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Hello, and welcome to our 2026 annual meeting of shareholders. I am Marc Larkins, Corporate Secretary and Worldwide Vice President of Corporate Governance at Johnson & Johnson. At today's meeting, we will provide an update on our business and cover the items described in our proxy statement. We will also have time for questions and answers. During this period, we will respond to questions submitted via the voting portal prior to today's meeting. A copy of today's program, including the agenda and rules of order, are available in the Meeting Materials section of the meeting website. There, you will find links to our 2026 proxy statement and 2025 annual report. You will be hearing shortly from our Chairman and CEO, Joaquin Duato. Together, we are joined by our executive committee, as well as Jonathan Hirschfeld, representing PricewaterhouseCoopers, our independent auditors. We are also joined by our board of directors.
These extraordinary leaders bring unique backgrounds, experiences, and skills to their work in ensuring the long-term success of Johnson & Johnson. With that, I would like to officially call this meeting to order and welcome our Chairman and CEO, Joaquin Duato.
Thank you, Marc. 2025 was a catalyst year for Johnson & Johnson. It was a year that propelled the company into a new era of accelerated impact and growth. Johnson & Johnson leads the industry as the most comprehensive healthcare innovation powerhouse, and today we have the strongest portfolio and pipeline in our 140-year history. I look forward to sharing our incredible progress over the last 12 months. First, I want to thank our board of directors for their outstanding leadership and oversight of the company. I would also like to welcome our two newest board members, John Morikis and Daniel Pinto. John and Daniel, welcome to J&J. In 2025, we sharpened our focus on six areas of high growth and high unmet medical need. Oncology, immunology, neuroscience, cardiovascular, surgery, and vision.
We have a unique business model that spans both Innovative Medicine and MedTech, giving us the depth and scale to shape the future of healthcare in ways no other company can. Our relentless focus on innovation, together with the strength of our commercial execution, drove strong momentum throughout the year. Operational sales grew 5.3% and excluding Stelara, the company grew 11.5%. Adjusted net earnings were $26.2 billion and adjusted earnings per share were $10.79. The power and resilience of our portfolio continues. With the addition of Shockwave and Carvykti, we now have 28 platforms generating more than $1 billion in annual sales. Our balance sheet remained strong, with nearly $20 billion in free cash flow, enabling us to drive value for our shareholders. We recently increased our dividend for the 64th consecutive year. In 2025, our share price increased 43%, yielding a total shareholder return of 47.5%.
This was one of the best annual returns in our 82-year history as a publicly traded company. We continue to invest in our capital allocation priorities, positioning Johnson & Johnson for sustained growth through the end of the decade and beyond. In 2025, we invested more than $32 billion in R&D and strategic acquisitions, including Intra-Cellular Therapies and Halda Therapeutics, as well as 40 other collaborations, partnerships, and licenses. We initiated billions of dollars in new state-of-the-art manufacturing facilities as we deliver on our plans to invest $55 billion in the U.S. by early 2029. These investments are helping us advance innovative healthcare solutions that will improve and extend lives for generations to come. In Innovative Medicine, we delivered 5.3% operational sales growth, with 13 brands growing double digits. For the first time, pharmaceutical sales exceeded $60 billion.
Across major markets, we secured 51 approvals and filed 32 regulatory submissions. We had positive readouts from 17 key studies and initiated 11 new phase III programs. The depth and strength of our pharmaceutical pipeline and portfolio is clear to see across each of the three focus areas, oncology, immunology, and neuroscience. Let me share a few highlights. In oncology, we are delivering innovative therapies to treat and intercept cancer with the hope of one day finding a cure. We are the number one company in multiple myeloma, where 80% of patients are treated with at least one of our four medicines over their treatment journey. Darzalex is considered the gold standard and exceeded $14 billion in annual sales. Carvykti, our CAR T therapy in multiple myeloma, is the most successful cell therapy ever launched with over 10,000 patients treated across 14 markets.
We were awarded a national priority review voucher by the FDA and published impressive results on the combination of Tecvayli and Darzalex, which led to its recent approval for multiple myeloma as early as second-line. In our solid-tumor portfolio, we received important FDA approvals, including for RYBREVANT FASPRO in lung cancer and Ilexo, a novel drug-releasing system for bladder cancer, which may provide an alternative to bladder removal. Our acquisition of Halda Therapeutics added a promising clinical-stage treatment for prostate cancer with additional potential across multiple tumor types. In immunology, we're continuously transforming the standard of care for people living with immune-mediated disease. Tremfya became the first and only IL-23 inhibitor with a fully subcutaneous treatment regimen for both ulcerative colitis and Crohn's disease, and now is the fastest growing IL-23 therapy in the U.S.
