Johnson & Johnson (JNJ.US) Q3 Earnings Call: Annual Revenue Expected to Surpass $100 Billion for the First Time, Strong Innovative Drugs Offset Headwinds in Medical Technology

According to Zhitong Finance APP, Johnson & Johnson (JNJ.US) released its FY2026 third quarter financial report and held an earnings conference call. The report showed that Johnson & Johnson's third quarter sales increased 5.9% year-on-year to $25.4 billion, in line with market expectations. In terms of profit, net income under GAAP plunged 95.9% year-on-year to $210 million, with diluted earnings per share at only $0.09 (compared to $2.12 in the same period last year), mainly due to a one-time pre-tax charge of $5.519 billion related to the proposed talc litigation settlement.

In terms of guidance, Johnson & Johnson raised its full-year 2026 reported sales revenue guidance midpoint from about $101.1 billion to $101.2 billion (range: $101.0–101.4 billion) and adjusted EPS guidance midpoint from $11.04 to $11.10 (range: $11.05–11.15), both exceeding market consensus expectations.

Management stated that 2026 will be a year of accelerated growth and impact, with the company expected to surpass $100 billion in annual revenue for the first time in its 140-year history and reiterated expectations for double-digit growth by the end of this decade. The strong innovation pharma business offset headwinds in certain areas of medtech; the long-term fundamentals of medtech remain strong, but the company acknowledged the need to improve cardiovascular and ex-US surgical businesses and is taking action. The company expects a better performance in 2027 and will provide more outlook and early pipeline information during the December 8 corporate business review.

The following are details from Johnson & Johnson’s Q3 earnings call.

Management Statements

Operator

Good morning, and welcome to Johnson & Johnson's 2026 third quarter earnings call. Today's call will be recorded. I'll now turn the call over to Johnson & Johnson.

Ryan Koors (Vice President of Investor Relations)

Hello everyone, I’m Ryan Koors, Vice President of Investor Relations at Johnson & Johnson. Welcome to the review of our 2026 third quarter business results and full-year financial outlook.

Please note that today’s presentation and related tables are available for download on the Johnson & Johnson Investor Relations website. This presentation includes forward-looking statements related to the company’s future operational and financial performance, market position, and business strategy. Please do not place undue reliance on these forward-looking statements. They are based on current expectations of future events and involve risks and uncertainties that could cause actual results to differ materially. For a discussion of related risks, please refer to our SEC filings.

Today's agenda: Chairman and CEO Joaquin Duato will discuss business performance and growth drivers; I’ll review the third quarter sales and P&L results; CFO Joe Wolk will share capital allocation priorities and updated FY2026 guidance. Tom Cavanaugh, Global Chair, Innovative Medicine; John Reed, EVP, R&D Innovative Medicine; and Tim Schmid, Global Chair, MedTech, will participate in Q&A. We expect the call to last about 60 minutes.

Joaquin Duato (Chairman and CEO)

Thank you, Ryan, and good morning, everyone. Our strong third-quarter performance reinforces our confidence in 2026 as a year of accelerated growth and impact. Third-quarter operational sales growth reached 6%, exceeding consensus and accelerating sequentially over Q2.

We lead in six strategic priority areas: oncology, immunology, neuroscience, cardiovascular, surgery, and vision. The powerful integration of our innovative medicine and medtech expertise strengthens our competitiveness. Currently, 29 products and platforms generate at least $1 billion in annual sales.

Our marketed portfolio continues to perform well, newly launched products show significant momentum, and our pipeline will underpin growth into the next decade. This quarter, sales exceeded $25 billion, and we are on track to meet guidance and, for the first time in the company’s 140-year history, surpass $100 billion in annual revenue. With our differentiated portfolio and advancing pipeline, we have a clear path to double-digit growth by the end of this decade.

Innovative Medicine operational sales grew 7.9%, with 8 brands posting double-digit growth.

