All right, thanks for joining us, everybody. I'm Terence Flynn, the U.S. large cap biopharma analyst. Very pleased to be hosting Johnson & Johnson this morning. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. Very pleased to be hosting Joaquin Duato, who is the company's CEO and chairman, and John Reed, who is head of Pharma R&D. Thank you both for joining us. We were just chatting. This is his thirty-fifth anniversary at Johnson & Johnson. So a pretty big milestone. Thank you. Congratulations on that. It's been a great run, and I know you have a lot more to do here in the CEO role on the forward. You know, I guess, you know, turn it over to you guys if you want to make any prepared remarks before we go into questions, or we can go right into questions, whatever works for you. No, let's go right into questions. All right. All All right, well, let's do it. Maybe, you know, obviously, you know, there's been a lot of focus on, you know, what kind of longer term outlook. So as you think about, you know, kind of the near-term growth target that you've given for next year in terms of 3%, maybe just help us think about that, and then confidence level in continuing that growth, where again, you guys have targeted for each of your business segments at above industry growth for each of the pharma segment and the med tech business. And I know there are a lot of puts and takes as you think about that with some of the new growth assets, and then you obviously have the Stelara LOE. So maybe talk to us about kind of the confidence in the 2025 targets, and then those longer term targets that you put out at the Enterprise Review Day. I think it's about a year ago now. Yeah. Thank you, and thank you, everybody, for joining us. So we feel very confident about our ability to reach the targets that we put forward in our December last year Enterprise Business Review. So, to refresh the targets, what we said is that we were going to grow more than 3% in 2025. And then in our innovative medicine group, in particular, that we were going to grow 5%-7% from 2025 to 2030. So we feel very confident about our ability to hit those targets. Where's the confidence coming from? The confidence is coming from the strength of our performance. And if we look at our performance in 2024, and we look at the first six months of the year, the growth for Johnson & Johnson in totality, the revenue growth was north of 7%, with 11% EPS growth. And if I divide it between innovative medicine and medical technology, was north of 8% in innovative medicine and north of 5% in medtech. So we feel very confident in our ability to be able to hit our revenue targets based on the strength of the business that you can see today. If I focus now on innovative medicine, where the growth is coming from in 2024, it's coming from our multiple myeloma franchise, which is an area of strength for us with Darzalex, Carvykti, Tecvayli and Talvey. It's coming from our prostate cancer franchise with Erleada. It's coming from our neuroscience group with our long-acting injectables in schizophrenia and the growth of Spravato. And it's also coming from our pulmonary arterial hypertension franchise, which is growing strongly, both Uptravi and Opsumit. The positive things that are occurring now that are gonna have an impact in 2025 are mainly two. One is the launch of Rybrevant plus Lazcluze in first-line EGFR mutated non-small cell lung cancer, which is occurring as we speak. It was approved a couple of weeks ago, and I am sure we have an opportunity to talk more about the regimen later, and John is here, too. And that is gonna be an important growth driver. We see that regimen, chemo-free regimen, becoming standard of care in first line. And there's about 360,000 patients with EGFR mutated non-small cell lung cancer globally. The second big opportunity is the approval of Tremfya in inflammatory bowel disease, both in ulcerative colitis and in Crohn's disease. That should occur in the second half of this year or early 2025. So those are two very important growth drivers moving into 2025 that give me significant confidence on us being able to reach our targets in innovative medicine. At the same time, in the second half of this year and moving into 2025, you're gonna have a number of potential regulatory milestones and data readouts that are going to be important, that I'm sure we'll discuss later. We have already filed for nipocalimab in myasthenia gravis. We are presenting data soon at ESMO on TARIS and our SunRISe-1 study in muscle-invasive bladder cancer in patients that are BCG-unresponsive, and that could be something that may get into 2025. We are going to be presenting data, too, of our oral IL-23, phase III in psoriasis and phase II in IBD, in particular in UC. Those are other three important opportunities that give me confidence beyond 2025, to your point earlier. Right. So that's how I see our trajectory in innovative medicine and our ability to be able to deliver on the targets that I described. If I move into MedTech, our growth in the first half of the year was 5.2%. We see our growth and our momentum moving into the second half of the year and also into 2025, and our optimism is based on a number of factors. One is our continued growth in our vision franchise, with the global rollout of the launch