In 2025, Tremfya delivered more than $5 billion in global sales, driven by momentum in inflammatory bowel disease indications. Building on that success, we recently received approval of Icotide. Icotide is the first and only IL-23 receptor targeted oral peptide to deliver an unprecedented combination of complete skin clearance and a favorable safety profile with the simplicity of a daily pill for patients with moderate to severe plaque psoriasis. In neuroscience, we have an unmatched 70-year legacy of tackling some of the most debilitating neurodegenerative and neuropsychiatric diseases. Spravato maintained its strong trajectory with more than 200,000 patients now treated worldwide. We solidified our leadership with the U.S. launch of Caplyta as an adjunctive therapy for major depressive disorder. In MedTech, we deliver 5.4% operational sales growth with sales of nearly $34 billion.
We launched 15 major products and secured more than 40 regulatory approvals across major markets and progressed more than 60 active clinical trials. Let me share a few highlights across our three key focus areas, cardiovascular, surgery, and vision. Johnson & Johnson is the market leader in three cardiovascular businesses. In electrophysiology, we expanded our position in pulsed field ablation with growing global adoption of our Varipulse platform, which has been used to treat nearly 50,000 atrial fibrillation patients. We recently published positive 12-month data of our investigational OMNIPULSE catheter and completed initial cases with our dual energy ThermoCool SmartTouch SF catheter in Europe. In surgery, our advancements in robotic, digital, and surgical instrumentation are creating new possibilities to improve outcomes.
We filed our FDA De Novo submission for OTTAVA, our next generation robotic surgery system, and we launched the ETHICON 4000 stapler, which is designed to minimize risk factors for surgical complications across multiple types of surgery. In vision, we launched ACUVUE OASYS MAX 1-Day disposable lenses for astigmatism and presbyopia. In surgical vision, our premium intraocular lenses, TECNIS PureSee and TECNIS Odyssey, continue to penetrate new markets, supported by our full suite of cataract equipment. In 2025, we also announced the planned separation of our orthopedics business, a move that will increase our focus on high-growth areas and enable both organizations to pursue leadership positions in their respective markets. Johnson & Johnson ended 2025 stronger than ever with an unrivaled portfolio and pipeline. In 2026, this will translate into faster growth and impact with game-changing innovation, reaching more patients more quickly than ever before.
We are at an inflection point, and 2026 will be a year of accelerated momentum. What fuels everything we do is our people. Whether in research labs, manufacturing sites, an office, or in the field, our people share a deep commitment to improving lives. Their expertise, passion, and unwavering dedication to our credo is the foundation of our success. They are the driving force behind the breakthroughs that are transforming health for humanity. I am immensely proud to lead such an extraordinary global team. With that, I will turn the meeting back over to Marc.
Thank you, Joaquin. I will now present the formal portion of today's meeting. I'm pleased to announce that we have a quorum of shareholders present today, in person or by proxy, representing more than 85% of the outstanding shares entitled to vote at today's meeting. A list of all shareholders of record entitled to vote at this meeting is available upon request. Please refer to the meeting materials section of the virtual meeting website. The first item of business is the election of directors to serve on the board of directors until the next annual shareholders meeting. As described beginning on page 12 of the proxy statement, there are 12 nominees for the board of directors: Mary Beckerle, Jennifer Doudna, Joaquin Duato, Marillyn Hewson, Paula Johnson, Hubert Joly, Mark McClellan, John Morikis, Daniel Pinto, Mark Weinberger, Nadia West, and Eugene Woods.
Under our bylaws, the election of each director nominee in today's election requires the affirmative vote of a majority of the votes cast. The Board recommends a vote for each of the nominees. The second item of business is an advisory vote to approve the compensation of our named executive officers and the executive compensation philosophy, policies, and procedures described in the compensation discussion and analysis section beginning on page 48 of the proxy statement. As an advisory vote, the results of this vote will not be binding on the Board or the company. However, the Board understands the importance of receiving shareholder feedback on executive compensation. The Board recommends a vote for this management proposal.
The third item of business is a ratification of the appointment of PricewaterhouseCoopers LLP, as the independent registered public accounting firm for Johnson & Johnson for fiscal year 2026, as described in the proxy statement beginning on page 116. The board recommends a vote for this management proposal. The final item of business is a proposal submitted by a shareholder. The shareholder proposal and its supporting statement appear on page 119 of the proxy statement and was submitted by the Accountability Board Inc. Matt Prescott will introduce the proposal and have two minutes.
Hi, everybody. Good morning. I can keep this much shorter than two minutes just for the sake of everybody's time. We think the proposal is pretty self-explanatory, speaks for itself, and we encourage everyone to vote for it. For anybody with questions or wants more information, we would just refer you to the proxy statement itself. Thank you very much, and have a good morning, everybody.
Thank you, Mr. Prescott, for your interest in and engagement with Johnson & Johnson. Directed by the fourth paragraph of our credo, our management team and the board take their responsibility to our shareholders very seriously. Shareholder engagement has been and remains a top priority of our corporate governance program here at Johnson & Johnson. In keeping with that commitment, we engage each year with the proponents of shareholder proposals. After careful consideration, the board recommends a vote against the proposal presented today for reasons more fully described in the proxy statement. In summary, the board believes that the adoption of the requested policy would unduly limit the board's discretion to choose the appropriate leadership structure best suited for the long-term success of the company. It is therefore recommended that shareholders vote against the shareholder proposal presented today. The polls will now remain open for a few minutes.