In oncology, we are redefining cancer care from treatment to potential cure. Oncology grew approximately 17% in Q3. Our multiple myeloma portfolio and pipeline are unmatched, with 80% of patients receiving Johnson & Johnson therapies at some point in their treatment journey. We continue to support recently launched myeloma therapies and combination regimens. New phase III data announced in July showed that TECVAYLI with TALVEY in second-line therapy reduces the risk of disease progression or death by 89%. In solid tumors, RYBREVANT sales increased 64%, reflecting its potential in lung cancer. Approval for RYBREVANT FASPRO for advanced head and neck cancer is expected by year end from the U.S. FDA. In bladder cancer, INLEXZO became the market leader for new patient share within only a year from launch, with nearly a third of eligible patients starting the INLEXZO regimen in Q3. This quarter, we completed the acquisition of Firefly Bio, adding a promising degradation antibody-drug conjugate platform targeting tough drivers like KRAS. Our goal is to be the number one oncology company by 2030, with sales expected to exceed $50 billion.

In immunology, we build on a 25-year legacy of industry-leading innovation. TREMFYA sales grew 68% this quarter, reflecting strong forces across indications. In the U.S., it has become the leading IL-23 inhibitor for new brand share in Crohn’s disease, ulcerative colitis, and psoriatic arthritis. Based on the milestone STAR study, TREMFYA is the first and only IL-23 inhibitor to demonstrate positive results in clinical trials for axial disease, including significant improvement in spinal pain, stiffness, and inflammation in psoriatic arthritis patients. This strengthens our confidence in TREMFYA as a foundational medicine for IBD and psoriatic disease, and we believe it can grow into a $10 billion+ franchise.

ICOTYDE, our first oral targeted peptide for plaque psoriasis, continues to outperform recent competitors at launch. Over 20,000 patients have started treatment since launch in the U.S., with nearly 9,000 prescribing physicians. Commercial access is strong, and ICOTYDE is now broadly covered in national formularies. This quarter, IMAAVY was approved as the first advanced therapy for warm autoimmune hemolytic anemia, a rare, life-threatening condition causing severe anemia and fatigue. This new indication builds on IMAAVY’s momentum in generalized myasthenia gravis, reflecting broad potential in autoantibody diseases. We continue to advance the next wave of therapeutics. In July, we announced a partnership with Sail Biomedicines to advance in vivo CAR-T approaches for immune-mediated diseases.

In neuroscience, we aim to change the future of brain health by tackling complex neurological diseases. Today, we are the clear leader in neuropsychiatry. CAPLYTA sales exceeded $1 billion year to date, becoming our 29th billion-dollar platform. As adjunctive therapy for major depressive disorder, CAPLYTA is the fastest growing oral brand in this space. Last month, we announced pivotal phase III data showing CAPLYTA significantly and rapidly improved manic symptoms in bipolar disorder. SPRAVATO grew 36% this quarter, reflecting strong demand in treatment-resistant depression.

In medtech, Q3 operational sales increased 2.5%. While below expectations for this segment, our confidence in its future direction remains unchanged.

In cardiovascular, we continue to invest in heart recovery, circulatory restoration, and arrhythmia to address the world’s leading cause of death. Shockwave grew another 17%. The global launch of Shockwave C2 Aero continues to broaden our IVL platform reach. Our VARIPULSE PFA platform reached a major milestone this quarter, now having treated over 100,000 AFib patients worldwide. The new VARIPULSE Pro ablation system offers fivefold faster ablation in Europe, driving double-digit growth and was approved last week in Japan. Growing clinical experience is confirming differentiated benefits; a recent retrospective showed VARIPULSE reduced major cardiac event risk by 68% compared to competitive PFA platforms. On heart recovery, physician selectivity continues to impact Abiomed, but we remain confident in technology and are focused on supporting appropriate patient selection.

