Manufacturing Growth & Investment - BioPharma manufacturing has increased by 221% since 2016 [1] - All other manufacturing industries only increased by 38% [2] - BioPharma facilities increased from 1,000 in 2017 to 1,500 [2] - Johnson & Johnson committed to $55 billion of investment in the US [2] Tax Policy Impact - Good tax policy translates into bringing manufacturing jobs back to the US [1] - The 2017 Tax Cuts and Jobs Act (TCJA) provided evidence of this [1] Supply Chain & Production - Johnson & Johnson aims to supply all medicines to US citizens from US facilities by the end of the decade [2] - Building BioPharma manufacturing facilities takes time [2][3] - High-quality and reliable products are essential for patients [3] Government Engagement - The administration is listening and understanding the business [3] - There is an understanding that building these facilities takes time [3]

Let's get a Wednesday edition of Kramer's Mad Dash. The best non-bank is J&J. I mean, this J&J quarter, it may set, you know, they're not talking that much about tariffs.Uh, that is going to happen. They're probably a later thing. But I was stunned.The oncology sales are incredible, up 24%. They have new bladder cancer. Uh, I nothing's a cure, but great maintenance that I think uh medtech finally came back.It was really sensational. Uh, a lot of people were thinking that medtech was weaker. uh neuroscience ...

强生涨超6%，为2023年7月以来最大盘中涨幅。 ...

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Financial Data and Key Metrics Changes - In Q2 2025, worldwide sales reached $23.7 billion, reflecting a 4.6% increase despite a headwind from Stellara [24][25] - Net earnings for the quarter were $5.5 billion, with diluted earnings per share of $2.29, up from $1.93 a year ago [25][26] - Adjusted net earnings were $6.7 billion, with adjusted diluted earnings per share of $2.77, representing a decrease of 2.1% [26][34] Business Line Data and Key Metrics Changes - Innovative Medicine reported worldwide sales of $15.2 billion, increasing by 3.8% despite a headwind from Stellara [26][27] - MedTech achieved worldwide sales of $8.5 billion, reflecting a 6.1% increase, driven by strong performance in cardiovascular, surgery, and vision [30][31] - In oncology, DARZALEX grew by 21.5%, while CARVICTI saw over 100% growth [27][28] Market Data and Key Metrics Changes - U.S. sales growth was 7.6%, while international sales experienced a decline of 1.6% due to Stellara biosimilars and COVID-19 vaccine impacts [26][27] - The cardiovascular segment in MedTech delivered over 22% operational sales growth, driven by new product performance [18][30] Company Strategy and Development Direction - The company aims to become the number one oncology company by 2030, targeting over $50 billion in sales [11][72] - Focus areas include oncology, immunology, neuroscience, cardiovascular, surgery, and vision, with a commitment to innovation and addressing unmet medical needs [10][21] - The company plans to launch several new products and therapies in the second half of 2025, including TAR200 for bladder cancer and subcutaneous Ribrovant for lung cancer [49][50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving and potentially exceeding growth targets for 2025, driven by strong performance in both Innovative Medicine and MedTech [39][42] - The company anticipates an acceleration in operational sales growth in the second half of the year, supported by new product launches and market share gains [42][60] - Management highlighted the importance of navigating external challenges while maintaining financial commitments and delivering shareholder value [51][52] Other Important Information - The company raised its full-year sales guidance by $2 billion and EPS guidance by $0.25, reflecting strong Q2 performance [9][42] - The effective tax rate for the quarter was 14.7%, down from 18.5% in the previous year [35][36] - The company ended Q2 with $19 billion in cash and marketable securities and $51 billion in debt, resulting in a net debt position of $32 billion [40] Q&A Session Summary Question: Drivers of upside to guidance for the year - Management indicated that both Innovative Medicine and MedTech contributed to strong performance, with notable growth in brands like DARZALEX and CARVICTI [54][55] Question: Oncology target of $50 billion by the end of the decade - Management expressed confidence in achieving the target, citing strong growth in multiple myeloma and the potential of TAR200 for bladder cancer [70][72] Question: Guidance for top-line growth acceleration - Management expects 2026 to show better growth rates than 2025, driven by new product introductions and market dynamics [84][86]

