1

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changes to applicable laws and regulations, including global health care reforms; trends toward health care cost containment;
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& Johnson. Any forward-looking statement made in these presentations speaks only as of the date of these presentations.
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Notice Regarding Non-GAAP Statements

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non-GAAP financial measures should not be considered replacements for, and should be
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certain of these non-GAAP financial measures to the most directly comparable GAAP
financial measures can be found in the Investor Relations section of the Companys
website at www.investor.jnj.com.
Note: Operational sales growth excludes translational currency impact and is a
non-GAAP financial measure.

Notice Regarding Trademarks

Third-party trademarks used herein are trademarks of their respective owners.

Strategic Partnerships, Collaborations and

Licensing Arrangements
During the course of this mornings presentations, we will discuss a number of products
developed in collaboration with strategic partners or licensed from other companies.
Following is an acknowledgement of those relationships.
Diabetes Care

INVOKANA licensed from Mitsubishi Tanabe Pharma Corporation; ANIMAS VIBE in

partnership with Dexcom; ONETOUCH VERIO FLEX uses Bluetooth

Orthopaedics

MONOVISC and ORTHOVISC licensed from Anika Therapeutics, Inc.; Kick 2D Surgical
Navigation co-developed with Brainlab AG; Various products in connection with the Cooperation
Agreement with the AO Foundation; TRUMATCH developed in collaboration with iMorphics Ltd
and Materialise; CARTO software in partnership with Siemens

Surgery

SURGIFLO research collaboration with Ferrosan Medical Devices A/S

Consumer

ZYRTEC licensed from UCB Inc. and its affiliates; RHINOCORT licensed from AstraZeneca AB

Hospital Medical Devices

Gary Pruden
Executive Vice President and Worldwide Chairman

Our Credo defines our

responsibility to the doctors,
nurses and patients we serve

Johnson & Johnson Hospital Medical Devices

Leading from a Position of Strength

Key Takeaways

Current pipeline of products filing by

2018 has sales potential greater
than $6 billion

Unique, broad-based approach

to innovation:

More than 20+ major filings planned

through 2018

Focus on disease states,

new technologies

Expanding new product freshness

index from 25%1 to >30% by 2020

Strategic partnerships driving an increase in

multi-product contracts, expanding
to ~40% of the business by 20202

MedTech market is attractive & growing

Strong global leadership position

Deliver novel commercial models

Leverage Johnson & Johnson

innovation footprint
Build strategic customer partnerships

Poised to Deliver Above Market Growth

Source: Internal estimates
1. Percent of 2015 sales from products launched in the last five years; 2. Representing US Orthopaedic and Surgery businesses
8

Medical Devices Organization

Business Unit Focused Approach to the Customer

16 Business units
15 Management Boards
3 OUS regions
Limited Centers of Excellence
Non-integrated supply chain

A Leading Hospital Medical Devices Organization

Novel Commercial Models Aligned to the Customer
Today

Surgery

3 Global franchises
4 Regions with integrated P&Ls

CV & Specialty

Orthopaedics

1 R&D inclusive of Medical,

Regulatory COEs
1 Integrated supply chain

10

Accelerating Innovation & Growth, Increasing Efficiency

Restructuring in Action

Accelerate Pace
of Innovation
Prioritize and reallocate
research and development
resources
Source external innovation

Streamline
Operations

Strengthen Our Novel

Go-to-market Model

Further Prioritize Key

Platforms / Geographies

Consolidate footprint and

maintain quality standards

One Strategic Customer

Team

Increase resources to key

platforms & geographies

Reduce complexity

Three global franchises and

integrated regional P&Ls

Exit non-strategic businesses

On Track: $800MM-$1B Annual Savings Majority by 2018

11

Gaining Momentum and Accelerating Growth

Hospital Medical Devices Adjusted Sales Growth
4.2%

5-year CAGR (10-15): 1.7%

3-year CAGR (12-15): 2.5%

2.7%

3.0%

1.8%
0.6%

0.5%

2011

2012

2013

2014

2015

2016 Q1

Note: Growth figures are operational and adjusted for acquisitions / divestitures / Venezuela (2016 only)

