Johnson & Johnson at Bernstein Forum: Strategic Growth and Innovation

On Wednesday, 24 September 2025, Johnson & Johnson (NYSE:JNJ) participated in the Bernstein Insights: Healthcare Leaders and Disruptors - 2nd Annual Healthcare Forum. The conference call, led by US MedTech Analyst Lee Hambrecht and Johnson & Johnson’s Company Group Chairman Tom Cavanaugh, explored the company’s strategic outlook, highlighting both growth opportunities and challenges. Johnson & Johnson reaffirmed its confidence in achieving a 5-7% compound annual growth rate through the decade, driven by a robust portfolio and recent product launches.

Key Takeaways

• Johnson & Johnson expects to achieve a 5-7% compound annual growth rate through the decade.
• Significant confidence in Tremfya and Rybrevant reaching peak sales of over $10 billion and $5 billion, respectively.
• Achieved $57 billion pharma sales target by 2024, ahead of schedule, with expectations of nearly $60 billion in 2025.
• Committed $55 billion to U.S. manufacturing, including a new biologics facility in North Carolina.
• Focus on R&D investments, particularly in oncology, immunology, and neuroscience.

Financial Results

• Compound Annual Growth: Johnson & Johnson reaffirmed its long-term projection of 5% to 7% compound annual growth, with tracking towards the upper range.
• Stelara Loss of Exclusivity: The company is managing the expected erosion of Stelara, similar to Humira’s erosion.
• 2025 Sales Target: Achieved the $57 billion pharma sales target a year early, with 2025 projections nearing $60 billion.
• Tremfya and Rybrevant: Tremfya sales reached $4 billion in 2024, with expectations to exceed $10 billion. Rybrevant is projected to surpass $5 billion in peak sales.

Operational Updates

• Manufacturing Investment: Committed $55 billion to U.S. manufacturing, including a new biologics facility in Wilson, North Carolina.
• Product Launches: Tremfya launched for ulcerative colitis and Crohn’s disease in the U.S., and Coaster Kenro filed with the FDA for psoriasis treatment.
• Carvykti and TAR 200: Over 8,000 patients infused with Carvykti, with manufacturing no longer a barrier. TAR 200 received FDA priority review.

Future Outlook

• Growth Strategy: Focus on oncology, immunology, and neuroscience, with strategic M&A and R&D investments.
• Darzalex and Carvykti: Continued growth potential in earlier treatment lines, with Carvykti expected to achieve over $5 billion in peak sales.
• R&D Investments: Leveraging AI and machine learning for efficiency in core therapeutic areas.

Q&A Highlights

• IRA Negotiations: No indications of tougher future negotiations.
• Product Differentiation: Tremfya recognized as the only dual-acting IL-23 on the market, and Rybrevant poised to become a standard in EGFR-mutated non-small cell lung cancer.

For a detailed understanding, readers are encouraged to refer to the full transcript.

Full transcript - Bernstein Insights: Healthcare Leaders and Disruptors - 2nd Annual Healthcare Forum:

Lee Hambrecht, US MedTech Analyst, Bernstein: I think we’ll jump in here. Thanks everybody for joining. Lee Hambrecht, US MedTech Analyst at Bernstein. We’re thrilled to host Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Tom Cavanaugh. Tom, thanks so much for being here.

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: Thank you for having me.

Lee Hambrecht, US MedTech Analyst, Bernstein: We’re scheduled for a 40-minute fireside chat. You should all have the pigeonhole link if you want to submit questions. I’ve got the iPad up here. Tom, you’ve been in the Chairman role here for almost two years now. Maybe you could just kick us off with some opening remarks on how you see the state of the business at Johnson & Johnson.

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: Yeah, I’d be happy to. Hello everyone. Pleasure to be here with all of you. It’s an exciting time at our company, at Johnson & Johnson, and I’m happy to share some major catalysts for our business and outlook for the coming quarters and years. Look, I think at Johnson & Johnson, what sets us apart is really our depth and breadth and strength of our portfolio against any of our industry peers. We are what we like to say in a new era of growth in the innovative medicine business. I think as many people had realized, you know, we were facing the loss of exclusivity of Stelara, the biggest asset that we had in Johnson & Johnson. I would tell you that that’s behind us.

I think we’ve proven ourselves to be able to, what we set out to do is grow through loss of exclusivity of Stelara in the coming years. In the first two quarters, we’ve proven just that. We’re quite excited about our portfolio, the breadth and depth of it, but also some of the most recent launches that we have. Just recently, we got the approval for TAR 200 for bladder cancer. We’re anticipating the launch of Caplyta for adjunctive major depressive disorder. In fact, you know, we just closed that acquisition for Intercellular earlier this year and excited to welcome employees on board to Johnson & Johnson, and they’re ready to launch this product for major depressive disorder.

We’re also quite excited about the momentum that we had in some of our most critical launches, whether it be Tremfya in IBD, that’s off to an incredible start, Rybrevant for non-small cell lung cancer, those with an EGFR mutation, again off to a very strong start, as well as some of our underlying base business and portfolio, really the inline markets growing above expectations, really centered around Darzalex, really the gold standard for multiple myeloma, the foundational therapy across all lines of therapy in multiple myeloma. I have to tell you, it’s going to be an exciting time to be at Johnson & Johnson Innovative Medicine. I will say, based on all of this, we are really confident to live into our long-term projections of 5% to 7% compound annual growth through the remainder of the decade.

