2014 was a strong year for Johnson & Johnson, as we delivered solid financial results while continuing to make investments to accelerate growth for the long term. We have built significant momentum in our Pharmaceutical business, are realizing the benefits of innovation, scale and breadth in our Medical Devices business and are continuing our market leadership with iconic brands in our Consumer business. We’ve achieved our near-term priorities, exceeding our financial targets with full-year operational* sales growth of 6.1 percent. Excluding the net impact of acquisitions and divestitures, on an operational basis, worldwide sales increased 8.0 percent.1
Worldwide Pharmaceutical sales of $32.3 billion for the full-year 2014 represented operational growth of 16.5 percent. With 14 new medicines launched since 2009, our Pharmaceutical segment is the fastest growing of the top 10 pharmaceutical businesses in the U.S., Europe and Japan**, and our medicines are making a dramatic impact.
The strong sales results were driven by new products and the strength of our core products. New products include OLYSIO®/SOVRIAD® (simeprevir), for combination treatment of chronic hepatitis C in adult patients; XARELTO® (rivaroxaban), an oral anticoagulant; ZYTIGA® (abiraterone acetate), an oral, once-daily medication for use in combination with prednisone for the treatment of metastatic, castration resistant prostate cancer; INVOKANA® (canagliflozin), for the treatment of adults with type 2 diabetes; and IMBRUVICA® (ibrutinib), an oral, once-daily therapy approved for use in treating certain B-cell malignancies, or blood cancers.
Additional contributors to operational sales growth were STELARA® (ustekinumab), a biologic approved for the treatment of moderate to severe plaque psoriasis and psoriatic arthritis; INVEGA® SUSTENNA®/XEPLION® (paliperidone palmitate), a once-monthly, long-acting, injectable atypical antipsychotic for the treatment of schizophrenia in adults; SIMPONI®/SIMPONI ARIA® (golimumab) and REMICADE® (infliximab), biologics approved for the treatment of a number of immune-mediated inflammatory diseases.
When it comes to innovation and ensuring we have continuous access to new ideas and products at their earliest stages, we expect the best science to prevail regardless of whether that comes from sources inside or outside of Johnson & Johnson. In 2014, we made two significant acquisitions to add to our innovation portfolio: Alios BioPharma, Inc., a privately-held clinical stage biopharmaceutical company focused on developing therapies for viral diseases; and Covagen AG, a privatelyheld biopharmaceutical company specializing in the development of multispecific protein therapeutics through the FynomAb® technology platform.
Worldwide Medical Devices sales of $27.5 billion for the full-year 2014 represented an operational decrease of 1.6 percent. Excluding the net impact of acquisitions and divestitures, on an operational basis, worldwide sales increased 1.6 percent.1
The Medical Devices business holds a strong leadership position in the industry, including 10 platforms with more than $1 billion in sales. We’ve launched over 50 major new products since 2012, and have more than 30 major new filings planned by the end of 2016.
Primary contributors to operational growth were our broad portfolio of Orthopaedic products; Biosense Webster’s electrophysiology products in the Cardiovascular Care business; and biosurgicals and international sales of energy products in the Specialty Surgery business. Sales results in the Vision Care and U.S. Diabetes Care businesses were negatively impacted by competitive pricing dynamics.
Key approvals and launches during the year include U.S. Food and Drug Administration (FDA) approval for the Animas® Vibe™ insulin pump and Continuous Glucose Monitoring system for the management of insulin-requiring diabetes in adults ages 18 and older; the INCRAFT® AAA Stent Graft System was approved and launched for treatment of abdominal aortic aneurysms (AAA) in Europe and Canada; the SABER™ PTA Dilatation Catheter for the treatment of patients with Peripheral Arterial Disease received FDA and European Commission approval; and the FDA approved the THERMOCOOL® SMARTTOUCH® Catheter for treatment of patients suffering from drug-resistant paroxysmal atrial fibrillation.