In surgery, we’re preparing to shape the next era of care through robotics, digital innovation, and advanced instrumentation. In July, the U.S. FDA granted De Novo authorization to OTTAVA, the world’s first table-integrated soft tissue robotic system—one of our largest medtech innovations this decade. OTTAVA’s unique architecture, automation, and next-gen instruments address OR space and workflow needs. Its integration with our open digital ecosystem Polyphonic transforms OR data into actionable insights for clinicians. We have signed the first commercial OTTAVA customer and advanced developmental programs. Investigational device exemption (IDE) has begun in inguinal hernia, with plans to expand to urology and gynecology.

In vision, we are advancing lifelong eye health, improving vision for over 40 million people yearly. TECNIS PureSee launched recently in the U.S., strengthening our IOL portfolio. Combined, TECNIS PureSee and TECNIS Odyssey have now been implanted in over 1 million cases globally this quarter, reflecting ongoing physician adoption and our leadership in personalized vision solutions. We also received CE mark for the reusable ACUVUE OASYS MAX 2-Week lens, expanding the ACUVUE portfolio in Europe.

Overall, strong results this quarter validate the impact of choices made to establish the foundation for durable growth. We have streamlined the portfolio to focus on the most life-changing innovations. We have proven the ability to grow through major patent expirations. Strategic investment in high-growth areas is paying off, and our innovation engine continues to deliver breakthroughs for patients. Therefore, we’re confident we will finish 2026 strongly and that 2027 will be even better for Johnson & Johnson. Over to you, Ryan.

Ryan Koors (Vice President of Investor Relations)

Thank you, Joaquin. Let’s turn to the financials. Unless otherwise stated, all percentages are operational, excluding currency effects.

2026 Q3 Sales: Global sales of $25.4 billion grew 6%. U.S. sales increased 9.1%. Non-U.S. rose 1.8%. Acquisitions and divestitures had a -10 basis point net effect on global growth.

Earnings: Net income this quarter was $210 million, diluted EPS was $0.09, vs. $2.12 in the prior year period. Results were impacted by approximately $7 billion in charges related to the proposed talc settlement, the Firefly Bio transaction, and the Sail Biomedicines partnership. Adjusted net income was $6.3 billion and adjusted diluted EPS was $2.59, down 6.8% and 7.5% respectively. Adjusted earnings also reflect costs from Firefly Bio and Sail Biomedicines.

Business sales:

Innovative Medicine: Global sales $16.8 billion, up 7.9%. U.S.: +11.1%. Non-U.S.: +3%. Divestitures had a -10 basis point effect on global growth.

Oncology: In multiple myeloma, DARZALEX rose 15.6% driven by 5-point share gain in all lines, 10 points in first line, and market growth, partially offset by ex-U.S. pricing headwinds. CARVYKTI grew 35.2% due to early-line share gains and more site adoption. TECVAYLI grew 77.3% on launch adoption and early-line uptake, U.S. over 100%. TALVEY rose 42.1% due to increased community Rx depth. In lung cancer, RYBREVANT and LAZCLUZE grew 63.5% with strong gains in both first- and second-line. In prostate cancer, ERLEADA grew 9.4% on increasing share and market growth, partially offset by adverse patient mix.

Immunology: TREMFYA grew 68.2% driven by ongoing IBD launch momentum, with UC and Crohn’s share both up 4 points. STELARA declined 54% due to biosimilar competition and migration to new categories. Other Immunology growth was driven by IMAAVY and ICOTYDE U.S. launch adoption.

Neuroscience: SPRAVATO grew 36%, driven by share gain, physician adoption, and patient demand. CAPLYTA increased 66.1% due to launch in adjunctive depression, plus demand in bipolar disorder and schizophrenia.

