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Q3 2009 Earning Report of Johnson & Johnson
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Q3 2009 Earning Report of Johnson & Johnson

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  • 1. Louise Mehrotra Vice President, Investor Relations
  • 2. Safe Harbor Statement • This presentation may contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could vary materially from the Company’s expectations and projections. • Risks and uncertainties include general industry conditions and competition; economic conditions, such as interest rate and currency exchange rate fluctuations; technological advances and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approvals; domestic and foreign health care reforms and governmental laws and regulations; and trends toward health care cost containment. • A further list and description of these risks, uncertainties and other factors can be found in Exhibit 99 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2008. Copies of this Form 10-K, as well as subsequent filings, are available online at www.sec.gov, www.jnj.com, or on request from the Company. The Company does not undertake to update any forward-looking statements as a result of new information or future events or developments.
  • 3. Dominic Caruso Vice President, Finance Chief Financial Officer
  • 4. Alex Gorsky Worldwide Chairman Medical Devices & Diagnostics
  • 5. WW Medical Devices & Diagnostics Market – $335B MD&D Market Segments* Segment Value 2008-12 (US $ in Billions) CAGR Total 2008 WW MD&D Market Blue = Where J&J MD&D Competes Surgical Instrument / Other 47 7.4 % Imaging 42 2.9 % Cardiovascular 32 6.9 % In‐Vitros Diagnostics 30 7.4 % Orthopaedics 27 8.1 % Vision 20 6.3 % $157B US Dental 18 3.5 % $178B 47% Urology & Renal Wound Care 15 12 5.6 % 6.9 % OUS 53% Endoscopy 11 7.0 % Drug Delivery 10  6.8 % Energy‐Based/Radiotherapy 10 6.9 % Diabetes SMBG & Int. Sol 9 7.0 % Critical Care 7 3.7 % Opthalmic Surgery 6 6.3 % Sports Medicine 4 9.5 % Blood Donation & Proc.  3 5.3 % Overall MD&D Market CAGR (2008-12) 6.5% Neuromodulation 3 16.0 % Infection Control 3 6.0 % Aesthetics 2 21.6 % Neurosurgery/ICU/Instruments 2 3.1 % *Market Segments listed above do not include certain minor categories such as Insulin Delivery – Pumps 1 15.2 % Patients Aids & Home, Non Electrical Diagnostics and other minor markets Source: HRI, Internal Estimates
  • 6. Largest MD&D Business in the World • Strong track record of financial performance • Leadership positions (#1 or #2) in key segments • Compete in attractive categories • Global capabilities and advantages of scale • Unique understanding of chronic disease states • Depth and breadth of Johnson & Johnson
  • 7. Seven Extraordinary Franchises Diabetes Care
  • 8. MD&D Segment – Major Franchise Sales & Operational Growth Rates – Nine Months 2009 YTD’09 Sales: $17.3 Billion YTD’09 Ops Growth Rate: 3.3% $3.0 Ethicon +9% DePuy $3.9 $2.0 (11%) Cordis +7% $1.9 Vision Care +1% Ethicon Endo $3.2 +8% $1.5 $1.8 +9% OCD (4%) $ U.S. Billions Diabetes Care
  • 9. Key Growth Strategies • Grow core businesses • Launch breakthrough new products/technologies • Accelerate growth in emerging markets • Drive operational effectiveness and efficiency
  • 10. Key Growth Strategies: Grow Core Businesses Joint Contact Clinical Sutures Reconstruction SMBG Lenses Labs WW Market $3.1B $13.2B $8.5B $5.7B $13.3B J&J WW Market Position #1 #2 #2 #1 #5 J&J WW 75% 20% 27% 45% 7% $ Market Share Source: Combination of external and internal estimates. WW Market data reflect 2009 estimates; WW Market Position and Market Share data reflect YE’08 actuals.
