3/7/2017
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`Johnson & Johnson's (JNJ) CEO Alex Gorsky on Q4 2014 Results - Earnings Call Transcript | Seeking Alpha
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`Johnson & Johnson's (JNJ) CEO Alex Gorsky on Q4 2014 Results -
`Earnings Call Transcript
`
`Jan. 20, 2015 3:16 PM ET1 comment
`by: SA Transcripts
`
`Q4: 01-20-15 Earnings Summary
`
` 10-K
`
` Analysis
`
` News
`
`EPS of $1.27 beats by $0.01 | Revenue of $18.25B (- 0.6% Y/Y) misses by $-310M
`
`Johnson & Johnson (NYSE:JNJ)
`
`Q4 2014 Earnings Conference Call
`
`January 20, 2015 8:30 AM ET
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`Executives
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`Louise Mehrotra - VP, IR
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`Alex Gorsky - Chairman and CEO
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`Dominic Caruso - VP, Finance and CFO
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`Analysts
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`Lawrence Biegelsen - Wells Fargo
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`Derrick Sung - Sanford Bernstein
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`Mike Weinstein - JPMorgan
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`Glenn Novarro - RBC Capital Markets
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`Jeff Halford - Jefferies
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`Kristen Stewart - Deutsche Bank
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`JANSSEN EXHIBIT 2146
`Mylan v. Janssen IPR2016-01332
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`3/7/2017
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`Johnson & Johnson's (JNJ) CEO Alex Gorsky on Q4 2014 Results - Earnings Call Transcript | Seeking Alpha
`
`David Lewis - Morgan Stanley
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`Rick Wise - Stifel Nicolaus
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`Vamil Divan - Credit Suisse
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`Danielle Antalffy - Leerink Partners
`
`Operator
`
`Good morning. And welcome to Johnson & Johnson’s Fourth Quarter 2014 Earnings
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`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
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`may disconnect at this time. (Operator Instructions)
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`I would now like to turn the conference call over to Johnson & Johnson. You may begin.
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`Louise Mehrotra
`
`Good morning and welcome. I’m Louise Mehrotra, Vice President of Investor Relations for
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`Johnson & Johnson and it is my pleasure this morning to review our business results for
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`the fourth quarter and full year of 2014. Joining me on the call today, are Alex Gorsky,
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`Chairman of the Board of Directors and Chief Executive Officer, and Dominic Caruso, Vice
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`President, Finance and Chief Financial Officer.
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`A few logistics before we get into the details. This review is being made available via a
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`webcast accessible through the Investor Relations section of the Johnson & Johnson Web
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`site at investor.jnj.com. I’ll begin by briefly reviewing fourth quarter and full year results for
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`the corporation and for our three business segments. Following my remarks, Alex will
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`comment on the 2014 results and provide a strategic outlook for the Company. Then
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`Dominic will provide some additional commentary on the business and review the income
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`statement and provide guidance for 2015. We will then open the call to your questions. We
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`expect the call to last approximately 90 minutes.
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`Included with the press release that was issued earlier this morning is the schedule of
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`sales for key products and/or businesses to facilitate updating your models. These
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`schedules are available on the Johnson & Johnson Web site, as is the press release.
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`Please note, we will be using a presentation to complement today’s commentary. The
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`presentation is also available on our Web site.
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`Johnson & Johnson's (JNJ) CEO Alex Gorsky on Q4 2014 Results - Earnings Call Transcript | Seeking Alpha
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`Before we begin, let me remind you that some of the statements made during this review
`
`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. The Company does not undertake to update any forward-looking
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`statements as a result of new information or future events or developments. Our SEC
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`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
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`considered replacements for and should be read together with GAAP results. Tables
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`reconciling these measures to the most comparable GAAP measures are available in the
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`schedules accompanying the press release and on the Investor Relations section of the
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`Johnson & Johnson Web site. A number of the products and compounds discussed today
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`are being developed in collaboration with strategic partners or license from other
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`companies, this slide lists the acknowledgement of those relationships not otherwise
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`referenced in today’s presentations.
