3/7/2017
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`Johnson & Johnson (JNJ) Q3 2014 Results - Earnings Call Transcript | Seeking Alpha
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`Johnson & Johnson (JNJ) Q3 2014 Results - Earnings Call Transcript
`
`Oct. 14, 2014 12:32 PM ET
`by: SA Transcripts
`
`Q3: 10-14-14 Earnings Summary
`
` 10-Q
`
` Analysis
`
` News
`
`EPS of $1.5 beats by $0.06 | Revenue of $18.47B (+ 5.1% Y/Y) beats by $90M
`
`Johnson & Johnson (NYSE:JNJ)
`
`Q3 2014 Results Earnings Conference Call
`
`October 14, 2014 8:30 AM ET
`
`Executives
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`Louise Mehrotra - Vice President, Investor Relations
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`Dominic Caruso - Vice President, Finance and CFO
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`Analysts
`
`Mike Weinstein - JPMorgan
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`Larry Biegelsen - Wells Fargo
`
`Jami Rubin - Goldman Sachs
`
`Glenn Novarro - RBC Capital Markets
`
`Derrick Sung - Sanford Bernstein
`
`Vamil Divan - Credit Suisse
`
`Kristen Stewart - Deutsche Bank
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`JANSSEN EXHIBIT 2145
`Mylan v. Janssen IPR2016-01332
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`3/7/2017
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`Johnson & Johnson (JNJ) Q3 2014 Results - Earnings Call Transcript | Seeking Alpha
`
`Bob Hopkins - Bank of America
`
`Matt Miksic - Piper Jaffray
`
`Josh Jennings - Cowen & Co.
`
`David Lewis - Morgan Stanley
`
`Operator
`
`Good morning. And welcome to Johnson & Johnson’s Third Quarter 2014 Earnings
`
`Conference Call. All participants will be able to listen-only until the question-and-answer
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`session of the conference. This call is being recorded. If anyone has any objections, you
`
`may disconnect at this time. (Operator Instructions)
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`I would now like to turn the conference over to Johnson & Johnson. You may begin.
`
`Louise Mehrotra
`
`Good morning and welcome. I’m Louise Mehrotra, Vice President of Investor Relations for
`
`Johnson & Johnson and it is my pleasure this morning to review our business results for
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`the third quarter of 2014. Joining me on the call today is Dominic Caruso, Vice President,
`
`Finance and Chief Financial Officer. A few logistics before we get into the details.
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`This review is being made available via webcast accessible through the Investor Relations
`
`section of the Johnson & Johnson website at investor.jnj.com. I’ll begin by briefly reviewing
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`third quarter results for the corporation and for our three business segments. Following my
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`remarks, Dominic will provide some additional commentary on the business, review the
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`income statement and provide guidance for 2014. We will then open the call to your
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`questions. We expect the call to last approximately one hour.
`
`Included with the press release that was issued earlier this morning is a schedule of sales
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`for key products and/or businesses to facilitate updating your models. These schedules
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`are available on the Johnson & Johnson website as is the press release. Please note we
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`will be using a presentation to complement today’s commentary. The presentation is also
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`available on our website.
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`Before we begin, let me remind you that some of the statements made during this review
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`are or maybe considered forward-looking statements. The 10-K for the fiscal year 2013
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`and the company’s subsequent filings identify certain factors that could cause the
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`company’s actual results to differ materially from those projected in any forward-looking
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`statements made today.
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`3/7/2017
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`Johnson & Johnson (JNJ) Q3 2014 Results - Earnings Call Transcript | Seeking Alpha
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`The company does not undertake to update any forward-looking statements as a result of
`
`new information or future events or developments. Our SEC filings including the 10-K are
`
`available through the company and on our website.
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`During the review, non-GAAP financial measures are used to provide information pertinent
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`to ongoing business performance. These non-GAAP financial measures should not be
`
`considered replacements for GAAP results.
`
`Tables reconciling these measures to the most comparable GAAP measures are available
`
`in the press release and on the Investor Relations section of the Johnson & Johnson
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`website.