We will report on the voting results for each item of business shortly after the polls have closed and the Inspector of Elections has had the opportunity to conduct its preliminary tabulation. In the meantime, we would like to share a video with you that articulates how Johnson & Johnson is giving healthcare real meaning, advancing life-changing innovation, and connecting the best of health and care.
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The polls have been closed, and I will now report on the preliminary voting results for the items of business that were presented. The preliminary voting results are based on the tabulation received from the Inspector of Elections today and are as follows. The 12 director nominees named in the proxy statement have been elected to the board of directors. The advisory vote to approve named executive officer compensation has been approved. The ratification of appointment of our independent public accounting firm has been approved. The shareholder proposal did not pass. The board and management appreciate all forms of feedback from our shareholders. Despite the advisory nature of some of today's votes, we will carefully evaluate the voting results as we always do. Final voting results will be published within four business days of this meeting in a Form 8-K that will be filed with the Securities and Exchange Commission.
This now concludes the formal portion of our program, and this year's annual meeting is adjourned. We will now open the meeting for a question and answer session. We want to thank you for all the questions submitted. Several of your questions were on the same topic. For those topics, we have selected a representative question to answer today. Our chairman and I will now conduct the question and answer portion of this meeting. We received questions from John K, Barbara H, Ben M, and other shareholders regarding the qualifications of our directors, how they are selected, and their service on other boards. Can you offer your thoughts and insights on the company's approach?
Thank you for the question. As explained in our proxy statement, board composition is an area of important focus at Johnson & Johnson. The board has a proven record of strategic refreshment as we seek new directors with complementary skills, qualifications, and backgrounds consistent with the criteria established in our principles of corporate governance. Our nominating corporate governance committee considers suggestions from many sources, including shareholders, regarding potential candidates to serve on the board. Among other criteria, we expect our directors to have the highest ethical character and to share our credo values, along with a proven record of accomplishment within the candidate's field. We also look for leadership of a major complex organization, including scientific, government, or educational institutions, and ensure that new directors can dedicate sufficient time to the Johnson & Johnson board and deliver a high level of performance.
We have welcomed five new directors in the past five years, including both John G. Morikis and Daniel E. Pinto in 2025. We are proud to have such exceptional group of directors. Regarding service on other boards, our directors are all highly accomplished and sought after for their respective expertise. We do have limits on their outside board service, as described in our principles of corporate governance, which can be found on our website, and our annual board evaluation process considers whether each director is devoting the necessary time to fulfill their fiduciary duties to shareholders.
We received a question from James J. asking when we expect the talc litigation to be resolved. Can you provide an update?
For Johnson & Johnson, patient safety always comes first. For clarity, Johnson & Johnson no longer sells consumer health products, including Johnson's Baby Powder, and today, we are exclusively focused on developing innovative medicines and medical technologies to address the world's most serious diseases. Our position on cosmetic talc litigation has not changed. Decades of independent scientific testing confirm that Johnson's Baby Powder was safe, and we continue to stand behind that science. Following the dismissal of the most recent bankruptcy proceeding in March 2025, the company returned to the tort system to litigate these claims, where it has a strong track record defending talc cases at trial and on appeal. We are also proactively pursuing legal actions against those who knowingly engaged in improper conduct to create and advance meritless talc claims.
While litigation takes time, the company remains disciplined and focused on responsibly addressing these matters while continuing to deliver long-term value for shareholders.
We received a question from Lewis M. asking when the company intends to effectuate a stock split. Can you offer the company's perspective on this issue?
Johnson & Johnson believes our long-term success is the result of meeting the responsibilities set forth in our credo. The responsibility to the patients, doctors, and nurses who use our products, to our employees and our communities, and finally, to our shareholders. That relentless focus resulted in exceptional financial performance and total shareholder return in 2025. As mentioned earlier during my business review, in 2025, the company stock price increased 43%, yielding a total shareholder return of 47.5%, representing one of the best annual returns in our history. Our commitment to our capital allocation strategy has remained a top priority for decades, with over 60% of free cash flow returned to shareholders in the form of dividends or share repurchase programs over the past five years. We announced earlier this month that we have increased our dividend for the 64th consecutive year.
We'll continue to take a disciplined approach on behalf of our shareholders and make announcements related to that strategy as appropriate.
There are no further questions.
Thank you, Marc. That concludes our annual shareholder meeting. As you have heard, 2025 was a catalyst year for Johnson & Johnson, propelling the company into a new era of accelerated growth and impact. Today, Johnson & Johnson has the strongest portfolio and pipeline in its history. In 2026, we'll build on that momentum, bringing game-changing innovation to more patients more quickly than ever before. Your confidence and investment in Johnson & Johnson are vital to our success. Thank you for your continued support.