unique customers that are writing in terms of payers our goal is to have both early and broad access and we're in we're in the middle of very very positive you know, conversations with them to try to drive that early and very broad access. So, more to come on that. In terms of the positioning, you know, I can't think of a better portfolio than being able to have both Icatide and Trumpfya for our folks and really for patients. So, with Icatide being the first and only targeted oral peptide, it is really going to become the preferred first-line systemic therapy. We know there are so many patients that keep cycling and cycling and cycling on topical therapies. Now the International Psoriasis Foundation guidelines have changed so that patients after two topicals and trials of four weeks each really become eligible for systemic and advanced therapies. And so we think Icatide fits right in this sweet spot as that first choice systemic.
Likewise, Tramphya holds a really unique and distinct position as well. And that really is the first choice biologic. And so, you know, Tramphia is both structurally and functionally different from the other IL-23s. We've been able to demonstrate really durable, complete skin clearance. And in our case here, it's the first and only IL-23 that's got significant inhibition of structural damage. So we think it's really the first choice biologic, especially in patients that have active or suspected PSA or psoriatic arthritis. So we think that with that one-two punch, we have got the portfolio for psoriatic disease in patients and are really excited about both agents going forward. Maybe we'd just add one other thing, John Reed here. Our study of mycotide in psoriatic arthritis should read out later this year. That's important given that about a third of patients with psoriasis also develop psoriatic arthritis. And the studies in inflammatory bowel diseases, Crohn's, and colitis are off and rolling that phase three program.
Larry Beagleson (Wells Fargo): Good morning. Thanks for taking the question, and congrats on a nice start to the year here. Tim, you know, sentiment in the medical device space is relatively low right now because of a number of headwinds and concerns. You posted a respectable growth rate this quarter, but it was slightly below the Q4 growth rate, and the comp in Q1 was relatively easy. So my question is, what are you seeing in your end markets, and how are you thinking about the remainder of the year?
Executive Name (Title): Well, good morning, Larry, and thank you for the question. Let me jump right in and say that, as you know, we've been very clear, Larry, in articulating our strategy, which is focused on higher growth and higher innovation markets. And that includes our deliberate choice to prioritize our three focus areas of cardiovascular, vision, and surgery as we separate ortho. And I can confidently say that that strategy is working. And in short, while we're navigating a dynamic world and market like everybody else, for us, Q1 unfolded as we expected the years to start. Seasonally quieter, but operationally solid. And this was also not a one business or one region quarter. As you've seen by the results, we saw growth across the board. And overall, we're pleased with the 4.6% operational growth, especially given that Q1 is typically our most seasonally subdued quarter. And I think it's also worth noting, Larry, that while there were some easier year-over-year comparisons, this by no means drove the quarter.
Specifically, the 210 basis points of one-time impact we referenced in Q1 of last year, which you will recall was a bit of a noisy quarter, were almost entirely related to the items that occurred in 2024. And so those prior year events temporarily depressed the year-over-year growth rate, creating a lighter competitor, but they did not affect underlying dollar sales. And so one-time items from 2024 fully lapped last year, and our Q1 performance reflects underlying operational execution and normal seasonality rather than any benefit from prior one-timers. So I'd say in summary, Larry, overall Q1 played out largely as we anticipated, balancing normal seasonality with solid execution. And most importantly, nothing in the quarter changes our confidence in further acceleration as we look towards Q2 and the remainder of 2026. And we've got a lot of growth catalysts to be proud of. What I will say in terms of the underlying market is that it's solid and underlying demand is what we expected. Now, we did see some procedural softness early in the quarter, but nothing that we would define really as material.
You know, while certain regions, particularly here in the U.S., you will recall we experienced some periods of severe weather in late January and early February, that was largely consistent with normal seasonal patterns. And while there was some localized impact on procedure volumes due to poor weather in parts of the business area, we would not categorize them as material or meaningful at any – at an overall level. And so, you know, what I'm proud of is our teams are highly experienced in managing these types of short-term disruptions, and our supply chain, our clinical support and commercial teams work closely with healthcare providers to maintain continuity of service and support patient care. And so, you know, in short, Larry, you know, a strong quarter for us, consistent with our expectations, and we believe strongly in the robustness of our end markets.
