Johnson & Johnson (JNJ)

Business

From the FY2025 10-K, accession 0000200406-26-000016.

Johnson & Johnson develops, manufactures and sells prescription medicines and medical devices worldwide. It earns its revenue in two segments: Innovative Medicine, prescription drugs sold to wholesalers, distributors, retailers, hospitals and healthcare professionals, which produced $60.4 billion of the company's $94.2 billion of 2025 sales; and MedTech, procedural products sold to hospitals, wholesalers and retailers and used by surgeons, interventional cardiologists, eye-care professionals and clinics, which produced $33.8 billion. The U.S. accounted for $53.8 billion of 2025 sales and international markets for $40.4 billion (approximately 23% Europe, 5% Western Hemisphere excluding the U.S., and 15% Asia-Pacific/Africa). The company is a New Jersey holding company (incorporated 1887) operating in virtually every country, with approximately 140,800 employees (138,200 full-time-equivalent positions) and 63 manufacturing facilities.

Revenue is concentrated in a handful of large drugs and in three U.S. wholesalers. DARZALEX/DARZALEX FASPRO alone was approximately 15.0% of 2025 revenue; STELARA was 6.5% and TREMFYA 5.5%. Three wholesalers serving both segments accounted for approximately 21.8%, 15.5% and 11.1% of 2025 gross revenues. New products launched within the past five years were about 25% of 2025 sales, and the company spent $14.7 billion on R&D in 2025.

Innovative Medicine covers six therapeutic areas:

• Oncology, DARZALEX (daratumumab, multiple myeloma; the company's largest product), CARVYKTI (CAR-T for relapsed/refractory multiple myeloma), TECVAYLI and TALVEY (bispecific antibodies for multiple myeloma), RYBREVANT/RYBREVANT FASPRO with LAZCLUZE (EGFR-mutated non-small cell lung cancer), ERLEADA (apalutamide, prostate cancer), IMBRUVICA (ibrutinib, B-cell malignancies) and ZYTIGA. DARZALEX is licensed from Genmab A/S at royalty rates of 12%–20% of net sales (about $2.4 billion in 2025); the two Genmab patent families expire in the U.S. in 2029.
• Immunology, TREMFYA (guselkumab; psoriasis, psoriatic arthritis, Crohn's disease and ulcerative colitis; U.S. composition patent projected to 2031), STELARA (ustekinumab, now facing biosimilars), SIMPONI/SIMPONI ARIA and REMICADE.
• Neuroscience, SPRAVATO (esketamine nasal spray for treatment-resistant depression), CAPLYTA (lumateperone; bipolar depression, schizophrenia and adjunctive major depressive disorder), the INVEGA long-acting injectable franchise and CONCERTA.
• Pulmonary Hypertension, OPSUMIT/OPSYNVI (macitentan) and UPTRAVI (selexipag).
• Infectious Diseases, HIV medicines EDURANT, PREZISTA/PREZCOBIX/REZOLSTA and SYMTUZA.
• Cardiovascular and Metabolism, XARELTO (rivaroxaban), an oral anticoagulant.

MedTech has four franchises:

• Cardiovascular, electrophysiology products for heart-rhythm disorders, Abiomed heart pumps (Impella) for cardiogenic shock and high-risk PCI, Shockwave intravascular lithotripsy for calcified coronary and peripheral artery disease, and neurovascular products.
• Surgery, instruments, energy devices, staplers (endocutters), wound closure, biosurgery and digital/robotic technologies for open, laparoscopic and robotic surgery, plus Mentor breast aesthetics and reconstruction.
• Orthopaedics, joint reconstruction (hips, knees), trauma, spine and sports medicine products and enabling technologies such as the VELYS robotic-assisted solution.
• Vision, ACUVUE contact lenses and TECNIS intraocular lenses for cataract and refractive surgery.

In October 2025 the company announced its intention to separate the Orthopaedics business, targeting completion 18 to 24 months after the announcement; the Q3 2026 10-Q now states that the separation is expected to be completed in mid-2027.

Sales are not materially seasonal, though spending (advertising, R&D) is typically heaviest in the fourth quarter. Raw materials are generally available from multiple sources.

