All right. Thank you, everybody. Thanks, guys. I'm Lee Hambright, US MedTech analyst at Bernstein, and we are thrilled to host Johnson & Johnson. We have Chairman and CEO Joaquin Duato and CFO Joe Wolk. Thanks, guys, for being here.
Thank you.
Thanks for having us.
We're scheduled for a 50-minute fireside chat. Just a reminder that investors can submit questions at any time through Pigeonhole, and we'll try to work them in as we go. Joaquin, first of all, thanks so much for joining us. Lots of macro uncertainties lately and pressures on the industry. The news cycle has been pretty frenetic. Maybe you could kick us off with some opening remarks on how you see the state of the industry and the state of the business at J&J.
Thank you, and thank you for inviting me. I have participated in all the strategic decision conferences since I became CEO, so I'm already a veteran. Thank you, Lee.
Thank you.
How do I see the industry, trying to elevate myself? I see a great combination of science and technology driving significant medical innovation in a way that I have not seen in my 40 years working in the industry. I clearly see when we look at Johnson & Johnson that the opportunities to improve the standard of care, I see more opportunities than I have ever seen. In that sense, I see the industry being healthy. Yes, there is rhetoric in the industry, and I am sure you will have more questions about that, but I also have seen a lot of situations in which we have a combination of headwinds and tailwinds. Ultimately, in this industry, if you are able to bring opportunities that are going to improve the standard of care for patients in serious diseases, you normally are able to create significant value.
I remain optimistic despite all the comments that we may have seen there. I also believe that we have an administration that wants to be able to create value for American businesses, that wants to invest in the U.S., that wants to create manufacturing jobs, and we share those goals with them too. There is good common ground to build from there. Johnson & Johnson, we have a great combination at Johnson & Johnson that has made us successful for 140 years, that is based on two things: a clear focus on healthcare. We are not a pharmaceutical company or a medical technology company. We are a healthcare company, and we are the only company that can span the entire patient journey. Our breadth of capabilities at Johnson & Johnson is unmatched. We can go from cell therapy to robotic surgery.
We can work in cardiovascular or in mental health. There's no other company in the healthcare ecosystem with the breadth of capabilities of Johnson & Johnson, and that makes us unique. That is translated into a company that is broadly diversified. We can go where medicine is going. We have 26 platforms at Johnson & Johnson of more than $1 billion, and that diversification enables us to be able to manage multiple business cycles. We are diversified by product, by geographic area, and it helps us to be able to reinvent ourselves constantly. That's why we have had 63 consecutive years of dividend increases. That's why we're able to deliver the consistent results that we deliver. We have been able to meet or exceed analysts' expectations in earnings for 28 consecutive quarters for seven years.
If you have an example of a company doing that, please, you know, bring it up. As I look at our current situation, we have had the first quarter results. Our overall growth in the first quarter results was 4.1%, 4.2% in our pharmaceutical group, and 4% in our medtech group. I think the first quarter of this year is particularly important. Why? Because we have started to address the number one question that I used to get in every single investor meeting. You know the question, Lee? It was, "Are you going to be able to continue to deliver growth in the middle of the biosimilar entry in the U.S. of your biggest product, Stelara?" In the first quarter, we delivered 4.2% growth in our pharmaceutical group in the face of the Stelara biosimilars that were an 810 basis points headwind.
We are starting to address the number one question that we have had. We are delivering growth in the face of the Stelara biosimilars. Again, I cannot find any other pharmaceutical company that has been able to grow in year one of having biosimilar or generic competition of their major product. Do you know any other one?
Can I tell you?
Absolutely. I'm glad that we are able to address that question, and our results show the strength of our business model. We have been investing for that. In the last two years, we have invested $50 billion in M&A and in R&D. We also have announced an investment in the U.S., in R&D, manufacturing, and technology of $55 billion over the next four years, which is an increase of 25% over our previous four years. We feel confident about our future, and we feel particularly confident about our ability to meet our guidance that we provided about having growth of 5-7% from 2025 to 2030. I believe that, based on the results that we're having today, we are increasingly confident in our ability to do that.
As a matter of fact, I think that there's significant still disconnects between the street and our own expectations.
Mm-hmm.
That is something that is not new. We have done an analysis of our top 10 new product launches over the last 20 years, and in 9 out of 10, we have exceeded the consensus expectations of the analysts. As a matter of fact, the median increase over the consensus expectations of the analysts in these top 10 launches was 93% at the five-year mark. I am not surprised, because it is the pattern, that the street is still underestimating our potential both in medtech and in pharmaceuticals. I think Joe, in the first quarter call, gave a good update on where these disconnects were.