of ACUVUE OASYS MAX. The other one is the launch of our premium IOL, intraocular lenses, both ex-US and in the U.S. So that is gonna help us in the growth of our vision franchise second half of the year, next year. If I continue in other areas, I'm optimistic about our trajectory in cardiovascular. We may have an approval of our PFA catheters by the end of the year or beginning of this year here in the U.S. They are already approved in Japan and in Europe. We are optimistic about the trajectory of our Impella franchise, based on the results of the DanGer Shock study that were presented this year. And next year, we will also add Shockwave to our cardiovascular franchise and growth. And Shockwave, as you saw in the second quarter, is growing robustly. On the orthopedic side, we also just announced the approval of two new additions to our robotics VELYS offering. One is the unicompartmental knee and also our spine robot, so that's gonna help the continuous expansion of VELYS. And then importantly, in the second half of this year, we have an important milestone for us, which is the IDE of our robotic system called OTTAVA, which is our soft tissue robotic system. So all this, it's going to continue to move us into higher growth markets and build the momentum of our MedTech franchise into 2025. So I'm confident on our targets in 2025, and I'm also confident that you are gonna see, from 2025 onwards, an acceleration of our growth once we digest the Stelara biosimilar entry in 2025. Okay, great. I guess the one corollary is just the margins as we think about 2025. I know you're not gonna guide there, but just as you think about those puts and takes, you walk through, you know, there's obviously ongoing investments behind some of these new products. You have the Stelara, which, from a mix perspective, is probably a headwind. How should we think high level about kind of the near-term margin picture? Yeah. So what we have commented is that, and I'm gonna quote literally, you know, that we expect competitive revenue growth and commensurate margin growth. Yeah. What you are going to be seeing is that there's gonna be periods that our margins are gonna be more tempered based on the factor that you just described, and then you're gonna see periods of margin expansion once we are able to cycle through the Stelara erosion. So that's the way you have to look at it, you know? We are always aiming to have margin growth or EPS growth higher than sales. That's going to be, you know, what you will see in the totality of the period, but you can expect periods in our margin will be more tempered and the margin expansion once we anniversary that. Okay. Okay, great. Maybe just, again, moving on, another high-level question here is: on the M&A side, you've really leaned in on, on what I'd call growth MedTech assets. You talked about, Shockwave, Abiomed, obviously, you know, V-Wave, Impella. It seems like that's been a, a focus. Then you look back at, you know, your history on the pharma side, where you've leaned in and have done one of the best jobs, I think, arguably across the industry, at finding assets early and generating a, a very high return there when you think back to, you know, Darzalex and Imbruvica. And so is that the right framework to think about going forward, where like MedTech is more kind of these, you know, growthy MedTech assets is really where you'll be focusing on pharma because of that ability to kind of find assets early and generate a very strong return? That's kind of the framework we should think about, or are there any differences now that Stelara is going LOE, and that maybe changes the playbook a little bit? Generally speaking, that's the framework. Okay. So you are right. And for us, M&A and external innovation is always a key component of our growth. In the first half of 2024, we've invested about $18 billion in M&A. We've done the Shockwave transaction, but also we have acquired, and we announced it weeks ago, V-Wave in heart failure, and several companies in the innovative medicine pharma side, like Ambrx, with antibody drug conjugates, Proteologix, with bispecific antibodies, and also Yellow Jersey in bispecific antibodies in atopic dermatitis. So that's only in the first six months of the year. At the same time, and they have less headlines, we have done 20 other smaller deals. And oftentimes, to your point, those smaller deals that do not make the headlines are the ones in which we create disproportionate value. I don't think TARIS made any headlines, and we are now saying that it's gonna be a $5 billion platform for us. I don't think that the deal that we made with Protagonist to develop the oral IL-23 made any headlines, and now it's going to be one of our most important products in the pipeline. So that's really been a source of value for us, and we will continue to be able to invest in earlier stage deals, which we think we have a special ability to identify them. Yes, sometimes in MedTech, as we try to move into higher growth markets, we need to get into platforms like Shockwave or Abiomed that are already more mature and more developed. In general, I would tell you, we have the financial muscle to be able to be agnostic in size and sector, and the criteria that we apply are three. One is a strategic criteria, the other one is a