Regulatory and pricing environment. The Inflation Reduction Act subjects selected high-spend Medicare drugs to government-set prices: XARELTO, STELARA and IMBRUVICA were on the first Selected Drug list with government-established Medicare prices beginning in 2026, and in January 2026 CMS added ERLEADA to the list for 2028. Janssen's constitutional challenge to the IRA negotiation program is pending; in December 2025 it sought U.S. Supreme Court review. In January 2026 the company reached an agreement with the U.S. Administration aimed at improving access and lowering costs for U.S. patients.

Risk factors

From the FY2025 10-K, accession 0000200406-26-000016 (Item 1A). The Q3 2026 10-Q does not update Item 1A.

The risks that bear most directly on value:

• Loss of exclusivity and patent challenges. For Innovative Medicine, loss of patent exclusivity is typically followed by a substantial and rapid fall in sales as generics and biosimilars enter. Competitors increasingly challenge J&J's patents through litigation and inter partes review, and an unsuccessful defense or an "at-risk" launch can remove a major portion of a product's revenue in a short time. STELARA is already in biosimilar decline; DARZALEX's licensed U.S. patents expire in 2029.
• Talc and other mass litigation. J&J is a defendant in numerous lawsuits over talc body powders, primarily JOHNSON'S Baby Powder. Settlements or judgments could exceed accruals, and the company does not buy third-party product liability insurance (it uses a wholly owned captive insurer, subject to limits). Securities, class-action and multi-district litigation can involve thousands of plaintiffs and run for years.
• Pricing pressure and healthcare reform. Government and private payors are pushing reimbursement down. The IRA has redesigned Medicare Part D and imposed government-set prices on certain J&J products from 2026, with more possible. Growing 340B program utilization may hurt results, and major ex-U.S. markets (EU, U.K., Japan, China) impose price controls or restrict access.
• Regulatory scrutiny and compliance. cGMP failures can lead to recalls, shortages, production interruptions and delayed approvals. Marketing and pricing practices draw False Claims Act, Medicaid Rebate and state consumer-protection actions; debarment from government healthcare programs would be materially adverse. FDA budget and staffing cuts may slow reviews.
• Innovation and R&D risk. Growth depends on developing, licensing or acquiring new products to offset exclusivity losses. Few programs reach market, and approved products may not be commercially successful. Acquisitions carry integration and identification-of-liabilities risk.
• Manufacturing and supply chain. J&J runs 63 plants and sources from thousands of suppliers, some of them single third-party manufacturers. Disruptions from quality deviations, regulatory action, disasters or labor issues can cause shortages and costly remediation. Counterfeit and diverted products threaten patient safety, sales and reputation.
• International operations. About 43% of 2025 sales were outside the U.S., which exposes the company to currency translation, highly inflationary economies (Argentina, Turkey, Venezuela, Egypt), illegal importation, FCPA/U.K. Bribery Act enforcement, tariffs and retaliatory trade measures, the Russia-Ukraine war, Middle East conflict and U.S.-China tensions.
• Tax law changes. Global minimum taxes or other changes in statutory rates would force deferred-tax remeasurement, and tax authorities may take positions that exceed reserves.
• Credit rating and market access. A downgrade of J&J's investment-grade ratings would raise borrowing costs, shrink commercial-paper capacity and could require more derivative collateral.
• Orthopaedics separation. The separation needs works-council consultations, final Board approval and regulatory approvals, and may be delayed or not completed. It will involve significant costs, the expected benefits may not materialize, and the share price may become volatile around the transaction.
• Cybersecurity, privacy and AI. A breach of J&J's or vendors' systems could cause operational, regulatory and reputational harm, and cyber insurance may be insufficient. Privacy and data-transfer laws are tightening globally, and the use of AI brings new legal and operational risks.
• Talent and climate. Competition for skilled staff and succession risk could hurt execution. Extreme weather and water scarcity could disrupt facilities and the supply chain, and climate regulation could raise costs.

Management's discussion and analysis, fiscal 2025

From the FY2025 10-K, accession 0000200406-26-000016 (Item 7).

Consolidated sales

Worldwide sales rose 6.0% to $94.2 billion in 2025 (4.3% growth in 2024). The increase came from volume (+8.4 points) and currency (+0.7 points), partly offset by lower price (−3.1 points). Acquisitions, mainly CAPLYTA (Intra-Cellular) and Shockwave, added a net 1.1 points, and the STELARA biosimilar decline subtracted about 6.2 points from worldwide operational growth. U.S. sales rose 6.9% to $53.8 billion and international sales rose 5.0% to $40.4 billion. By region, Europe grew 6.5% (2.4% operational), the Western Hemisphere excluding the U.S. 3.4% (8.4% operational, −5.0% currency), and Asia-Pacific/Africa 3.2%.