Quite frankly, we feel we’re on the upper range of that, just where we have the momentum going.

Lee Hambrecht, US MedTech Analyst, Bernstein: Excellent. Excellent. It’s a great kickoff. Lots to dig into there. Maybe we start with some macro, you know, just a lot of moving parts over the last year or so. MFN, Medicaid cuts, expiration of the exchange subsidies, PBM reform, changes to HHS, cuts at FDA and CDC, tariffs, all these things. How would you just frame your latest thinking on all that policy uncertainty?

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: Oh, that’s a lot.

Lee Hambrecht, US MedTech Analyst, Bernstein: It’s a lot.

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: Look, there’s been a lot going on, a lot of discussions taking place, especially from a policy perspective. I can tell you at Johnson & Johnson, we have experience in navigating these times. You know, a 140-year-old company, we’ve dealt with 24 administrations with different complexity, different policy reforms, proposed policy reforms. I tell you, we’ve been able to weather the storm. I think first and foremost, on the foundation of the strength of our portfolio, the breadth and depth of our portfolio allows us the stability to navigate these uncertain times, as people would call it. I’ll tell you, giving you more confidence due to these uncertain times, we raised our guidance. It just reassures your confidence in our ability to grow through this. It’s not without some potential challenges that we might face.

I will say, as we think about the administration, the current administration, it really comes to be about finding commonalities, common grounds, ways in which we could work together. We’re quite pleased with an open-door policy that we see on both ends, both from a pharma perspective, whether through our trade groups, whether it be pharma or bio, but also the administration. They’re willing and able to work with us and are listening to us. Sometimes that wasn’t the case in some of our previous administrations. With that said, I do think as you come together and are able to have those open dialogues, we got to find common grounds. You mentioned a few things, MFN, IRA, effectuation, some other things with regards to macro policy changes. I’ll tell you, I do think there’s some more alignment than not. I’ll say one thing as we think about it.

Some of the things we just recently announced earlier this year, Johnson & Johnson committed to $55 billion in manufacturing here in the U.S., kicking off our state-of-the-art biologics facility down in Wilson, North Carolina. This is something the administration was very focused on, bringing the U.S. economy and jobs back to the U.S., as well as manufacturing to the domestic manufacturing. We are committed to that. We’re already working along the way, even during this first term, when he made some tax changes to allow and incentivize us to come back to the U.S. I’ll tell you, a lot of our industry peers are doing that. Here we are, you know, it brings resilience to our supply chain as well, but bringing the economy back to the U.S. and really domestic manufacturing is one area I think we saw eye to eye with and are moving forward.

Other areas, I think we talk about lowering healthcare costs. What it comes down to is the consumer or the patient. We are fully committed to that as well. One of the things you think about MFM is pricing is looking at equality across some of the countries or the intent is, you know, everybody paying the fair share, so to speak. I think at the end of the day, if you think about, you know, list versus net price, some of the things from the intermediaries is where we need to focus on. The administration is willing to work with us on that, whether it be PBM reform or 340B reform.

Just recently, they allowed HRSA to move forward with our industry to do a rebate model for 340B, really to understand the transparency in the system and ensure the right patients are getting the right discounts or the providers are seeing those discounts to the appropriate patients. I think that’s important. If we can really reduce those costs in the intermediaries, I mean, we have our transparency reports, the 10th year we publish it online. I welcome anybody to go to it. $0.58 to every dollar goes to the intermediaries. If you can reduce that, you can reduce overall healthcare costs and consumption and ultimately hit the consumer and lower the out-of-pocket costs for them as well.

Lee Hambrecht, US MedTech Analyst, Bernstein: Excellent. Okay, great. One policy question from the crowd, just somebody wondering, what’s the tenor of the conversations with the government with respect to IRA? I think there’s a little bit of a thought that maybe the negotiations get a little harder this next time around. Any comment on that?

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: Yeah, I can tell you, you know, we went through the first round. We had two products ourselves, and we’re looking, we’re preparing and working with the government, CMF, on effectuation. The model to be able to effectuate the prices in the system. Very open dialogue, willingness to work with us. We haven’t seen anything from a signal standpoint that they’re going to be harder on negotiations. I think, you know, some would say the first round was not necessarily negotiations. That was in the first other administration. It’s always going to be dynamic. We expect that. For us, it’s continuing to recognize the value and defend the value because we are really changing the lives of many patients worldwide.

Lee Hambrecht, US MedTech Analyst, Bernstein: Excellent. Okay, great. Let’s talk about targets. You mentioned it’s your last EBR of December 2023. You set a target to hit $57 billion in pharma sales by 2025, and you got there a year early in 2024. I think you’re proving that you can grow the business through Stelara loss of exclusivity, as you said. Consensus now expects almost $60 billion in sales for 2025. Maybe, you know, talk a little bit about the drivers that enable you to fill that gap.