scientific criteria, and the third one is a financial criteria. Our belief is that we do better when we go into areas in which we have established capabilities. So that's why, you know, we expand into areas, for example, as we do in oncology or in immunology or in cardiovascular. And sometimes we go into adjacencies, like we are doing in atopic dermatitis, because it's connected with our immunology franchise. But we do better when we stay in areas in which we can understand very well what's good and what's gonna be best in class, best in disease. Hence, our success, because we are able to understand that. The second one, it is scientific. We, you know, we want to look for things that are improving the standard of care or that first in class, best in class, and we are not interested in me-toos, and we don't look for me-toos. We prefer to go into higher-risk areas and have a number of opportunities in order to be able to identify the best ones, and then financial, we need to be very disciplined in the way we use our capital, and we always try to create a favorable return for our shareholders. So that's the way we frame M&A, and it will continue to be an important growth area for us with the nuances that you describe between MedTech and pharmaceuticals. Although I always feel compelled to reiterate that we are agnostic to size and to sector, and that we are open to any opportunity. Preferably, we have been able to make and to create more value in what you would call bolt-ons or earlier stage opportunities. Right. And again, at this point, given the size of, you know, and focus on obesity, it seems like every company has to have a view internally on if that's something they wanna pursue or not. And so, given your comments that you outlined in the framework, where does obesity fit in that framework? It would hit on the scientific one. Okay. If we were able to identify assets in obesity that were sufficiently differentiated, it would be an area of interest to us. We are not interested in another me-too, but if we were able to identify assets in obesity that could be sufficiently differentiated, it would be an area of interest to us. And diabetes and metabolic disease is not an area that is foreign to Johnson & Johnson. As you know, we've been there, and we have a legacy there, too. Yeah. I can let John talk about that. What do you think, John? Yeah, no, I think one of the areas that we're kind of doing some exploration around pertains to the fact that J&J is number one in psychiatry. And, you know, these sensations of hunger and satiation, these things are all controlled in the brain, in the reward centers of the brain. So, you know, that's an area where we have some familiarity with pharmacology, and we're, we're looking where there may be some opportunity there that's perhaps been overlooked. So that'd be the kind of thing that's on our radar. But, but, you know, as Joaquin said, we're, first of all, committed to medicines that are practice-changing, first or best in class. What is it that patients are waiting for? So if we find something that is something that patients are waiting for, that addresses a problem that others haven't addressed, then, you know, we would certainly be interested. Okay, great. Maybe the other high-level one is, you know, we're on the other side of the first IRA, Medicare Part D negotiations. You know, J&J had two drugs on that list. So just as you think about, you know, reflecting on the implications here, just any lessons or takeaways as you think about, you know, the other side of IRA and anything you're doing to adapt the strategy in a post-IRA world, to kinda mitigate the impact? So, when I look at the IRA, as we have always stated, we believe that this is something which is gonna be negative to innovation and to investment in R&D for all the ecosystem, not only for companies like Johnson & Johnson. So we are concerned about the long-term consequences of IRA. Let's make that clear. Now, the products that were in the list that were negotiated were products, as you know, that were at the end of cycle. Even Stelara was in the list, that is gonna have biosimilars before- Yeah before the actual price of IRA takes effect, which is in 2026, no? So in terms of the impact on the guidance that we have provided, it's already embedded on the guidance. So let's make it clear. So the impact of the IRA prices, it's already on the revenue guidance that we have provided. And our lesson is that, you know, we have to adapt to the situation, and John can comment, you know, what are we doing from a development perspective in order to do that, no? Yeah, I mean, you'll notice that we do a lot of multiple parallel indication seeking. You take nipocalimab is a good example, 10 different indications, so that rather than sequentially developing a molecule, we're trying to get as many indications as we can up front. We've fortunately have been in the position to have the resources to do that. So that's certainly, you know, one of the dimensions. And then a lot of times with our biologics, we start off with an IV, but move to a subQ, and sometimes that can become a new medical entity, particularly if you're, you know, using things like hyaluronidase together with it. We've done that with Darzalex, so it starts a fresh clock for you. I would just