Innovative Medicine, $60.4 billion, +6.0% (+5.3% operational)

U.S. segment sales were $36.3 billion (+7.0%) and international $24.1 billion (+4.6%). CAPLYTA added 1.2 points of growth, while STELARA erosion cost about 10.4 points worldwide. The therapeutic areas moved as follows:

• Oncology, $25.4 billion, +22.1%. DARZALEX $14.35 billion (+23.0%), ERLEADA $3.57 billion (+19.2%), IMBRUVICA $2.82 billion (−7.1%), CARVYKTI $1.89 billion (+95.9%), RYBREVANT/LAZCLUZE $734 million, TECVAYLI $670 million and TALVEY $463 million. Share gains and market growth drove DARZALEX, and capacity expansion drove CARVYKTI. ZYTIGA fell on loss of exclusivity, and IMBRUVICA fell on competition and Medicare Part D redesign.
• Immunology, $15.7 billion, −11.8%. STELARA fell 41.3% to $6.08 billion (U.S. about $3.8 billion) on biosimilar competition and Part D redesign. TREMFYA rose 40.5% to $5.16 billion. SIMPONI/SIMPONI ARIA (+21.8%) and REMICADE (+10.2%) benefited from Merck, Sharp & Dohme returning European rights in Q4 2024. At least two SIMPONI biosimilars were pursuing U.S. approval.
• Neuroscience, $7.8 billion, +10.1%. SPRAVATO rose 57.4% to $1.70 billion, and CAPLYTA contributed $700 million from the April 2, 2025 acquisition date. The INVEGA franchise fell 9.8% to $3.81 billion.
• Pulmonary Hypertension, $4.4 billion, +3.6%. The company expected OPSUMIT generics in 2026.
• Infectious Diseases, $3.2 billion, −4.6%. Lower COVID-19 vaccine revenue drove the decline.
• Cardiovascular/Metabolism/Other, $3.8 billion, +6.1%. XARELTO rose 11.0% to $2.63 billion.

Products with 2025 regulatory filings or approvals in the U.S. and/or EU included TREMFYA (ulcerative colitis, Crohn's disease, subcutaneous induction, pediatric psoriasis), DARZALEX (frontline transplant-ineligible and high-risk smoldering myeloma), CAPLYTA (adjunctive MDD), IMAAVY (nipocalimab, generalized myasthenia gravis), INLEXZO (bladder cancer), ICOTYDE (icotrokinra, psoriasis), AKEEGA (prostate cancer) and TECVAYLI (earlier-line myeloma).

MedTech, $33.8 billion, +6.1% (+5.4% operational)

U.S. segment sales were $17.4 billion (+6.6%) and international $16.4 billion (+5.5%); Shockwave added 1.1 points. By franchise:

• Cardiovascular, $8.9 billion, +15.8%. Electrophysiology $5.63 billion (+7.0%), with growth partly offset by competition in pulsed-field ablation catheters. Abiomed $1.75 billion (+17.1%) and Shockwave $1.15 billion.
• Surgery, $10.1 billion, +3.0%. Biosurgery and new endocutters drove growth, partly offset by China volume-based procurement and competition in energy and endocutters.
• Orthopaedics, $9.3 billion, +1.1%. Restructuring disruption, China volume-based procurement and selling days weighed on growth, and Spine, Sports & Other fell 2.5%.
• Vision, $5.5 billion, +6.3%. ACUVUE OASYS 1-Day, strategic price actions and premium IOL demand drove growth.

Earnings and expenses

Pre-tax earnings were $32.6 billion (34.6% of sales) versus $16.7 billion (18.8%) in 2024. The swing was driven by talc accounting. In Q1 2025 the company reversed approximately $7.0 billion of its talc reserve after the dismissal of the Red River bankruptcy, while 2024 had carried about $5.1 billion of talc charges. Other (income) expense, net was $7.2 billion of income versus $4.7 billion of expense in 2024. That figure also absorbed a $0.8 billion charge for the Auris Health shareholder litigation and acquisition costs for Intra-Cellular and Halda Therapeutics.