Yeah, sure. Thanks, Joaquin. Yeah, Lee, we're very optimistic based on what we said back in December of 2023 on our investor day, and we pointed out some significant disconnects between products that we saw, some of which were still in the pipeline, that today are now approved, but those disconnects still exist. We're not talking hundreds of millions of dollars in our forecast. We're talking potentially billions. If you go to Rybrevant LAZCLUZE for lung cancer, new data came out recently, proposed a one-plus-year benefit of life for the average lung cancer patient who has only three years to live if diagnosed today. 80% of those patients don't get to a second line of therapy. We feel really good. I think the street estimate for 2027, 2028 on average is about $2 billion. We see twice that amount for that same timeframe.
Let's go to Spravato, something that's been on the market but performing extremely well for us. We launched it during COVID. There was a lot of, I'd say, implications to launching during that period of time for that particular drug. Just received monotherapy indication. The street has that also at about $2 billion 2027, 2028. We see that 50% higher in that same timeframe. Tremfya. Most of our revenue, about 75% of our revenue for Stelara, came from IBD indications. We just successfully launched ulcerative colitis in the fourth quarter of last year. We recently received, at the end of the first quarter of 2025, approval for Crohn's disease, subcutaneous, induction as well as maintenance. We see that the street has about $6 billion 2027, 2028. We see that 25% higher in that same timeframe. A new one to the list, Icotrokinra, which wasn't in the 2023 investor day.
That's about $700 million. That's the oral formulation that has biological efficacy. We're studying in psoriasis. Hope to file that later this year. We see that potentially two times higher. Lastly, for bladder cancer, about 600,000 patients every year get diagnosed as new patients for bladder cancer. The treatments today do not do enough for patients, usually resulting in patients losing their bladder. About $700 million is the forecast for 2027-2028 for Consensys. We see that three times higher during that same timeframe. You just do some rough math, and you clearly get to a much higher growth rate. The 5-7%, when you consider that we've added a really nice asset in the neuroscience field with Caplyta, that 5-7%, we're very, very bullish on.
Personally, I think Joaquin and I will both be disappointed if it's not closer to seven than to five.
This is great, guys. Thank you. There's a lot to dig into here. Maybe we can start with the macro environment. You know, lots of moving pieces here. Obviously, MFN, Medicaid cuts, PBM reform, changes at HHS, cuts at FDA and CDC tariffs. You know, how do you put all of that in perspective for us? And maybe you could, you know, kind of rank those in terms of sort of relative risk.
Yeah, thank you. As I said at the outset, I'm optimistic about the outlook for the biopharmaceutical industry and the medical technology industry because I see a situation in which science and technology are combining to advance the standard of care in a significant way, both in medtech and in pharma. It's difficult to predict how the situation is going to end up in some of the aspects you were talking before. Some of them can have a short-term impact, like MFN or tariffs. Some of them are more longer-term impact, like what's happening with the NIH or the FDA. I'm gonna tell you what is our perspective. We see opportunities to work with this administration. We see openness to have a dialogue with the industry, and we are having that dialogue as we speak.
We are working to try to be able to address a dual need. One is to be able to maintain our ability to continue to innovate in the context of this unique opportunity that we have today, and at the same time, make sure that medicines for American patients and medical technologies are affordable and the patient experience improved. That is what we are trying to do with this administration, and I think we have common ground to be able to do that. Now, you know, what is going to happen with tariffs? To be honest, I do not know. We have said it before, and I will say it now. If we want to have more jobs in the U.S. and to manufacture in the U.S., it is also about tax policy.
Part of the investments that we were describing before of the $55 billion are facilitated clearly with the 2017 Tax Cuts and Jobs Act. You know, that is what has made possible for us to be able to invest in the U.S,. Our goal is to be able to manufacture here in the U.S., once we complete this four-year plan investment, essentially all the advanced medicines that are being used in the U.S., I think that's a goal that we share with the administration, and we want to work to be able to do that.
All the advanced medicines, meaning, these are the.
Advanced biologics.
Biologics.
Yeah. For the most part, you know, in our medtech sector, we have already a quite a, a dual source, you know, manufacturing footprint that enables us to work with two separate supply chains.
Very good. Okay. Let's drill down on most favored nation drug pricing. The president's executive order was a little bit light on details, but the press conference and, you know, commentary since, you know, the tone seems to be more about helping pharma companies, to your point. The focus seems to be more on PBM reform and balancing lower prices in the U.S. with higher prices in Europe and, you know, elsewhere outside the U.S., Can you just help us understand your, your latest thinking on how all of that might play out?