MedTech: Global sales $8.6 billion, up 2.5%. U.S.: +4.8%. Non-U.S.: +0.1%. Cardiovascular grew 4.1%, including +20 basis point acquisition contribution. Electrophysiology rose 4.4% on more procedures, commercial execution, and new product adoption, partially offset by competitive PFA pressure (notably in APAC) and last year's ex-U.S. inventory dynamics. Abiomed declined 1.5% due to lower patient volumes. U.S. performance showed improvement signals; AMI, cardiogenic shock, and Impella 5.5 continued adoption. Shockwave rose 17.2% from coronary and peripheral adoption, new launches, and U.S. office lab reimbursement. Surgery fell 1%, including a ~30 bp headwind from portfolio actions. The decline was mainly due to China VBP expansion, transformation initiatives, and Middle East disruptions affecting tenders and orders, partially offset by recent innovation such as ETHICON 4000 and DUALTO and biosurgery execution. Vision up 5.1% on premium innovation, execution, and global reach. Contact lenses and other up 4.3% on ACUVUE OASYS 1-Day strength, partially offset by U.S. channel inventory. Surgical Vision up 7.1% thanks to new product innovation, premium IOL demand, and execution, offset by market challenges including Middle East disruption. Orthopaedics up 3.4% mainly on VOLT trauma, EMPHASYS hip, and VELYS knee launches.

P&L: Cost of products sold deleveraged by 150 basis points, driven by unfavorable product mix and higher R&D amortization for Intra-Cellular, partially offset by MedTech tariff recoveries. SG&A as % of sales flat. R&D spend about $4.7 billion, 18.3% of sales, including $1 billion from Firefly Bio acquisition. This quarter saw $339 million IPR&D impairment mainly related to the preCARDIA asset. Other income/expense was net expense $5.8 billion, vs. $478 million income last year, largely due to proposed talc settlement and separation costs in orthopedics. Tax rate this quarter reflected a small net benefit, mainly from tax impacts of talc settlement accruals.

Adjusted Pre-tax Income: Innovative Medicine margin fell from 44.3% to 35.4% due to ~$1B IPR&D charges (Firefly Bio), Sail Biomedicines deal costs, and product and cost mix. MedTech margin rose from 21% to 22.9%, boosted by tariff recoveries, offset by commercial capability investments. Corporate adjusted pre-tax income margin dropped from 35.2% to 30.2%.

Joseph Wolk (EVP & CFO)

Thank you, Ryan. Hello, everyone. As Joaquin and Ryan highlighted, Q3 results were driven by strong Innovative Medicine, offsetting MedTech headwinds in certain areas, keeping us ahead on both top and bottom lines, while continuing to invest in the pipeline and future growth. We recognize the need to improve MedTech, notably in cardiovascular and ex-U.S. surgery, and actions are underway to deliver stronger results.

While disappointed, the MedTech fundamentals remain robust and support our long-term confidence in the segment. Across Johnson & Johnson, the underlying drivers supporting our outlook remain solid. Therefore, we are raising our FY2026 guidance compared to the most recent July update.

Financial metrics and Cash: End-Q3 cash and marketable securities were about $17 billion, debt about $45 billion, net debt about $28 billion. Free cash flow in Q3 exceeded $6 billion. We remain confident in full-year free cash flow guidance of about $21 billion. We completed the $1 billion Firefly Bio acquisition this quarter to bolster our oncology capabilities. We also entered a partnership with Sail Biomedicines to advance in vivo CAR-T.

Capital allocation principles: Our priorities remain supporting key launches, accelerating future innovation, increasing the annual dividend, and strengthening the pipeline through strategic, value-creating inorganic opportunities. In July, we announced a $5.5 billion settlement for ovarian cancer talc litigation, reflected in Q3 GAAP results. The agreement is conditional on at least 95% of remaining ovarian claims opting in. We are on track to reach the 95% threshold.

Full-year 2026 Guidance: Based on YTD performance and Q4 expectations, we are raising the midpoint and narrowing the range for operational sales guidance. We expect full-year operational sales growth of 6.7–7.1%, midpoint $100.7 billion, growth of 6.9%. We do not speculate on future currencies. FX spot on the euro-dollar last week was 1.12, but full-year average is 1.15. Based on this, we expect reported sales growth of 7.2–7.6%, midpoint $101.2 billion, +7.4%. If current spot rates persist into next year, FX may be a headwind.