• Cost of products sold rose as a share of sales. STELARA mix, tariffs and transactional currency drove the increase, partly offset by a smaller Shockwave inventory step-up. Intangible amortization in cost of sales was $4.6 billion.
• SM&A fell as a share of sales. Corporate cost rationalization drove the decline, partly offset by CAPLYTA investment.
• R&D fell 14.9% to $14.7 billion (15.6% of sales). 2024 had included acquired IPR&D for the NM26 bispecific (Yellow Jersey, $1.25 billion), V-Wave ($0.5 billion) and a Laminar milestone ($0.3 billion).
• Segment pre-tax margins. Innovative Medicine earned $22.3 billion (36.9% of sales versus 33.2%). MedTech earned $4.1 billion (12.2% versus 11.7%) despite $0.9 billion of litigation expense, mainly Auris, and higher restructuring costs.
• Effective tax rate. 17.7% (15.7% in 2024).
• Restructuring. A Surgery-franchise program began in 2025 to exit non-strategic product lines, costing $205 million in 2025; the 10-K estimated $0.9–$1.0 billion in total. The Orthopaedics restructuring begun in 2023 cost $307 million in 2025, about $0.8 billion cumulatively.

Liquidity, capital and dividends

Operating cash flow was $24.5 billion. Capital expenditures were $4.8 billion, and acquisitions net of cash acquired were $17.5 billion: Intra-Cellular Therapies at $132.00 per share, about $14.5 billion, closed April 2, 2025, and Halda Therapeutics at about $3.05 billion, closed December 26, 2025. Dividends were $12.4 billion and share repurchases $6.0 billion. The company issued $9.2 billion of senior notes in Q1 2025 to fund Intra-Cellular, lifting total debt to $47.9 billion (from $36.6 billion) and net debt to $27.8 billion (from $12.1 billion). Debt was 37.0% of total capital. Cash and equivalents ended at $19.7 billion. The dividend was raised for the 63rd consecutive year, to $5.14 per share paid in 2025.

Current quarter, fiscal Q3 2026 (quarter ended September 27, 2026)

From the Q3 2026 10-Q, accession 0000200406-26-000197, and the October 13, 2026 earnings release (Form 8-K, accession 0000200406-26-000189, Exhibit 99.1).

Headline results

Q3 sales grew 5.9% to $25.4 billion ($25,399 million versus $23,993 million). Operational growth was 6.0%, and currency cost 0.1 points. STELARA biosimilar erosion cost about 4.2 points of worldwide operational growth. U.S. sales rose 9.1% to $15.0 billion, while international sales rose only 1.5% to $10.4 billion; Europe fell 0.6% (+1.0% operational).

Reported earnings collapsed on one-off charges. Pre-tax earnings were $34 million (0.1% of sales) versus $7.5 billion (31.2%) a year earlier. A $176 million tax benefit left net earnings at $210 million, or $0.09 per diluted share, versus $5,152 million and $2.12. The quarter absorbed:

• a charge of about $5.5 billion for the proposed resolution of the ovarian talc litigation (in Other expense);
• about $1.0 billion of acquired IPR&D expense for Firefly Bio (in R&D);
• about $0.3 billion, primarily the option premium paid to Sail Biomedicines (in Other expense);
• $339 million of IPR&D impairment, mainly PreCardia, a non-strategic asset acquired with Abiomed in 2022;
• Orthopaedics separation costs of about $0.4 billion, of which about $0.3 billion was in Other expense.

On the company's non-GAAP basis, adjusted EPS was $2.59 versus $2.80, down 7.5%. Adjusted net earnings were $6,339 million versus $6,801 million. The company notes that adjusted EPS also reflects the Firefly and Sail transactions.

For the nine months, sales rose 7.4% to $74.8 billion (6.0% operational). Pre-tax earnings were $12.8 billion versus $27.6 billion, a comparison distorted by the talc charge this year and the roughly $7.0 billion talc reserve reversal in the 2025 period. The nine-month effective tax rate was 14.0% (21.5% in 2025). The talc accrual lowered the 2026 rate by about 2.5 points and share-based compensation benefits by 3.7 points. The 2025 rate had included a roughly $1.0 billion deferred-tax remeasurement under the One Big Beautiful Bill Act.