12

Our Opportunity
13

Surgery Globally
Surgery is an indivisible,
indispensable part of health
care and can help millions
of people lead healthier,
more productive lives
Jim Kim, President of the World Bank

14

32 percent
of the global burden of disease
can be attributed to surgically
treatable conditions

5 billion

people lack access to safe, affordable

surgical care when needed

143 million

additional surgical procedures are

needed each year to save lives and
prevent disability

The Lancet Global Surgery Commission, 2015

15

63 percent
of surgeons are now
employed by hospitals

Medscape Physician Compensation Report 2015, for USA only

16

Innovating
new solutions that address unmet patient
needs globally, and create value

17

Reach More Patients,

Restore More Lives

18

Global MedTech Growth is Building Momentum

MedTech Market Size ($US Billions)

~$470
~$340

~$370

~$250

2005

2010

2015

2020

Note: MedTech market growth per internal estimates; MedTech dollars at as reported rates; MedTech growth rates are operational (2015 base year)

19

Significant Opportunity to Improve Patient

Care in Emerging Markets

Developed
(US, Western Europe,
Other Developed)

2015

Global Population

MedTech Spending

7.3 Billion

$370 Billion

Emerging
(China, India,
Other Emerging)

Developed

23%

Emerging

87%
Emerging

Developed

Source: MedTech market size per EvaluateMedTech; MedTech developed vs. emerging per BMI; Population per U.S. Census Bureau, International Database

20

Global Markets Are Significantly Under-penetrated

Patients not receiving treatment
Patients receiving treatment

2015

34%

2%

1%

Minimally Invasive Surgery

Ablation

Total Knee Replacements

(General Surgery)

(% with AF Diagnosis)

(% with Symptomatic OA Diagnosis)

Source: Internal estimates; GlobalData

21

Our Strategy for Growth

SURGERY

Accelerate Growth
in Priority Platforms

ORTHOPAEDICS

Endocutters

Knees

Energy

Trauma

CV & SPECIALTY
Electrophysiology

Surgical Oncology

Obesity

Robotics

Sustain Growth
in Core Platforms

Select Cardiovascular
Disease Areas

Biosurgery

Hips

Sterilization /
Disinfection

Germany
UK
France

US

Brazil

Italy

China

Osteoarthritis
Osteoporosis

Wound Closure

Drive Above
Market Growth
in Nine Key
Geographies

Focus on
Key Unmet Needs

Japan

ANZ

Accelerate Cadence
of Innovation
Strengthening our near
term pipeline
Leverage J&J enterprise
innovation framework
Externally source
new technology

Leverage Our
Breadth and Scale
Novel commercial models
Strategic customer
partnerships
Risk sharing agreements

22

Disciplined Portfolio Focused Approach

PRIORITY
#11

Endocutters

#1

$2.3B
#2

#1

$4.2B
#1

$3.7B

#1

4%

#2

0%

$2.6B

5%

$1.2B

3%

$1.2B

4%

$1.1B

7%

CMF

Market Position
Worldwide Market Size 2015 ($US)

Robotics

$1.5B

Breast Aesthetics

3%

Trauma
$6.7B

NA

#2

3%

Neuro

4%

Wound Closure

$3.3B 11%
#1

#2

$8.9B
Mechanical

2%

Sterilization / Disinfection

3%

Electrophysiology

#1

$6.4B

Spine

6%

Hips

5%
#1

$7.3B

#2

$2.6B
#2

Knees

BASE

Biosurgicals

9%

Energy
$3.7B

#2

CORE

Shoulders

Market CAGR (5 years to 2020)