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: Yeah, thanks for recognizing. We did hit it a year ahead of expectations. Hopefully now maybe you can get a little change, maybe an upgrade coming out of this conversation like you and I did yesterday. I will say people are starting to realize our growth and our opportunity ahead of us. We are quite excited about where that growth is coming from. A few areas I’ll focus on, Tremfya. You know, Tremfya, we have said we believe Tremfya will be a $10 billion plus asset. I don’t necessarily say the street is recognizing all of that and realizing all of that. If you look at the underlying source of business, predominantly has been in psoriatic disease. We’re about $4 billion worldwide in 2024. Now we just launched in the last year globally, our indications in IBD. Both in ulcerative colitis about a year ago, Crohn’s disease in the U.S.

earlier this year, and now fully a subcutaneous induction therapy for both Crohn’s and ulcerative colitis. I’ll tell you why that’s important. I bring this up because if you think about a proxy, I talked about Stelara is the largest asset or was the largest asset in Johnson & Johnson. $11 billion peak year sales, 75% of that was IBD. If you just think about that, the promise that we have for Tremfya and IBD, we are off to an incredibly good start. We foresee absolutely every chance to be able to achieve the $10 billion plus. Really with the best-in-class asset that we see, our customers are saying that simplicity and ease of administration, the subcutaneous formulation based on our customers’ reaction is a game changer. No other IL-23 has that. Our growth is, and we’re starting to see that growth already.

You know, IL-23 and ulcerative colitis is the fastest growing class or the fastest growing asset. We feel very confident in our ability to deliver Tremfya. That also helps close that gap as we think about the $60 billion that you highlighted. Another area I would talk about is lung cancer. Rybrevant we’ve launched across multiple patient types and lung cancer with the EGFR mutation. I’ll tell you, with the positive data, the overall survival advantage that we’ve communicated earlier this year, nothing has shown a survival advantage of that magnitude versus standard of care OC chemo or OC, I would say. We do believe Rybrevant has the ability to become a $5 billion plus peak year sales asset. We’re well underway to achieving that.

Not to mention the underlying growth of our inline business, really back on the Darzalex, I think we can continue to see momentum there and the breadth of our portfolio. We do believe in oncology by 2030, we’re going to see a $50 billion peak year sales, really based on, you know, the backbone of our multiple myeloma franchise. I feel more than confident we’re going to be able to live into the five to seven and achieve more than what we expect.

Lee Hambrecht, US MedTech Analyst, Bernstein: That’s great. Excellent. Okay, great. Let’s go one by one and try to jump into some of these. Maybe starting with immunology. On Stelara, it’s been a few months now. The biosimilar launches are out there. Last quarter, Johnson & Johnson sales grew 3% organic despite the 710 bps headwind from Stelara loss of exclusivity. Can you just talk a little bit more about how the erosion curve is playing out versus your expectations?

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: Yeah, as expected. I think we gave, we felt a proxy for Stelara erosion would be Humira year two erosion, and we’re tracking along those lines. As I said before, we do believe Stelara is in the back seat or in the rearview mirror, and we are ready to grow well above where we were with Stelara in our hands.

Lee Hambrecht, US MedTech Analyst, Bernstein: Yeah. Could that move even faster as Tremfya really starts to take off?

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: You raise a very good point. You have molecular erosion of the molecule, so the branded within the molecule, but then you also have erosion of the actual class, let’s call it IL-12/23. With Tremfya and the momentum that we have, we can also cut that erosion by really growing through it with our launch in UC and also in, as well as CD and across the other indications with the psoriatic disease.

Lee Hambrecht, US MedTech Analyst, Bernstein: Yeah, excellent. You talked, you highlighted Tremfya already as a key driver, 30% growth last quarter, great feedback for the IBD indication, strong start in Crohn’s and UC. What are you hearing in the field? I mean, what do you hear from physicians?

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: Yeah, I can tell you, I think first and foremost, they are recognizing Tremfya is differentiated. The only dual-acting IL-23 on the marketplace. As I highlighted, they do believe in ulcerative colitis, really best-in-class endoscopic remission and histological endpoints similar to that in Crohn’s disease. First head-to-head study in a registration trial versus Stelara and definitely moving in on multiple endpoints there that are very important to the patient, but also the provider. As you think about it, you know, we feel it’s a best-in-class asset. We have fulfillment, so the patients to be able to receive the product is simple and easy. As we launched it, it’s the first time they’ve seen it where in 24 hours, the patient was able to receive the product. Why is that important? Why were they able to do that? One, subcutaneous induction, so self-administration.

They could go directly to their house and they could administer it versus the other IL-23s. Quite frankly, what we had with Stelara, where you actually have to have it infused for induction, and then you go to maintenance where it’s subcutaneous and it’s self-administered. That is really what physicians are calling a game changer. Like when we just got approval in UC for subcutaneous induction, we sent out communications to many of our thought leaders and customers, and they were just immediately going back. This is just practice change, a game changer. These are actual votes. Incredible enthusiasm. It’s where we are so confident and excited about this. That’s so confident we also went forward with a head-to-head study against Skyrizi in Crohn’s disease. We just recently announced that as well. We feel very confident in this molecule to really get us well beyond $10 billion plus.

Lee Hambrecht, US MedTech Analyst, Bernstein: That was a PR just five days ago or so, right?

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: Yeah, you saw it.

Lee Hambrecht, US MedTech Analyst, Bernstein: Announcing the head-to-head trial. I know it’s to demonstrate superiority of Tremfya over Skyrizi. I think, as you mentioned, you like your chances given the fully sub-Q regimen. Can you just elaborate maybe a little bit on what you’re trying to achieve with that study?