Other P&L items: Operational margin is expected to decline about 60 basis points, an improvement from July's forecasted 75 bps drop which included Firefly Bio and Sail Biomedicines negative impact of 150 bps. Excluding these deals, we continue to deliver underlying margin improvement. Adjusted pre-tax operational margin also reflects the 53rd week of operating costs and the previously announced U.S. government agreement to improve drug access. Net interest expense guidance reduced to $150–200 million. Effective tax rate guidance narrowed to 17.0–17.5%. Adjusted operational EPS expected at $10.95–11.05, midpoint up 2%. Reported adjusted EPS is expected at $11.05–11.15, midpoint $11.10, up 2.9%. Excluding the $0.64 Firefly Bio and Sail Biomedicines headwind, reported EPS growth would be close to 9%. Note for 2027, Firefly Bio and Sail Biomedicines are expected to dilute full-year adjusted EPS by $1.36 in total. We will provide more 2027 insights at the later-in-year corporate business review.

Coming developments: Oncology: In Q4, we expect several major data readouts, including pasritamig (late-stage prostate dual-specific antibody), JNJ-6143 (daily oral for metastatic castration-resistant prostate cancer). INLEXZO year-to-date sales are about $200 million with data in high-risk non–muscle-invasive bladder cancer due at year end. Approval is expected for RYBREVANT FASPRO in advanced head and neck cancer in the U.S. Immunology: ICOTYDE is off to a strong start with psoriatic arthritis data later this year. MedTech: Q4 expected approval of VARIPULSE Pro in the U.S., supplementing last week's Japan approval. In heart recovery, corrective actions are being taken to improve Abiomed. We continue to invest in clinical evidence, including the 2027 HRPCI PROTECT IV trial, which will enroll 1,252 patients—four times BCIS3—to evaluate Impella CP in high-risk PCI safety and efficacy. Surgery: Following recent De Novo FDA approval, OTTAVA is focused on commercialization, with adoption and revenue contribution expected to grow over time, aiming to become a major pillar of our surgery portfolio by decade’s end. Orthopaedics: DePuy Synthes separation is on track for mid-2027. I’m proud of the thorough process examining every separation option, all now more robust than when announced. Considering DePuy Synthes’ performance and Namal Nawana’s team momentum, a spin-off IPO remains the best long-term value creation path. Updates will be provided in due course.

Finally, we look forward to the December 8 business review. That will provide more specifics for 2027 and detail the key drivers supporting expected double-digit growth by decade’s end—and more importantly, highlight how our early-stage pipeline will fuel the next wave of growth into the 2030s. Attendees will also have the chance to experience innovations like OTTAVA firsthand. 2026 is poised for another successful year, exceeding initial expectations. We look forward to a strong finish and laying the foundation for sustainable success in 2027. Thank you to our colleagues for your dedication. I’m now ready for questions. Kevin, please open the Q&A.

Q&A Segment

Asad Haider (Goldman Sachs)

Question: Congratulations on the progress. Just to clarify: on the double-digit growth by decade’s end, the press release refers to “alongside strategic investments.” Please confirm this means internal investment rather than M&A. Also, Joe, you mentioned dissatisfaction with MedTech performance and are taking action—does this mean a higher sense of urgency for M&A to augment high-growth areas, or do you feel current offerings are sufficient?

Joseph Wolk: Yes, Asad, thank you. The first part is correct. You should interpret that as internal strategic investment, driving us to double-digit growth at the end of this decade with performance building throughout the coming years. No inorganic additions are assumed. We always pay attention to business adjacencies where ownership would be more meaningful for us than it is for current holders, and where we’re prepared to create value and take risk on behalf of shareholders. On urgency—it’s urgency to fix the existing business. We like the current mix and structure, with three focus areas: vision care, surgery, and cardiovascular. You’re likely familiar with this; maybe I’ll ask Tim to comment on specific heart recovery measures. That business is stable now, but we aim to accelerate back to double-digit growth. We’re excited for OTTAVA to join surgery and become a major contributor by the end of the decade. Vision is strong in both surgical and contact lenses; we’re a market leader. Tim, perhaps you can discuss Abiomed.