Yeah, it's similar to tariffs, Lee, quite frankly. We still have to see what is what actually transpires. What I would say, and maybe underscore what Joaquin said about how the administration and its officials are willing to engage in the dialogue. I mean, how often have we heard or not heard about middlemen as part of the equation here, right? If you just look at the difference between list and net price, on average, the industry is discounting 50-60% off of list. Yet we all know, whether it's ourselves or people close to us going to the pharmacy counter paying higher copays. If we made just a simple change and calculated the copay off of net price versus list price, that results in a 50-60% reduction of out-of-pocket copay costs.
There's also the administrative factor of, you know, prior authorizations, additional approvals to get the drug that's been prescribed to them by the physician that they trust, right? Those are, I think, IRA did have the benefit of limiting the out-of-pocket copay, $2,000. That's become less noise, I think, in the system. Not that we shouldn't do more for patients, but now it's about, "Hey, I was supposed to get this drug, and I have to go, I have to make three or four phone calls and hopefully talk to the right person after that time to get the drug that I was prescribed." There's a lot that can be done in the system. You know, in terms of the opportunity of raising prices outside the U.S., I think administratively that gets a little bit complicated. I'd like to see how that's going to be affected.
You know, maybe the pie remains intact, and it acts similar to a tariff in that, or the argument with NATO, right? You know, the U.S. was paying a disproportionate share, and so how can other countries contribute to that? You know, the access in countries outside the U.S. is quite alarming, if you ask me. You look at the G20, there's been about 130 oncology drugs approved since 2014. Americans have access to about 96% of those drugs. In the G20, so developed countries, it's like 48%, I believe. If we want the best treatments available to the patients that really changes their life, look, look what we've done with Darzalex and Carvykti. Carvykti at ASCO is gonna have five-year data coming out, and the results are astounding. They're gonna be astounding.
It's those types of treatments we wanna make sure that we preserve the system here where Americans do have access to the best medicines. We just gotta get the discounts and the rebates that are intended for the patients into their hands.
I believe that is in these circumstances where a company like Johnson & Johnson plays better because of our diversification that I was telling you before. I mean, we are diversified geographically. We are diversified, by book of business, and we always have opportunities to grow one way or another within our own portfolio. I'm optimistic about our ability to navigate these circumstances as we have navigated multiple circumstances in the past.
Yeah, very good. Still lots of questions about how MFN works. Still really up in the air. Okay. HHS. Lots of changes at HHS, including new leadership, cuts at FDA and CDC. Have you seen any changes in the day-to-day interactions, with the agency or drug approval timelines?
No. We won't have seen any impact in our drug approval timelines. We continue to have a good dialogue with the FDA, and that's to the credit of the people working at the FDA that continue to produce for the health of all Americans. At this point, we have seen a very good working relationship with the FDA, and we have, you know, multiple approvals that are ongoing, and all of them are on time.
Great. Okay. One of the questions from the audience is on talc, just to get that out of the way. You know, it seems like the end of the road for the bankruptcy path. Now we're back in the tort system. You know, what's the path forward from here, and how should investors value that liability related to talc?
Very simply, you know, we are back in the tort system. We are now working with the redo of the Daubert hearing, which is heard in New Jersey, which is gonna set different standards for evidence to be able to be presented in the MDL. We like our odds in the tort system. In the last, you know, years, we have won 16 out of 17 cases in ovarian cancer. We like our odds in the tort system. On the mesothelioma side, we have essentially all of the cases settled. We like where we are today, and we have been able to revert $7 billion of, you know, accruals that we had for this bankruptcy. I have to tell you, this bankruptcy had more than 80% of support of the claimants and the plaintiffs.
Clearly, we continue to believe that there is no connection between talc and cancer, and most of the science, the regulatory agencies support that, that assertion that I'm giving you. We like our odds in the tort system, and that's where we're going. We have no intention to settle. We are going to fight it in the tort system, and we like our odds as they are.
Yeah, the other component I would just add to that is just, the level of rigor that's gonna be placed around this junk science. The change in how the Daubert standard is applied is a very significant factor that actually improves our hand, than what we had in the cases that we prevailed in. That's only gonna get tougher for the plaintiff's attorneys, and their claimants.
I think you mentioned before that there was actually a decent chance that a lot of these cases get thrown out through the Daubert tort.