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: It is just what you said. Like we do believe in Crohn’s disease. We are differentiated. We want to show that clinically. I think everybody cross-compares trials, but until you go head-to-head, it’s really where you can prove it in the pudding.

Lee Hambrecht, US MedTech Analyst, Bernstein: Yeah, great. You’ve highlighted this as, you know, this is a $10 billion plus asset. Any chance you might be willing to offer sort of a timeline to that number?

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: It’s hard to speculate. I think we’re still in the early phases of the IBD launch. I think we need a little bit more time to really reassure the timing of that. I will say just knowing the unmet medical need in this disease, still in this disease, the need for complete and histological remissions is very important. That bar is raised, and we’re raising that bar each and every day. We have pipeline assets to come on after that as well. I would say it’s definitely within reach before 2030.

Lee Hambrecht, US MedTech Analyst, Bernstein: Yeah, great.

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: Give us some time there.

Lee Hambrecht, US MedTech Analyst, Bernstein: Okay, got it. You know, speaking of pipeline, you filed a code to Kenro with the FDA in the third quarter as the first targeted oral peptide to selectively block the IL-23 receptor with similar efficacy to a biologic. This is a once-a-day pill, potential to set a new standard of treatment in plaque psoriasis. Maybe can you just talk about the market expansion opportunity with that?

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: Absolutely. We are incredibly excited about the Coaster Kenro. If you think about the profile of this product, based on the data, whether it be head-to-head against the crowd-accepted neb or against placebo in some even hard-to-treat populations, we’ve shown remarkable efficacy. You mentioned biologic-like, but really complete clearance is what you’re looking for. We’re seeing equally the amount of complete clearance with this drug. It’s from a profile of safety, which is very important in this patient population, similar to placebo from an AE rate. I think if you think about safety and efficacy, it’s there. The convenience of a once-a-day oral pill. We still see in this marketplace, basically there’s around 5 million patients that are eligible to receive advanced biologics that are not receiving advanced biologics. Some of it is safety. Safety is still a big concern.

You know, they don’t want something in their body or they just may not feel comfortable with it. The other is pedophobia or just for other reasons. If you think about really the treatment journey for a patient, sometimes when they present with plaque psoriasis or moderate to severe, you know, they might want to start with a topical. It depends on how many plaque psoriasis that they have on their skin or how much lesions that they have. Maybe go to an oral. Sometimes they go to a methotrexate, you know, conventional, and then maybe some of these other orals that are in the marketplace. They think about the biologics. Coaster Kenro is uniquely positioned in that to be the first-line systemic treatment based on the profile that I acknowledged and highlighted.

I do think we have an opportunity to really not just expand the market, but to penetrate the current marketplace of what’s being used because there’s a lack of satisfaction and there’s absolutely a need from a patient’s convenience.

Lee Hambrecht, US MedTech Analyst, Bernstein: How do you think about market segmentation and development over time, you know, between the orals and the injectables? Like, you know, how big can orals get as a percentage of this market over time?

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: Yeah, it really depends. I think that’s where we’re going to be able to really test it with a Coaster Kenro because of the profile of the product. Unfortunately, the current orals don’t satisfy the needs of the marketplace. You see that based on share uptake and in those that are able to tolerate and go on long-term treatment. That population I talked about, the $5 billion, you have also the populations you think about into the topicals. These are moderate to severe plaque psoriasis. It’s still the same indication, but they’re on topicals. Why are they on topicals? We need to understand that. I do think there’s opportunities to penetrate earlier. Those that are not satisfied in the biologics, they just want the convenience. They see the safety and efficacy of this product and are ready to switch and switch.

Lee Hambrecht, US MedTech Analyst, Bernstein: Yeah, excellent. Okay. Can you just remind us the catalyst path or the timeline on Carvykti and Rybrevant?

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: We’re currently under FDA review right now for plaque psoriasis.

Lee Hambrecht, US MedTech Analyst, Bernstein: Yeah, totally. Got it. Excellent. Oncology, let’s talk about Darzalex. There’s been some debate on IRS price negotiation inclusion. Maybe you talk a little bit about J&J’s position regarding when it could be potentially up for negotiation.

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: For Darzalex/Faspro, we still remain committed based on the interpretation of the draft guidance for CMS for 2034. We truly believe Darzalex/Faspro is clinically different than Darzalex IV, and we’re very confident in that number.

Lee Hambrecht, US MedTech Analyst, Bernstein: Got it. Darzalex has done really well, obviously 21% growth in the second quarter. It’s clearly foundational treatment for multiple myeloma. You know, what are the growth expectations in 2025 and beyond?

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: Yeah, I can tell you I’ve been in this space. I had the opportunity to launch some of the previous, I would say, standard of care in multiple myeloma in my previous company. Coming over to Johnson & Johnson a little less than eight years ago, I’ve not seen a drug like this in any other marketplace. I mean, Darzalex/Faspro is truly unique. It is foundational therapy. When we say that, combinable with most all products, every patient population, we’re seeing survival rates where in multiple myeloma, it used to be two to three years survival overall. With Darzalex, whether in combination with a quad-based regimen or a triplet-based regimen like Revlimid and dexamethasone, we’re seeing survival rates close to eight years and PFS rates in the decades. This is truly remarkable. You’re really talking about chronic care here. Darzalex is the backbone treatment across all lines of therapy.

