Louise Mehrotra. Vice President Investor Relations

Transcription

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2 Louise Mehrotra Vice President Investor Relations

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4 Safe Harbor Statement This presentation may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 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, Copies of this Form 10-K, as well as subsequent filings, are available online at 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.

5 Note on Non-GAAP Financial Measures These presentations may refer to certain non-gaap financial measures. These non-gaap financial measures should not be considered replacements for GAAP results. A reconciliation of these non-gaap financial measures to the most directly comparable GAAP financial measures can be found in the Investor Relations section of the Company s website at

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7 William C. Weldon Chairman of the Board & Chief Executive Officer

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9 2009 Performance Results Met or exceeded expectations Adjusted EPS* growth 1.8% Maintained long-term management focus Important investments for growth * * Non-GAAP measure; excludes IPR&D charges and other special items

10 Well Positioned for Leadership & Growth in Health Care

11 Agenda Introduction 2009 Business Highlights Strategic Outlook 2010 and Beyond Business Segment Growth Priorities

12 A Continuing Evolution of Growth Building on our Foundation of Growth January 2008 Restructured Pharmaceuticals and Cordis Integrated PCH Built presence in emerging markets Invested in pipelines Identified white spaces Wellness & Prevention Licensed & acquired new capabilities Executing Strategies for Leadership & Growth in Health Care January 2009 Advanced pipelines Launched six new drugs Restructured business to fund innovation and provide financial flexibility Invested in strategic acquisitions and collaborations Well Positioned for Leadership &Growth in Health Care January 2010 Expanding market leadership Core products New launches Continuing to advance pipeline Internal development New platforms for growth Expanding global presence Emerging markets Public policy Investing in our people

13 Financial Highlights: 2009 vs % Change Total Company Total Ops Sales $61.9B $63.7B (2.9%) (0.3%) Adjusted Earnings* $12.9B $12.9B Adjusted EPS* $4.63 $ % Free Cash Flow ** $14.2B $11.9B * Non-GAAP measure; excludes IPR&D charges and other special items **Non-GAAP financial measure: defined as operating cash flow less capital spending; estimated as of 1/25/10

14 From Guidance to Results Total Company January 2009 Guidance 2009 Actual Operational Sales (1)% - 1% (0.3%) Reported Sales (3)%-(5)% (2.9%) Operational Adjusted EPS* $ $4.70 $4.79 Reported Adjusted EPS* $ $4.55 $4.63 Average Euro Rate * Non-GAAP measure; excludes IPR&D charges and other special items

15 Broad Base of Health Care Leadership 2009 Sales by Segment Total Sales $61.9 Billion Medical Devices & Diagnostics 38% $23.6B $15.8B Consumer 26% Pharmaceutical 36% $22.5B

16 2009 Consumer Highlights 2009 Sales: $15.8 Billion 2009 Ops Growth Rate: 2.0% World s Premier Consumer Health Care Business NEUTROGENA LISTERINE SPLENDA AVEENO Operational sales increases in skin +12.2%* +5.6%* +6.3%* +4.3%* care, women s health, oral care and wound care

17 2009 Consumer Highlights LISTERINE Mouthwash NEUTROGENA AVEENO SPLENDA +7%* +6%* +12%* +6%* * Operational Growth

18 2009 Consumer Highlights Increasing market presence around the globe

19 2009 Pharmaceutical Highlights 2009 Sales: $22.5 Billion 2009 Ops Growth Rate: (6.1)% #7 Worldwide Market Rank #4 Global Biotech Market Rank IMS Data; MAT 3Q09

20 Pharmaceutical Highlights REMICADE CONCERTA RISPERDAL CONSTA +15%* +9%* +14%* * Operational Growth

21 2009 Pharmaceutical Highlights PREZISTA +83%* VELCADE +26%* INVEGA +23%* *Operational growth VELCADE developed in collaboration with Millenium Pharmaceuticals, The Takeda Oncology Company

22 2009 Medical Devices & Diagnostics Highlights 2009 Sales: $23.6 Billion 2009 Ops Growth Rate: 4.2% Largest Medical Technology Business in the World Strong growth in 4 of 7 franchises

23 2009 Medical Devices & Diagnostics Highlights +11%* *Operational growth

24 2009 Medical Devices & Diagnostics Highlights +8%* Adjustable Gastric Band *Operational growth HARMONIC ACE

25 2009 Medical Devices & Diagnostics Highlights +8%* *Operational growth

26 2009 Medical Devices & Diagnostics Highlights +9%* *Operational growth

27 2009 Medical Devices & Diagnostics Highlights Diabetes Care

28 Positive Momentum Across all Segments Segment Operating Profit* $17.3B $17.4B $2.7 $2.9 $7.0 $7.5 Operating margin % to sales Consumer 17.0% 18.0% MD&D 30.1% 32.0% Pharm 31.0% 31.1% $7.6 $7.0 Total 27.1% 28.1% Pharm MD&D Consumer * Non-GAAP measure; excludes IPR&D charges and other special items