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`Now I would like to review our results for the fourth quarter of 2014. Worldwide sales to
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`customers were $18.3 billion for the fourth quarter of 2014, down 0.6% versus the fourth
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`quarter of 2013. On an operational basis, sales were up 3.9% and currency had a
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`negative impact of 4.5%. In the U.S., sales were up 7.4%. In regions outside the U.S. our
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`operational growth was 1.2%, while the effect of currency exchange rates negatively
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`impacted our reported results by 7.9%. On an operational basis, the Western Hemisphere
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`excluding the U.S. grew 3.9%, while both the Asia-Pacific and Africa region and Europe
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`grew 0.6%. The success of new product launches and continued growth of key products in
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`all regions was partially offset by divestitures, the most significant one being Ortho-Clinical
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`Diagnostics, excluding the net impact of acquisitions and divestitures underlying operation
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`of 0.7% worldwide, 10.7% in the U.S. and 3.6% outside the U.S.
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`Turning now to earnings, net earnings were $2.5 billion and earnings per share were
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`$0.89 versus the $1.23 a year-ago. As referenced in the table reconciling non-GAAP
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`measures, 2014 fourth quarter net earnings were adjusted to exclude a charge of $1.1
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`billion for after-tax special items. Fourth quarter 2013 net earnings were adjusted to
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`exclude a net charge of $42 million for after-tax special items. Dominic will discuss special
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`items in his remarks. Excluding special items for both periods, net earnings for the current
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`quarter were $3.6 billion and diluted earnings per share were $1.27, representing
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`increases of 1.4% and 2.4% respectively as compared to the same period in 2013.
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`Johnson & Johnson's (JNJ) CEO Alex Gorsky on Q4 2014 Results - Earnings Call Transcript | Seeking Alpha
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`Now turning to the financial highlights for the full year of 2014, consolidated sales to
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`customers for the year of 2014 were $74.3 billion, an increase of 4.2% as compared to the
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`same period a year ago. On an annual basis, sales grew 6.1% operationally and currency
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`had a negative impact of 1.9%. Excluding the net impact of acquisitions and divestitures,
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`underlying operational growth was approximately 8% worldwide, 11.6% in the U.S. and
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`5.1% outside the U.S.
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`Turning now to earnings, 2014 annual net earnings were $16.3 billion and earnings per
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`share were $5.70. For the year, 2014 adjusted net earnings were $17.1 billion and
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`adjusted earnings per share were $5.97, up 7.7% and 8.2% respectively versus the 2013
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`results. Free cash flow for the year was strong at $14.7 billion, up $900 million versus
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`2013.
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`Turning now to business segment highlights. Please note percentages quoted represent
`
`operational sales change in comparison to the fourth quarter of 2013, unless otherwise
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`stated and therefore exclude the currency translation impact. I’ll begin with the Consumer
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`segment. Worldwide Consumer segment sales of $3.6 billion increased 0.9% with U.S.
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`sales up 2.5%, while outside the U.S. sales grew 0.1%. Excluding the net impact of
`
`acquisitions and divestiture, underlying operational growth was 2.1% worldwide, 4.9% in
`
`the U.S. and 0.7% outside the U.S. Growth was driven by OTC worldwide, U.S. Skin Care,
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`as well as Oral Care and Women’s Health outside the U.S. This growth was partially offset
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`by lower sales of Baby Care and Skin Care outside the U.S., due to competitive pressures
`
`and prior-year inventory stocking.
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`OTC sales growth was driven by analgesics and upper respiratory products. Upper
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`respiratory grew 8% worldwide driven by sales growth outside the U.S. Analgesic growth
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`was 16% with growth in the U.S. of 24% driven by share gains, as well as trade inventory
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`build related to the re-launch of products. In the U.S., adult analgesic market share was
`
`11%, up from approximately 9.5% a year ago, while U.S. pediatric share was nearly 42%,
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`up from 34% a year ago. New product launches and successful marketing campaigns
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`drove the results for NEUTROGENA and AVEENO in U.S. Skin Care, as well as
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`LISTERINE in Oral Care and Women’s Health products outside the U.S.
