Inquire about 2027 sales growth expectations (similar to 2026 adjusted for extra week) and EPS growth excluding IPR&D, and quantify Firefly/Sale dilution for this year and next.

IPR&D dilution is $0.64 for FY26 and $1.36 for FY27. Expect income/EPS growth to be slightly better than sales growth in FY27, adjusted for the $1.36 dilution. More details will be provided at the Investor Day on December 8. “So for this year, the IPR&D dilution is $0.64. And for next year, the combination of those deals is $1.36.”

Update on ICO Tide patient uptake (new to biologic vs. switches) and whether its strong launch and pending indications suggest a peak sales opportunity much larger than $10 billion.

Over 20,000 patients have initiated therapy with nearly 9,000 prescribers. Approximately 60% of patients are systemic naive, 20% sourced from orals, and 20% from other treatments (likely biologics). Broad commercial access is now in place. The drug is expected to be one of the largest assets, with upcoming data readouts in PSA and head-to-head STELARA data. “Approximately 60% of the patients are systemic naive, so they haven't received any systemic therapy. And roughly the 40 remaining 20% are sourced from orals and 20% are sourced from other treatments, most likely biologics as we dig into the data.”

Confirm if 'underlying fundamentals are solid' refers to patient volumes/CapEx, and what actions are needed to improve the J&J MedTech franchise.

MedTech Q3 performance was below standard, primarily due to ex-U.S. performance and Abiomed. U.S. growth was robust at almost 5%. Challenges outside the U.S. include VBP in China, competitive intensity in electrophysiology (Asia Pacific), and Middle East disruption. Encouraging indicators include double-digit growth for Varapulse Pro in Europe and expected U.S. launch. The underlying procedure environment is stable. Actions include converting demand into consistent performance and leveraging new innovations like Ottava. “growth in the U.S., which, as you know, is the most important market wasn't fact robust in the quarter and accelerated to almost 5%.”

JNJ

Johnson & Johnson (JNJ) Q3 FY26 earnings call: guidance and Q&A

Earnings call· Sep 2026 (Q3 FY26)· Health Care· Oct 13, 2026

Source: earnings call transcript

Executive summary

Johnson & Johnson Q3 FY26 — Strong Innovative Medicine Performance Drives Sales Beat and Raised Full-Year Guidance

Johnson & Johnson delivered a strong third quarter, driven by robust performance in its Innovative Medicine segment, particularly in Oncology and Immunology, which offset underperformance in MedTech. The company raised its full-year operational sales guidance, expecting to surpass $100 billion in annual revenue for the first time. Management remains confident in achieving double-digit growth by the end of the decade, supported by new product launches and pipeline catalysts, while actively addressing MedTech headwinds.

Highlights

Worldwide operational sales grew 6%, exceeding analyst consensus.
Innovative Medicine operational sales grew 7.9%, with 8 brands achieving double-digit growth.
Oncology business grew approximately 17%, driven by multiple myeloma portfolio and RYBREVANT.
TREMFYA delivered exceptional sales growth of 68%, becoming brand share leader in ulcerative colitis and Crohn's disease in the U.S.
Full-year operational sales guidance raised to $100.7 billion at the midpoint, on track to exceed $100 billion annual revenue for the first time.

Concerns

MedTech operational sales grew only 2.5%, falling short of expectations, particularly in cardiovascular and surgery outside the U.S.
Abiomed sales declined 1.5% due to lower patient volume, attributed to a study outside the U.S. focused on high-risk PCI.
STELARA sales declined 54% due to competitive pressures from biosimilars.
Net earnings were $210 million, significantly down from $2.12 billion a year ago, impacted by a $5.5 billion talc litigation resolution and $1 billion Firefly Bio acquisition.
Adjusted diluted EPS decreased 7.5% to $2.59, impacted by Firefly Bio acquisition and Sale Biomedicines collaboration expenses.