$2.4B

11%

Source: Internal estimates

1. Tied for #1 position with competitor
23

Focus on Innovation Drives Growth

Expanding New Product Freshness Index1 from 25% to >30% by 2020

~45%

~45%

Electrophysiology
grew 13%2
in 2015
~25%

~35%
~25%

Total Hospital MD

Priority Platforms

Priority Platforms
grew 6%2
in 2015

Electrophysiology

Source: Internal estimates

1. Percent of 2015 sales from products launched in the last five years; 2. Operational growth

24

Novel Commercial Models

The New Value Framework for Hospital Medical Devices
Dedicated Health System Focus

Portfolio Breadth and Depth

Integrated Solutions

Single point of contact with customers to

identify needs and deliver tailored solutions

Unique contracting models

and risk share

Solutions to address health system

needs across the continuum of care

FROM: MULTIPLE TOUCH POINTS

FRAGMENTED

DePuy Synthes

Solutions

Franchise Acct
Mgr.

TO: SINGLE LEAD

COORDINATED

Enterprise
Customer
Group.

Commercial
operations

Marketing

Contracting

Professional
education

Solutions

Health Economics
& Market Access

DePuy Synthes Field Sales

Health Economics
& Market Access

Health
System

Ethicon
Ethicon Field Sales

Strategic Acct
Mgr

Director
Strategic
Accounts

Commercial
operations

Professional
education

Field Sales
Cardiovascular &
Specialty Solutions
Field Sales

Johnson
& Johnson
Health Care
Systems
Contracting

Supply Chain

25

Innovating in Our Commercial Offering

Simplified Customer
Experience

Progressive Cross-portfolio
Contracting

Integrated Services
and Solutions
Nutrition

40%

Single lead accountable for bringing best of

Hospital Medical Devices to Health Systems

Multi-product line contracts outperform our base

and are projected to represent ~40% of
the US business1

Surgery Education

Wound & Pain Management

Evaluation

Pre-op Testing

Rehab

Decision Making

Discharge Planning

Follow-up Visits

Surgery Planning

Hospital Preparation

IN-DECISION

PRE-ADMISSION

Discharge
INPATIENT

Exit Surveys
POST-OP

SURVEILLANCE

Supporting Health Systems pressing need to

integrate care across surgical episodes

Notable Strategic Partnerships:

1. Note: Representing US Orthopaedic and Surgery businesses

26

Global Reach and Capability

CHINA LEADERSHIP

ENTERPRISE R&D

ONE J&J SOUTHEAST ASIA

Sales
2x

2015

2020

#1 in Medical Devices sales

China Lung Cancer R&D Center

~15% 2012-2015 OPS CAGR

Leveraging Johnson & Johnson

enterprise capabilities

Leadership share in key platforms:

6 platforms >50% share
Strengthening go-to-market model
Global professional education support,
~55K surgeons trained in China1
1. Internal estimates; 2. Operational

Multiple Global R&D sites

Products tailored to specific
needs of patients / surgeons in
Asia / Emerging Markets
Launched CORAIL Hip
system with shorter neck
for smaller anatomies

Leverages Johnson & Johnson scale

in smaller markets
Johnson & Johnson channel
strategy by customer

One voice to key stakeholders

and policy makers
Hospital Medical Devices delivered
double-digit sales growth2 in 2015

27

Accelerating Pace of Externally Sourced Innovation

Leveraging Breadth and Scale of Johnson & Johnson

Innovation Centers

Boston
California
London
Shanghai

JLABS

6 sites in North America

~140 companies in residence
Toronto / Houston:
Medical Devices focus

Johnson & Johnson

Development Corp.