That's correct. During the bankruptcy proceeding, we found out that a lot of the claims were either barred or fraudulent. The claims that were out there in the tens of thousands is probably significantly less. We still do not have a firm number. We will have to see what is filed here. There was even talk yesterday in a Bloomberg article, I believe, just the cost that the plaintiff's attorneys are now weighing in their mind, whether it is worth pursuing or not, to file one of these claims.
Yeah, got it.
They're even thinking about it differently if that article is true to form.
Can you talk about timelines as briefly? Is there any chance this is resolved somewhat quickly, or is this likely to drag out for many years?
I think the best next milestone we can point to is a couple months away with the Daubert hearing and how judgeship rules in New Jersey.
Yeah. Okay. Very good. Okay. Why don't we shift to financials, Joe? You know, looking forward, you're guiding to 2025 organic sales growth of 2-3%, sticking to your promise, as you said, Joaquin, to grow despite Stelara LOE, and EPS growth of about 5-7%. What's your latest thinking on sources of upside and downside to those numbers?
Yeah, I, I, you know, I still like those. I'm not gonna give mid-quarter guidance. We'll, we'll update that in July. The year did get off to a very fast start. I would say the upside is from some of the pharmaceutical products, just the level of receptivity for ulcerative colitis that we saw with Tremfya. We think that will also play well with Crohn's disease, so that's a potential opportunity. And Rybrevant LAZCLUZE, some of the newer multiple myeloma therapies, Darzalex continues to do well. It's hard to come up with a real strong downside on the pharmaceutical side. I think on the medtech side, we continue to make progress. Some of the things that we haven't maybe executed as well as we should in recent quarters, we see a light at the end of the tunnel for those.
If you go to VisionCare, 2024, as well as maybe the first quarter, 2025, it wasn't as strong as we had hoped 'cause of some supply chain issues that really related back to 2023. Those are now correct. They were putting some investment from behind it commercially. Some new indications with the stigmatism coming out. We think it's, that's gonna get back to the growth that we're used to. EP is going to be an improving story as we go throughout the year. Joaquin certainly will tell you, I'm sure, in one of these responses how committed we are to being the number one in cardiac ablation, no matter whether it's RF, PFA, or whatever else might come down the road. Orthopedics has room for improvement.
We had a number of one-timers in the first quarter that probably hampered the reported growth that I see abating as the year goes on. As we called in January, we always saw the second half stronger than the first half for our entire business.
I would say, look, we are more convinced than we were at the beginning of the year that this is going to be a good year for Johnson & Johnson.
Very good. Very good. Just quickly on tariffs, you know, you reported early, as you always do, and sized 2025 impact around $400 million. Things have changed a little bit since then. We've maybe walked back from the ledge on a couple of conversations. You know, can you just reflect on two?
Yeah. You know, listen, and things will change by the week, by the day. I would say just based on the retaliatory China tariffs that we had in our $400 million assessment, that probably cuts the $400 million down to $200 million. That does not include anything that may come out of Section 232. The Europe tariffs are still somewhat in flux. We will provide our best and latest estimate in a transparent way on July 16 when we report earnings. It is a moving target, but it is going in the right direction.
That's great. Okay. Looking at margins, the first quarter in 2025 was a miss on adjusted gross margin, 71.8% versus consensus 74.9%. That said, EPS still beat by 7%, driven by spending control on R&D and SG&A and some favorability in other income. You have a number of efficiency programs running across the organization. How should investors think about margin progression over the next few years beyond the Stelara LOE?
Yeah. I think it's important the first quarter, you guys saw it as a miss. I'm not sure that was a fair characterization. I, and I hate to say that, 'cause you guys are very good at what you do. You've got a lot of companies to cover. When you just think about Stelara, as well as Part D redesign, which was worth about, you know, $400 million-$500 million, that's pretty significant. The expectation that we were gonna actually improve gross margins for the first quarter was optimistic. That doesn't mean we don't have initiatives going on across all of our businesses to improve the gross margin profile, most notably in our surgery business, as well as the ongoing efforts in our orthopedics business, where we're looking at SKU rationalization, network footprint, as well as exiting some markets that just aren't profitable.
That work will continue. You know, I think the way , we like to manage the full P&L. We like to manage that we're always prioritizing that next dollar towards R&D 'cause that is really the long-term lifeblood of the company going forward, you know, transforming the current standard of care into something much better. And so I think what you can expect from Johnson & Johnson is us doing, you know, at or slightly above our sales growth when you think about operating margins. This year, we committed to 300 basis points. Despite the miss in Q1, we're still committed to that 300 basis points improvement by the year end.