Asad Haider (Goldman Sachs): Great. Thanks. And congrats on yet another solid quarter. For Joaquin, just going back to the goal of double-digit top-line growth towards the end of the decade, that's still not something that's getting reflected in consensus models. And in light of your comment earlier that Icotite could be one of your largest products ever, that would suggest an opportunity of at least $10 billion. So any updated views on what you see as the key product variances versus the street looking towards the end of the decade and related, how important is the BD lever in that global algorithm? Thanks.
Executive Name (Title): Thank you very much. And, Luke, again, as you can see, we are off to a faster start with momentum that will accelerate throughout the year in 2027. And as you mentioned, with line of sight to double digit growth by the end of the decade. And I think it's a fair question. How is that possible for a company that this year in 2026 is going to deliver more than $100 billion? This is grounded in reality. As a matter of fact, it's already happening today. If you look at the first quarter of 2026, we're already delivering double digit growth as total Johnson & Johnson when you exclude Stellara. So it's already happening today. And it's based on our pro portfolio and pipeline, the strongest in our history. And also, as the decade progresses, we are going to see increasing impact in our revenue of our new product launches that are largely de-risked. In particular, as you mentioned, there's still an underestimation of the potential of in psoriasis, psoriatic arthritis, and IBD. The potential of in non-small cell lung cancer, head and neck, where we got breakthrough resignation and colorectal cancer.
And finally, the potential of Inlexo in high-risk non-muscle invasive bladder cancer. By the way, Inlexo got the J code earlier in April. So I believe those are three particular products that remain underestimated that are already marketed. The same is true in medtech, where launches, especially in cardiovascular, including our next-generation PFA catheters and Impella ECP, along with Otava in robotic surgery, are not yet fully reflected, as well as the fact that the separation of orthopedics will further lift our growth rates. So I think when you take into consideration all those factors, you are going to get into a similar conclusion of double-digit growth by the end of the decade. Further, I would say that the strong sales growth will also drive operating leverage that will be further amplified when the U.S. Darth Alex royalties roll off in 2029. So, taken together, this creates what some of you have called the cleanest growth story in healthcare. And we are going to be providing additional details in our enterprising review that will take place in December as we have announced today. BD, let me be clear, all these numbers do not include business development.
This is based in the strong portfolio pipeline that we have today that is largely the risk, which increases the confidence in our ability to get there. When it comes to business development, I mean, that remains an important part of our capital allocation. As a matter of fact, I would say we have been ahead of the curve in our investments in M&A with the acquisitions during the last two and a half years of Biomed, Showave, and Intracellular. As I have commented in multiple times, our sweet spot remains early stage deals like the one we did earlier this year with Halda Therapeutics, which brings a new platform in our oncology business. And at the same time, I have to say that given the situation that I just described, our priority from a capital allocation perspective, our priority is to invest behind our portfolio of new product launches and our promising pipeline program. So that's our priority today. We remain opportunistic from a business development standpoint, but we do not depend on M&A to be able to deliver on that promise.
So in summary, you know, we see both revenue growth and operating margins improving, and we reaffirm that we have line of sight to double-digit growth by the end of the decade.
Chris Schott (J.P. Morgan): Great. Thanks so much for the question and congrats on the progress. I just had a two-parter coming back to Icotide. Maybe the first one, you mentioned 1,500 prescriptions so far. Is there any color on where those customers are coming from as we think about new patients versus those switching off orals versus those switching off injectables? And then just on the bigger picture view of Icotide, as you mentioned, potential for the drug to become one of the company's largest ever. The pathway to get there, should we think about this as a similar dynamic to Tramfaya that skews more towards IBD versus psoriasis? Or is this one that could have more balanced sales by indication given, as you mentioned, the frontline potential of the drug in the psoriasis setting? Thank you.