reiterate what Joaquin said. We really see this as an Inflation Reduction Act in many ways, and not to the benefit of patients. If you think about oncology, for example, where, you know, the typical paradigm is you start in late line, maybe third line, fourth line, patients who've already failed standard of care, try to get your first approval, then move to second, move to first. All those studies take more and more investment, longer and long time, and if it's a solid tumor, even on to adjuvant therapy. I mean, with the current paradigm, it's those investments are really just not going to add up in the future. I mean, we just published or presented in the last few months, even with Imbruvica, in combination with a BCL-2 inhibitor, now the standard of care in chronic lymphocytic leukemia study. I think it cost us $600 million to do that. You know, these kind of things just become untenable in an IRA world. So oncology, in particular, will be disproportionately impacted, but it's true across many medicines. In psychiatry, we often start like we are with Aticaprant and Seltorexant with depression, but we want to move into other areas where those mechanisms could play, and, you know, these things just become less particularly for a small molecule, less attractive in an IRA world. Yeah. Okay. Do you think, is there any movement in DC to mitigate that small molecule versus biologic difference, or do you think that's stalled out? It is something that is an anomaly, that stands out, and, perhaps this is one of the elements that is more feasible to address. Right. Okay. The last one before we go into some of the more exciting, pipeline, questions, is just on any update on next steps on the talc, litigation here? I know there were some headlines, a couple of weeks ago, over the summer. Thank you. We have always said that we are determined to resolve the talc issue and leave it behind, and that's what we are trying to do. We are trying to work in a prepackaged bankruptcy for our ovarian cancer claims, and at this point we are waiting for the votes to be certified. We think the process will still take about a month, and we feel very confident that we are going to be able to meet the threshold of 75% of the claimants voting in favor of the prepackaged bankruptcy. Yeah. And then what would be the next step after that, if they were certified above the 70%? Then the next step would be to file. Okay. After that, I cannot comment on the outcome of that because it's not in our control, but the next step would be to file. Okay. Okay, great. One of the pipeline assets, you know, you alluded to this earlier, Joaquin, is your, you know, JNJ-2113 is the oral IL-23 inhibitor. As you said, it was kind of below the radar for a while here, but then obviously, there was some very exciting phase II data in psoriasis. You're running a phase II trial now on the IBD side. We're waiting on the phase III psoriasis data later this year. You know, generally high level, should we expect that efficacy to replicate what we saw in phase II, or are there any differences? This may be more a question for John. Any differences in the trial design or the patient population that we need to think about as we think about kind of the level of efficacy we should expect to see out of- Yeah -phase III? We have a broad program in psoriasis, and just, you know, to back up, the phase II data were really impressive and showed that with an oral, we could deliver everything that a biologic does. The PASI 75 data were around 70%, PASI 100, where you have complete clearance of skin, was 40-ish%, so really impressive phase II data. The phase III program in psoriasis has three different studies. One of them is pretty much a repeat of the phase II placebo-controlled, a very typical population. Another, though, is in a hard-to-treat population that has the disease affecting anatomic locations that have particularly been more difficult to clear. So you wouldn't expect as high an effect size on that. Then the final one is a head-to-head with a TYK2 inhibitor, so that'll be a really interesting and important study. So it'll be a broad program, broad package, and. But we're, we remain super excited, super committed and excited to that molecule. We'll have that, as you referenced, the phase II data and also colitis this year, which is dose-ranging, where we'll figure out what is the appropriate dose. I was joking, we kinda have some bets internally for a six-pack of beer or a bottle of wine, whether the dose will be higher, same, or lower because the different thoughts around it being oral and it's a, you know, it's a disease that affects the gut, and whether it might be lower versus higher, harder to treat. What's your bet? We'll see. Yeah. Your bet. I think, if anything, it'll be lower, but probably about the same, I'm guessing. Okay. So at any rate, now that's. And of course, the IL-23 is a proven mechanism in IBD, so you know, the confidence in the target biology is extremely high, and the pharmacology has been robust, so really excited about that molecule. Yeah. What in those trials, this is sequential, I'm assuming? So we get, like, the monotherapy, the kind of a phase II POC trial population, that one will come first, and then the other two trials are after that, or is this like all in, we're gonna get data