Now, some of that has a natural tailwind because we had asset acquisitions of about 150 basis points last year that won't, you know, that aren't on the horizon to repeat this year in the second half. The other 150 basis points is around operational improvement. Some of that is just due to technological advances. AI is helping our business become more predictable, in terms of our forecasting. That leads to better efficiencies. We're using some of the AI technologies in some of our global services to be quicker in processing AR, looking at disputes, things that kinda can add cost but also limit cash flow. We're using those tools to improve the overall financial health of the business as well.
Excellent. Okay. Let's shift into the fun part in the businesses. Maybe we'll start with EP in medtech. You know, you've got a couple competitors here who have had some really successful PFA launches, more PFA launches to come. You've been the dominant player in AFib for a really long time, but you're a bit behind on PFA. What are you doing to stem those market share losses in EP?
Thank you. Let me start by saying that we are determined to retain our leadership in cardiac ablation. That means that we are gonna be investing in cardiac ablation to be sure that we are at the forefront of medical innovation and that we are going to have the appropriate clinical and commercial support to deliver on that. Let me be clear. We are determined to do that. When I think about our priorities in medtech, number one priority is to win in cardiac ablation. Number one priority. It's correct that we have been late in PFA, and we're working to correct that, right? When it comes to cardiac ablation, now we have a new modality, which is PFA. We have to see what the overall clinical effect of PFA is once we have more time to analyze that.
Eventually, we'll understand better how PFA, RF can combine and coexist together. That's something that we're gonna be working to understand. Nevertheless, clearly, PFA has had a significant impact. We remain leaders in overall, you know, cardiac ablation with a business of more than $5 billion, and we are especially strong in the mapping area. You know, we are also mapping most of the competitive procedures too. Why we are strong in the mapping area, which is a very important part of the value of each procedure? Sometimes we only focus on the catheter. Keep in mind that mapping and the mapping catheters are a very important part of the value of each procedure. Why are we strong in the mapping area? We have the best mapping system in the market, which is CARTO, with more than 5,000 installations.
We have the best mapping catheters. We have the best intracardiac echocardiography technology with our ultrasound technology. We have studies to demonstrate that the combination of intracardiac echo plus our mapping clearly improves outcomes in any ablation procedure. We have a well-established network of clinical specialists. We call them mappers that are supporting the procedure. We are determined to maintain our leadership in the mapping space, which is a very important part of the value of each procedure. That is a strong, clear strength of Johnson & Johnson. The second area, we are working in PFA catheter innovation. We are working to improve body pulse with different things. We are looking at the pulse sequence. We are looking at the irrigation flow. We are going to work in order to improve our body pulse catheter.
Our Varipulse today is working very well outside of the U.S., and we are now, with new instructions for use, getting up to speed here in the U.S. too. You're gonna see an improvement in Varipulse as the year goes by. Staying in catheter innovation, we are working in two additional catheters. One is a dual energy catheter, which will give the opportunity of having RF and PFA in a single catheter, which is very practical for the electrophysiologists as they can ablate with different energy modalities depending on the lesion. That's already ongoing, and it's approved in Europe, and we're gonna be launching. It will come to the U.S., and we think it's gonna be another alternative based on the STSF catheter, which is the most utilized catheter today as far as handling the catheter in radio frequency.
The third catheter that we are developing is a large deep focal catheter. We call it OmniPulse, that we are starting our IDE study here in the U.S. as we speak, that will give another option for the electrophysiology. We are going to have a suite of PFA catheters together with our suite of RF catheters that is gonna create a combination together with our mapping that will continue to drive growth and drive opportunities for Johnson & Johnson down the road. We are committed to this space and to understand and analyze what is the best combination of therapies for patients.
We are gonna be looking at all information coming from electronic medical records, real-world evidence, to really understand the impact of using one technology or another and help the electrophysiology see what is the best option depending on the type of lesion and the type of patient. We are very much focused on retaining our leadership in cardiac ablation. As I said before, that is my number one priority in our medtech business.
Very good. Very good. Probing on one thing you said, related to mapping. You know, with the advent of really effective and safe, single-shot catheters, you know, some people think maybe mapping is less important than it used to be. It's not happening as much in Europe, as it used to. How do you see that trend going forward?
As I said before, all the data that we have, and we have done real-world evidence studies to analyze the effect of mapping and ultrasound, show that mapping and ultrasound technologies improve the outcomes for patients with atrial fibrillation with RF or PFA. Saying the contrary is going against the evidence. When I see evidence of that, then I will change my mind. The evidence that we have today, it's clear that mapping and ultrasound improve the outcomes of cardiac ablation.