Tim Schmid: Absolutely, Joe. Asad, Abiomed is in a temporary headwind, as we saw this quarter, but our confidence in long-term opportunity is unchanged. The deceleration is still from the same issue highlighted last quarter—high-risk PCI studies outside the U.S. Importantly, we do not believe these challenges are structural or will have a lasting business effect. No change in patient need, reimbursement, or competition. We also question the optimal design of the study, so we are focused on clinical evidence and education showing Impella’s significant life-saving advantage. We see this as a short-term issue. With any emerging science, there’s debate and discussion—our job is to continue building an evidence base supporting patients’ best interests. That’s Abiomed—a short-term setback, but we are very confident it will be a major growth platform for Johnson & Johnson.

Larry Biegelsen (Wells Fargo)

Question: Joe, a question about your prior comments at Deutsche Bank on 2027. For top line, you said reported sales growth would be similar to 2026, but with 100bps week adjustments both years, so next year growth is about 5.4%. EPS—excluding IPR&D, how should we think about growth? And please remind us how much Firefly and Sail dilute IPR&D this year and next?

Joseph Wolk: This year IPR&D is diluted by $0.64, next year the two deals total $1.36. Larry, you’ve followed us for a long time; you know earnings/earnings growth usually outpaces sales growth. If you adjust for the $1.36, that’s how to think about next year. We’ll keep focusing on margin accretion from the ortho separation and be more holistic about how we view the business—technology advances, higher efficiency. That’s our 2027 framework. If you come to Investor Day December 8, we’ll be more specific, laying out the pieces and possibly providing pro forma data and long-range outlook for ortho separation.

Chris Schott (JPMorgan) / Richard Wagner (BofA)

Question: On ICOTYDE. Two parts: first, patient uptake—how much from naïve biologic, oral switch, or injectable switch? Second, big picture—you describe it as a $10B+ asset, but with strong psoriasis launch plus multiple indications pending, could peak sales materially exceed $10B?

Tom Cavanaugh: Chris, this is Tom—thanks to Jennifer Taubert for her leadership and collaboration; she’s put Innovative Medicine in a great position, driving profitability, portfolio, pipeline, and team strength. We are fortunate to build on her foundation. We expect ICOTYDE to be one of our biggest assets in Innovative Medicine and its launch is off to an excellent start. As Joaquin said, over 20,000 patients have started therapy, and nearly 9,000 physicians have written scripts—outpacing most psoriasis launches. Early numbers: about 60% are systemic naïve, with 20% of switches from oral therapies and 20% from other therapies, mostly biologics. We are expanding the systemic market. Broad commercial access: all national plans have preferred access and we are working to expand Medicare. We’re as excited about the post-launch as the launch. Expect data imminently in PsA and pivotal phase III, and head-to-head in ASCEND versus STELARA. Long term, we expect similar launches in IBD, UC, and CD.

Joanne Wuensch (Citi)

Question: Focusing on MedTech. When you say “MedTech fundamentals remain stable,” do you mean patient volume, hospital CapEx, and overall flow? Further, what’s needed to improve that business?