`
`Now, I would like to review our results for the third quarter of 2014. Worldwide sales to
`
`customers were $18.5 billion for the third quarter of 2014, up 5.1%. On an operational
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`basis, sales were up 5.8% and currency had a negative impact of 0.7%. In the U.S., sales
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`were up 11.6%. In regions outside the U.S., our operational growth was 1%, while the
`
`effect of currency exchange rates negatively impacted our reported results by 1.3%.
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`On an operational basis, the Western Hemisphere excluding the U.S. grew by 3.5%, Asia
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`Pacific, Africa region grew 2% and Europe declined 0.8%. The success of new product
`
`launches and continued growth of key products in all regions was partially offset by
`
`divestitures, the most significant one being Ortho-Clinical Diagnostics. Excluding the
`
`impact of divestitures, underlying operational growth was approximately 9%.
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`Turning now to earnings, net earnings were $4.7 billion and earnings per share were
`
`$1.66 versus $1.04 a year ago. As referenced in the table reconciling non-GAAP
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`measures, 2014 third quarter net earnings were adjusted to exclude a net gain of $457
`
`million for after tax special items. Third quarter 2013 net earnings were adjusted to
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`exclude a charge of $937 million for after tax special items. Dominic will discuss special
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`items in his remarks.
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`Excluding special items for both periods, net earnings for the current quarter were $4.3
`
`billion and diluted earnings per share were $1.50, representing increases of 9.5% and
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`10.3%, respectively, as compared to the same period in 2013.
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`Turning now to business segment highlights, please note percentages quoted represents
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`operational sales change in comparison to the third quarter of 2013 unless otherwise
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`stated and therefore, exclude the currency translational impact. I’ll begin with the
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`Consumer segment.
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`3/7/2017
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`Johnson & Johnson (JNJ) Q3 2014 Results - Earnings Call Transcript | Seeking Alpha
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`Worldwide Consumer segment sales of $3.6 billion increased 0.3% with U.S. sales down
`
`4.2%, while outside the U.S. sales grew 2.6%. Excluding the impact of divestitures,
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`worldwide growth was approximately 2.5% with U.S. growth of approximately 1.5% and
`
`growth outside the U.S. were approximately 3%.
`
`Major drivers of the results were over-the-counter and oral care products offset by the
`
`divestiture of the North American Sanitary Protection business. OTC sales growth was
`
`driven by upper respiratory products and analgesics. Upper respiratory products grew
`
`10% worldwide driven by sales growth outside the U.S., which included an early seasonal
`
`inventory build.
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`Analgesic growth was 7% in U.S. driven by market share gains, partially offset by
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`comparisons to the third quarter 2013 trade inventory build related to the re-launch of the
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`products.
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`In the U.S. adult analgesic market share was approximately 11%, up from 8.5% a year
`
`ago, while U.S. pediatric share was over 40%, up from 26% a year ago. Oral care results
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`were driven by strong results for LISTERINE due to new product launches and successful
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`marketing campaigns.
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`Moving now to our Pharmaceutical segment, worldwide sales of $8.3 billion increased
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`18.7%, with U.S. sales up 33.1% and sales outside the U.S. up 4.1%, driven by both
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`strong sales of new products, as well as core growth products.
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`A major driver was our recently launched hepatitis C product called OLYSIO in the U.S.
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`and EU and SOVRIAD in Japan. Excluding sales of hepatitis C products, OLYSIO and
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`INCIVO, underlying growth worldwide, U.S. and outside the U.S. was approximately 8%,
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`14% and 1.5%, respectively.
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`Other significant contributors to growth were immunology products, STELARA,
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`REMICADE and SIMPONI, SIMPONI ARIA, as well as XARELTO, INVOKANA, ZYTIGA,
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`INVEGA SUSTENNA/XEPLION and recently launched IMBRUVICA. Partially offsetting
`
`the growth were lower sales of ACIPHEX due to generic competition and lower sales of
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`vaccines.
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`The results for immunology were driven by strong double-digit market growth
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`complemented by increased market share for STELARA and SIMPONI, SIMPONI ARIA.
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`We continue to be the U.S. market leader in immunology.
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`3/7/2017
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`Johnson & Johnson (JNJ) Q3 2014 Results - Earnings Call Transcript | Seeking Alpha
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`XARELTO sales were up 68%, compared with the same quarter last year and grew 14.5%
`
`on a sequential basis. Total prescription share or TRx for the quarter in the U.S.