Very good. Okay. The surgery business, you announced a $900 million two-year restructuring program in surgery. Can you just talk a little bit about the key goals for that program and, you know, why was now the right time?
Yeah. I think, Lee, similar to what I said earlier, we're looking at gross margin improvement across our entire network, pharmaceuticals included. In surgery, we saw some of the success we were having in early days with the orthopedic program that we announced about two years ago and thought that was a very good template to follow. We have the core competency built up on a pilot basis. We think surgery was the next logical area to go to, and to get that business ready for when we have Otava down the road.
Great. Maybe you could just touch on Otava timing. I think you mentioned that the trial started, and you announced first cases in April. What's the timeline look like on Otava?
We're continuing the clinical studies now. We would hope to file, either late this year or early next year.
Great. Okay. Turn to orthopedics. Lots of moving parts this last quarter with the ortho transformation program, some revenue recognition, timing changes, and selling days and stuff, some competitive pressures in spine and sports. How do you think about ortho performance in the back half of the year?
We see ortho performance in the back half of the year improving. There were a number of headwinds in the first quarter, that we communicated, and we provided even a chart in our first quarter results in order to be able to reconcile, you know, the one-time items. You know, it was related to the walk-in implants. It was related to less-selling days. And it is also related to our restructuring program that Joe was mentioning. You are going to see an improvement in orthopedics in the second half of the year. I am very excited about the opportunities that we have in orthopedics. We now have about 25% of the knees, the primary knees, that are utilizing our VELYS system. We are launching two new robotic systems in orthopedics. One is the Uni-Knee, and also VELYS Spine in the spine surgery.
We had the first clinical cases in the U.S. very recently. I am excited about opportunities that we have there in orthopedics, especially in robotics, to continue to improve the outcomes of, you know, joint replacement or spine surgery based on the precision that robotics can offer.
Very good. Just a question from the audience on China. You know, you've talked about China as a headwind in the medtech business, VBP, anti-corruption, etc. You know, when do you see China turning back to a growth tailwind?
Yeah. Let me tell you, long-term, not being a company with a presence in China is myopic. We are the largest medtech company in China, and as a consequence, the movements in the China market affect us too, right? We are seeing now, headwinds due to VBP that eventually would be anniversary. Today, the China business, as opposed to it was in the past, that was a major growth driver for us, it's been more a headwind in our overall, overall, medtech profile. We see our China business continue to grow in the rest of the decade. Once we anniversary the value-based procurement headwinds, we have the strength to be able to remain with our innovation in the China market. Being a strong player in the China market is a strength moving into the long term.
Mm-hmm. Very good. Okay. Bigger picture, you know, ever since you spun out Consumer, you've gotten lots of questions about whether it makes sense to keep medtech and pharma together under one roof. You've made some progress on drug device synergies like Taris in bladder cancer and Monarch in lung cancer, but these haven't been a real material driver of growth yet. I'm just wondering, has your thinking evolved at all on keeping on the benefits of keeping pharma and medtech together?
I mean, I told you before, why have we been able to deliver 28 consecutive quarters that we have met or exceeded analyst expectations? Why have we been able to deliver 63 consecutive years of dividend increases? It's because we are a well-diversified company that can go where medicine is going, that can span the entire patient journey. No other company can do what we do, and that's the secret of our longevity. It gives us the financial strength to have strategic optionality. We are the only, you know, together with another company here in the U.S., AAA rated. We have significant scale in every aspect that we want to invest. We are always a preferred partner based on our scale and our reach. I think it does have tremendous advantage over the long term. I think it's great not to be a one-trick pony company.
I know investors, some of them like one-trick pony companies because they may have some upside in the short term. In the long term, the longevity is not with one-trick pony companies, and I can give you multiple examples of that. One of the questions that I get frequently is, "Okay, but show me show me one product in which you are gonna be able to combine your drug and device expertise." You know what? I'm gonna be able to show you one. I'm gonna be able to address that question. We this fall are gonna be launching our first drug device combination, or it's the platform that we call Taris. It's a drug, a lutein extend that is gonna release gemcitabine for localized bladder cancer. Has two breakthrough designations. We just presented data at the American Rural Association. 80% response rates in localized bladder cancer.
Patients continue disease-free a year after about half of them. This is gonna be a more than a $5 billion platform, and it's only the beginning of our interventional cardiology sprint. That is only possible because we are a medtech and a pharmaceutical company. It has advantages in the longevity of the long term. There is no question about it. It also is gonna bring significant products, platforms of more than a $5 billion, like the Taris platform, that we are going to launch in the second half of this year in the U.S., There you go. A demonstration of that. I'm glad I can answer that question for all investors that have been asking me that for many years. You have a demonstration of that now.