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`Moving now to our Pharmaceutical segment, worldwide sales of $8 billion increased
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`13.9% with U.S. sales up 22.7% and sales outside the U.S. up 5.8%, driven by strong
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`sales of new products, as well as core growth products. A major driver was our Hepatitis C
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`product, OLYSIO. Excluding sales of Hepatitis C products, OLYSIO and INCIVO,
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`underlying growth worldwide U.S. and outside the U.S. was approximately 11%, 16% and
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`Johnson & Johnson's (JNJ) CEO Alex Gorsky on Q4 2014 Results - Earnings Call Transcript | Seeking Alpha
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`7% respectively. Other significant contributors to growth were immunology products,
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`STELARA and SIMPONI, SIMPONI ARIA as well as XARELTO, INVOKANA, ZYTIGA,
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`INVEGA SUSTENNA or XEPLION and recently launched IMBRUVICA.
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`Net revenue recorded from IMBRUVICA in the fourth quarter was $92 million worldwide,
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`with $64 million in the U.S. On a full year basis, net revenue was $200 million worldwide,
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`with $144 million in the U.S. The results for immunology were driven by strong double-digit
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`market growth, complemented by increased market share for STELARA and combined
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`SIMPONI, SIMPONI ARIA. U.S. export sales of REMICADE were down due to timing of
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`shipments to our distribution partners. XARELTO sales were up 58% and total prescription
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`share or TRx for the quarter in the U.S. anticoagulant market grew to 15%, up
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`approximately 0.5 point from last quarter and up over 4.5 points from a year-ago.
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`Cardiology TRx estimated at 23.5% was up over 4.5 points from a year-ago.
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`INVOKANA/INVOKAMET sales were approximately $200 million in the quarter, with over
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`$190 million in the U.S. contributing approximately 3.5% to the U.S. pharmaceutical
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`growth rate. In U.S. INVOKANA/INVOKAMET achieved 4.1% TRx within the defined
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`market of Type 2 diabetes excluding insulin and metformin, up from 3.3% in the third
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`quarter of 2014. TRx in endocrinologist grew to 10% for the quarter, up approximately 1%
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`sequentially. INVOKANA/INVOKAMET was the category-leader in new-to-brand share
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`with endocrinologists reaching over 19% at the end of the quarter.
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`Strong growth of the combined metastatic castrate resistant prostate cancer market at
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`over 15% drove the results for ZYTIGA in the U.S. ZYTIGA’s share was approximately
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`31% of that market down approximately two points on a sequential basis due to increased
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`competition. Continued strong market uptake and additional country launches drove the
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`strong results outside the U.S. ZYTIGA is approved in more than 95 countries. INVEGA,
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`SUSTENNA or XEPLION, achieved strong result in all regions due primarily to increased
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`market share.
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`I’ll now review the Medical Devices segment results. Worldwide Medical Devices segment
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`sales of $6.6 billion decreased 4.7%. U.S. sales declined 7.7%, while sales outside the
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`U.S declined 2.3%. Ortho-Clinical Diagnostics was divested mid-year 2014. Excluding the
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`net impact of acquisitions and divestures, underlying operational growth was 1.5% at
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`worldwide, with the U.S down 1% and growth of 3.5% outside the U.S. Growth was driven
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`by orthopedics and cardiovascular care products, partially offset by lower sales in vision
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`care. Competitive pricing dynamics negatively impacted growth for vision care in the U.S.
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`This was partially offset by growth outside the U.S with strong results in emerging market.
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`Orthopedics sales growth was driven by Sports Medicine, hips, spine and knees. The
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`successful launch of MONOVISC coupled with the continued strong growth for
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`ORTHOVISC drove results for Sports Medicine. Hip growth of 5% worldwide was driven
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`by strong volume growth partially offset by continued pricing pressure. Primary stem
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`platform sales were a major contributor to the results. Spine grew 3% with solid market
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`volume growth and new product launches partially offset by continued pricing pressure.