Even with new products coming in, our own products, Tecvayli, ALV, we’re combining with Darzalex. You’ll see significant opportunities still to grow in the earlier lines of treatment. About half the patients are going on Darzalex-based therapies in any line. There’s opportunities to grow as you go bringing it earlier. We just recently in Europe got approval for CEPHEUS, which is in the transplant ineligible population. We’re actually awaiting that also in the U.S. There’s opportunities to move it earlier. The other area for growth with Darzalex is duration. As you think about this, whether it be in combinations or just continuing with through a maintenance phase, highly convenient. It gets to a monthly-based dosing, a quick injection, five minutes, less than five minutes injection to the healthcare provider, subcutaneous. We see tremendous opportunity and truly it has revolutionized the treatment of multiple myeloma.

Lee Hambrecht, US MedTech Analyst, Bernstein: Amazing. Okay. Hitting Carvykti, you know, new five-year data shows a single treatment of CAR-T therapy has the potential to deliver long-term remission. You have firm conviction, I think, in Carvykti as a $5 billion plus asset, and the commercial ramp is moving along really nicely. What do you see as key to kind of keeping that current momentum for Carvykti?

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: Yeah, so every year they have a Congress. It used to be called the Myeloma Workshop. Now it’s called IMS, International Myeloma Society. I bring that up because it was just last week. This is relatively new. In that, this is basically a Congress of world experts in multiple myeloma. They’ve been doing this for 20 years plus. They come together and they look at consensus. The topic of this one was definition of cure. You know, they went down the list of how to define cure. Really what it comes down to is time. Five years, relapse-free. In remission for over five years. I bring that up because we just recently released data with Carvykti in the CARTITUDE-1 trial. This was five lines of prior therapy, so very heavily refractory patient population. A third of those patients are five years out, remission-free.

Based on that definition that is coming out from the IMS, they would call that cure. That to me is really the goal of any oncology agent. If you take that, that was in previously treated five lines of previous treatment. We have approval in previous line one and beyond. CARTITUDE-4 data, lines one through four lines of therapy, showing the only cell therapy to demonstrate overall survival advantage versus the standard treatment with a one-time infusion. We do believe as you think about CARTITUDE-4 or Carvykti to be able to move it up in earlier lines, the magnitude of benefit not only for the patient, but if you think about the immune system being intact, the ability to really transform lines, it’s really going to be amazing. We’ll, you know, let’s look at the long-term efficacy of that as that continues to play out just with time.

Rest assured, we could see ourselves having an even greater impact in earlier lines. We have ongoing trials in frontline as well. We do believe Carvykti is well within reach of achieving greater than $5 billion peak year sales. It is truly the most efficacious treatment in multiple myeloma.

Lee Hambrecht, US MedTech Analyst, Bernstein: Amazing.

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: I do give a lot of compliments to our manufacturing and supply chain. We were able to increase our supply, our scale, our consistency. We are well within that. That would not be an impediment on any of our opportunities.

Lee Hambrecht, US MedTech Analyst, Bernstein: Is that manufacturing, not a gating item?

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: Not a gating item. We have over 8,000 patients infused, you know, with Carvykti in over 11 countries now. That’s the other expansion opportunity as we look outside of the U.S. and other markets.

Lee Hambrecht, US MedTech Analyst, Bernstein: What is the gating item at this point if it’s not manufacturing?

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: It is the ability for site to be able to step up. That is part of the strategy. As you think about the community right now, it’s been heavily concentrated in more academic centers, those that had infrastructure in place. It’s expanding beyond.

Lee Hambrecht, US MedTech Analyst, Bernstein: Yeah. Can you just talk about the competitive environment there a little bit and maybe some stuff coming at some point? You know, you feel like you had a good lead there.

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: Yeah, we definitely feel we have a good lead there. I think, as you said, you really got to prove an improvement over the standard of care. There are two that have registration trials, phase three registration trials, and it’s against the comparator. There’s another one that’s being developed by another company that has a lot of time to go, I would say, before they can get into anywhere near the frontline setting where we are at.

Lee Hambrecht, US MedTech Analyst, Bernstein: Okay, great. All right, let’s talk about bladder cancer. You got FDA priority review for TAR 200, first of its kind drug releasing system. And Nalexo just got FDA approval on September 9. How’s the kind of prep for launch early phase looking at this point?

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: Again, this is truly game-changing. First of its class. This is the first time. So TAR 200 is, as you said, an intravesical drug release system. People refer to it as a pretzel. It looks like a pretzel. It’s a simple procedure done in a urology practice. This is another thing that’s important about TAR 200, why we proceed. TAR 200 to be a $5 billion plus peak year sales asset. It’s a product that then locally administers gemcitabine in the bladder. It’s inserted within a five-minute, you know, simple procedure through a catheter, an Ethicon catheter, nonetheless. It can be done by a nurse, an APP or an advanced practitioner provider or a physician, and then simply removal in the same period of time. I bring this up because of the simplicity of the procedure and to be able to deliver that localized delivery also.

