Johnson & Johnson at Wells Fargo Healthcare Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Larry Biegelsen - Wells Fargo Securities, LLC - Analyst : So let's start with a few big-picture questions. You've been leading the J&J worldwide MedTech business for nearly a year. Talk about what's gone well, what could have gone better and what you're excited about?

Question: Larry Biegelsen - Wells Fargo Securities, LLC - Analyst : That's helpful. One follow-up on the decentralized model. Any margin implications of that? Of course, more centralized, you might have more cost synergies. Decentralized, I understand what you said about speed, but are there any margin implications from that?

Question: Larry Biegelsen - Wells Fargo Securities, LLC - Analyst : That's helpful. And the M&A strategy, we've certainly noticed you've done a lot of deals recently and four in the cardiovascular side. Your CFO talked about modest tuck-in deals going forward on the Q2 earnings call. How do you define modest in size? And is cardio, is that still an area of focus for you for M&A?

Question: Larry Biegelsen - Wells Fargo Securities, LLC - Analyst : And cardio, I mean, still a focus or --

Question: Larry Biegelsen - Wells Fargo Securities, LLC - Analyst : That makes sense. Tim, the guidance, I think, is for this year about 6% for MedTech. I think the first half was about 5% -- a little over 5% or operational organic. It implies an acceleration in the second half. What gets better from first half to second half?

Question: Larry Biegelsen - Wells Fargo Securities, LLC - Analyst : The anticorruption issues in China, you said it's taking longer to resolve, I think, earlier. We heard that from another company this morning as well. Was that contemplated when you -- on the Q2 call? Or is that incremental?

Question: Larry Biegelsen - Wells Fargo Securities, LLC - Analyst : Got it. Got it. And you've not disclosed the percent of MedTech sales in China, correct?

Question: Larry Biegelsen - Wells Fargo Securities, LLC - Analyst : That's helpful. So let's move on to some of the businesses or maybe just before that, maybe just how you're thinking about the outlook beyond this year, that 5% to 7% for the market? And J&J, maybe it's just -- maybe it's too early. Any preliminary thoughts on puts and takes for next year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 05, 2024 / 3:00PM, JNJ.N - Johnson & Johnson at Wells Fargo Healthcare Conference

Question: Larry Biegelsen - Wells Fargo Securities, LLC - Analyst : That's helpful. Tim. On the interventional and EP is the Varipulse US approval, you've talked about late '24, early '25. Is that still on track? And what's the strategy once you launch that? I assume that some physicians, Biosense Webster users have started using Faripulse the Boston Scientific product or the Medtronic product. What's just -- once you have Varipulse, what's the strategy to maybe recapture some of those physicians that maybe started using other catheters?

Question: Larry Biegelsen - Wells Fargo Securities, LLC - Analyst : Is there any way to stop other catheters being used with CARTO? I mean I know it's not fully integrated. There's different types of mapping. But if someone wants to use CARTO with competitor or catheter going forward, will they have that option?

Question: Larry Biegelsen - Wells Fargo Securities, LLC - Analyst : No, I mean, to close CARTO ops, so it has to be -- you have to use it.

Question: Larry Biegelsen - Wells Fargo Securities, LLC - Analyst : One question on Shockwave. The outpatient reimbursement did not get mapped higher. Just curious if you think that will have any impact on volumes of Shockwave for coronary in the US. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 05, 2024 / 3:00PM, JNJ.N - Johnson & Johnson at Wells Fargo Healthcare Conference

Question: Larry Biegelsen - Wells Fargo Securities, LLC - Analyst : And the integration so far so good, it sounds like, with Shockwave.

Question: Larry Biegelsen - Wells Fargo Securities, LLC - Analyst : All right. Let's move on. I could ask cardio questions all day, but we need to get a couple other businesses. Vision care, I heard you talk about contact lenses bouncing back. I may have missed it, but surgical has also been a little soft within Vision Care, particularly in the US. Please correct me if I'm wrong. But what's -- talk about that end of the business because it sounds like contact lens is back on track, but what about the surgical side?

Question: Larry Biegelsen - Wells Fargo Securities, LLC - Analyst : It's interesting. We haven't seen a lot of M&A in the ophthalmology area from J&J since you've owned the AMO asset. Why is that? And how are you thinking about inorganic opportunities in ophthalmology?

Question: Larry Biegelsen - Wells Fargo Securities, LLC - Analyst : Got it. And then surgical, that was a little soft as well in the first half mainly due to softness in advanced surgery. It was -- 2023 grew nicely 6%. How do you see that business performing moving ahead?

Question: Larry Biegelsen - Wells Fargo Securities, LLC - Analyst : So you said we're going to file the IDE in the second half of this year. Do you think you could have FDA approval of the IDE this year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 05, 2024 / 3:00PM, JNJ.N - Johnson & Johnson at Wells Fargo Healthcare Conference

Question: Larry Biegelsen - Wells Fargo Securities, LLC - Analyst : Maybe just, Tim, while we're on robotics, if you could give us an update on the digital robotic strategy. You have three platforms. Ottava, you just went through; VELYS; and then you also have MONARCH.

Question: Larry Biegelsen - Wells Fargo Securities, LLC - Analyst : VELYS spine, I think, is already cleared.

Question: Larry Biegelsen - Wells Fargo Securities, LLC - Analyst : Soft launch this year? Any activity this year before the full launch? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 05, 2024 / 3:00PM, JNJ.N - Johnson & Johnson at Wells Fargo Healthcare Conference

Question: Larry Biegelsen - Wells Fargo Securities, LLC - Analyst : I'm not sure I heard anything on MONARCH, just the uptake adoption of MONARCH? How is that going?

Question: Larry Biegelsen - Wells Fargo Securities, LLC - Analyst : And the orthopaedic SKU rationalization, $250 million over two years. That starts in the second half of this year, I believe.

Question: Larry Biegelsen - Wells Fargo Securities, LLC - Analyst : So that's on track. And I assume you'll help us understand the impact of that when you report your results?

Question: Larry Biegelsen - Wells Fargo Securities, LLC - Analyst : Tim, you've been pretty clear about -- so I wanted to ask about procedure volumes. And you historically, the backlog, particularly in ortho would kind of run through the second half. Is that your view? And any kind of color commentary on kind of the state of procedure volume around the world? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 05, 2024 / 3:00PM, JNJ.N - Johnson & Johnson at Wells Fargo Healthcare Conference

Question: Larry Biegelsen - Wells Fargo Securities, LLC - Analyst : Tim, I'm going to try to sneak in a couple of cardio questions.

Question: Larry Biegelsen - Wells Fargo Securities, LLC - Analyst : So back on the Shockwave outpatient, it sounds like you're still having discussions with CMS. You don't expect it to have an impact, but it sounds like you think there's still a chance you could get the outpatient reimbursement moved up?

Question: Larry Biegelsen - Wells Fargo Securities, LLC - Analyst : And then in cardio, gaps, any other -- you just bought V-Wave, that interventional heart failure. How are you thinking about rounding out your cardiovascular device portfolio?

Question: Larry Biegelsen - Wells Fargo Securities, LLC - Analyst : All right. We're out of time, but I want to give you the last word, Tim, and thank you so much for being here. Any closing remarks, anything you want to highlight that we didn't touch upon?