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`Knees worldwide increased 3% due to the successful launch of ATTUNE, with pricing
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`pressure offset by positive mix. Cardiovascular growth was driven by a 16% worldwide
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`increase in our BioSense Webster business due to strong growth of the ThermoCool
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`SmartTouch Catheter.
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`That concludes the segment highlights for Johnson & Johnson’s fourth quarter of 2014.
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`For your reference, there were some notable developments in the fourth quarter which we
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`have summarized on this slide to assist as you develop your models. Lastly, to assist you
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`in updating your models for the full year 2014, on our Web site you will find annual sales
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`highlights by-segment, as well as adjusted earnings before tax by-segment.
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`It is now my pleasure to turn the call over to Alex Gorsky. Alex?
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`Alex Gorsky
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`Thank you, Louise and good morning everyone who has joined the call today. I am really
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`pleased to be reviewing with you the highlights of our very strong 2014 results and a
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`preview of '15 and beyond. But before I get to that, I’d like to start as I often do with just a
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`word on Our Credo. This remarkable document was written 71 years ago by the son of our
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`founder and Johnson & Johnson has long been guided by its principles. And what I can
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`tell you is that this philosophy, this ethos is alive and well in our organization. There is a
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`fixated version of it etched in glass and positioned directly in front of my desk. It’s
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`something we pay a lot of attention to and it challenges our entire Company to ensure that
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`we’re working with the interest of our key stakeholders in mind consumers, care-givers
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`and patients, our employees, the global communities in which we live and work and of
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`course our shareholders.
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`And as we enter 2015, the business of Johnson & Johnson is very strong and we’re well-
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`position for the long-term. We delivered 31 consecutive years of adjusted earnings
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`increases, and 52 consecutive years of dividend increases for our shareholders. We’re
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`one of just three companies to be Triple A rated by all three major credit agencies, which
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`continues to afford us many benefits in the financial markets. Our products are industry
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`and segment-leading with 70% of sales coming from the number one or number two
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`Johnson & Johnson's (JNJ) CEO Alex Gorsky on Q4 2014 Results - Earnings Call Transcript | Seeking Alpha
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`market share position and 25% of our sales coming from products we’ve launched in the
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`past five years. And we reward the shareholders by returning about 70% of our free cash
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`flow over the past decade, which amounts to about $90 billion.
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`As most of you know, Johnson & Johnson is built around three core businesses and as
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`the chart on the left of the slide shows, our Pharmaceutical segment generated over 32
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`billion in sales last year, followed by Medical Devices at 27.5 billion and 14.5 billion in
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`Consumer to round it out. We’re the largest pharmaceutical company in the United States
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`and the fastest growing Company among the top-10 globally. We’re also the market-leader
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`in Medical Devices which includes surgery, orthopedics and consumer medical devices,
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`like vision care and diabetes. And we’re a market-leading consumer products healthcare
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`company as well.
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`And so looking back on 2014 here is a slide I presented last January, that delineated our
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`commitments for the year and I’m proud to say that we’ve achieved our near-term
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`priorities and exceeded our financial targets of full year operational sales growth of 6.1%.
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`We successfully restored a reliable supply of the over-the-counter medicines the shelf in
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`the United States and saw strong growth in our pediatric analgesics. And at DePuy
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`Synthes which showed 3% operation growth over the prior-year led by the trauma, hips
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`and knee businesses, we’ve begun to realize the benefits of the scale and breadth of the
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`combined businesses which have contributed to strategic wins in key markets. And by any
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`measure we built on the already strong momentum in our Pharmaceuticals business,
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`driven by the strength of key products including OLYSIO, XARELTO, ZYTIGA, INVOKANA
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`and IMBRUVICA. Later, I’ll cover the progress we’ve made against our long-term growth
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`drivers, particularly in the area of innovation.
