Financial Data and Key Metrics Changes - In Q4 2025, worldwide sales reached $24.6 billion, a 7.1% increase despite a 650 basis point headwind from Stelara [20][21] - For the full year 2025, worldwide sales totaled $94.2 billion, reflecting a 5.3% increase, with U.S. growth at 6.9% and 3.4% outside the U.S. [21][22] - Net earnings for Q4 were $5.1 billion, with diluted earnings per share at $2.10, compared to $1.41 a year ago [21] - Full year 2025 adjusted net earnings were $26.2 billion, with adjusted diluted earnings per share at $10.79, an 8.1% increase from 2024 [23][31] Business Line Data and Key Metrics Changes - Innovative Medicine reported Q4 sales of $15.8 billion, a 7.9% increase, with significant contributions from oncology and immunology [24] - In oncology, Darzalex grew 24.1%, while Carvykti achieved sales of $555 million with 63.2% growth [24][25] - Tremfya in immunology saw remarkable growth of 65.4%, with full year sales exceeding $5 billion for the first time [14][25] - MedTech sales reached $8.8 billion in Q4, a 5.8% increase, driven by strong performance in cardiovascular and surgical segments [26][27] Market Data and Key Metrics Changes - In oncology, operational sales grew 21% in 2025, with expectations to exceed $50 billion in annual sales by 2030 [10] - The cardiovascular segment delivered 15% operational sales growth, with Abiomed and Shockwave showing strong performance [16][26] - Vision care saw robust growth, particularly in Surgical Vision, with a 10.8% increase driven by new product innovations [27] Company Strategy and Development Direction - The company plans to separate its Orthopaedics business to focus on high-growth areas [7] - Investments of over $32 billion in R&D and M&A in 2025, including acquisitions of Intra-Cellular Therapies and Halda Therapeutics, are aimed at accelerating growth [8] - The company aims for double-digit growth by the end of the decade, supported by a diverse portfolio of 28 products generating over $1 billion annually [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving faster growth in 2026 compared to 2025, driven by a strong pipeline and portfolio [8][19] - The company anticipates operational sales growth of 5.7%-6.7% for 2026, with a midpoint of $100 billion [35] - Management highlighted the importance of innovation in driving future growth and improving patient outcomes [43][55] Other Important Information - The company ended 2025 with approximately $20 billion in cash and marketable securities, generating $19.7 billion in free cash flow [34] - The effective tax rate for Q4 2025 was a benefit of 3%, compared to an 11.7% cost in Q4 2024 [30] Q&A Session Summary Question: Overview of growth potential and strategic repositioning - Analyst inquired about the key levers for achieving double-digit growth and the impact of the strategic repositioning away from lower growth segments [47] - Management responded that the strength of the portfolio and pipeline, particularly in oncology and immunology, supports the growth outlook [48][49] Question: MedTech market dynamics and growth expectations - Analyst asked about the MedTech market outlook for 2026 and the expected growth acceleration [58] - Management indicated confidence in growth despite potential policy changes, emphasizing strong clinical demand and strategic focus on higher growth markets [59][60] Question: Margin progression and relationship to top-line growth - Analyst sought clarification on margin progression in relation to expected top-line growth [68] - Management explained that margin improvements are expected to align with sales growth, particularly following the orthopedic separation [70][71] Question: Vision Care market health and performance - Analyst requested insights on the Vision Care market and performance discrepancies between regions [73] - Management highlighted strong underlying performance in the contact lens category and ongoing focus on vision as a growth area [74]

Financial Data and Key Metrics Changes - In Q4 2025, worldwide sales reached $24.6 billion, a 7.1% increase despite a 650 basis point headwind from Stelara [17] - For the full year 2025, worldwide sales were $94.2 billion, reflecting a 5.3% increase, with U.S. growth at 6.9% and international growth at 3.4% [18] - Net earnings for Q4 were $5.1 billion, with diluted earnings per share at $2.10, compared to $1.41 a year ago [18] - Full year 2025 net earnings were $26.8 billion, with diluted earnings per share at $11.03, significantly up from $5.79 the previous year [19] Business Line Data and Key Metrics Changes - Innovative Medicine reported Q4 sales of $15.8 billion, a 7.9% increase, with notable growth in oncology and immunology [20] - In oncology, Darzalex grew 24.1%, while Carvykti achieved sales of $555 million with a growth of 63.2% [20] - Immunology saw Tremfya grow 65.4%, while Stelara declined 48.6% due to biosimilar competition [21] - MedTech sales for the year were $34 billion, with operational growth of 5.4%, driven by cardiovascular and surgical segments [13] Market Data and Key Metrics Changes - U.S. sales growth was 7.5% in Q4, while international sales grew by 6.6% [17] - The cardiovascular segment delivered 15% operational sales growth, with Abiomed and Shockwave showing strong performance [13] - Surgical vision grew 10.8%, driven by new product innovations and demand for premium intraocular lenses [24] Company Strategy and Development Direction - The company plans to separate its orthopedics business by mid-2027, focusing on high-growth areas [30] - Investments of over $32 billion in R&D and M&A were made in 2025, including acquisitions of Intra-Cellular Therapies and HALDA Therapeutics [6] - The company aims for double-digit growth by the end of the decade, supported by a strong portfolio and pipeline [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving faster growth in 2026 compared to 2025, with a line of sight to double-digit growth [6] - The company anticipates operational sales growth in 2026 to be between 5.7% and 6.7%, with a midpoint of $100 billion [31] - Management highlighted the strength of their portfolio and pipeline as key drivers for future growth [41] Other Important Information - The company ended 2025 with approximately $20 billion in cash and marketable securities, and $48 billion in debt [30] - A net interest expense of $300 million to $400 million is expected for 2026 [33] - The effective tax rate is projected to be between 17.5% and 18.5% for 2026 [34] Q&A Session Summary Question: Overview of growth prospects and key levers for double-digit growth - Management highlighted the strength of the portfolio and pipeline, focusing on oncology, immunology, and MedTech as key growth areas [40][41] Question: MedTech market dynamics and growth expectations - Management does not expect the loss of ACA subsidies to materially impact MedTech performance, with a focus on clinical capacity driving growth [48] Question: Margin progression and relationship to top-line growth - Management indicated that margin improvements will align with sales growth, with expectations for at least 50 basis points of improvement in 2026 [55] Question: Vision care market health and performance - Management noted strong underlying demand in the contact lens category, with robust growth driven by new product launches [58][59]