from all three of these around the same time? So within IBD, we just picked UC as a starting point to get the dose figured out, and Oh, sorry, I meant psoriasis, the three psoriasis trials. Yeah. Oh, the- The psoriasis trials. Are we gonna get all those at the same time? Oh, no, no, no! Or are they staggered? We'll get the first one this year, which I- Okay. Which I can't remember which one. I think it might be the tough to treat areas. Okay. The other two come in next year. Yeah, okay. They're all fully recruited, and, you know, if it's any indication about how much physicians and patients are interested in, we recruited these studies in one-third the time that it normally takes us to do these. This is a, you know, paradigm change in the treatment of psoriasis and IBD. Having a medication with the efficacy of the advanced therapies, the side effect profile and the tolerability of a biologic in a pill form, it's gonna change the market. Yeah. And why is that? Because there's still about five million patients that are candidates for advanced therapy that are not moving into injectables. Why? Some of them may have fear of the, you know, going into an injectable. Some of them may simply wait and be in orals that are less effective. So this is going to expand the market in a significant way and reach patients that today are not getting advanced therapies by having the efficacy of the and the tolerability of the advanced therapies in a pill form. So this is going to be a market-changing event. Yeah. This is coming from a company that has been in this area since the late 1990s because we were the ones launching Remicade too. So this is gonna be a massive change in the market, and it cannot be read with the lens of the existing orals or the existing injectables. This is gonna be a market-changing event. Yeah. So how do you position it relative to Tremfya then? Because obviously, Tremfya, great medicine as well, same pathway. So it sounds like it's more this is for people who don't want an injection- Yeah as opposed to, like, you'd actively look to switch patients for some reason, or it seems like there's two different pockets of population. Is that the right way to think about it? Yeah. I mean, we'll see how the market pans out, but there's enough room today for patients that do not get into injectable therapy, because they either are in orals that are not as effective, and have side effect issues, or they just don't want to go into injectables because they want to delay that. So all these patient population that we estimate is about five million people, will be candidates for the oral. So there's room for injectables and advanced therapies and orals like that. Not only that, I mean, John can tell you, we are working on Tremfya in IBD, which I think it's the biggest opportunity that we have in the short term. Keep in mind that Tremfya, Stelara in IBD is 75% of the sales of Stelara. I mean, for us, the majority of the potential of Tremfya, which is already a $3 billion medicine, is in IBD, and that is one of the growth drivers that you're gonna see there. In the short term, you're gonna see Tremfya in IBD being a major growth driver. And as John can explain to you, Tremfya in IBD has been able to show the highest level of endoscopic complete remission. Yeah, so that, you know, one of the. I think the real indicators of whether you've truly silenced a disease is endoscopy and look for residual disease or the extent of that, and when you see zero evidence of disease, you know, that makes you feel good. And we had the highest levels, about, oh, about a third of patients, even a year out, that have ever been seen. The other thing about Tremfya that we think is underlying this mechanism is it localizes to the site of the inflammation, where the IL-23 is being produced. It actually binds to the surface of those cells that are making the IL-23. So we like to think that it catches it right out the gate. And then the other thing that's a real differentiator is, Tremfya is the only IL-23 class inhibitor that can be delivered subcutaneously, both for induction and maintenance. Everyone else has to do an IV delivery in the induction phase. Patients have to get to an IV center. It's even a different code for billing and stuff. So, this really brings that convenience factor home for the patients as well. So we feel really, good about what we're bringing there. Great. Well, I wanna get to a couple more assets, just in the last few minutes or so here. TAR-200, again, you highlighted this as one of the, you know, $5 billion assets. Obviously, greater appreciation now for this opportunity. Sounds like we're gonna get an update at the ESMO conference. Is that going to be the data that you're gonna submit to the FDA for filing? And maybe just what are we gonna see there in terms of patient numbers follow-up? Right. Right. So TAR-200, for those who haven't been following, is a med device combo, something that J&J can do well with medtech and pharma, and it basically delivers the cancer-fighting medicine. It's placed into the bladder, and then it delivers the cancer-fighting medicine with very continuous pharmacology. In this first iteration, what we call TAR-200, for three weeks of gemcitabine, and we saw unprecedented rates of complete response at north of 80%, got