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`To set context for our businesses going forward, there are a few points I’d like to make
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`about the dynamics shaping the global healthcare environment. First is the rising cost of
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`healthcare, which by 2020 is expected to account for 21% of the GDP in the United
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`States, nearly 11% in the European Union and 6% in China. And as I travel around the
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`world, it's clear that providing sustainable high-quality healthcare is one of our society's
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`greatest challenges. It's at the forefront of many discussions I have with our associates,
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`government leaders, physicians, hospital administrators and executives at our peer
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`companies. As the world's largest healthcare company, we're working to assume a leading
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`role in the solutions which must be centered on the patient and improving outcomes.
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`Next, expanding access is an important macro trend impacting how we and others think
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`about the future of the business. Healthcare reform efforts and improving economies are
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`clearly helping more people access affordable quality care, which will certainly help in the
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`fight against cancer, obesity and heart disease. And here in the U.S, we’ve seen
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`healthcare utilization rates increase for the second quarter in a row, both sequentially and
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`versus the prior year. And we estimate that we will continue seeing similar to slightly
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`higher growth rates when all of the fourth quarter numbers are reported. Managing those
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`dynamics demand innovation and new models and are driving considerable health
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`industry consolidation at the health system level, as well as in the med tech,
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`pharmaceutical and biotech sectors, where the M&A activity is back to peak levels last
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`observed before 2009.
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`The good news is the governments are increasingly recognizing the need to continue to
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`address healthcare needs and are taking steps to reward innovation through FDA and
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`EMEA designations that are helping to speed product review times. And in thinking about
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`all of these dynamics in the marketplace, today I will cover three themes about Johnson &
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`Johnson that are driving our confidence in the future. First, the core businesses at
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`Johnson & Johnson are strong and positioned to continue expanding our market-
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`leadership positions. Next, we have an exciting and deep product pipeline across the
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`entire enterprise. And we’re changing the way we interact with our customers and evolving
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`our structure to be more effective and efficient to drive growth.
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`Now I am also a firm believer that in order to achieve our goals as a Company, it's
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`important to establish a clear set of priorities for the entire organization. Three years ago,
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`when I first assumed this role we were very focused on excellence in execution and given
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`the progress we’ve made today, we're evolving our approach placing an even greater
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`emphasis on innovation and accelerating growth with continued excellence in execution
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`as a non-negotiable part of the process. So without compromise, we're focused on
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`delivering on our financial and quality commitments.
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`In Pharmaceuticals, we'll continue building on our launch excellence and robust pipeline.
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`In Medical Devices, the emphasis is on growth acceleration from innovation and also by
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`transforming our go-to-market models that better reflect the reality, the purchasing
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`decisions are increasingly being made at the healthcare system level, as they look to
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`improve the quality of care they provide patients, while controlling cost. And in Consumer,
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`we're expanding our market-leadership in key segments within the over-the-counter
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`medicines, oral care, baby and beauty markets.
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`Let me take you through the thinking of how we will meet these priorities in each one of
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`our businesses. Let's start first with our Pharmaceutical business. I've got to tell you, I
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`could not be proud of this organization. About six years ago we lost $8.5 billion of sales to
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`patent expiry and this was out of about a $24 billion portfolio in our Pharmaceutical
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`business. Now, a lot of companies have chosen different strategies, but what we said is,
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`first of all we want to be very focused on innovation and are developing differentiated
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`products that will ultimately help fulfill unmet medical needs. We focus on five therapeutic
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`areas, recognizing that we can't be everything to everybody. And we've also said that we
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`want to go where the best science is and have a mix of internal and external innovation,
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`while being completely agnostic about the source. And the results really speak for
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`themselves.
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`The 14 new products launched since 2009, driving cumulative sales of over $27 billion, six
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`of these products have already crossed the $1 billion threshold. With this we are the
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`industry-leader in terms of research and development productivity and that means per
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`dollar spent compared to the benchmark. And the story is not over, in 2014 we had 20
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`new line extensions approved and we filed an additional 20. We also started 23 Phase 3
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`trials and initiated 11 Phase 2 trials. And as currently constituted, our pipeline is poised to
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`yield 10 potential new product filings between 2013 and 2017.