Guidance & targets

Category	Target	Timeline	Confidence
Full-year operational sales growth	6.7% to 7.1% high materiality	FY26	High
Full-year reported sales growth	7.2% to 7.6% high materiality	FY26	High
Full-year operating margin decline	approximately 60 basis points medium materiality	FY26	High
Full-year net interest expense	$150 million to $200 million low materiality	FY26	High
Full-year effective tax rate	17.0% to 17.5% medium materiality	FY26	High
Full-year adjusted operational EPS	$10.95 to $11.05 high materiality	FY26	High
Full-year reported adjusted EPS	$11.05 to $11.15 high materiality	FY26	High
Firefly Bio and Sale Biomedicines combined dilutive impact on adjusted EPS	$1.36 per share medium materiality	FY27	High
Double-digit growth	double-digit growth high materiality	by the end of the decade	High
Oncology sales	exceed $50 billion high materiality	by 2030	High
TREMFYA franchise sales	$10 billion-plus high materiality	long-term	High
Abiomed business growth	back to growth medium materiality	in short order	Medium
Ottava contribution to surgery portfolio	significant pillar medium materiality	by the end of the decade	High
P Synthes separation	on track for planned separation high materiality	by mid-2027 · FY27	High
MedTech EMEA Surgery growth	return to growth medium materiality	Q4 · FY26	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Innovative Medicine Underscores continued strength of key brands and new launches. Growth in the U.S. was 11.1% and 3% outside the U.S. Divestitures had a negative impact of 10 basis points on worldwide growth.	$16.8 billion	7.9%	—	—
Oncology Making progress to redefine cancer care from treatment to cure. Multiple myeloma portfolio and pipeline are strong, with 80% of patients receiving a Johnson & Johnson therapy.	—	approximately 17%	—	—
DARZALEX Primarily driven by strong share gains and continued market growth. Share gains: 5 points across all lines of therapyShare gains: 10 points in frontline settingMarket growthOUS pricing headwinds: partially offset growth	—	15.6%	—	—
TREVICTA Driven by share gains and continued site expansion. Share gains across earlier lines of therapySite expansion	—	35.2%	—	—
Sigvaily Driven by launch uptake and share gains following last quarter's U.S. approval. Launch uptakeShare gains across earlier lines of therapy	—	77.3%	—	—
RYBREVANT plus LAZCLUZE Strong performance driven by launch uptake and share gains. Strong share gains in first and second linesContinued launch uptake in all regionsRapid uptake in RYBREVANT Faspro	—	63.5%	—	—
ERLEADA Continued share gains and market growth, partially offset by unfavorable patient mix. Continued share gainsMarket growthUnfavorable patient mix: partially offset growth	—	9.4%	—	—
Inlexzo Rapidly emerged as a market leader for new patient share in bladder cancer, just 1 year after launch. New patient share: market leaderEligible patients on regimen: Nearly 1 in 3 in Q3	—	—	—	—
TREMFYA Exceptional sales growth reflecting strong momentum across its indications. Now brand share leader in ulcerative colitis and Crohn's disease in the U.S. Momentum from IBD launchShare growth: 4 points in ulcerative colitisShare growth: 4 points in Crohn's diseaseMarket growth	—	68.2%	—	—
STELARA Decline reflects continued competitive pressures. Competitive pressures from biosimilarsOngoing shift towards novel classes	—	declined 54%	—	—
Other Immunology Growth driven by new product launches. Move and ICO Tide launch uptake in U.S.	—	—	—	—
SPRAVATO Impressive growth reflecting strong demand in treatment-resistant depression. Continued share gainsStrong physician adoptionIncreased patient demand	—	36%	—	—
CAPLYTA Significant growth driven by strong launch momentum and increased demand. Strong continued launch momentum in adjunctive major depressive disorderContinued demand increases across bipolar disorder and schizophrenia	—	66.1%	—	—
MedTech While falling short of expectations for this segment, conviction in future direction has not changed. Growth in the U.S. was 4.8% and 0.1% outside the U.S.	$8.6 billion	2.5%	—	—
Cardiovascular Continued investment in heart recovery, circulatory restoration, and rhythm disorders. Acquisitions: 20 basis points related to growth	—	4.1%	—	—
Electrophysiology Growth driven by procedure expansion and new product performance, partially offset by competitive pressures. Procedure expansionCommercial executionNew product performanceCompetitive PFA pressures: partially offset growth (more pronounced in AsPac)Lapping prior year OUS inventory dynamics: partially offset growth	—	4.4%	—	—
Abiomed Decline due to lower patient volume, with encouraging signals in U.S. performance. Lower patient volumeImprovement in U.S. performance sequentiallyImpella 5.5 gaining adoption	—	decline of 1.5%	—	—
Shockwave Double-digit growth driven by continued adoption and new product launches. Continued adoption of coronary and peripheral productsNew product launchesReimbursement in office-based lab setting (U.S.)	—	17.2%	—	—
Surgery Decline driven by VBP in China, transformation program, and Middle East disruption, partially offset by portfolio strength and commercial execution. Negative impact from divestitures: approximately 30 basis pointsOngoing expansion of VBP in ChinaSurgery transformation program outcomesMiddle East disruption: impacted tender timing and ordering patternsPortfolio strength from innovations (Ethicon 4000, DUALTO)Commercial execution in biosurgery	—	decline of 1%	—	—
Vision Advancing lifelong eye health with strong growth. Premium innovationStrong executionGlobal reach	—	5.1%	—	—
Contact Lenses and other products Driven by strong performance in ACUVUE OASYS 1-day family, partially offset by U.S. inventory dynamics. Strong performance in ACUVUE OASYS 1-day familyU.S. inventory dynamics: partially offset growth	—	4.3%	—	—
Surgical Vision Driven by new product innovations and robust demand for premium IOLs, partially offset by market-specific factors. New product innovationsRobust demand for premium IOLsStrong commercial executionMarket-specific factors (Middle East disruptions): partially offset growth	—	7.1%	—	—
Orthopaedics Primarily driven by new product launches and strong commercial execution. New product launches (volt and trauma, emphasis and hips)Strong commercial executionVelis pull-through in knees	—	3.4%	—	—