#1 Ranked VC fund1
Invested ~$250MM in capital
on behalf of the Hospital MD
businesses over the last
three years

1. Source: Lake Whillans research; MedCity June 2015

28

Unique and Broad-based Approach to Innovation

Accelerate Our Cadence of Innovation

Building novel commercial models

and strategic customer
partnerships and solutions

Leveraging Johnson & Johnson

innovation footprint and convergence

Focusing on disease states,

innovation and insourcing new
technology to accelerate growth

29

Appendix
30

Biosurgicals
2015
SALES CHANGE*

2015 WW
MARKET POSITION**

WW MARKET
2015-2020 CAGR**

TOTAL WW MARKET
REVENUE 2020**

7.8%

#1

~6%

~$3.4B

Strategic Initiatives

Build on hemostasis expertise to address

unmet needs in leaks and tissue healing
Selectively globalize, including strong growth
in Emerging Markets

Expand Depuy Synthes collaboration across

platforms and geographies

* Operational and includes BCS, TAH, AP

** Internal estimates

31

Energy
2015
SALES CHANGE*

2015 WW
MARKET POSITION**

WW MARKET
2015-2020 CAGR**

TOTAL WW MARKET
REVENUE 2020**

4.3%

#2

~5%

~$4.7B

Strategic Initiatives

Strengthen core offerings in HARMONIC and ENSEAL

through innovation focus on sealing, dissection, and
ease-of-use
Penetrate mid-value markets through a segmented
portfolio and sustainable solutions
Expand into new specialties such as hepatobiliary
and orthopaedics

* Operational
** Internal estimates

32

Endocutters
2015
SALES CHANGE*

2015 WW
MARKET POSITION**

WW MARKET
2015-2020 CAGR**

TOTAL WW MARKET
REVENUE 2020**

15.1%

#1***

~9%

~$3.6B

Strategic Initiatives

Deliver tissue-specific innovation that reduces patient

complications in the most challenging oncologic and
bariatric cases
Expand evidence generation and dissemination to
increase the penetration of obesity surgery
Increase penetration of minimally-invasive surgical
approaches by balancing device performance and cost

* Operational
** Internal estimates
*** Tied for #1 position with competitor

33

Wound Closure
2015
SALES CHANGE*

2015 WW
MARKET POSITION**

WW MARKET
2015-2020 CAGR**

TOTAL WW MARKET
REVENUE 2020**

1.6%

#1

~3%

~$4.3B

Strategic Initiatives

Elevate standard of care by leveraging evidence to drive

customer upgrades to the Plus Antibacterial Suture
Portfolio, STRATAFIX Knotless Tissue Control Devices,
and PRINEO Skin Closure System
Reduce variability and improve efficiency in minimallyinvasive procedures by automating laparoscopic suturing
Expand presence in orthopaedics through collaboration
with Depuy Synthes
* Operational
** Internal estimates

34

Hips
2015
SALES CHANGE*

2015 WW
MARKET POSITION**

WW MARKET
2015-2020 CAGR**

TOTAL WW MARKET
REVENUE 2020**

3.2%

#2

~2%

~$7.1B

Strategic Initiatives
Drive growth in CORAIL and PINNACLE Power Brands
Global expansion of the Anterior Approach
Launch of the ACTISTM Total Hip System in 2017
Deliver Enabling Technologies to improve outcomes
and reduce costs

* Operational
** Internal estimates

CORAIL Hip with

CERAMAX Ceramic Total Hip System
35

Knees
2015
SALES CHANGE*

2015 WW
MARKET POSITION**

WW MARKET
2015-2020 CAGR**

TOTAL WW MARKET
REVENUE 2020**

2.8%

#2

~3%

~$8.3B

Strategic Initiatives
Continued global expansion of ATTUNE Primary Knee
System (Brazil and China)
Capture and leverage evidence to demonstrate the
value of ATTUNE
Complete the ATTUNE Platform, including revision
Transform knee procedures for outcomes and cost to
serve via INTUITION SOLO
* Operational
** Internal estimates
Note: Knees includes TKA, excludes HA and Sports Emerging Technologies

ATTUNE Knee System

INTUITION SOLO
Instruments

36

Shoulders
2015
SALES CHANGE*

2015 WW
MARKET POSITION**

WW MARKET
2015-2020 CAGR**

TOTAL WW MARKET
REVENUE 2020**

4.9%

#2

~7%

~$1.6B

Strategic Initiatives

Enhance key growth drivers

DELTA XTEND Reverse Shoulder System
GLOBAL UNITE Platform Shoulder System
Launch GLOBAL ICON Stemless Shoulder OUS