Tim Schmid: Joanne, Tim here, thanks. Let’s set context. Our Q3 MedTech performance was clearly below our internal and externally communicated expectations. We can and will do better. We’re now focused on executing the actions needed for a stronger Q4 and beyond. Breaking down the results, pressure centered on two areas: non-U.S. and global Abiomed. The U.S., our biggest market, performed strongly—nearly 5% growth, improved from Q2. Challenges outside the U.S. are mostly known headwinds: surgical transformation, China VBP, and APAC electrophysiology competition where PFA adoption is early. The Middle East added a new layer of incremental pressure. Despite this, positive signs are emerging. In electrophysiology, e.g., Europe markets with VARIPULSE Pro are back to double-digit growth. In Japan, where we got approval last week, launch will follow soon. U.S. approval anticipated by year-end. Abiomed’s high-risk PCI trial may not have reflected best practice, which we're addressing with education. Evidence remains strong, especially for AMI cardiogenic shock and Impella 5.5. We’ve seen sequential improvement this quarter and expect that business to return to growth soon. While Q3 MedTech was soft, it shouldn’t obscure the overall picture: challenges are mostly focused, surgical environments in major markets remain resilient, and our job is to translate demand into more consistent performance. We are confident in U.S. momentum and in easing recent headwinds for Q4 and beyond. We’ll have more detail to share December 8, especially on new innovations like OTTAVA.

Vamil Divan (Guggenheim)

Question: Regarding ICOTYDE, can you comment on Q3 net sales or how it compares to consensus? And on INLEXZO, YTD sales, SunRISe-5 data, and market expansion opportunity?

Tom Cavanaugh: We have not disclosed ICOTYDE sales, but based on momentum and progress, I expect disclosure next year. INLEXZO is also an exciting product, really a platform, notably given the TAR-210 opportunity. The start has been very strong. Joe mentioned net sales near $200 million year to date. Quarterly sales not disclosed, but Q3 exceeded $90 million—very strong sequential growth. New patient insertions were up 45% sequentially. The current label is for high-risk CIS non–muscle-invasive bladder cancer patients—a small group (~4,000), but a third now use INLEXZO. SunRISe-5 targets a broader ~15,000-patient group; SunRISe-3 is the BCG-naive group (~50,000). We see a $5B+ opportunity and believe actual potential will exceed that, based on unmet need, ease of use, and high durable complete response rates. John, would you address clinical development?

John Reed: Currently approved for CIS non–muscle-invasive bladder cancer, with lateral expansion ongoing. Papillary disease is more common. In SunRISe-1, among papillary cohorts—after transurethral resection, INLEXZO helps prevent recurrence. Nearly 75% were recurrence free after a year, with over 95% progression free. Hence, use in papillary disease is in NCCN guidelines, and FDA has invited us to submit for label expansion.

Joaquin Duato: ICOTYDE, INLEXZO, and RYBREVANT will all be key drivers of accelerating growth and double-digit performance. Each will likely become one of our largest products.

Michael Yee (UBS)

Question: Two pipeline science questions. For ICOTYDE, the psoriasis data was strong—slightly below biologics—but the UC data in IBD was very strong. Could gut delivery drive biologic-like efficacy and make it an even bigger growth driver? Second, milvexian—SSP data is imminent, and do you have confidence in results being as strong as asundexian for Factor XI derisking?

John Reed: I’m John Reed. For ICOTYDE and IBD, we’re often asked if oral with gut absorption will be even more effective. I can only say, let’s see the data. We’re quite pleased with the UC phase II data. Phase III trials, like those in psoriasis and PsA, are enrolling fast—about a third the usual time—reflecting doctor and patient enthusiasm for oral options. The theory is oral absorption could boost efficacy, but it remains to be seen in the data. For milvexian, we are confident in our program, especially in secondary stroke, after asundexian results. In vitro, milvexian is a stronger FXI inhibitor, and we have the safety margin to push dose high enough to be confident in effect. Results due soon—secondary stroke possibly this year, event-driven; the larger atrial fibrillation study next year. If both indications succeed, it will be exciting, as 25% of secondary stroke candidates have atrial fibrillation. In the AFib study, we can go fourfold higher in dose, and monitoring has shown we're in the right range. Thank you.