I think we've got a really timely example too. If you would think about just Stelara and the pending biosimilar, we don't wake up and it all of a sudden went biosimilar. We would have been planning for that two or three years and probably had to cut some investment, right? Yet we have a robust pipeline for lung cancer, bladder cancer. We've got a coach or conjure for psoriasis and perhaps other IBD, and inflammation and diseases. I don't think you could have done that without having the complementary medtech business. It doesn't mean we don't prioritize. We still make choices. You saw last year we exited infectious diseases and vaccines.
We still prioritize, but it gives us a lot more flexibility to manage for that long term and have the robust pipeline and the growth outlook we have for the balance of this decade.
Very good. On that topic of flexibility and financial strength, you know, Joaquin, from the start of your tenure, you've talked about getting more acquisitive, particularly in medtech. You've had some time to digest Shockwave and Abiomed. Going forward, you know, do you see potential for more medium to large-sized deals in medtech?
Let me start by saying that our goal in medtech clearly, our strategy is to move into higher-growth markets. If you ask me, "What is your number one strategy in medtech?" We want to move into higher-growth markets, and that's translated into our ability to bring new technologies into those markets. One of the areas that we see as a higher-growth market is cardiovascular. Clearly, that's an area where you have significant mortality and morbidity and where medical technologies make a significant difference. We have worked in order to identify companies that would have technologies that would make a significant difference in the standard of care and also have a significant competitive moat. We have identified two great companies, Abiomed in heart recovery and Shockwave in calcified arterial disease.
Both of these companies are working ahead of our ideal models, and we are especially pleased with the results that they are delivering. With Abiomed, we have more than two years' trajectory. With Shockwave, we're gonna go into our first year. We are very glad of these two acquisitions, and they are exceeding analyst models and doing really well for us. I am pleased with what we have been able to do that, and it has enabled us to be in three of the most attractive markets in cardiovascular: heart recovery, calcified arterial disease, and cardiac ablation. We are well-positioned to be a leader in cardiovascular. Are we thinking about more acquisitions? Look, it depends on the opportunities that are out there. I mean, basically, our focus is in cardiology and in robotics, as we have commented multiple times.
The two areas that we see as growing areas within medtech where medical innovation can make a difference for patients. We are always looking for things that are gonna be, that are gonna combine, improving the standard of care in which we have enough expertise to understand what's good, what, what is may not be as good. We have internal expertise, and finally, that we have a good competitive moat that can give us the opportunity to develop those markets. You know, we continue to look for them, and that's as much as I can tell you about it, right? It is an important tool. Now, our focus now, both in medtech and in pharmaceuticals, is to make our platforms work, to make what we have in-house work. I mean, we have multiple opportunities in medtech. We just commented about EP.
We spoke about Otava, which is the other big priority for us. We have Abiomed and Shockwave doing well. We have our Vision franchise coming back strong. We want to make sure that we make the things that we have organically work well. In pharmaceuticals, we have multiple opportunities, multiple opportunities. I mean, we are launching Tremfya in ulcerative colitis and in Crohn's disease. We're launching Rybrevant and LAZCLUZE in lung cancer. We are launching Imbruvica in hypokalemia in myasthenia gravis. We are launching our drug-device combination Taris, which is going to be branded Inlexzo in localized bladder cancer. We are going to have the approval of Caplyta in adjunctive therapy of major depressive disorder, which is a relatively big market.
We are gonna be filing this year for our next blockbuster, which is called Icotrokinra, which is an IL-23 oral. That's gonna be groundbreaking. This is the first time—difficult to understand—it's the first time that you're gonna have an oral medicine that's gonna have an efficacy and a tolerability like an advanced biologic. That's gonna transform the treatment of immune-mediated, inflammatory diseases, and that's gonna be a real groundbreaker. We have enough opportunities internally to be able to deliver in our 5-7% growth, both in medtech and in pharmaceuticals. We are gonna be, you know, focused on trying to develop those opportunities. We don't exclude that if something comes our way that checks all the boxes, we can also pursue that.
Yeah.
Most of our innovation comes from smaller deals. When you think about, our drug-device combination now, that was a small deal that we did for a company in the hundreds. When you think about Icotrokinra, that was a small deal that we did with a company in the hundreds. Most of our innovation comes from small deals. Sometimes we do larger deals like Abiomed, Shockwave, and Intra-Cellular.