`
`anticoagulant market grew to over 14.5%, with cardiology TRx estimated at 23.5%.
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`INVOKANA sales contributed over three and a half points to the U.S. pharmaceutical
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`growth rate and for the quarter achieved 3.2% TRx within the defined market of type II
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`diabetes excluding insulin and metformin, up from 2.4% in the second quarter of 2014.
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`TRx with endocrinologists grew to 9.2% for the quarter, up approximately 1.5%
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`sequentially.
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`The strong results for ZYTIGA in the U.S. were driven by increased market share in the
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`combined metastatic castrate-resistant prostate cancer market and estimated market
`
`growth of 11%. ZYTIGA has captured approximately 33.5% of that market. Continued
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`strong market uptick and additional country launches drove the strong results outside the
`
`U.S. ZYTIGA is approved in more than 90 countries.
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`I will now review the Medical Devices and Diagnostic segment results. Worldwide Medical
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`Devices and Diagnostic segment sales of $6.6 billion decreased 4.6%. U.S. sales declined
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`6.5%, while sales outside the U.S. declined 2.8%. Excluding the impact of the OCD
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`divestiture, worldwide growth was 1.6% while U.S. growth was 0.6% and growth outside
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`the U.S. was 2.4%. Growth was driven by orthopedics and cardiovascular care, partially
`
`offset by lower sales in vision care and surgical care. Competitive pricing dynamics
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`impacted growth for vision care.
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`In surgical care, the success of the ECHELONFLEX Powered ENDOPATH Stapler outside
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`the U.S. was offset by lower sales of women's health and urology products, coupled with
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`U.S. pricing pressure. Orthopedic sales growth was driven by trauma, sports medicine,
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`knees and hips. Trauma was up 3% worldwide due to market growth and new product
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`launches, while the successful launch of MONOVISC, coupled with the continued strong
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`growth for ORTHOVISC drove results for sports medicine.
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`Hip growth of 4% worldwide was driven by strong volume growth, partially offset by
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`continued pricing pressure. Primary stem platform sales were major contributors to the
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`results. Knees worldwide increased 5% due to the successful launch of ATTUNE, partially
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`offset by pricing pressure across the regions. Cardiovascular growth was driven by an
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`18% worldwide increase in our BioSense Webster business due to strong growth of the
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`ThermoCool SmartTouch catheter.
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`That concludes the segment highlights for Johnson & Johnson’s third quarter of 2014. It is
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`now my pleasure to turn the call over to Dominic Caruso. Dominic?
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`3/7/2017
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`Johnson & Johnson (JNJ) Q3 2014 Results - Earnings Call Transcript | Seeking Alpha
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`Dominic Caruso
`
`Good morning, everyone and thank you, Louise for sharing the highlights from our
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`performance in the third quarter. We are very pleased with our strong performance this
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`past quarter as well as the progress we've made on our long-term growth drivers. I believe
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`we are well positioned in this evolving healthcare environment.
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`I'll take the next few minutes to highlight some of the progress we've made to advance our
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`business, as well as to review some additional highlights of our financial performance for
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`the third quarter. Then, I will provide our guidance for you to consider in refining your
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`models for 2014.
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`But before I do that, I want to comment on what we're seeing in the market for healthcare.
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`Although modest, we have now seen two consecutive quarters of positive momentum in
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`hospital utilization rates, which is in line with recently published analysts’ reports noting
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`the strength. We continued to remain confident that as economies recover and as
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`healthcare reform continues to gain momentum here in the U.S. and abroad, utilization
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`rates are going to increase.
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`At Johnson & Johnson, we’ve continued making very good progress on our near-term
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`priorities of achieving our financial commitments, restoring and relaunching our U.S. OTC
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`products, continuing to capitalize on the potential of the DePuy Synthes acquisition and
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`building on our strong momentum in Pharmaceuticals. At the same time, we’ve continued
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`to focus on advancing our long-term growth drivers, which you're familiar with from our
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`previous discussions.