Tom Cavanaugh: Adding to John’s remarks: There’s an absolute need for highly effective oral anticoagulation with less bleeding risk. For AFib alone, about 40% of eligible oral anticoagulation patients aren’t treated because of current DOAC safety and bleeding risk concerns.

Jayson Bedford (Raymond James)

Question: Going back to international MedTech. Can you quantify the Middle East and VBP effects? Tim, in international surgery, is underlying demand unchanged? Joe cited action—what specifically is being done in ex-US surgery?

Tim Schmid: Thanks, Jayson. First, on the Middle East: this is a new and expanding risk, now affecting more countries. We’re seeing broader shifts in order patterns, tender timing, and hospital spending. Governments and healthcare systems are increasingly cautious with purchases, extending decision cycles. This is more apparent recently. Importantly, we see it as a short-term issue. Clinical demand remains, and many opportunities may be delayed, not lost. In surgery, we're excited about U.S. performance. International issues stem from transformation and VBP, and incremental pressure from the Middle East. Despite headwinds, we focus on areas we control—there’s much opportunity. Wound closure, where we’re market leader, benefits from innovation like STRATAFIX and Plus Sutures. Biosurgery is another $1B+ platform with brands like SURGIFLO, SURGICEL, and VISTASEAL. In internal mechanicals, ETHICON 4000 and DUALTO are gaining strong traction. U.S. momentum continues, EMEA is accelerating, and we expect overall turnaround in Q4. We are confident in the business long term—it's core to J&J MedTech. Our greatest confidence is entering robotics, integrating wound closure, biosurgery, and advanced instrumentation. OTTAVA positions us to participate more fully in the most attractive, underpenetrated surgical spaces. With ongoing transformation, innovation in our existing portfolio, and OTTAVA’s launch, we are confident in the long-term trajectory. At the December 8 review, we’ll update on OTTAVA and our conviction in its major long-term contribution.

Alexandria Hammond (Wolfe Research)

Question: With CARTITUDE-5 and 6 advancing for newly diagnosed multiple myeloma, how will Johnson & Johnson educate physicians and treatment centers to prepare for earlier CARVYKTI use? How should investors think about share gains from current frontline regimens?

Tom Cavanaugh: Alex, this is Tom. We’re eagerly anticipating trial results. We have already advanced share globally through CARTITUDE-4. CARVYKTI is available in over 20 markets, with noteworthy uptake in early lines. In the U.S., about 50% of CARVYKTI use is in second and third line. Familiarity, access, and excitement are growing, particularly because of unprecedented overall survival in second line. We’ve already been educating providers on earlier use—selection, earlier referrals, and proper bridging, so patients achieve the best MRD-negative status for effective treatment.

John Reed: I’d note that the recent myeloma meeting highlighted five-year follow-up for second-line cohorts in CARTITUDE-2—about half showed sustained complete remission for five years without further therapy. A single treatment, five years disease-free—remarkable.

Closing Remarks

Ryan Koors: Thank you, John, and thank you Alex for your question. Thanks everyone for your questions and for your ongoing interest in the company. I’ll hand off to Joaquin for brief final remarks.

Joaquin Duato: Thank you for your questions and participation. As you’ve seen, momentum is building. Q3 growth accelerated sequentially; we expect 2027 to accelerate further, and we have a clear path to double-digit growth by decade’s end. Innovative Medicine growth will come from the current portfolio—DARZALEX and TREMFYA—as well as new launches such as ICOTYDE, RYBREVANT, and INLEXZO, which are beginning to contribute more meaningfully. MedTech offers similar opportunity, including cardiovascular product launches, next-generation PFA and IVL catheters, plus additional data for Impella and OTTAVA robotics not yet fully reflected in growth. All these drivers make Johnson & Johnson one of the most transparent growth stories in healthcare. In December, we’ll share more detail on our portfolio and late-stage pipeline. Thank you very much, and have a great day.

Operator: Thank you. This concludes today’s Johnson & Johnson 2026 third quarter earnings conference call. You may now disconnect.