Product announcements

Product	Type	Timeline
Ottava	launch	—
TECNIS PRC	launch	—
TECNIS PureSee and TECNIS Odyssey	milestone	—
ACUVUE ASYS MAX 2-week reusable lenses	expansion	—

Deals & partnerships

Firefly Bio Acquisition of a promising new degraded antibody conjugate platform that targets drivers of difficult-to-treat cancers, including KRAS. $1 billion

Completed acquisition of Firefly Bio, adding a promising new degraded antibody conjugate platform.

Sale Biomedicines Collaboration to advance in vivo CAR T approaches for immune-mediated diseases.

Entered into a collaboration with Sale Biomedicines to advance in vivo CAR T therapies for immune-mediated diseases.

Risks & headwinds

MedTech underperformance Q3 FY26, ongoing

MedTech operational sales growth of 2.5%, below expectations. Abiomed declined 1.5%.

Mitigation:Actions to strengthen results, focus on education for Abiomed, leveraging new innovations like Ottava, expecting return to growth in EMEA for surgery in Q4.

STELARA biosimilar competition Q3 FY26, ongoing

Sales declined 54%.

Mitigation:Focus on new product launches and pipeline.

OUS pricing headwinds (DARZALEX) Q3 FY26, ongoing

Partially offset DARZALEX growth.

Mitigation:N/A (implied by strong share gains).

Competitive PFA pressures (Electrophysiology) Q3 FY26, ongoing

Partially offset electrophysiology growth, more pronounced in AsPac.

Mitigation:Launch of Varapulse Pro (faster and easier to use catheter) in Europe (double-digit growth), Japan, and U.S.

VBP in China (Surgery) Q3 FY26, ongoing

Contributed to 1% decline in Surgery.

Mitigation:Leveraging portfolio strength from innovations (Ethicon 4000, DUALTO) and commercial execution in biosurgery.

Middle East disruption (MedTech) Q3 FY26, short-term factor

Impacted tender timing and ordering patterns, created more meaningful impact on purchasing behavior.

Mitigation:Underlying issues have not changed, clinical need remains intact, opportunities expected to be deferred rather than permanently lost.

Unfavorable patient mix (ERLEADA) Q3 FY26

Partially offset ERLEADA growth.

Mitigation:N/A (implied by continued share gains and market growth).

U.S. inventory dynamics (Contact Lenses) Q3 FY26

Partially offset contact lenses growth.