* Operational
** Internal estimates
Note: also includes sales related to ankles, fingers, wrists and elbows

DELTA XTEND
Reverse Shoulder
System

37

Trauma
2015
SALES CHANGE*

2015 WW
MARKET POSITION**

WW MARKET
2015-2020 CAGR**

TOTAL WW MARKET
REVENUE 2020**

1.9%

#1

~4%

~$8.1B

Strategic Initiatives

Increase cadence of new product introductions and build

strong innovation platforms
Drive growth in core platforms with TFN-ADVANCED
Proximal Femoral Nail and introduction of anatomic
VA Locking Hand System

TFN-ADVANCED
Proximal Femoral Nailing
System

Offer a competitive, complete portfolio for the elective foot

market
Strengthen position in high growth geographies

Variable Angle (VA)

Locking Hand System

* Operational
** Internal estimates

38

Spine
2015
SALES CHANGE*

2015 WW
MARKET POSITION**

WW MARKET
2015-2020 CAGR**

TOTAL WW MARKET
REVENUE 2020**

(2.6)%

#2

~3%

~$10.2B

Strategic Initiatives

Strengthen Our Core

Close key portfolio gaps with targeted M&A
Upgrade our key platforms
Simplify our current portfolio (brand reduction)

Address The Aging Spine

Better diagnostics
Slow / halt / reverse
DDD

Less Invasive Surgery

Reduce the impact of surgery on patients
Improve clinical and cost outcomes
Normalize surgeon variation
Move to outpatient
* Operational
** Internal estimates

39

Sports Medicine
2015
SALES CHANGE*

2015 WW
MARKET POSITION**

WW MARKET
2015-2020 CAGR**

TOTAL WW MARKET
REVENUE 2020**

7.1%

#3

~5%

~$7.0B

Strategic Initiatives

Drive market leading growth with MONOVISC and

ORTHOVISC in the U.S.
Continue global launch of visualization tower
Deliver pipeline of innovation in minimally
invasive mobility therapies

* Operational
** Internal estimates

40

Neuro
2015
SALES CHANGE*

2015 WW
MARKET POSITION**

WW MARKET
2015-2020 CAGR**

TOTAL WW MARKET
REVENUE 2020**

0.5%

#2

~5%

~$3.4B

Strategic Initiatives

Continue growth in Neurosurgery through product launches in

hydrocephalus, cranial procedures and neuro critical care
(e.g. CERTAS Plus, DirectLink)
Accelerate growth in Neurovascular through product launches in
hemorrhagic and ischemic stroke (e.g. ENTERPRISE 2 VRD,
CODMAN SPECTRA family of coils, InNeuroCo intermediate
catheters and REVIVE SE thrombectomy device in Japan / China)
Expansion of partnership with AO Neuro collaboration in
neurosurgical education globally
* Operational
** Internal estimates, excludes Neuro Modulation

Codman ENTERPRISE 2
Vascular Reconstruction Device
41

Craniomaxillofacial (CMF)
2015
SALES CHANGE*

2015 WW
MARKET POSITION**

WW MARKET
2015-2020 CAGR**

TOTAL WW MARKET
REVENUE 2020**

0.7%

#1

~4%

$1.5B

Strategic Initiatives

Extend Market Leadership in Core Platforms

(Maxillofacial & Neuro)
Establish technology leadership in personalized
solutions TRUMATCH