Executive Name (Title): Hi, Chris. Thanks so much for the question. So in terms of the early information on Iketide, obviously it is really early, so we're still getting information in. I can tell you that there's a broad range of prescribers for icotide as we look across the medical community. We don't yet have data that is specific to exactly where that's coming from, what is exactly new, what they're switching off of, etc. So hopefully we'll have greater granularity on that you know, at our next call next quarter. So obviously it's pretty new and hot off the press. I think as we take a look at Iketide, Iketide is going to fit in psoriasis really firmly in that systemic first-line therapy area. And there's also a great opportunity there for market expansion. If you think there are so many patients that are cycling on topicals, they are resistant to moving into biologics for a number of reasons, whether it's needle phobia, perceptions around safety profile and things. We think not only given the size of the current systemic market and having significant impact there, but really being able to expand that broader is going to be key for ICTIDE success.
I also think when you think about IBD, and having an oral agent, we've got to see the studies pan out, but based on our goals there, we think that that's going to be a similar very, very large opportunity. I think here we're going to see maybe more of a balanced scenario given the strength that we really anticipate having in psoriasis, but I think both segments, both psoriatic disease and inflammatory bowel diseases are going to be very big, offer a lot of potential and promise for icotide. Yeah, Chris, maybe just one other comment on that is that across most autoimmune diseases, about 70% to 80% of patients who are eligible for a biologic are not taking one. And so that's why we really think about this market expansion opportunity to offer patients the convenience of a highly effective, very safe, once-a-day pill.
Shugun Singh (RBC Capital Markets): Thank you so much. I wanted to touch on some of your growth drivers within the medical device business. You know, Abiomed, Post-ACC, you know, some of our checks were suggesting that within the high-risk population, we could see up to a 30% reduction. How does that compare with your expectation? And it looks like the ideal space is looking to get increasingly more competitive. So, you know, how do you manage your market leadership position in that space? And then overall, as I think about all the drivers that you mentioned within medical devices, should we think about MedTech as a high single-digit growth contributor towards the double-digit growth that you've called out for total company by the end of the decade? Thanks for taking the question.
Executive Name (Title): Thank you for the question, and there's a lot in there. Let me try and unpack it. Firstly, we are really excited to be now significantly embedded in the cardiovascular space beyond the leadership position we hold in electrophysiology. And with the acquisitions of both Abiumed and Shockwave, we've added to high-growth, high-margin businesses with tremendous trajectory for the future. You know, Abiomed, as you know, grew 14, almost 15% in the first quarter. And this is really driven by rapid adoption of Impella 5.5 and CP. And what excites me most going forward is Abiomed's robust pipeline of not only technologies, but ongoing clinical studies showing the benefits of this technology. You will know that in August of last year, we saw new data from the danger shock randomized control trial published in the New England Journal of Medicine, and this really confirmed the long-term survival benefit of Impella. You know, these results found that up to 10 years, when compared to the standard of care, routine use of Impella in patients who had a STEMI heart attack with cardiogenic shock leads to an absolute mortality reduction of 16.3%.
And to put this in context, you know, when compared with the control arm in 10 years, Impella CP patients gained an average of 600 additional days alive. I mean, that is compelling. And so, you know, while you're always going to see new data and new studies come about, we believe that our evidence base for the products we have and the indications we have today are absolutely solid and will continue to drive performance in a category where we don't have line of sight to any significant competitor for the foreseeable future. I'll turn to Shockwave, 18.1% in the first quarter, and we're very pleased with that performance. You know, the IVL market is one we completely have created ourselves through the acquisition of Shockwave, and we continue to advance our leadership position. Now, clearly, competition is coming. Competition is going to come to any space that is attractive and certainly one as attractive as IVL. But there's three reasons that we have confidence in our portfolio and our future. And the first thing really is our portfolio. The second is evidence. And it's our presence.
And over the past seven years, we've earned the reputation of an innovative disruptor, launching nine new coronary and peripheral catheters that have introduced a new standard of care when it comes to safely and effectively treating calcified lesions. And as a result, shockwave IVL has become the preferred treatment strategy in most calcium cases worldwide, where it has been used in now more than a million cases around the world. And global expansion has also increased since the acquisition, as we have transitioned 10 markets to direct sales forces. We've expanded our presence to now cover 70 markets globally with J&J representatives, where we can leverage our scale and the broader J&J organization to drive government relations and address any legal and market access opportunities. And, you know, while we will never take any competitor for granted, new competitive entrants into the IVL market validate, really, Shockwave's robust portfolio in legion-specific solutions. You know, while competitors are introducing similar versions to our first-generation products from 2017, we're introducing our fifth-generation coronary and peripheral devices in 2026.