29 Consistent Performance Consecutive years of adjusted earnings increases* Consecutive years of dividend increases ~70% ~25% of sales from #1 or #2 global market share position of sales from new products introduced in the past 5 years * Non-GAAP measure; excludes IPR&D charges and other special items

30 Delivering Strong Total Shareholder Return As of 12/31/ Year 3 Year 5 Year 10 Year 11.3% 2.1% 2.9% 5.4% S&P % -5.6%.4% -.9% S&P Pharmaceutical 18.6% 0.5% 2.6%.6% S&P H/C Equipment 28.8% -.7%.4% 6.3% Dow Jones Index 22.7% -3.1% 1.9% 1.3% Note: Data source - Bloomberg

31 Strategic Outlook: 2010 and Beyond

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36 Global Healthcare Spending Growth Healthcare spending in $Trillion (PPP*), $5.3 +5% per year $6.8 SOURCE: Espicom World Medical Factbook *PPP - Purchasing Power Parity

37 Headwinds from Patent Pressures Have Largely Subsided for Johnson & Johnson Pharmaceutical Industry Global Patent Expirations $ Billions Total prior year sales of all drugs expiring in a given year* total = $85 Billion total = $205 Billion *Year of patent expiry according to Evaluate Pharma reporting; does not account for challenges to IP or at risk launches by generics manufacturers NOTE: Includes drugs from top 20 pharmaceutical companies only SOURCE: McKinsey & Company

38 Strong Global Momentum on Increasing Access Nations moving to increase access Sizeable opportunities remain

39 Strong Global Momentum on Increasing Access Brazil In the last 5 years, private medical insurance has increased by 60% - covering ~30% of the population India Covered population expected to double to 220 million by 2015 China Covered population has doubled since 2001 to 45% Expected to grow to 85% by 2012 and universal coverage is planned by 2020 Mexico Russia Turkey SOURCE: Seizing China s Pharmaceutical Opportunity, McKinsey Quarterly, February 2008; Indian Pharma 2015: Unlocking the Potential of the Indian Pharmaceuticals Market, Healthcare Brazil, UBS March 9, 2009; McKinsey & Company 2007; JP Morgan, November 2009;

40 Strong Global Momentum on Increasing Access Nations moving to increase access Sizeable opportunities remain Increased access means more patients, investment, innovation and growth

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42 Perspectives on U.S. Health Care Reform Health care reform remains a moving target Additional costs, but increased access and opportunities Continue to assess potential implications

43 Health Care: Making A Difference in People s Lives

44 Mixed Business Indicators Heading into Headwinds 2010 Tailwinds

45 Restructuring for Sustainable Growth Streamlining our operations to increase efficiency and free up resources Allowing us to invest in our long-term growth platforms and new product launches Initiative underway

46 Well Positioned for Leadership & Growth in Health Care

47 Our Credo Customers Employees Community Shareholders

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49 Strategic Framework Our Credo Broadly Based in Human Health Care Managed for the Long Term Operating Model Growth Priorities Decentralized Management Approach Focused on People and Values Innovative Products Robust Pipelines Global Presence Talented People

50 Medical Devices & Diagnostics

51 Well Positioned for Growth Medical Devices and Diagnostics Innovative Products CARTO 3 Navigational Mapping System

52 Well Positioned for Growth Medical Devices and Diagnostics Innovative Products

53 Well Positioned for Growth Medical Devices and Diagnostics Innovative Products 1-DAY ACUVUE TruEye

54 Well Positioned for Growth Medical Devices and Diagnostics Recent Acquisitions MD&D

55 Well Positioned for Growth Medical Devices and Diagnostics Robust Pipelines Pinnacle CoMplete Acetabular Cup System

56 Well Positioned for Growth Medical Devices and Diagnostics Robust Pipelines NEVO Sirolimus-Eluting Coronary Stent

57 Well Positioned for Growth Medical Devices and Diagnostics Robust Pipelines SEDASYS First Computer- Assisted Personalized Sedation System

58 Well Positioned for Growth Medical Devices and Diagnostics Robust Pipelines FIBRIN PAD Soft tissue bleeding in surgery

59 Well Positioned for Growth Medical Devices and Diagnostics Global Presence R&D Centers in China/India Manufacturing in Brazil/China/India Surgical Training Centers in all BRIC countries

60 Consumer

61 Well Positioned for Growth Consumer Innovative Products

62 Well Positioned for Growth Consumer Innovative Products

63 Well Positioned for Growth Consumer Innovative Products Anti-aging, Skin care breakthrough Stimulate skin s renewal Technology = Imperceptible flow of energy