Financial Data and Key Metrics Changes - In Q2 2025, worldwide sales reached $23.7 billion, reflecting a 4.6% increase despite a headwind from Stellara [23][24] - Net earnings for the quarter were $5.5 billion, with diluted earnings per share of $2.29, compared to $1.93 a year ago [24] - Adjusted net earnings were $6.7 billion, with adjusted diluted earnings per share of $2.77, representing a decrease of 2.1% year-over-year [25][32] Business Line Data and Key Metrics Changes - Innovative Medicine reported worldwide sales of $15.2 billion, increasing by 3.8% despite an 11.7% headwind from Stellara [25][26] - MedTech achieved worldwide sales of $8.5 billion, growing by 6.1%, with strong performance in cardiovascular, surgery, and vision [29][30] - In oncology, DARZALEX grew by 21.5%, while CARVICTI saw over 100% growth [26][27] - Tremfya in immunology grew by 30.1%, while Stellara declined by 43.2% due to biosimilar competition [28] Market Data and Key Metrics Changes - U.S. sales growth was 7.6%, while international sales saw a decline of 1.6% due to Stellara biosimilars and COVID-19 vaccine impacts [25][26] - Cardiovascular segment delivered over 22% operational sales growth, driven by new product performance [17][29] - Surgical vision grew by 8.9%, supported by strong performance in contact lenses and intraocular lenses [21][30] Company Strategy and Development Direction - The company aims to become the number one oncology company by 2030, targeting over $50 billion in sales [10][11] - Focus areas for growth include oncology, immunology, neuroscience, cardiovascular, surgery, and vision, with a commitment to innovation [8][12] - The company plans to launch several new products and expand its pipeline, including TAR200 for bladder cancer and icotrokinra for psoriasis [47][48] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving and potentially exceeding growth targets for 2025, driven by strong performance in both Innovative Medicine and MedTech [36][39] - The company anticipates an acceleration in operational sales growth in the second half of the year, supported by new product launches and market share gains [40][46] - Management highlighted the importance of navigating external challenges, including tariffs and competition, while maintaining a focus on innovation and market leadership [88] Other Important Information - The company ended Q2 with $19 billion in cash and marketable securities and $51 billion in debt, resulting in a net debt position of $32 billion [38] - The effective tax rate for the quarter was 14.7%, down from 18.5% in the previous year [33] - The company is committed to investing $55 billion in the U.S. over the next four years, driven by favorable tax policies [39] Q&A Session Summary Question: Drivers of upside to guidance for the year - Management indicated that both Innovative Medicine and MedTech contributed to strong performance, with notable growth in oncology and cardiovascular segments [52][53] Question: Oncology target of $50 billion by the end of the decade - Management expressed confidence in achieving this target, citing strong growth in multiple myeloma and the potential of TAR200 for bladder cancer [68][71] Question: Guidance for operational growth and operating margin improvement - Management expects 2026 to show better growth rates than 2025, with ongoing efforts to improve operating margins [81][83] Question: Impact of pharma tariffs and manufacturing capacity - Management acknowledged uncertainty regarding tariffs but emphasized ongoing investments in U.S. manufacturing and job creation [88]