The data that we’ve seen in non-muscle invasive high-risk BCG-exposed carcinoma in situ bladder cancer, so more of a narrow indication first, it’s truly remarkable. 82% complete remission where over 50% of them were out for more than 12 months. Truly durable complete remission. That’s really the game here for bladder cancer. The other alternative to these patients is the removal of their bladder. This is bladder preservation. This was the first indication. We have ongoing trials. We have a robust development plan looking in papillary disease, a much larger patient population. We’re going head-to-head against the standard of care. There hasn’t been much innovation in bladder cancer, and that’s BCG. Those that have been on BCG, what we hear from the patients, it’s really a tough treatment to have. Sometimes they refer to it as a tiger clawing at the bladder.

It’s a fluid that’s injected into the bladder, and it needs to be held there for about four hours. You can imagine your bladder really wants to get rid of that fluid. Highly complex, and it’s something that we believe we want to displace and really maximize the potential for patients. There’s roughly a million patients. It’s the eighth largest tumor. A million patients suffering from bladder cancer, unfortunately. 600,000 of them are newly diagnosed, 400,000 are recurrent. We see this to be a tremendous opportunity and potential. We talk about the technology and this drug releasing system. We also have TAR 210, and the TAR 210 is erdafitinib in this device, our drug releasing system. It’s important because it’s targeting FGFR mutation. There’s a high prevalence of FGFR mutation in intermediate risk bladder cancer. We’re in high risk for TAR 200.

We have the ability to have a portfolio product. We really are excited about what we can do in bladder cancer, significant unmet medical need, and we’re bringing transformational medical innovation.

Lee Hambrecht, US MedTech Analyst, Bernstein: That’s great. On the last earnings call, when you were talking about the street’s disconnect with your $50 billion oncology target, I think this is the one that came up first. You talked about it, I think it’s a $5 billion plus, but maybe it’s bigger than that.

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: You can model it. We’re excited about it. I would say we’re really excited about it. You mentioned our ability, like we had the product available within four days. They’re working through the systems. It’s a buy-and-build product. People, you know, temporary J codes, so we’re able to work through the process with our providers. There’s tremendous excitement. There’s a race to see who’s going to be the first one to insert. We have people on the ground training on how to do the insertion, whether in practice, in office, alongside of them. This is some of the stuff where we see a little bit of the synergy and learning from our medtech colleagues. This is something new for us from a pharma or innovative medicine that we’re able to get the training, the catheter, and things from our medtech.

There was a bit of synergy there, and we’re definitely capitalizing on the expertise from our medtech colleagues.

Lee Hambrecht, US MedTech Analyst, Bernstein: That’s great. Excellent. Okay. Moving on to Rybrevant. Consensus estimates for 2027, 2028, a little bit over $2 billion. You’ve just suggested, I think, that it could be $4 billion by 2028. You know, we’re just getting started, just $180 million or so in Q2. There’s a steep ramp there to get to that $4 billion. Can you talk a little bit about the path to get there over the next few years?

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: Yeah, I would say unfortunately, as many of you could know, lung cancer, the five-year survival rate is still less than 30%. The ultimate goal is survival. With Rybrevant, we do believe we’re bringing a game-changing therapy, what will become the new standard of care in frontline EGFR-mutated non-small cell lung cancer. I’ll tell you why. One, it’s a chemo-free regimen. Two, it targets multiple targets, not just EGFR. It’s EGFR, CMET, and it harnesses the immune system. I bring that up, and that’s important because it’s changing the underlying biology of the disease. We just recently released data where the data, because of this, suppression of resistant mechanisms. As you think about resistant mechanisms, this is what leads to relapse and further relapse and resistance and ultimately death, unfortunately. The ability to be able to suppress that is very important as we think about it.

If you think about the Kaplan-Meier curve, we have demonstrated at least a 12-month advantage over OC for overall survival. We haven’t hit median. You’re starting to see a little bit of a plateau of the curve. If you just use correlations to other lung cancer agents such as the checkpoint inhibitors, you saw that there. We saw it in the earlier indications with Exon 20. Tough, difficult to treat disease, the population of EGFR, but you’re actually seeing that as well. We have significant promise. We do believe it’s going to become the standard of care. That’s just in lung cancer. We do believe Rybrevant itself, we’ve seen already have preliminary data both in head and neck cancer, significant unmet medical need, as well as colorectal cancer. We see tremendous opportunities for Rybrevant overall, but Rybrevant becoming the standard of care in lung cancer.

Lee Hambrecht, US MedTech Analyst, Bernstein: That’s great. AstraZeneca is marketing Tagrisso plus chemotherapy as a way to raise the bar versus competition. I hear some investors who worry that they may be winning the narrative battle in some places. I don’t know. How do you respond to that competitive threat?

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: Yeah, they just recently released data. I think we need to wait to see our longer-term data of overall survival because overall survival is really what it is. I will say, one of the other things that I think will be a catalyst for us, we have approval ex-U.S., but Rybrevant subcutaneous formulation. We do recognize right now they are accustomed, they’re used to treating with OC and sometimes adding in chemo. We had a lot of education that we had to do with Rybrevant/Rybrevant, and we’re doing just that. We’ve had protocols in place to manage AEs. They call it cocoon. We want to make sure that they’re able to manage the RAS and skin toxicity and potential for that, as well as IRRs, infusion-related reactions. Now with SubQ2, those are significantly reduced. What you also see is the convenience of a five-minute injection, just like Darzalex.