Mitigation:N/A (implied by strong performance in ACUVUE OASYS 1-day family).

Talc litigation resolution Q3 FY26

$5.5 billion agreement, impacted Q3 GAAP results.

Mitigation:Agreement conditioned on 95% participation, trending to meet threshold.

Firefly Bio and Sale Biomedicines transactions FY26, FY27

Unfavorable impact of 150 basis points on operating margin, $0.64 dilutive impact on FY26 adjusted EPS, $1.36 dilutive impact on FY27 adjusted EPS.

Mitigation:Strategic investments for future growth.

What to watch in Q4 FY26

MedTech performance improvement

Q4 FY26 and beyond

Current Q3 operational sales growth 2.5%, Abiomed decline 1.5%

Target Improved growth, Abiomed back to growth

Why it matters

MedTech underperformance was a key concern, and management is taking corrective actions; verification of these actions' impact is crucial for overall company growth.

We are clear on where med tech performance needs to improve, specifically cardiovascular and surgery outside the U.S. and are taking action to strengthen results.

Find out whether JNJ delivers this. Inve re-checks your case every morning.

Q&A highlights

Clarify if the 'double-digit growth by end of decade' target relies on internal investments or M&A, and if MedTech underperformance increases M&A urgency.

The double-digit growth target is based on internal strategic investments, not M&A. For MedTech, the urgency is to fix existing issues within the current construct (Vision Care, Surgery, Cardiovascular), not necessarily to acquire. They are addressing Abiomed's temporary headwinds and are excited about future innovations like Ottava.

“Your interpretation of that being internal strategic investments is what will us to double-digit growth by the end of this decade in the coming years with increasing performance. So is the correct interpretation. It does not assume any inorganic additions at this moment in time.”

asked by Asad Haider · answered by Joseph Wolk

2 min read 6 chapters

Detailed narrative

Innovative Medicine Drives Strong Performance

The Innovative Medicine segment was a primary growth driver, achieving 7.9% operational sales growth. This was fueled by strong performance in Oncology, which grew 17%, and Immunology, with TREMFYA sales up 68%. New launches like ICO Tide and Inlexzo are gaining significant traction, with ICO Tide expanding the systemic marketplace and Inlexzo rapidly becoming a market leader in bladder cancer, with year-to-date sales of approximately $200 million.

MedTech Underperformance and Corrective Actions

MedTech operational sales grew 2.5%, falling short of expectations, primarily due to challenges outside the U.S. and a 1.5% decline in Abiomed sales. Management acknowledged the need for improvement, particularly in cardiovascular and international surgery, and is taking corrective actions. These include educational efforts for Abiomed, leveraging new innovations like Ottava, and expecting a return to growth in EMEA for surgery in Q4.

Strategic Acquisitions and Collaborations Bolster Pipeline

J&J completed the acquisition of Firefly Bio for $1 billion, enhancing its oncology pipeline with a promising degraded antibody conjugate platform targeting difficult-to-treat cancers. The company also entered a collaboration with Sale Biomedicines to advance in vivo CAR T therapies for immune-mediated diseases, reflecting a disciplined capital allocation strategy focused on accelerating future innovation.

Pipeline Progress and Regulatory Catalysts

The company highlighted several upcoming pipeline catalysts, including data readouts in Q4 for pasritamig and J&J-6143 in prostate cancer, and Inlexzo in high-risk non-muscle invasive bladder cancer. Regulatory approvals are also anticipated for RYBREVANT Faspro in advanced head and neck cancer and Varapulse Pro in the U.S. in Q4, complementing its recent approval in Japan.

Talc Litigation Resolution Update

J&J announced an agreement for a $5.5 billion resolution of ovarian talc litigation, which impacted Q3 GAAP results. The agreement is contingent on 95% participation from claimants, a threshold the company expects to meet. This resolution aims to remove a significant overhang and clarify future financial liabilities.

Full-Year Outlook and Long-Term Growth Vision

J&J raised its full-year operational sales guidance, now expecting to exceed $100 billion in annual revenue for the first time. The company reiterated its confidence in achieving double-digit growth by the end of the decade, driven by its differentiated portfolio and pipeline, with a clear path to sustainable growth beyond, supported by internal strategic investments.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.