That's a great comment. You know, any other opportunities or areas where you could do smaller tuck-in deals to augment internal programs, maybe in EP or maybe in some areas in pharmaceuticals?
I think it's across all of our franchises, both sides of the house in terms of medtech and pharmaceuticals. We did last year, while the Abiomed, Shockwave, Intra-Cellular gets the headlines, we did about 40 deals last year for less than $5 billion, right? Those are some of the big blockbuster products that we've had in the past. You think about going back to the Imbruvica, Darzalex wasn't all that much capital upfront. We continue to do those. We've got the ecosystem, with our JLabs facilities. We've got a venture arm, Johnson & Johnson Development Corp, it's over $1 billion of investments scattered around. We're always looking for that next new opportunity and how that could tuck into our business, whether it be in the medium term or the long term, next decade type of stuff.
Look, another benefit of being a large company is that everybody wants Johnson & Johnson at the table. That's a benefit of being a large medtech and pharma arms is that every single deal that is out there, you know, they want Johnson & Johnson at the table.
Yeah. Can you speak quickly to the venture capital portfolio? You know, you do quite a bit of early, early-stage investment as well. Can you comment a little bit on the importance of those deals?
Yeah. I mean, that gives us really good insight. Many times we will have at least board observer seats. There's been a few that we've actually went ahead and acquired those businesses, again, much smaller deals. It does provide us with real good insight, and there's a really good strategic alignment with the businesses. That development corp isn't really outrunning on its own saying, "Let's go after the next speculative idea." They talk to a Jennifer Taubert or Tim Schmid and their teams to say, "Hey, does this fit into the portfolio as to how you're seeing it go, whether it be in orthopedics, surgery, neuroscience?
Yeah. Very good. Okay. Great. Maybe just one on Part D, you know, how is the Part D benefit redesign impacting J&J so far in 2025? How much of a net headwind could this be to pricing this year?
Yeah. This year we quantified it in January. That would be a $2 billion headwind. I would say the first quarter we're still getting in some of the details from the actuals, but that first quarter number that we accrued, and it doesn't seem to be too far off based on the actual results, is about what you would expect, about 25% of the $2 billion coming in. I think where we'll probably need to get a little bit more detailed is around byproduct and informing analysts of that. I think it's coming in, in aggregate where we thought it would come.
Excellent. Okay. You've done a great job of highlighting some of the areas where the consensus might be a little bit off on expectations or a little, a little too conservative. On Stelara, obviously, LOE this year, maybe just can you give us a sense on how is biosimilar competition coming along? Is it playing out the way you had expected it to play out so far?
Yeah. When you look at the first quarter results here in the U.S., I would say the first quarter came in as expected. We've been saying that Humira's second year was a really good proxy. You know, you have the added headwind of Part D and some discounting. That kind of played out right to script for Q1. Q2 probably might even be a little bit less, or more erosion, if you will. That is not to be unexpected either, and that is what we plan for in our overall enterprise guidance. Right now, based on one quarter worth of data, we feel pretty good about where it is tracking. Then you complement that with some of the strength we have on the other side of our business. We feel good about the guidance that we put out there.
Very good. Okay. Maybe wrapping up, obviously, this is the strategic decisions conference. You know, maybe, Joaquin, when you look ahead over the next three years or so, what do you think are the most important one or two strategic decisions that you'll face?
One, we are, if I look at medtech, two major things. One, continue retaining our leadership in cardiac ablation. The second one is entering into the robotic surgical market. That is clearly. You think about our priorities in medtech, two priorities: cardiac ablation, robotic surgery. In pharmaceuticals, you know, our number one priority is to show everybody that we are able to grow through the Stelara biosimilar entry. I am glad to be able to be in front of you today, showing you that in the first quarter, we were able to grow 4.2% in pharmaceutical despite a significant impact of 810 basis points of Stelara. Those are our two, you know, major areas. I think this is a good time to enter into Johnson & Johnson.
Some of the major questions that investors have about Stelara biosimilars, that was the number one question that we always got, are starting to be addressed. You're seeing that we are able to grow. We are gonna improve our results in medtech in the second half of the year. This is a good time to think about Johnson & Johnson, especially with the type of volatile environment that we are in, because we are always to have more optionality than most of the companies based off our unique diversification. I'm glad that the year is starting well for us. This is a good time to be at Johnson & Johnson.
Very good. We'll have to leave it there. Thanks so much, guys.
Thank you.
Thank you, as always.
Thank you.