You have that ability, much easier and simple for the provider. What we also saw that was uniquely different with Rybrevant/Faspro, or I would say the subcutaneous formulation versus the IV, improvement in duration of response and efficacy. We do believe it to be a game changer. We’re doing a clinical trial now with that treatment regimen in the frontline setting.

Lee Hambrecht, US MedTech Analyst, Bernstein: Got it.

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: We’re looking forward to that to help differentiate the product.

Lee Hambrecht, US MedTech Analyst, Bernstein: Excellent. Okay, I missed an audience question about immunology. How long is the induction period for your competitors in IBD?

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: It’s two to three inductions, depending on the competitor.

Lee Hambrecht, US MedTech Analyst, Bernstein: Excellent. We got one more on what are your strategies for insourcing versus outsourcing clinical trials to adapt to the changing landscape?

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: We absolutely continue to look at ways in which to find efficiency in the model. I think that is one of the areas from an R&D perspective, we have a lot of focus. There are definitely times when you want to make sure it’s in-source, but you definitely want to have a hybrid model for flexibility and scale.

Lee Hambrecht, US MedTech Analyst, Bernstein: Got it. Okay, let’s hit a couple of neuroscience things. Spravato grew 53% last quarter, strong momentum. Maybe talk a little bit about its role in treatment-resistant depression and what’s that opportunity look like?

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: Yeah, the profile of Spravato is truly unique. It is absolutely a first in its class agent. If you talk to any patients, it absolutely is a lifesaver, game changer. Many of them, their lives have been turned around because they’ve been on Spravato. The efficacy can work within 24 hours of administration and resolution of AEs in that same period with strong durability. Once they’re on it, they can see years of durability as long as they’re taking the product. I would say if you think about it, that was one area where I think there was a disconnect also with the street, and rightfully so, I would say somewhat, because when we launched Spravato, this was not a simple administration. We launched it during the time of COVID.

In-office procedures were not necessarily available to a provider base, which are psychiatrists that are not typically accustomed to treating patients physically. This is where they need to sit there and administer the product and observe for over two hours. From an infrastructure perspective, they didn’t have, if you think about some of the psychs, they have one office. That’s where they see their patients. They don’t have observation rooms. They had to make sure they could be able to operationalize this. We’ve gotten that right. We’ve helped them out. We worked along the ways, and we have treatment centers all over the U.S. Site of care, being able to get to these places is readily available. That’s where you’ve seen our growth really accelerate. They absolutely believe in the product. For what I just said, it’s truly differentiated. It’s unique. It’s both for monotherapy and adjunctive.

We just recently got monotherapy approval, so highly flexible in how they want to administer it. We truly see that to continue with growth momentum.

Lee Hambrecht, US MedTech Analyst, Bernstein: Great, great. Caplyta is, you got a couple of indications there, schizophrenia, bipolar depression, maybe another indication coming later this year. What are the expectations there with Caplyta?

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: Yes, yeah, I would tell you for Caplyta, especially in the pending AMDD launch. Right now, it’s currently approved for bipolar one and two, as well as schizophrenia and growing quite nicely. I will tell you, we’re anxiously awaiting, it’s under FDA review right now, the adjunctive major depressive disorder indication. If you just think about the data right now, the effect size versus what you see on the marketplace is two times from an efficacy standpoint. We’ve never seen anything like this in depression. When you think about some of the traditional antipsychotics, right now, if you think about the marketplace, 21 million patients unfortunately suffering from depression, the penetration of the branded markets is only about 10%. About 90% are cycling through the generics, some of it for convenience, some for what they were used to, you know, the providers are used to using it.

A lot of the challenge with some of these treatments, even the branded ones, are the side effects. There’s the efficacy component, but we feel we’ve got that covered. From a side effect perspective, one of the most side effects that they see is weight gain, and what patients don’t want to get is weight gain. Sexual dysfunction is another one, as well as movement disorder. All three of these, if you think about it, if you look at Caplyta, it’s the ideal product because really zero effect versus placebo in those three areas. You now have a simple once-a-day pill, no titration needed. Convenience, if you think about a primary care physician or advanced practitioner provider, they can simply administer the product and feel that they’re going to get those results and not get the weight gain that they might on some of the others.

We do believe this is going to be a catalyst for growth for Caplyta. We do believe Caplyta is going to be another $5 billion plus asset. We’re quite excited to have it in our portfolio and the entire Intercellular organization. That’s another one that we foresee to be, you know, a significant growth opportunity and really will transform patients with major depressive disorder.

Lee Hambrecht, US MedTech Analyst, Bernstein: Awesome. Great. That’s another one where there might be a little bit of a street disconnect, I think.

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: I think there is a little bit, yeah.

Lee Hambrecht, US MedTech Analyst, Bernstein: $5 billion in that window, maybe before 2030.

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: Let’s see. We’re excited about it, and we are ready. I would tell you this organization is ready to go.

Lee Hambrecht, US MedTech Analyst, Bernstein: Excellent. Okay. Let’s talk about pharma R&D. Pharma companies continue to spend more and more money on R&D. At the same time, you’ve got price pressure, regulatory scrutiny, putting pressure on returns on investment. How do you think about returns on R&D investment in the pharma business? Do you expect the ROI to increase, decrease, or stay the same the next five or ten years?