Q2 2025 Financial Performance - Worldwide sales reached $23.7 billion, a 5.8% increase compared to Q2 2024, with operational sales growth of 4.6%[47] - U S sales increased by 7.8% to $13.5 billion in Q2 2025 from $12.6 billion in Q2 2024[47] - Adjusted earnings were $6.7 billion, and adjusted EPS was $2.77[49] - GAAP net earnings increased to $5.5 billion, a rise of 18.2%[49] Innovative Medicine - Innovative Medicine sales reached $15.202 billion, with operational growth of 3.8%[51] - Oncology sales grew by 22.3% operationally, reaching $6.312 billion[51] - Immunology sales declined by 16% operationally, totaling $3.993 billion, impacted by STELARA biosimilar competition[51] MedTech - MedTech sales were $8.541 billion, with operational growth of 6.1%[53] - Cardiovascular sales increased by 22.3% operationally, reaching $2.313 billion[53] - Orthopaedics sales decreased by 1.6% operationally, totaling $2.305 billion[53] Guidance - The company increased its operational sales guidance for 2025 to 4.8% and adjusted operational EPS guidance to 7.0% (midpoints)[62] - Operational sales are projected to be between $92.7 billion and $93.1 billion[62]

[Financial Performance Summary](index=1&type=section&id=Financial%20Performance%20Summary) [Overall Sales Performance](index=1&type=section&id=Overall%20Sales%20Performance) Worldwide sales grew 5.8% to $23.7 billion in Q2 2025, driven by U.S. market and MedTech segment strength Q2 2025 Sales Performance by Geography (vs. Q2 2024) | Geographic Area | 2025 Sales ($M) | 2024 Sales ($M) | Total Change | Operational Change | | :--- | :--- | :--- | :--- | :--- | | U.S. | $13,544 | $12,569 | 7.8% | 7.8% | | International | $10,199 | $9,878 | 3.2% | 0.6% | | **Worldwide** | **$23,743** | **$22,447** | **5.8%** | **4.6%** | Six Months 2025 Sales Performance by Geography (vs. Six Months 2024) | Geographic Area | 2025 Sales ($M) | 2024 Sales ($M) | Total Change | Operational Change | | :--- | :--- | :--- | :--- | :--- | | U.S. | $25,849 | $24,189 | 6.9% | 6.9% | | International | $19,787 | $19,641 | 0.7% | 1.4% | | **Worldwide** | **$45,636** | **$43,830** | **4.1%** | **4.4%** | Q2 2025 Sales Performance by Business Segment (vs. Q2 2024) | Business Segment | 2025 Sales ($M) | 2024 Sales ($M) | Total Change | Operational Change | | :--- | :--- | :--- | :--- | :--- | | Innovative Medicine | $15,202 | $14,490 | 4.9% | 3.8% | | MedTech | $8,541 | $7,957 | 7.3% | 6.1% | | **Worldwide** | **$23,743** | **$22,447** | **5.8%** | **4.6%** | Six Months 2025 Sales Performance by Business Segment (vs. Six Months 2024) | Business Segment | 2025 Sales ($M) | 2024 Sales ($M) | Total Change | Operational Change | | :--- | :--- | :--- | :--- | :--- | | Innovative Medicine | $29,075 | $28,052 | 3.6% | 4.0% | | MedTech | $16,561 | $15,778 | 5.0% | 5.1% | | **Worldwide** | **$45,636** | **$43,830** | **4.1%** | **4.4%** | [Condensed Consolidated Statement of Earnings](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Earnings) Q2 2025 GAAP net earnings rose 18.2% to $5.5 billion, while adjusted net earnings declined 2.1% to $6.7 billion Q2 2025 Statement of Earnings Highlights (vs. Q2 2024) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | % Change | | :--- | :--- | :--- | :--- | | Sales to customers | $23,743 | $22,447 | 5.8% | | Gross Profit | $16,115 | $15,578 | 3.4% | | Net Earnings (GAAP) | $5,537 | $4,686 | 18.2% | | Diluted EPS (GAAP) | $2.29 | $1.93 | 18.7% | | Adjusted Net Earnings (Non-GAAP) | $6,699 | $6,840 | (2.1)% | | Adjusted Diluted EPS (Non-GAAP) | $2.77 | $2.82 | (1.8)% | Six Months 2025 Statement of Earnings Highlights (vs. Six Months 2024) | Metric | Six Months 2025 ($M) | Six Months 2024 ($M) | % Change | | :--- | :--- | :--- | :--- | | Sales to customers | $45,636 | $43,830 | 4.1% | | Gross Profit | $30,651 | $30,450 | 0.7% | | Net Earnings (GAAP) | $16,536 | $7,941 | 108.2% | | Diluted EPS (GAAP) | $6.82 | $3.27 | 108.6% | | Adjusted Net Earnings (Non-GAAP) | $13,405 | $13,420 | (0.1)% | | Adjusted Diluted EPS (Non-GAAP) | $5.53 | $5.53 | 0.0% | [Detailed Segment Sales Analysis](index=13&type=section&id=Detailed%20Segment%20Sales%20Analysis) Innovative Medicine growth was offset by Immunology decline, while MedTech surged, driven by Cardiovascular and Shockwave [Innovative Medicine Segment](index=13&type=section&id=Innovative%20Medicine%20Segment) Innovative Medicine sales grew 