And, you know, a single catheter offering will be difficult to compete against Shockwave's portfolio strategy and the improvements we've made over the years to reset the standard of IVL. And while new competitors are completing their first regulatory-required clinical studies, we're continuing to invest millions in robust real-world clinical evidence, with nearly 25,000 patient outcomes published across 600 journals to date, demonstrating our unique safety profile exclusively associated with Shockwave's ultrasonic acoustic platform. And what physicians also appreciate is our compact, easy-to-use, and rechargeable generators, which require minimal capital expenditure. And back to the point of presence, these generators provide widespread access to Shockwave's IVL technology, and they're available in almost every cath lab across the United States, and we actually have more than two generators in over 1,700 U.S. hospitals, and so very difficult for competitors to unseat us.
Most importantly, I'd say is we remain hyper-focused on continuing to earn our innovative disruptor reputation with plans to launch at least one new IVL catheter per year that we expect will redefine the future of IVL in new indications and new disease states. And this year, we will launch our C2 arrow new coronary catheter, which from the early feedback we've got from physicians is going to be another standout product. I think to your final point around long-term prospects, we're excited about our growth profile and the catalysts we have to continue to accelerate medtech from a mid-single digit player into a higher single digit player as we move towards the end of the decade. You know, I will point to some big catalysts, especially in our surgery business. Surgery is one of our larger portfolios. We are a dominant leader both in the open and laparoscopic space. And we have an expectation to play a big role in the robotics space. As you know, we've submitted OTAVA for approval. And assuming everything plays out, we expect that by the end of this year, we will be launching not one, but two new surgical robotic programs, both with OTAVA and Monarch for Urology.
Now, while we don't expect those programs to be significantly accretive to growth in the short term, they certainly will be accretive as we move to the back half of the decade. So another good example of an important catalyst that will take us from a mid-single-digit player into a higher single-digit player as we look to the back half of the decade.
Alexandria Hammond (Wolf Research): Good morning, and thanks for taking the question. A few more on icotides. Can you walk us through the investments you guys are making on prescriber and patient education? And how important do you think advertising will be to kind of engage those new patients who might be nervous to start on a systemic therapy? And then just as a follow-up as well, with Iconic Ascend trial set to read out imminently, how important could this result be to those ongoing commercial discussions? Thank you.
Executive Name (Title): The study you mentioned in the head-to-head against the TIK2 inhibitor is, I think, just illustrates the best in disease profile for Icotide in terms of having both that high-level efficacy combined with safety in the once-a-day pill. How much the direct-to-consumer is going to matter? I'm going to let Jennifer answer that question.
Jennifer (Title): Hi, Alex. It's safe to say that we are investing big in Icotide to make sure that this brand can do all that it can do for patients. I think that the ease and the simplicity, when you combine the clinical profile, the safety, the efficacy, and then the ease of the product, we really believe that we've got a winner. And so we're investing to really get off to a very strong launch that's with all of the appropriate field teams. Additionally, we've invested and built out what we believe are really best-in-class patient access and support services to help patients get on the medicine both get on and be able to stay on. And then we're continuing to evaluate the best way to make sure that both the clinicians, all the appropriate health care providers, and patients are aware of this important offering. So probably more to come on that, but please know that we're investing what we believe we're investing to win in this area.
Joanne Wench (Citibank): Good morning. Thanks for taking the question, and very nice start to the year. I'm going to pause for a moment on the ophthalmology franchise, in particular your views on the U.S. surgical and U.S. contact lens markets. I'm curious in particular about the almost 3% decline in U.S. surgical in the quarter and how to think about that recovery throughout the remainder of the year. Thank you.