On June 30, 2014, the Company completed the divestiture of its Ortho-Clinical Diagnostics business to The Carlyle Group for approximately $4 billion.
Worldwide Consumer sales of $14.5 billion for the full year 2014 represented an operational increase of 1.0 percent. Excluding the net impact of acquisitions and divestitures, on an operational basis, worldwide sales increased 2.8 percent.1
Positive contributors to operational results were sales of TYLENOL® and MOTRIN® analgesics and ZYRTEC® allergy over-the-counter products; AVEENO® and NEUTROGENA® skin care products; and LISTERINE® oral care products.
During the year, we launched several new products including Women’s ROGAINE®, ZYRTEC® dissolve tabs and several new formulations of LISTERINE®, and re-launched brands such as TYLENOL® PM. Our insight-driven innovation in the Consumer business is focused on addressing key consumer need states, led by our 12 megabrands, with 20 new product launches planned for 2015.
CITIZENSHIP & SUSTAINABILITY
Managing our social, environmental and economic impacts locally and globally is an important responsibility. Our Citizenship & Sustainability strategic priorities focus our efforts to advance global health, help to safeguard the planet, and lead a dynamic and growing business responsibly.
We have continued to make progress toward our Healthy Future 2015 goals, including leveraging our research and development, and our ability to innovate and collaborate to find solutions for global health issues. In response to the Ebola crisis, in collaboration with the U.S. National Institutes of Health and Bavarian Nordic A/S, we committed to accelerate our vaccine program. With Stop TB Partnership’s Global Drug Facility and with USAID we are expanding access to our multidrug-resistant tuberculosis compound, SIRTURO™. We have expanded our collaboration with the International Partnership for Microbicides for development and commercialization of dapivirine, for prevention of sexual transmission of HIV, and we are working with Viiv Healthcare to develop a two-drug single tablet regimen for maintenance treatment of people living with HIV.
Our legacy of care for the environment and protection of natural resources continues. We are working to reduce our energy consumption while increasing the proportion of energy we use from renewable sources, thereby reducing our carbon dioxide emissions. We continue to look for ways to reduce water consumption and waste production throughout our products’ lifecycles. For example, we continue to integrate and expand our Earthwards® approach to drive continuous sustainability improvements and innovation across our businesses. To date, 73 products have gained Earthwards® recognition, ahead of our 2015 goal.
We remain committed to enhanced transparency and engagements with stakeholders that serve to improve the health of patients and drive improved clinical outcomes. We announced an extended agreement with the Yale Open Data Access (YODA) Project to provide access to clinical trial data for pharmaceutical and medical device products, setting new industry standards by being the first company to do so. Our ongoing efforts to improve the health of women and children include our work in support of the Millennium Development Goals. In addition, in 2014 we expanded programs using mobile technology as a way to disperse health information to new and expectant mothers in South Africa and India and announced a global partnership with Save the Children that has the potential to help improve the survival and healthy development of millions of children under age 5 over the next three years.
Our commitment to transforming the lives of patients and communities includes our contributions of approximately $1 billion in products and cash last year in support of over 500 programs that address major health-related issues in local communities in more than 50 countries around the world.
1 Non-GAAP measure. See “Reconciliation of Non-GAAP Financial Measures” on pages 70 and 71 of the Annual Report.
* Operational measures exclude the impact of currency translation.
** IMS MIDAS data as of Q3 2014 (growth versus previous year (moving annual total) in local currency dollars)
NOTE REGARDING FORWARD-LOOKING STATEMENTS
The Business Highlights section contains forward-looking statements relating to, among other things, business strategy, performance and expectations for product development. The reader is cautioned not to rely on these statements and should review the section “Cautionary Factors That May Affect Future Results” on page 19 of the Annual Report for important information about these statements, including the risks, uncertainties and other factors that could cause actual results to vary materially from the assumptions, expectations, and projections expressed in any forward-looking statements. Johnson & Johnson does not undertake to update any forward-looking statement as a result of new information or future events or developments.