Strengthen position in high growth Thoracic Market

Broaden global market access with OR-efficient, cost
effective portfolio

* Operational
** Internal estimates

TRUMATCH Patient-Specific Portfolio

42

Power Tools
2015
SALES CHANGE*

2015 WW
MARKET POSITION**

WW MARKET
2015-2020 CAGR**

TOTAL WW MARKET
REVENUE 2020**

5.2%

#3

~3%

~$1.7B

Strategic Initiatives

Collaborate across Medical Devices to

expand commercial channels and deliver greater value
to our customers
Accelerate the commercialization of new integrated
technologies to improve surgical procedure efficiency
Develop power solutions for target surgical procedures

* Operational
** Internal estimates

ANSPACH EG1 High

Speed Electric System

43

Breast Aesthetics
2015
SALES CHANGE*

2015 WW
MARKET POSITION**

WW MARKET
2015-2020 CAGR**

TOTAL WW MARKET
REVENUE 2020**

10.6%

#2

~3%

~$1.4B

Strategic Initiatives

Focusing on R&D programs and innovative solutions

for breast reconstruction to drive leadership in
breast surgery
Recent launch of latest generation expander platform
ARTOURA and ATHENA IDE trial providing unique
implant solutions for high BMI patients
Leveraging ability to meet wide range of plastic surgery
needs (e.g., implants, sutures)
* Operational
** Internal estimates

44

Ear, Nose, and Throat (ENT)

2015
SALES CHANGE*

2015 WW
MARKET POSITION**

WW MARKET
2015-2020 CAGR**

TOTAL WW MARKET
REVENUE 2020**

(7.0)%

#2

4%

$1.1B

Strategic Initiatives

Focus on US market & accelerate innovation cadence

with multiple new product introductions to continue
leadership in BSP
Leveraging Navigation Platform capabilities from
Biosense Webster to bring most advanced navigation
system & consumables to ENT Drs & their patients
Capitalize on Surgical Navigation platform launch to
establish Acclarent as a broad ENT player across BSP
& FESS surgery
* Operational
** Internal estimates

45

Electrophysiology
2015
SALES CHANGE*

2015 WW
MARKET POSITION**

WW MARKET
2015-2020 CAGR**

TOTAL WW MARKET
REVENUE 2020**

12.5%

#1

~11%

~$5.5B

Strategic Initiatives
Continue CARTO 3 System penetration around the world with innovative
software enhancements including our Multi-Electrode Mapping,
CARTOUNIVU, PASO, VISITAG and CONFIDENSE Modules
Launch next generation ablation solutions to address safety, efficacy and
ease of use needs for AF and VT
Expand AF leadership beyond Paroxysmal AF to include persistent AF
indication in the US
Establish leadership position along the AF Care continuum and capitalize
on AF adjacent categories (example: Left Atrial Appendage Device
Coherex acquisition)
* Operational
** Internal estimates

46

Infection Prevention
2015
SALES CHANGE*

2015 WW
MARKET POSITION**

WW MARKET
2015-2020 CAGR**

TOTAL WW MARKET
REVENUE 2020**

3.1%

#1

~4%

$5.1B

Strategic Initiatives

Focus on core instrument processing segment: high-level

disinfection and sterilization
Set new standards in operational efficiency with next
generation high-level disinfection and sterilization
solutions (hardware and consumables)

* Operational, excludes divestitures

** Internal estimates

47

Reprocessing
2015
SALES CHANGE*

2015 WW
MARKET POSITION**

WW MARKET
2015-2020 CAGR**

TOTAL WW MARKET
REVENUE 2020**

4.3%

#2

~7%

~$0.5B

Strategic Initiatives
Accelerate revenue growth and drive market share gains
Focus on highest growing / highest value procedure and product markets
the Operating Room and the Electrophysiology and Cath Labs
Increase pipeline volume and velocity and speed to market after
OEM product introduction
Create pull-through strategies and collaboration opportunities
Close partnership with Johnson & Johnson Operating Companies to drive
customer value through increased focus on Certified Reprocessed Programs
New account acquisition / conversion and account penetration

* Operational, represents total Johnson & Johnson reprocessing growth, including Sterilmed and Johnson & Johnson affiliates
** Internal estimates

48

49