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: I think at Johnson & Johnson, we always disproportionately invest in R&D than we do in sales and marketing. We do believe our strategy is built on three pillars, three therapeutic areas: oncology, immunology, and neuroscience, and some select disease areas, strongholds that we like to say. I bring that up because that allows us to really have end-to-end expertise from discovery all the way through commercialization, customer intimacy, and understanding of the business and all the way through that value chain. I bring that because we also then can leverage AI and understand the science and look for efficiencies. I do believe AI, machine learning, you know, are really going to help us grab greater efficiency and better returns. I foresee us continuing to double down there. As we talked about some of the challenges, maybe macro challenge, best way to weather those storms is to innovate.

Lee Hambrecht, US MedTech Analyst, Bernstein: Yeah, excellent. Maybe quickly on the M&A front, obviously you just closed Intercellular, a bigger deal, you know, almost $15 billion deal. Can you talk about the M&A strategy in pharma or just any areas of interest or priorities in terms of deal size?

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: I would say since we have declared the three major therapeutic areas, we’re always going to be looking within those, whether adjacencies and disease areas within those three therapeutic areas, but be opportunistic. We’re going to follow the science. We have, I would like to call them, drug hunters in the organization that understand the science and they’re following the science, and then we’re going to be opportunistic. We typically, you know, our sweet spot is some of these tuck-ins, some of the early deals, some maybe pre-proof of concept or right around that area where we can then develop a product and really take it to a full-fledged development. I mean, Darzalex/Faspro or Darzalex is a great example of that, but we’re able to do that.

We saw a little signal, took that and did a robust development plan and demonstrated our success, and you see that with Darzalex right now.

Lee Hambrecht, US MedTech Analyst, Bernstein: Excellent. Let’s talk about modalities, new modalities briefly. You mentioned it. Do you think you have the necessary tools in the toolkit for those new modalities, cell therapy, mRNA, gene editing, gene silencing, all those? Where you have gaps, are you looking to fill those gaps via licensing deals or build those in-house capabilities? How do you think about the plan for modalities?

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: Yeah, we don’t look at the modality approaches. We look more at the disease area strategy approaches, and if we see the disease and an innovation, we’ll find that modality and be able to make that modality work. I will say, if you think about it, we were one of the first products or first organizations to have a biologic Remicade, and we’ve mastered that, I believe, and we’ve already got bispecifics, and now I would love to talk to you about our trispecifics that we’re putting in the clinic, already have in the clinic. If we think about modalities, we have expertise there. Cell therapy is another one, you know, with Carvykti now we have a bicarb that we brought in. We’ve learned as we go. We also have ADCs and radioligand and things like that.

If the data is there and the technology, we’ll find a way to breathe in the marketplace.

Lee Hambrecht, US MedTech Analyst, Bernstein: Okay, great. All right. I’m a MedTech analyst, and I just went 38 minutes without talking about MedTech, even when you brought up TAR 200.

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: I tried to give you a little bit more.

Lee Hambrecht, US MedTech Analyst, Bernstein: You know, maybe to that point though on TAR 200, obviously you’re showing the benefits of having pharma and medtech under one roof. Should we expect more of that in other disease areas?

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: Yeah, I would say we’re already doing that organically. We like to say let’s become number one in our categories and then look for synergy. I think that’s what we’re focused on doing. I will tell you, naturally, as you think about one of the areas, we have a partner product for thrombosis, atrial fibrillation, for example. We have a significant presence there with MedTech. We’re definitely leaning on them. We have Xarelto in the U.S. as well. We’re looking at areas and we can look at patient data science, analytics, understanding customer intimacy. We’re absolutely doing it organically.

Lee Hambrecht, US MedTech Analyst, Bernstein: Yeah, excellent, excellent. There have been a bunch of PRs just in the last few weeks. It’s hard to keep up with all the things that you guys are up to. You know, anything we missed here, pipeline opportunities, or any sort of final comments you want to highlight?

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: Yeah, real quickly on the pipeline, you know, I mentioned it. I think if we think about our end-to-end expertise in multiple myeloma, we learned a lot as the introduction of our bispecifics, Tecvayli and Talvey. You know, we now have a trispecific that we have engineered, or kudos to our scientists, we’re able to engineer this to really look at reducing some of the AEs associated with these trispecifics to make it a more community-friendly therapy. We’re able to space the dosing, have incredible efficacy, and you see that already in the preliminary result, and it could really transform the treatment of multiple myeloma. Talked about Mobexia. I’ll just end and say, you know, at the end of the day, we believe we’re in another era of growth. We’re exciting opportunities ahead of us.

We feel more than confident we’re going to be able to deliver the 5 to 7% compound annual growth rate, even in the upper limit, due to this transformational medical innovation that we’re bringing in. We’re excited to be there.

Lee Hambrecht, US MedTech Analyst, Bernstein: Awesome, awesome. Thanks so much for being here.

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: Thank you, Lee.

Lee Hambrecht, US MedTech Analyst, Bernstein: We appreciate it.

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: All right. Thank you.

Lee Hambrecht, US MedTech Analyst, Bernstein: Thanks, everybody.

Tom Cavanaugh, Company Group Chairman, Johnson & Johnson Innovative Medicine North America, Johnson & Johnson: Thanks.

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