Johnson & Johnson (JNJ) at Wells Fargo Conference Notes

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JNJ grows its pharma business in the US through market share gains and penetration by way of clinical evidence, as opposed to pricing

“Overall, for Johnson & Johnson, in total, price is a very small component of growth, in sort of the half a percent range on a worldwide basis. If you talk about pharmaceutical pricing, and I think you may be specifically referring to US pharmaceutical pricing, what I can tell you is that the vast majority of our growth in the US pharma business is due to volume and not price. I can also tell you that our average price increases over the last five years have been below our competitor set. So we’re not really dependent on price because, as I just described, our philosophy is to expand indications and grow market share and penetration through clinical evidence and not grow through price increase.” Dominic Caruso – Executive Vice President and Chief Financial Officer

 

Pharmaceutical pipeline is robust

“as you may remember, that a year-and-a-half ago, we announced that we’re on track to file 10 new products by 2019, each of which had individually more than $1 billion market potential. So, therefore, we feel really good about that pipeline and that pipeline is coming to fruition… So I think that business of creating a robust pipeline within a product by multiple expansion, indications and also licensing in the product, as you mentioned with our strategy of developing that product, that’s a sustainable model for us. I think it will help us withstand patent expirations and the like and continue a very healthy growth trajectory.” Dominic Caruso – Executive Vice President and Chief Financial Officer

 

Med tech segment is undergoing restructuring, Pharma segment has already been restructured, and some supply chain opportunities remain in Consumer segment

“We’re now undergoing a restructuring in our Medical Device business and we commented that we would see that $800 million to $1 billion of savings from that restructuring by 2018, the vast majority by 2018, that part of the business is the business that’s mostly disparate within Johnson & Johnson. So the supply chain and consolidations of that business are where there is opportunities, for example, than in Pharma. Pharma had already been through that. Consumer, there’s still some opportunities with globalization of brands and that provides for more efficiency in the supply chain and they’re also doing that.” Dominic Caruso – Executive Vice President and Chief Financial Officer