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`During the quarter, we've made several significant advancements against these long-term
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`growth drivers that are worth noting. We continued to create value through innovation as
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`evidenced by the strong performance of our newly launched products as well as by
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`gaining regulatory approval for expanded uses of important products in our portfolio such
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`as INVOKAMET, which is a combination of INVOKANA and metformin into a single pill to
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`treat diabetes that the FDA approved in August.
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`Further, IMBRUVICA added a third indication in July, when the FDA approved it for use in
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`treating patients with chronic lymphocytic leukemia, who have a specific genetic mutation
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`that occurs when part of chromosome 17 is missing. That's an important advancement for
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`these patients who are considered to have the poorest prognosis and very limited
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`treatment options.
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`Johnson & Johnson (JNJ) Q3 2014 Results - Earnings Call Transcript | Seeking Alpha
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`The CHMP also recommended IMBRUVICA for approval for similar uses in Europe. And
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`just yesterday, we announced that we entered into an agreement with Bristol-Myers
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`Squibb and Pharmacyclics to evaluate IMBRUVICA in combination with an investigational
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`PD-1 immune checkpoint inhibitor as a potential option for patients with non-Hodgkin's
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`lymphoma. And in our cardiovascular business, we launched INCRAFT Stent-Graft
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`System for the treatment of abdominal aortic aneurysms in both Europe and Canada.
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`Looking longer-term, we continued to make important investments to access early-stage
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`innovation. In the quarter, we acquired Covagen, the company that is focused on
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`developing new therapeutics for the treatment of a broad range of inflammatory diseases.
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`On September 30th, we announced an agreement to acquire Alios Biopharma, which will
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`give us a promising Phase 2 potential treatment for RSD, a major pediatric disease with
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`no effective therapy available for prevention or treatment. Their pipeline also includes two
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`early-stage compounds for hepatitis C that could potentially augment our existing portfolio.
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`We anticipate that the Alios acquisition will close later this quarter. And we are also
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`leading with purpose, as demonstrated through our partnership with the NIH to fast-track
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`the development of an Ebola vaccine.
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`Now let's review some highlights from the quarter. Turning to the next slide, you can see
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`our condensed consolidated statement of earnings for the third quarter of 2014, which
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`reflects both the success of our new products and the strength of our core businesses.
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`We’re pleased to show strong reported sales growth in the quarter of 5.1% or 5.8%
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`operationally as we showed you earlier. This growth was driven in part by the continued
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`uptake of our newly launched Pharmaceutical products including hepatitis C treatment
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`OLYSIO, which is sold as SOVRIAD in Japan.
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`Please note that this is the first quarter reflecting the divestiture of our Ortho Clinical
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`Diagnostics business. And in order to mitigate the EPS impact on future earnings from the
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`OCD divestiture, you’ll recall that in July we announced a $5 billion share repurchase
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`program. Excluding the impact of the divestiture of Ortho Clinical Diagnostics, our sales
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`increased nearly 8.5% on an operational basis in the quarter. Our hepatitis C products
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`contributed approximately 1.5% of that growth.
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`Please now direct your attention to the box section of the schedule where we’ve provided
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`earnings adjusted to exclude special items. Adjusted net earnings were $4.3 billion,
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`reflecting an increase of 9.5% over the third quarter 2013, and adjusted earnings per
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`share were $1.50 in the quarter versus $1.36 a year ago, which was up 10.3%, exceeding
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`the mean of the analysts’ estimates as published by first call.
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`Johnson & Johnson (JNJ) Q3 2014 Results - Earnings Call Transcript | Seeking Alpha
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`Profitability from sales of OLYSIO, net of investments we made, contributed approximately
`
`$0.06 of EPS this quarter and approximately $0.20 of EPS for the nine months of this
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`year. As referenced in the table of non-GAAP measures, the 2014 third quarter net
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`earnings were adjusted to exclude the following special items. The net gains associated
`
`with the OCD divestiture, costs associated with the continued integration of Synthes,
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`additional reserves for litigation expenses under the DePuy ASR Hip program and an
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`approval for final IRS regulations related to the branded prescription drug fee.
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`Let me now provide some background about the branded prescription drug fee, which we
`
`have treated as a special item this quarter. As you know in 2011, we and all participants in
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`the U.S. pharmaceutical industry were required under the Affordable Care Act legislation
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`to begin paying the fee based on our respective shares of branded prescription drugs sold
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`to the U.S. government.
