Financial Data and Key Metrics Changes - Worldwide sales for Q1 2024 were 5.4 billion, with diluted earnings per share at 0.19 a year ago. Adjusted net earnings were 2.71, representing increases of 3.8% and 12.4% respectively compared to Q1 2023 [8][18]. Business Line Data and Key Metrics Changes - Innovative Medicine sales were 7.8 billion, increasing by 6.3%, with U.S. growth of 6.6% and 6.1% outside the U.S. [13]. Market Data and Key Metrics Changes - Sales growth in Europe, excluding the COVID-19 vaccine, was 6% [8]. - The pulmonary hypertension segment saw growth of 22.4%, driven by favorable patient mix and share gains for OPSUMIT and UPTRAVI [11]. Company Strategy and Development Direction - The company announced the acquisition of Shockwave Medical to enhance its cardiovascular portfolio, aligning with its strategy to become a best-in-class MedTech company [21]. - The completion of the Ambrx acquisition was highlighted as a move to strengthen the oncology portfolio [21]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving long-term growth goals with an operational sales compounded annual growth rate of 5% to 7% from 2025 to 2030 [41]. - The company anticipates continued growth in Innovative Medicine, particularly in the second half of the year, despite expected competition from biosimilars [34]. Other Important Information - The company invested $3.5 billion in R&D, representing 16.6% of sales, and announced a 4.2% increase in dividends, marking the 62nd consecutive year of dividend increases [31][32]. - The effective tax rate for the quarter was 16.9%, significantly lower than the previous year's 61.8% due to a tax benefit related to the talc settlement proposal [18]. Q&A Session Summary Question: Insights on CARVYKTI and TECVAYLI sales performance - Management noted that CARVYKTI saw over 100% growth year-over-year, with strong demand and expanded manufacturing capacity. TECVAYLI is performing well with strong uptake in major markets [37][44][45]. Question: MedTech growth and one-time items impact - MedTech growth was reported at 6.3%, with double-digit growth in electrophysiology. One-time items included fewer selling days and revenue recognition changes impacting orthopedics [48][50]. Question: Future M&A strategy - The company emphasized a disciplined M&A strategy focused on long-term growth, with flexibility to consider various transaction types, including smaller and earlier-stage assets [54][56]. Question: Vision Care business performance - Management acknowledged recent performance issues in the Vision Care segment due to distributor inventory contraction but expressed confidence in the underlying health of the business and expected high single-digit growth for 2024 [58][59]. Question: Pulmonary Hypertension business growth - The segment experienced strong growth driven by OPSUMIT and UPTRAVI, with the introduction of OPSYNVI expected to enhance the portfolio further [63]. Question: SPRAVATO growth context - SPRAVATO showed over 70% growth, with strong uptake in treatment-resistant depression, and the company remains optimistic about its future performance [84]. Question: Drug price negotiations under IRA - Management expressed concerns about the IRA's impact on innovation but remains focused on patient access and ongoing discussions regarding pricing [86].
J&J(JNJ) - 2024 Q1 - Earnings Call Transcript