4.9% operationally, led by Oncology, but offset by a significant decline in Immunology Q2 2025 Innovative Medicine Sales by Therapeutic Area (Worldwide, $M) | Therapeutic Area | Q2 2025 Sales | Q2 2024 Sales | Reported Change | Operational Change | | :--- | :--- | :--- | :--- | :--- | | Oncology | $6,312 | $5,090 | 24.0% | 22.3% | | Immunology | $3,993 | $4,722 | (15.4)% | (16.0)% | | Neuroscience | $2,051 | $1,782 | 15.1% | 14.4% | | Pulmonary Hypertension | $1,113 | $1,039 | 7.1% | 6.2% | | Infectious Diseases | $803 | $965 | (16.8)% | (19.0)% | | **Total Innovative Medicine** | **$15,202** | **$14,490** | **4.9%** | **3.8%** | Six Months 2025 Innovative Medicine Sales by Therapeutic Area (Worldwide, $M) | Therapeutic Area | Six Months 2025 Sales | Six Months 2024 Sales | Reported Change | Operational Change | | :--- | :--- | :--- | :--- | :--- | | Oncology | $11,990 | $9,904 | 21.1% | 21.3% | | Immunology | $7,700 | $8,969 | (14.1)% | (13.6)% | | Neuroscience | $3,698 | $3,585 | 3.2% | 3.6% | | Pulmonary Hypertension | $2,138 | $2,088 | 2.4% | 2.5% | | Infectious Diseases | $1,605 | $1,786 | (10.1)% | (10.2)% | | **Total Innovative Medicine** | **$29,075** | **$28,052** | **3.6%** | **4.0%** | [MedTech Segment](index=20&type=section&id=MedTech%20Segment) MedTech sales grew 6.1% operationally, driven by Cardiovascular, Electrophysiology, and Shockwave, despite Orthopaedics decline Q2 2025 MedTech Sales by Franchise (Worldwide, $M) | Franchise | Q2 2025 Sales | Q2 2024 Sales | Reported Change | Operational Change | | :--- | :--- | :--- | :--- | :--- | | Cardiovascular | $2,313 | $1,873 | 23.5% | 22.3% | | Orthopaedics | $2,305 | $2,312 | (0.3)% | (1.6)% | | Surgery | $2,555 | $2,488 | 2.7% | 1.8% | | Vision | $1,369 | $1,285 | 6.5% | 4.6% | | **Total MedTech** | **$8,541** | **$7,957** | **7.3%** | **6.1%** | Six Months 2025 MedTech Sales by Franchise (Worldwide, $M) | Franchise | Six Months 2025 Sales | Six Months 2024 Sales | Reported Change | Operational Change | | :--- | :--- | :--- | :--- | :--- | | Cardiovascular | $4,416 | $3,679 | 20.0% | 20.0% | | Orthopaedics | $4,546 | $4,652 | (2.3)% | (2.3)% | | Surgery | $4,951 | $4,904 | 1.0% | 1.5% | | Vision | $2,648 | $2,543 | 4.1% | 4.2% | | **Total MedTech** | **$16,561** | **$15,778** | **5.0%** | **5.1%** | - The acquisition of **Shockwave** on May 31, 2024, contributed significantly to Cardiovascular sales, with **$292 million** in Q2 2025 and **$550 million** in the first six months of 2025[23](index=23&type=chunk)[31](index=31&type=chunk)[33](index=33&type=chunk) [Non-GAAP Financial Measures and Reconciliations](index=9&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) Non-GAAP measures provide clarity on underlying performance, with significant adjustments for amortization, restructuring, and litigation costs Q2 2025 Reconciliation of GAAP to Non-GAAP Net Earnings ($M) | Description | Amount | | :--- | :--- | | Net Earnings, after tax- as reported (GAAP) | $5,537 | | Intangible Asset Amortization expense | $1,267 | | Acquisition, integration and divestiture related | $246 | | Litigation related | $57 | | Other Adjustments (Net) | ($233) | | **Adjusted Net Earnings, after tax (Non-GAAP)** | **$6,699** | Six Months 2025 Reconciliation of GAAP to Non-GAAP Net Earnings ($M) | Description | Amount | | :--- | :--- | | Net Earnings, after tax- as reported (GAAP) | $16,536 | | Litigation related | ($6,909) | | Intangible Asset Amortization expense | $2,387 | | Acquisition, integration and divestiture related | $378 | | Other Adjustments (Net) | $13 | | **Adjusted Net Earnings, after tax (Non-GAAP)** | **$13,405** | - The company is undergoing several restructuring programs: - A program in the Orthopaedics franchise, initiated in fiscal 2023, to exit certain markets and product lines, incurring **$50M** in costs in Q2 2025[8](index=8&type=chunk) - A new restructuring program in the Surgery franchise, initiated in fiscal 2025, to simplify operations, incurring **$29M** in costs in Q2 2025[9](index=9&type=chunk) Q2 2025 Adjusted Operational Sales Growth (Excluding A&D) | Segment | WW Adjusted Operational Growth | | :--- | :--- | | Innovative Medicine | 2.4% | | MedTech | 4.1% | | **Total Company** | **3.0%** |