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`The accounting for that fee has been consistently applied by the industry since that
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`passage of the act as agreed with the Securities and Exchange Commission. During the
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`third quarter, the IRS issued final regulations, which had the effect of changing the
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`recognition of the fee for accounting purposes from the period in which the fee is paid to
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`the period from which market shares used to allocate the fee are determined. Therefore,
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`we and other industry participants are now required to record an additional year of the fee.
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`Note that as the fee is still payable as originally provided for in the act, there is no resulting
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`cash flow impact.
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`Now let's take a few moments to talk about the other items on the statement of earnings.
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`I'm pleased to point out that we saw very good operating performance. Cost of goods sold
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`was 120 basis points lower than the same period last year primarily due to our product mix
`
`offset by currency impact.
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`Selling, marketing and administrative expenses were 60 basis points lower as compared
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`to the third quarter of 2013 due to the growth of new products in our pharmaceutical
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`business and overall good management of cost primarily in our MD&D business. These
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`factors more than offset the inclusion of an additional year of the branded prescription
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`drug fee, which I described earlier.
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`Excluding the impact of this fee, which we have treated as a special item, these expenses
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`were 180 basis points lower than in the prior year. Our investment in research and
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`development as a percent of sales was down compared to the prior year primarily due to
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`timing of various R&D programs that we have and we will continue to make important
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`R&D investments for the future.
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`3/7/2017
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`Johnson & Johnson (JNJ) Q3 2014 Results - Earnings Call Transcript | Seeking Alpha
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`Overall, our pretax operating margin increased 240 basis points. And excluding the
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`incremental accrual for the additional year of the branded prescription drug fee, pretax
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`operating margins increased 360 basis points. OLYSIO was a major contributor
`
`representing slightly more than one half of that increase.
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`Interest expense net of interest income are approximately $112 million was slightly higher
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`than the prior year. Other income net of other expenses was $1.3 billion in the quarter as
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`again, compared to $943 million of expense in the same period last year. Now excluding
`
`the special items that were included in this line item, other income net of other expenses
`
`show the net expense of $25 million this quarter versus a net gain of $43 million in the
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`prior year.
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`In the quarter, the effective tax rate excluding special items was 24.2% compared to
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`18.9% in the third quarter of 2013 and for nine months excluding special items, the tax
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`rate was 21.9% compared to 19.3% in the same period last year. This was due primarily to
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`the geographic mix of the results in each of the periods.
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`Now I will provide some guidance for you to consider as you refine your models for the
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`balance of 2014. Before I discuss sales and earnings, I will give some guidance on items
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`we know are difficult for you to forecast beginning with cash and interest income and
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`expense.
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`At the end of the quarter, we had approximately $17.7 billion of net cash, which consist of
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`approximately $33 billion of cash and marketable securities and approximately $15.3
`
`billion of debt. For purposes of your models, assuming no major additional acquisitions or
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`other major uses of cash, I suggest you consider modeling net interest expense of
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`between $400 million and $500 million, which is consistent with our previous guidance.
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`Regarding other income and expense, as a reminder, this is the account where we record
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`royalty income as well as gains and losses arising from such items as litigation,
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`investments by our development corporation as well as divestitures, asset sales and write-
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`offs. We will be comfortable with your models for 2014 reflecting other income and
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`expense, excluding special items as a net gain, ranging from approximately $300 million
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`to $400 million, which is lower than our previous guidance.
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`And now a word on taxes. Our guidance for 2014 anticipates that the R&D tax credit will
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`be renewed by Congress. And although that has not yet occurred, we do anticipate that it
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`will be retroactive for the full year when it is eventually passed consistent with our previous
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`guidance. If the R&D tax credit is not approved, it will negatively impact our effective tax
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`rate by approximately 0.5%.
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`Johnson & Johnson (JNJ) Q3 2014 Results - Earnings Call Transcript | Seeking Alpha
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`We would therefore be comfortable with your models reflecting an effective tax rate for
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`2014 excluding special items of approximately 20% to 21%. This is an increase in our
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`effective tax rate to reflect a higher portion of our earnings this year being subject to the
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`U.S. tax rate. As always, we will continue to pursue opportunities in this area to improve
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`upon this rate.