Executive Name (Title): Joanne, thank you for the question. Vision overall delivered a solid first quarter with sales growth of 3.6%, which is really consistent with our expectations. You'll recall that business tends to be slower in the first couple quarters and then accelerate throughout the year. We've seen that over the last couple and certainly 2025 was no exception. Keep in mind that Q1 is typically our lowest quarter and we're confident that we will see acceleration through the remainder of the year. If you break it down into the two component businesses, contact lens grew 2.7%, driven by the AccuAce's one-day family, and especially, as you heard earlier from Joaquin, the max multifocal products. And these latest launches really complete our family of daily disposables and are solidifying our leadership in the category with exceptional comfort, clarity and stability. And when I look to surgical vision, we grew 6% driven by normal seasonality. We continue to see strong global momentum in premium IOLs led by Technus, Odyssey, and Piercy, where we're outpacing the market globally. And this premium segment remains a key driver of value and differentiation.
I think to your pointed question on U.S. performance, you know, if we look at surgical vision growth in the quarter, it was offset in the U.S. due to competitive pressures as new entrants came into the market, which is not unexpected given the fierce nature of this portfolio. We also continue to expect some seasonality in our business as growth won't always be linear. That said, we remain confident in our clinical position with Technus Odyssey and as we prepare for the launch of Technus Pure C in the U.S. later this year. And, you know, we have seen extremely strong uptake of Technus Pure C globally, nearly half. It's actually almost half a million eyes worldwide have already experienced the clearer, uninterrupted vision with this premium IOL. And Technus Piercy, which received FDA approval, this quarter is the first and only U.S. FDA-approved extended depth of focus IOL with no warning on loss of contrast sensitivity, which is a huge game-changer for physicians and the comfort they have in recommending an IOL. In fact, 97% of patients reported no bothersome visual disturbances like halos or glares, which can often occur with other AIOLs.
And we're really excited about the launch of Peercy here in the US, which will give surgeons an important new lens option for their patients. As we continue to focus on the premiumization of our portfolio, we firmly believe that the combination of Technus Odyssey, which is in the market, and now Technus Piercy will be a key driver of value and differentiation. On the back of this, we can confidently say that we expect accelerated growth in the back half of the year for our surgical vision business and vision overall, including here in the U.S.
David Reisinger (Learning Partners): Yes, thanks so much. So my question is on JNJ4804, the co-antibody. Could you talk about your vision for its role in IBD treatment paradigms and the readouts that we should be focused on? And then since others have asked multiple questions, Joe, could you just share a the M of A sales like you did in the first quarter for Inlexo. Thank you.
Executive Name (Title): Yeah, thanks for the question about 4804. So just to remind the audience, this is our co-antibody therapeutic that combines Gucelcomab, our IL-23 inhibitor, also known as Trampia, together with our TNF inhibitor, Golimumab. And we are in a position to potentially be the first with a co-antibody therapeutic in the IBD space. Now, even with the best of therapies, more than half of patients with IBD do not achieve a complete remission. And so we see for patients where monotherapy is not getting the job done, then offer this dual therapy, the combined therapy as a fixed dose combination. So the Phase II data on that in both Crohn's and colitis, so we're two separate studies, will be presented in the coming year at a medical conference. So you'll have an opportunity to see the details of the data there, and that will provide more insights into the specifics around the most ideal patient populations for this kind of co-antibody therapeutic approach. But we're really excited to move this forward now with PACE. The phase three programs are underway and really excited to then try to break through these efficacy ceilings that have limited how many of these patients who battle with inflammatory bowel disease are able to achieve a complete remission and really get that mucosal healing from their therapy. David, thanks for the extra question there. We actually don't disclose the MRV sales at this point in time, so more to come on that.
Matt Mixick (Barclays): Oh, great. Thanks so much for squeezing me in, and congrats again on a really impressive quarter and start to the year. So you mentioned in Lexo a couple of times, and I know you've talked at length about it in the past. Just wondering if you could give us a sense of what the commercialization plan and rollout looks like for that, given it's a slightly different delivery mechanism than many of your other therapeutics and kind of where you are with that, any metrics you can provide would be great. And thanks again.
Executive Name (Title): Sure, thanks good morning. So maybe
as a reminder, you know, despite recent advances in bladder cancers unmet need in that area really remains significant and this is for bladder sparing options there's almost 600,000 new patients.