Core Viewpoint - Johnson & Johnson (JNJ.US) reported second-quarter earnings that exceeded Wall Street expectations and raised its full-year guidance amidst threats of tariffs and drug price reductions in the pharmaceutical industry [1]. Financial Performance - The company's second-quarter sales reached $23.7 billion, surpassing analysts' average expectation of $22.8 billion [1]. - The adjusted non-GAAP earnings per share for the quarter were $2.77, exceeding market expectations by $0.09 [1]. - Johnson & Johnson raised its 2025 revenue guidance midpoint by $2 billion to $93.4 billion and adjusted its full-year earnings per share guidance upward by $0.25 to a range of $10.80 to $10.90 [1]. Market Context - The earnings report coincided with President Trump's consideration of imposing tariffs on the pharmaceutical industry, with potential initial low rates that could gradually increase [1]. - Trump indicated that if pharmaceutical companies do not shift more production capacity to the U.S. within the next 12 to 18 months, they could face tariffs as high as 200% [1]. Management Insights - Johnson & Johnson's CFO, Joseph Wolk, expressed optimism regarding the gradual imposition of tariffs, suggesting it indicates government understanding of the complexities involved in building biopharmaceutical facilities [1]. - The stock price of Johnson & Johnson rose by 2.1% in pre-market trading following the earnings announcement [1]. Challenges Ahead - Johnson & Johnson faces a patent cliff for its key psoriasis drug Stelara, which is experiencing competition from generics in the U.S. and Europe [3]. - The company is relying on new products like the cancer drug Darzalex and the immunology drug Tremfya to offset the decline of Stelara [3]. - Darzalex achieved sales of $3.54 billion in the quarter, while Tremfya sales reached $1.19 billion, both exceeding expectations [3]. - The medical devices segment contributed $8.54 billion, also surpassing expectations, while Stelara's sales of $1.65 billion fell short of analyst predictions [3]. Regulatory Environment - The White House has threatened to implement a policy requiring pharmaceutical companies to charge the U.S. government the lowest prices offered to patients in wealthier countries [3]. - An executive order from May mandates that drug companies either voluntarily lower prices or face regulatory measures, while also pushing for other countries to increase prescription drug prices [3]. Investment Commitment - In March, Johnson & Johnson announced plans to invest over $55 billion in the U.S. over the next four years, joining other pharmaceutical companies in increasing domestic investments since Trump's inauguration [4].

Financial Performance - Johnson & Johnson reported earnings and revenue that beat estimates and raised guidance for the full year [1] - Pharmaceutical portfolio (excluding Stellara) experienced 155% growth, reaching a record revenue of over $15 billion [4] - Topline guidance is up about $2 billion for the full year, with half attributed to the weaker dollar and half to operational performance [25] - Reaffirming commitment from January for a 300 basis point improvement on operating margin, including $200 million of tariff costs [26] Product & Pipeline - Stellara, a $11 billion product, experienced a decline of $12 billion from Q2 last year to Q2 this year due to loss of patent exclusivity in the US [3][4] - TMIA is expected to be a $10 billion product, succeeding Stellara, with indications for ulcerative colitis and Crohn's disease [8][9] - Carvicti shows an overall median survival of 607% months better than five years with one treatment [7] - The company has 26, soon to be 27, platforms or products that generate more than $1 billion in revenue [20] Market Dynamics & Strategy - The spin-off of the consumer products group (Kenvue) in 2023 was the right decision, allowing for greater focus on pharmaceuticals and medtech [20][23] - Good tax policy translates into bringing manufacturing jobs back to the US, as evidenced by the 221% increase in bioarmal manufacturing since 2016 [13][14] - The company committed to $55 billion of investment in the US to supply medicines to US citizens out of US facilities by the end of the decade [14]