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`Turning to guidance on sales and earnings. As we've done for several years, our guidance
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`will be based first on a constant currency basis reflecting our results from operations. This
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`is the way we manage our business and we believe this provides a good understanding of
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`the underlying performance of our business.
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`We will also provide an estimate of our sales and earnings per share results for 2014 with
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`the impact that current exchange rates could have on the translation of those results. Our
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`sales and earnings guidance for 2014 takes into account several assumptions that I
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`highlighted to you in previous quarters.
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`For sales, our assumptions remain consistent from earlier guidance that PROCRIT will not
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`have biosimilar competition in 2014. And for INVEGA, SUSTENNA and RISPERDAL
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`CONSTA, we do not anticipate generic entries for these products this year.
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`Further, our guidance reflects net incremental sales from our hepatitis C products as well
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`the divestiture of Ortho-Clinical Diagnostics. Considering the factors I just noted, we would
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`be comfortable with your models reflecting an operational sales increase on a constant
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`currency basis of between 5.5% and 6.5% for the year. This would result in sales for 2014
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`on a constant currency basis of approximately $75 billion to $76 billion. This is an increase
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`to our previous guidance.
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`Our underlying operational sales growth in this 2014 guidance excluding the impact of the
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`hepatitis C products and the OCD divestiture for the full year 2014 is approximately 4.5%,
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`a higher growth rate than the estimate we provided on last quarter's earnings call. We are
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`not predicting the impact of currency movements but to give you an idea of the potential
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`impact on sales, if currency exchange rates were to remain where they were as of last
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`week for the balance of the year than our sales growth rate would decrease by nearly
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`1.5%, reflecting the recent weakening of the euro and other currencies against the U.S.
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`dollar.
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`Thus under this scenario, we would expect reported sales growth to range between 4%
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`and 5% for total expected level of reported sales of between approximately $74 billion and
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`$75 billion. Our 2014 earnings guidance reflects the strength of our performance we've
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`seen thus far including a strong contribution of OLYSIO which as I noted earlier
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`Johnson & Johnson (JNJ) Q3 2014 Results - Earnings Call Transcript | Seeking Alpha
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`contributed approximately $0.20 to 2014 EPS for the first nine months, net of investments
`
`we've made in the business. Therefore we suggest you consider full year 2014 EPS
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`estimates, excluding the impact of special items of between $5.94 and $5.99 per share on
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`operational or constant currency basis, which is higher than our previous guidance.
`
`Moving to reported EPS, again we’re not predicting the impact of currency movements but
`
`to give you an idea of the potential impact on EPS if currency exchange rates were to
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`remain where they were as of last week for the balance of this year than our reported
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`EPS, excluding special items, would be negatively impacted by approximately $0.02 per
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`share due to exchange rate fluctuations. This represents a $0.07 per share unfavorable
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`swing from our previous guidance, with the weakening euro as a major factor.
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`We therefore suggest that you model our reported EPS, excluding special items, in the
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`range between $5.92 and $5.97 per share for growth rate of about 7% to 8%. This is
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`higher than our previous guidance, as our strong operational earnings performance is
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`more than offsetting the negative impact of currency movements. And as a reminder, our
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`full year earnings guidance includes intangible amortization of approximately $1.4 billion
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`before tax, or an impact of approximately $0.38 on earnings per share.
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`Please note that our guidance does not include the impact of an official devaluation of the
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`Venezuelan Bolivar or any other currency. And while we’re not providing guidance for
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`2015, if currency exchange rates were to remain where they were as of last week for all of
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`2015, that impact would be a headwind to earnings per share of approximately $0.15 to
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`$0.20 per share.
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`As you update your models for the guidance I just provided, you will see that we do expect
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`that our pre-tax operating margins will show a significant improvement in 2014 over 2013
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`levels, and approximately half of that is attributed to OLYSIO net of the additional
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`investments we’re making in the business.
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`In summary, we are very pleased with our strong results this quarter and with our ability to
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`deliver an even stronger earnings performance for the full year than our previous
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`guidance. Our new products continue to produce strong growth and we are advancing our
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`near-term priorities while also continuing to make investments to fuel future growth.