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`Next, our Medical Devices business is in a very strong leadership position particularly in
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`orthopedics, electrophysiology, surgery and vision care, where there is a lot of innovation
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`advancing the standard-of-care. Many of our platforms are overwhelming market-leaders
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`in their categories and 85% of our sales are from platforms with a number one or number
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`two position. We have 10 different platforms in this business that have exceeded $1 billion
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`in sales, which is quite remarkable when you think about it. And we're growing very well in
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`emerging markets and are capitalizing on the scale, depth and breadth of the portfolio we
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`can offer to governments, large healthcare systems and large payors around the world to
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`add value and help patients and we grew sales in China by nearly 15% on an operational
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`basis last year. We've launched over 50 major new products since 2012 and have more
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`than 30 new filings pending as at the end of the year. So again, this is a very strong
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`business that's well-positioned for the future.
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`In our Consumer brands, these are the ones that most people know us by. As you can see
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`we're guided by inside driven innovation and have taken a very focused approach to
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`meeting key consumer need space led by our 12 megabrands. And while they are nearly
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`U.S the OTC business continues to operate in their consent decree they are on-track with
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`all of their commitments and the consistent supply of these products are returning to the
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`market. I am incredibly proud of the work that the team has done and based upon recent
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`market-share trends that show consumption is growing at four times the market, with
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`particular strength behind children’s TYLENOL and children’s MOTRIN, the new strategies
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`we’ve implemented within the organization are really paying off.
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`Now the work that I just described is leveraging the full strength of our enterprise, the
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`product portfolios, the expertise of our research, medical and epidemiological teams and
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`our commercial organizations. Looking longer-term, our strategy for driving growth should
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`be very familiar to all of you by now and I’ll use the balance of my time taking you through
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`some of the elements behind it. So let's start with innovation because in the end without
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`innovation we just can’t be successful that’s ultimately how we’re going to help more
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`patients and consumers and we invested $8.5 billion in R&D last year across our
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`segments to keep us at the forefront. Our approach can be viewed in these four ways. As
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`I’ve said earlier, we want to ensure we have the right mix of internally and externally
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`sourced science and products and we’ve built new innovation models.
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`We’re also focusing on greater cross-segment collaboration to innovate and focused
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`operationally on building market-leading capabilities that enable us to achieve the highest
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`quality and efficiency standards possible across the world. And the good news is, it’s
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`working. We’ve had about an 8% CAGR over the last 20 years and we’ve invested almost
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`$200 billion in innovation over that span. About 109 billion of that has been internal and
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`about 85 billion has been external, so a pretty fair mix. With that external spend, we’ve
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`done over 120 deals and well over 100 of those are under $1 billion. Of course the larger
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`ones make up more of the value, but what this graph shows is that you’ve got to have
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`those singles, doubles and triples as well as the larger home run type deals to be
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`successful over the long-term. And that’s helped us build a portfolio with 24 brands and
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`platforms that generate over $1 billion and sell the piece.
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`As an example, our team has done a great job at this in the oncology space. The
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`partnerships we’ve built since 2008 have helped us grow from a $1 billion franchise to
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`over $4.5 billion today and we have around four breakthrough designations in this portfolio
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`demonstrating our ability to identify and develop products that can revolutionize the care
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`of cancer patients. And we’re doubling down on our efforts to ensure we continue
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`accessing new ideas and products at their earlier stages. Building on the legacy of
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`entrepreneurship that the Johnson & Johnson Development Corporation established since
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`its inception by investing over $1 billion in start-up companies, the team made an
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`additional 43 investments with nearly $200 million just last year. Our new innovation
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`centers which are in four innovation hubs across the world have made over 200 alliances
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`in the past few years and at our four no-strings-attached incubators at Janssen Labs,
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`we’re giving small start-ups places to work and access the instrumentation.