64 Well Positioned for Growth Consumer Track Record of Innovation AVEENO BRAND HISTORY CAGR: 23% /7 2008/9 AVEENO Collodial Oatmeal Bath Treatment developed in conjunction with The Mayo Clinic for soothing relief of itch Johnson & Johnson acquires AVEENO brand from SC Johnson BABY CARE: Introduction of line of soothing & therapeutic skin care products for babies BODY WASH: Launched under Skin Relief platform for extra dry, itchy skin FACIAL CARE: Introduction of Total Soy Complex under Clear Complexion and Positively Radiant platforms PLATFORM EXPANSION: Body Care Facial Care LIP CARE (2005): Launch of lip care SUN CARE: Launched multiple Active Photobarrier Complex products CATEGORY LAUNCH: Launch into Hair Care with Nourish + collection Platform Expansion (EAME/AP) EAME launches Positively Ageless & Positively Radiant lines NZ launches Positively Radiant AVEENO launch into Russia

65 Well Positioned for Growth Consumer Global Presence On-going success of Vania, Le Petit Marseillais and Dabao Shanghai R&D Center Shanghai R&D Center

66 Pharmaceuticals

67 Well Positioned for Growth Pharmaceuticals Innovative Products

68 Well Positioned for Growth Pharmaceuticals Innovative Products Nucynta co-developed with Gruenthal, GmbH. Priligy developed in collaboration with PPD-GenuPro.

69 Well Positioned for Growth Pharmaceuticals Innovative Products

70 Well Positioned for Growth Pharmaceuticals Innovative Products Continue to expand core products with new indications REMICADE 15 Indications Broad spectrum of immune system disorders

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72 Rivaroxaban A Robust Clinical Development Plan Novel Oral Anticoagulant Prevention of VTE in major orthopaedic surgery Prevention of stroke in patients with atrial fibrillation VTE treatment and long-term secondary prevention VTE prevention in hospitalized acute medically ill patients Secondary prevention of cardiovascular events in patients with acute coronary syndrome (ACS) Rivaroxaban co-developed with Bayer Healthcare

73 Well Positioned for Growth Pharmaceuticals Potential NME Filings Through 2013 Robust Pipeline DACOGEN (E.U.) Oncology H3 Antagonist Neuroscience MTP Inhibitor Metabolism CNTO 136 Immunology Planned Filings 2010 Telaprevir (E.U.) Infectious Disease Planned Filings Anti-Nerve Growth Factor Neuroscience TMC 207 Infectious Disease CNTO 328 Oncology Bapineuzumab Alzheimer s Disease TMC 278 Infectious Disease Canagliflozin (SGLT-2) Metabolism TMC 435 Infectious Disease Abiraterone Oncology DACOGEN developed in collaboration with Eisai Corporation of North America; Telaprevir developed in collaboration with Vertex Pharmaceuticals Incorporated; Anti-NGF licensed from Amgen, Inc.; Canagliflozin developed in collaboration with Mitsubishi-Tanabe Pharmaceutical Corporation; TMC435 developed in collaboration with Medivir AB.; Bapineuzumab acquired from Elan Pharmaceuticals plc and being developed in collaboration with Pfizer.

74 Well Positioned for Growth Pharmaceuticals Robust Pipeline Alzheimer s Disease Elan/Pfizer Vaccines Crucell N.V. Combination HIV therapies Gilead Sciences Prostate cancer Cougar Biotechnology

75 Well Positioned for Growth: Pharmaceuticals Focus on Emerging Markets Global Presence Strengthening capabilities in key markets globally Partnering on branded generics in India Expanding sales reach in China Developing our R&D presence in emerging markets

76 Strategic Framework Our Credo Broadly Based in Human Health Care Managed for the Long Term Operating Model Growth Priorities Decentralized Management Approach Focused on People and Values Innovative Products Robust Pipelines Global Presence Talented People

77 Well Positioned for Growth Talented People Drive Growth #1 World s Most Respected Companies #1 Wall Street Journal / Harris Interactive Reputation Survey #5 Global Most Admired #1 Among Top 50 Companies for Diversity

78 A Continuing Evolution of Growth Building on our Foundation of Growth January 2008 Restructured Pharmaceuticals and Cordis Integrated PCH Built presence in emerging markets Invested in pipelines Identified white spaces Wellness & Prevention Licensed & acquired new capabilities Executing Strategies for Leadership & Growth in Health Care January 2009 Advanced pipelines Launched six new drugs Restructured business to fund innovation and provide financial flexibility Invested in strategic acquisitions and collaborations Well Positioned for Leadership &Growth in Health Care January 2010 Expanding market leadership Core products New launches Continuing to advance pipeline Internal development New platforms for growth Expanding global presence Emerging markets Public policy Investing in our people

79 Well Positioned for Growth January 2010 Advancing strong pipelines Moving innovative products into market Expanding global presence Continuing to invest in our people

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81 Dominic Caruso Vice President, Finance Chief Financial Officer

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83 2010 Guidance Sales Estimated Operational 2% - 3% $63 - $64 B Estimated at Mid-January Exchange Rates 4% - 5% $64 - $65 B Adjusted EPS* 4% - 6% $ $4.90 5% - 7% $ $4.95 * Non-GAAP measure; excludes special items NOTE: The above guidance excludes any impact from Health Care Reform 2010 Mid-January Euro Average Rate = 1.42

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