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`Now I would like to turn things back to Louise for the Q&A portion of the meeting. Louise?
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`Louise Mehrotra
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`Thank you, Dominic. And Stephanie, could you please give the instructions for the Q&A
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`session.
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`Johnson & Johnson (JNJ) Q3 2014 Results - Earnings Call Transcript | Seeking Alpha
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`Question-and-Answer Session
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`Operator
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`(Operator Instructions) Your first question is from the line of Mike Weinstein with
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`JPMorgan.
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`Dominic Caruso
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`Good morning, Mike
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`Mike Weinstein - JPMorgan
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`Good morning. Thanks for taking the questions. So Dominic, first, one clarification, the
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`$0.06, you called out this quarter and $0.20 for the year for OLYSIO, that would seem to
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`imply probably about $0.20 and more of investments netted against that to get to that
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`$0.20 number. So, can you just maybe outline that the $0.20 versus what profitability
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`could have been for that product?
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`Dominic Caruso
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`Sure, Mike. We are not going to give very specific profitability by product. But generally
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`speaking, when we saw the uptick in OLYSIO sales this year, we knew we had the
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`opportunity to invest more in the business, including both some marketing investment as
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`well as new R&D program. So we expected that we would do that while still having our
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`investors see the benefits of the uptick in the OLYSIO product. So I can’t give you the
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`specifics, but generally speaking about $0.20 for the year. I mean, if you assume that
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`OLYSIO is a high margin -- high gross margin product with very, very little costs
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`associated with it, you can probably estimate what the total impact would be.
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`Mike Weinstein - JPMorgan
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`And do you view that $0.20 as one-time, essentially going away next year. Is that you
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`want these rates to be picking up in ‘15?
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`Dominic Caruso
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`Yeah. I think so, because it’s obvious that we saw such a significant uptick this quarter and
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`you all know that Gilead’s compound in this space was just approved Friday. I think we all
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`expected that. So we took the opportunity to invest. I think we're being very transparent
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`with investors of what the impact to this year's earnings are net of the investments, of
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`course. And yes, we don't expect that that will continue into next year.
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`Johnson & Johnson (JNJ) Q3 2014 Results - Earnings Call Transcript | Seeking Alpha
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`Mike Weinstein - JPMorgan
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`One last question. Could you walk through the assumptions that you’ve laid for this year
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`relative to biosimilar competition? Do you have any preliminary comments relative to
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`2015? And are you thinking about competition for REMICADE or can you give a product
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`from the portfolio?
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`Dominic Caruso
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`Sure. Louise, we have spoken before about the fact that 2015 is biosimilar impact for
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`REMICADE in Europe, in particular.
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`Louise Mehrotra
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`Correct. And as far as INVEGA SUSTENNA and RISPERDAL CONSTA, we are not aware
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`of any ANDA filings on them at this point in time.
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`Mike Weinstein - JPMorgan
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`Perfect. I will let others jump in. Thank you.
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`Dominic Caruso
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`Thanks, Mike.
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`Louise Mehrotra
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`Next question please.
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`Operator
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`Our next question comes from Larry Biegelsen, Wells Fargo.
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`Louise Mehrotra
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`Good morning, Larry.
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`Dominic Caruso
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`Hi, Larry.
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`Larry Biegelsen - Wells Fargo
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`3/7/2017
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`Johnson & Johnson (JNJ) Q3 2014 Results - Earnings Call Transcript | Seeking Alpha
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`Good morning. Thanks for taking the questions. I wanted to ask a question about
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`international growth, which has slowed the last couple quarters. The U.S. has obviously
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`been very strong, but can you talk about what you're seeing outside the U.S. and why the
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`U.S. -- O-U.S. I am sorry isn’t growing quite as robustly as the U.S.? And then I had a
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`follow-up. Thanks.
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`Dominic Caruso
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`Right. Well, couple things. This quarter of course, we have the impact of the OCD
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`divestiture, so the quarter-over-quarter comparisons are difficult for that. So Europe, I think
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`you saw published operational growth of negative 0.8%. Without the OCD impact, it
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`would've