Johnson & Johnson Q4 FY2025 earnings call

Joaquin Duato highlighted strong 2025 results, a leading portfolio, and R&D investments. Darren Snellgrove reviewed Q4 and full-year 2025 financials, including sales and earnings. Joe Wolk discussed cash position, capital allocation, 2026 guidance, and phasing considerations. Key operational highlights included strong launches in oncology, immunology, and medtech, and significant R&D investments.

Innovative Medicine: Worldwide sales were $15.8 billion, increasing 7.9% despite a STELARA headwind. Oncology saw DARZALEX grow 22% with annual sales over $14 billion, Carvicti with over 10,000 patients treated, and strong progress in solid tumors. Immunology's Tremfya had 65.4% growth, with Q4 sales up 7565% worldwide. Neuroscience's Spravato grew 67.8%, and CAPLYTA had sales of $249 million. MedTech: Worldwide sales were $8.8 billion, up 5.8%. Cardiovascular had Abiomed at 18.3% growth and Shockwave at 22.9% growth. Surgery saw 3.7% growth, and Vision had 5.3% growth with Surgical Vision at 10.8%.

2026 operational sales growth is expected in the range of 5.7% to 6.7% with a midpoint of $100 billion or 6.2%. Acquisitions/divestitures are expected to favorably impact by ~30 basis points. Free cash flow is anticipated to elevate to approximately $21 billion. Adjusted pretax operating margin is planned to improve by at least 50 basis points. Adjusted operational earnings per share is expected to grow 5.5% at the midpoint, range $11.28 to $11.48.

Talc MDL rulings; the special master excluded some plaintiff's experts' opinions but the court didn't uphold proper gatekeeping duty, with plans to appeal these erroneous parts.

Q: Asad Haider asked about bridging to double-digit growth profile, key levers like organic pipeline, acquisitions, portfolio pruning.

A: Joaquin Duato discussed strength in portfolio and pipeline, focusing on oncology, immunology, neuroscience in innovative medicine and cardiovascular, surgery, vision in medtech, with multiple blockbusters and new launches.

Q: Larry Biegelsen asked about MedTech market dynamics in 2026 and EP business outlook.

A: Tim Schmid responded that ACA subsidies not expected to materially impact, expecting acceleration in 2026, and discussed EP business progress with Verapulse and catheter launches.

Q: Chris Schott asked about margin progression.

A: Joe Wolk said margin expansion tied to infrastructure improvement, efficiency efforts, and reduced STELARA impact.

Q: Danielle Antalffy asked about higher growth end markets and new growth opportunities.

A: Tim Schmid mentioned aspiration to increase participation in high-growth markets, over 70% post-ortho separation, and opportunities in cardiovascular, surgery, vision.

Q: Vamil Divan asked about Inlexo launch and Sunrise data.

A: Jennifer Taubert talked about Inlexo launch reception and anticipated J code in Q2, John Reed discussed myeloma therapies and MRD.

Q: Shagun Singh asked about tax litigation implications.

A: Joe Wolk and Joaquin Duato discussed appealing talc MDL ruling parts and continuing to litigate meritless claims.

Q: Alexandria Hammond asked about Milvexian.

A: John Reed and Jennifer Taubert discussed Milvexian's data readouts, confidence in the asset, and leveraging commercialization for multibillion-dollar opportunity.