J&J(JNJ) - 2025 Q4 - Annual Report

Business Segments - The company operates in two business segments: Innovative Medicine and MedTech[22] - Key products in the Innovative Medicine segment include CARVYKTI, DARZALEX, and ERLEADA, focusing on oncology and immunology[23] - The MedTech segment develops a broad portfolio of products for cardiovascular, orthopaedics, surgery, and vision, supporting a wide range of acute and elective procedures[25] Revenue Contributions - The Innovative Medicine segment is expected to contribute significantly to revenue, with a focus on therapeutic areas such as oncology and immunology[23] - Sales of the Company's largest product, DARZALEX and DARZALEX FASPRO, accounted for approximately 15.0% of total revenues for fiscal 2025, with royalty amounts to Genmab of approximately $2.4 billion for fiscal 2025[32] - Sales of the Company's second largest product, STELARA, accounted for approximately 6.5% of total revenues for fiscal 2025, with expected continued launches of biosimilar versions negatively impacting sales[33] - Sales of the Company's third largest product, TREMFYA, accounted for approximately 5.5% of total revenues for fiscal 2025, with a composition patent projected to expire in the United States in 2031[34] Growth Strategies - The company anticipates continued growth driven by new product launches and market expansion strategies[9] - Future growth strategies include potential acquisitions and collaborations to enhance product offerings and market reach[14] - The Company plans to separate its Orthopaedics business with a targeted completion within 18 to 24 months after the initial announcement[26] Challenges and Risks - The company is facing challenges related to patent expirations and increased competition from generic products[13] - The Company faces higher risks in international investments due to financial instability and restrictive economic policies[29] - The Company is subject to increasingly stringent regulations, which may materially affect its financial condition and business operations[40] - The Company is subject to potential changes in applicable laws and regulations that could affect operations, including product approvals and pricing for healthcare products[1] - The Company faces pricing pressures due to trends toward healthcare cost containment and increased scrutiny from government agencies[1] Regulatory Environment - The impact of regulatory changes and compliance requirements is a key consideration for the company's operations[16] - The federal Inflation Reduction Act of 2022 allows the government to establish prices for certain high-spend drugs starting in 2026, impacting products like XARELTO and STELARA[47] - The Company expects penalties for non-compliance with the Inflation Reduction Act provisions, which may include civil monetary penalties[48] - Janssen Pharmaceuticals filed litigation against the U.S. Department of Health and Human Services, challenging the constitutionality of the IRA's Medicare Drug Price Negotiation Program, claiming it violates their First and Fifth Amendment rights[49] - The Company is actively monitoring pending legislation that could impact drug pricing in Medicare and Medicaid programs, creating uncertainty in market conditions[51] Employee and Workforce Management - The Company reported a workforce of approximately 140,800 employees as of December 28, 2025, an increase from 139,800 in 2024, with full-time equivalent positions at 138,200[55] - The voluntary turnover rate for the Company in 2025 was 5.8%, indicating a focus on employee retention and development[61] - The Company emphasizes a culture of innovation and well-being, with 95% of global employees participating in the Our Credo Survey in 2025[60] - The Company has a human capital management strategy focused on attracting, developing, and retaining top talent to support its long-term success[57] - The Company emphasizes the importance of employee health and well-being, investing in programs that promote physical, mental, emotional, and financial health[64] Supply Chain Management - The company is focused on maintaining strong supply chain management to mitigate risks associated with global operations[19] - The Company relies on complex global supply chains that are increasingly subject to regulatory requirements, potentially affecting sourcing and pricing of materials[54] - The Company relies on global supply chains that are complex and subject to increasing regulatory requirements, which may adversely affect supply and pricing of materials[19] Innovation and R&D - The company is committed to innovation, with ongoing research and development in new therapies and technologies[13] - The Company has made substantial investments in research and development to remain competitive in the pharmaceutical market[38] - The Company has made a practice of obtaining patent protection on its products, facing challenges from third parties seeking to market generic versions of key pharmaceutical products[31] Economic Factors - The impact of inflation, interest rate fluctuations, and currency exchange rates may affect revenues, expenses, and resulting margins[1] - The Company is subject to increased regulatory scrutiny, particularly regarding data privacy and cybersecurity compliance, which may affect operations[41]