breakthrough designation from the FDA. So we'll show longer term follow-up at ESMO in a couple weeks, and that'll be among the data that will be presented. We're still in negotiation with the FDA, exactly what all needs to be in the package, but feel pretty confident that first quarter, roughly of next year, we should be ready to file on that. That's the population of patients who failed the standard of care, which is BCG, an attenuated bacteria that one puts in the bladder and tries to rev up an inflammatory immune response. Not well tolerated. Only one out of eight patients actually even completes the therapy because it's like having a urinary tract infection for two years. Our therapy fits right into the urology practice, takes one minute to put it in, three minutes to take it out, no special equipment needed, no special nursing staff, and no special precautions or isolation. It really looks like a winner. Then TAR-210 is the targeted therapy. That's where we took our Erdafitinib, a pan-FGFR receptor inhibitor, formulated it in a different device. Again, this is where med tech and pharma come together. To get the delivery right, we had to come up with another device. That gives three months, not three weeks, but three months of pharmacology, continued pharmacology, and there, in the FGFR mutant population, which incidentally is 70% of early bladder cancers, we saw north of 90% complete response rates. We really feel like this is a whole game-changing approach to urology, and incidentally, early bladder is the most expensive of all oncology indications to care for over the lifetime of the patient. I don't know if you knew that, and most of them go on to lose their bladder, have radical cystectomy, which as you can imagine, has quite a deleterious impact on your quality of life, trying to live without a bladder. This is really transformational stuff. In terms of market size, because sometimes it's difficult to calculate, that there is about six hundred thousand cases of bladder cancer. So it's one of the, a very frequent cancer. You know, with this therapy, to John's point, we're gonna save thousands of bladders. Okay, great. Maybe just in the last minute, congratulations. You mentioned the Rybrevant lazertinib approval in first line. You know, maybe just why you're confident in that $5 billion number, because I think consensus is south of that, just given the profile of Tagrisso and, you know, they're obviously entrenched competitor oral option. So how do you think about, you know, the commercial opportunity and confidence there? Maybe I can start a bit on the- No, I mean, I think this is gonna be very much driven by the data. So John can tell you the data that is coming- Right and the formulation that we have. Right. So the data we presented already were progression-free survival, where, you know, we're going head-to-head. I guess, just to put it in context, though, as we all know, the problem with cancer is resistance mechanisms, right? So if you just look at the lazertinib component, oral third-generation TKI inhibitor, inhibits multiple different mutations of EGF receptor, just like Ozi, brain penetrant. On top of that, then we have Rybrevant, which is the world's first bispecific to ever be approved for a solid tumor indication. So there you have the EGF receptor binder, which then inhibits signaling also by mutants that Ozi doesn't get, like Exon 20. You have the MET binder, which is another growth factor receptor that's often a bypass mechanism, so you're already shutting down these resistance mechanism. And then as a final kicker, the FC region, the tail antibody, recruits immune cells, and that also adds to the tumor-fighting thing. That's something you don't get with Ozi. So altogether, in the PFS, we had a hazard ratio of point seven, as you know, so, a significant reduction. The OS data, we're not yet mature, but we're gonna show at World Lung next weekend, a next cut of those OS data, and, and we're really pleased with the trajectory we're on there. And then we showed at ASCO, going from IV now to subQ, so from a couple hour infusion now to a five-minute push, and at the same time, that reduced infusion-related reactions by five-fold. So much more tolerated now, in addition to being much more convenient. And a bit amazingly to all of us, we were simply looking for non-inferiority. We did a head-to-head IV subQ, but we actually saw superiority with respect to efficacy on both progression-free and overall survival. So that's an interesting additional kicker. FDA gave us priority review for the subQ. They've never done that before. They've never given, going from IV to subQ, they've never given priority review. First time in FDA history, so that kinda tells you something about how they're thinking about what we're bringing here. So it's gonna be a combination of the efficacy level that you're gonna see in the overall survival data when it comes. And now with the subQ formulation, we are addressing the convenience and infusion-related reactions. So, we think that this is gonna be the new standard of care in first line EGFR mutated non-small cell lung cancer. Great. Well, I think we have to end it there in time, but thank you so much, Joaquin, John, and congrats again, Joaquin, on the anniversary. Thank you. Thank you. Thank you. Thank you.