  • 11. Sutures: Coated VICRYL™ Plus Antibacterial Suture • Faster, event-free closure • First and only suture of its kind • Protects against bacterial colonization • Tiered strategy for developed vs. emerging markets
  • 12. Joint Reconstruction: Pinnacle® CoMplete Acetabular Cup System • First ceramic-on-metal hip bearing considered by FDA • Combines durability/stability of metal-on-metal bearings with enhanced wear characteristics of ceramic-on-ceramic bearings • Laboratory testing showed: – >90% wear reduction compared to metal-on-metal under normal gait conditions – 80% reduction in wear under adverse conditions • FDA Advisory Committee unanimously recommended approval in August 2009
  • 13. Self-monitoring of Blood Glucose (SMBG): New Blue OneTouch® Ultra® Test Strips with DoubleSure™ Technology • Automatically double-checks each result for accuracy • OneTouch® Ultra® Test Strips are glucose-specific and eliminate the risk of falsely elevated results from other sugars – Nearly 7 years of proven accuracy reinforces patient and HCP confidence • Leverages competitive advantage of one strip platform for multiple meters • Does not contain the GDH-PQQ enzyme • U.S. launch in September 2009
  • 14. Contact Lenses: 1•DAY ACUVUE® TruEye™ • World’s first daily disposable silicone hydrogel • Sets the standard in healthy contact lens wear for today’s non-stop eye • Only contact lens to deliver on the four dimensions of eye health: – HEALTH YOU CAN SEE™ – HEALTH YOU CAN FEEL™ – PROTECTIVE HEALTH – EVERYDAY HEALTH • OUS Launches in 2008/09 • Planned U.S. Launch 2Q/3Q’10
  • 15. Clinical Labs: VITROS® 5600 and 3600 Systems • Market penetration: New systems double the markets served • Menu expansion: Competitive menu of clinical chemistry and immunoassay tests • New medical content: Emerging assays • FDA approved: 4Q08
  • 16. Key Growth Strategies: Launch Breakthrough New Products/Technologies DES Electrophysiology Energy Biosurgicals Sedation WW Market $4.8B $1.8B $1.5B $0.7B New Market 2009 2009-2014 2% 15% 15% 10% New Market CAGR* *Operational growth Source: Combination of external and internal estimates
  • 17. Drug-Eluting Stents (DES): NEVO™ Sirolimus-Eluting Coronary Stent • First and only drug-eluting stent utilizing RES Technology • 75% bare metal upon insertion; fully bare metal in ~3 months • Contains the drug Sirolimus – unmatched safety and efficacy data • Excellent deliverability • Robust clinical strategy • CE Mark Filing: 1Q 2010 • PMA Filing: 2012
  • 18. Electrophysiology: Atrial Fibrillation Ablation • Advancing the use of ablation for treatment of arrhythmias • Focused on atrial fibrillation – Most common sustained cardiac rhythm disturbance – Prevalence of 22MM…only 88K treated with ablation – Ablation fast-growing as second-line therapy – Biosense Webster has first and only FDA approval to treat Afib – CARTO® 3 system launching OUS
  • 19. Energy: ENSEAL® + HARMONIC® • Acquired SurgRX in 2008 • Expand leadership in “energy-based” surgical instruments • ENSEAL® and HARMONIC® are complementary technologies • ENSEAL® – Advanced bipolar device for large vessel sealing • HARMONIC® – Ultrasonic device for procedures requiring multi-functionality
  • 20. Biosurgicals: Fibrin Pad • Acquired Omrix Biopharmaceuticals in 2008 • Advanced hemostat to address bleeding in surgical settings • Combines functions of mechanical sealing and biological hemostasis • BLA Submission: 2009
  • 21. Sedation: The SEDASYS® System • First Computer-Assisted Personalized Sedation System • Integrates precise drug delivery and patient monitoring • For use by physician/nurse teams to deliver minimal-to-moderate propofol sedation • Targeting colonoscopy and EGD procedures – 16 million U.S. screening procedures per year* • Favorable FDA advisory panel recommendation in May 2009 *Internal Estimate
  • 22. Key Growth Strategies: Accelerate Growth in Emerging Markets Market Size 2009-2014 CAGR MD&D BRIC Market $6.0 Billion 15% Brazil $1.7 Billion 11% Russia $0.9 Billion 14% India $0.8 Billion 18% China $2.6 Billion 18% *Data source: Internal Estimates and based on markets J&J competes in and is not reflective of the entire MD&D market; Constant Dollars
  • 23. Key Growth Strategies: Accelerate Growth in Emerging Markets • Improve access, affordability, education – Market-appropriate products – Partnerships with government • Gain meaningful local market insights – R&D Centers in China/India – Manufacturing in Brazil/China/India – Surgical Training Centers in all BRIC countries – Johnson & Johnson Diabetes Institute in China
  • 24. Key Growth Strategies: Drive Operational Effectiveness and Efficiency MD&D Operating Profit*, 2003 - 2008 8000 $8.0 35% 35% Operating Profit ($ in Bn) $6.0 6000 30% 30% % to Sales 4000 $4.0 25% 25% 2000 $2.0 20% 20% $00 15% 15% 2003 2004 2005 2006 2007 2008 Operating Profit $'s % to Sales * Excludes IPR&D and other special items
  • 25. Medical Devices & Diagnostics: Well Positioned for Growth • Strong history of delivering clinically-relevant solutions • Favorable demographics and significant unmet needs globally • Market-leading franchises with established growth platforms and robust pipeline • Broad technology, scientific, and regulatory expertise • Global infrastructure, capabilities and networks • Exceptional financial profile enables continued investment in new markets, companies, and technologies