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`Johnson & Johnson's (JNJ) CEO Alex Gorsky on Q4 2014 Results - Earnings Call Transcript | Seeking Alpha
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`I had an opportunity to visit our facility in South San Francisco just last week and that was
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`one of our teams that we’re working with, who says it could have taken them eight years
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`and $300 million to do what we’re enabling them to do in just a couple of years for
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`significantly less, in an environment where they are building a foundation for strong
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`partnerships for themselves and frankly with us as well. As technologies are advancing,
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`we’re seeing more and more opportunities for cross-segment collaborations, bringing
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`together the scientific, regulatory, clinical and commercial expertise from across Johnson
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`& Johnson to improve care. Examples include our EVARREST Fibrin Sealant Patch, which
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`has demonstrated an ability to control problematic surgical bleeding that goes well beyond
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`the current standard of care. Stem cell therapy for Adult Macular Degeneration is another
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`area that we’re very excited about. We think it offers a great complement to our existing
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`vision care platform.
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`Also while I was in China for the APEC Economic Leaders Summit in November, I
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`announced plans to optimize our expertise on oncology to help the Chinese government
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`fight lung cancer. It's estimated that by 2025 there will be 1 million cases of lung cancer
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`and while China has 20% of the world’s population, they have got about 30% of the cases.
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`So we’re in the process of establishing a China Lung Cancer Center which will adopt an
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`integrated medical approach to transforming the disease we help ultimately into a
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`preventable and curable one, by taking a unique local approach where we have R&D,
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`medical device, pharmaceutical and consumer experts all working together to bring
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`forward new and very comprehensive solutions. This is also a good illustration of the
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`versatility of the types of enterprise-wide solutions we can uniquely offer as Johnson &
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`Johnson and we’re already in talks with governments and other nations to develop similar
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`models to help them attack diseases that are rapidly spreading through their nations.
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`Now we realize that in order to implement programs like these on such a large scale, we
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`must change the way we work as a Company. For many years Johnson & Johnson has
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`been extremely decentralized and we think that accountability and responsibility is
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`something that we don’t want to lose or compromise. But we also realize that operating a
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`$75 billion global company is different than operating a much smaller one and then
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`making sure we’ve got the right standards and systems in place in areas such as quality,
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`supply chain and finance is essential. So we put in a very ambitious agenda to strike the
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`right balance in our organization. And as I stated last year, we’re aiming to take $1 billion
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`out of our P&L over the next three years and believe that we’ll be an even stronger
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`organization. So all of our commitments to innovate have helped us establish a very
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`http://seekingalpha.com/article/2833836-johnson-and-johnsons-jnj-ceo-alex-gorsky-on-q4-2014-results-earnings-call-transcript?part=single
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`Johnson & Johnson's (JNJ) CEO Alex Gorsky on Q4 2014 Results - Earnings Call Transcript | Seeking Alpha
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`strong pipeline for Johnson & Johnson. As you can see in our Pharmaceutical business
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`we have a deep pipeline, and as I said earlier we’re expecting the yield 10 major filings
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`and 25 line extensions between 2013 and 2017.
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`One of them is esketamine, a potential breakthrough medication for treatment resistant
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`depression as well as daratumumab which is being developed for multiple myeloma. They
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`both have breakthrough designations from the FDA. We’re also excited by ARN-509, a
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`next-generation treatment for prostate cancer, as well as guselkumabfor Psoriasis and
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`sirukumab which is for Rheumatoid Arthritis. And just yesterday, we announced that the
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`FDA has granted priority review of our NDA supporting the three month formulation of
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`paliperidone palmitate for the treatment of adults with schizophrenia. If approved, it will be
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`the first and only long-acting atypical antipsychotic that can be dosed just four times a
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`year, adding an unprecedented treatment option to help address the needs of these
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`patients. We’ll keep you apprised of these programs, as their development progresses.
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`I