Innovative Medicine, Q3 $16,757 million, +7.7% (+7.9% operational)

U.S. segment sales rose 11.1% and international 2.4%. STELARA erosion cost about 6.9 points worldwide. Segment pre-tax margin fell to 30.2% from 41.4%, mainly because of the Firefly IPR&D charge, the Sail option premium, $0.2 billion of higher CAPLYTA amortization (the additional MDD indication), restructuring and STELARA mix. By therapeutic area:

• Oncology, $7,602 million, +16.7% operational. DARZALEX $4,239 million (+15.4%), CARVYKTI $710 million (+35.5%), ERLEADA $1,023 million (+9.4%), TECVAYLI $312 million (+76.6%; U.S. TECVAYLI + DARZALEX FASPRO approval), RYBREVANT/LAZCLUZE $320 million (+62.3%), TALVEY $171 million (+40.9%) and Other Oncology +26.3% on the U.S. INLEXZO launch. IMBRUVICA fell 18.8% to $563 million on competition.
• Immunology, $4,221 million, +1.4% operational. TREMFYA rose 68.3% to $2,396 million on share gains across indications and IBD launch momentum. Other Immunology rose to $147 million from $12 million with the U.S. launches of IMAAVY and ICOTYDE. These gains roughly offset STELARA, down 54.4% to $716 million, plus SIMPONI/SIMPONI ARIA (−17.3%) and REMICADE (−17.3%). SIMPONI biosimilars entered Europe in Q2 2026, with a potential U.S. entrant later in 2026.
• Neuroscience, $2,375 million, +17.6% operational. SPRAVATO $624 million (+36.1%), CAPLYTA $398 million (+66.1%, driven by the adjunctive MDD launch) and the INVEGA franchise $998 million (+7.3%).
• Pulmonary Hypertension, $897 million, −19.2% operational. OPSUMIT/OPSYNVI fell 35.7% to $372 million after U.S. generic entry late in Q2 2026. UPTRAVI was flat at $483 million. Generic entrants are possible in 2027 for UPTRAVI (U.S. and Europe) and for OPSUMIT in Europe.
• Infectious Diseases, $813 million, −1.1% operational.
• Cardiovascular/Metabolism/Other, $849 million, −5.5% operational. XARELTO rose 2.7% to $653 million; potential U.S. generic entrants are expected in 2027.

The company revised its 340B policies during the quarter. Covered entities must now submit limited claims data for each 340B-eligible dispense to keep receiving up-front 340B pricing, and each may designate one contract pharmacy. J&J says the changes target duplicate discounts and diversion.

MedTech, Q3 $8,642 million, +2.5% (+2.5% operational)

U.S. MedTech sales rose 4.8%, while international sales were essentially flat (+0.1%). Segment pre-tax margin fell to 9.0% from 15.3%. The drivers were Orthopaedics separation costs (about $0.4 billion), the $0.3 billion PreCardia impairment and $0.2 billion of unfavorable securities fair-value changes, partly offset by about $0.2 billion of tariff recoveries in cost of sales. By franchise:

• Cardiovascular, $2,307 million, +4.1% operational. Electrophysiology $1,487 million (+4.9%) on procedure growth and new products (VARIPULSE, TRUPULSE, CRYSTAL, DUAL ENERGY STSF), despite pulsed-field-ablation competition. Shockwave $325 million (+16.8%). Abiomed fell 2.3% to $412 million on lower patient volumes.
• Surgery, $2,528 million, −1.0% operational. The decline came from China volume-based procurement, the surgery transformation program, Middle East disruption and competition in endocutters and energy.
• Vision, $1,461 million, +5.1% operational. Driven by ACUVUE OASYS 1-Day, price actions and premium IOLs.
• Orthopaedics, $2,345 million, +3.4% operational. Trauma led with $844 million (+6.4%); knees grew on the ATTUNE portfolio and VELYS pull-through.

In the quarter the company received FDA market authorization for OTTAVA, which it describes as the world's first table-integrated soft-tissue robotic surgical system.

Expenses and margins

Gross margin was 68.1% versus 69.6%. The decline reflected STELARA mix and higher CAPLYTA amortization; intangible amortization in cost of sales was $1.2 billion versus $1.0 billion, and tariff recoveries of about $0.2 billion partly offset it. SM&A was flat at 24.7% of sales. R&D rose 26.7% to $4,652 million (18.3% of sales), and Innovative Medicine R&D reached 23.2% of segment sales because of the Firefly charge. Other (income) expense, net was $5.8 billion of expense versus $0.5 billion of income: litigation $5.5 billion, Orthopaedics separation $0.3 billion and the Sail option premium $0.3 billion.

Restructuring

Three restructuring programs ran in the quarter, costing $195 million pre-tax ($533 million in the nine months):

• Innovative Medicine supply chain (new in Q2 2026). Exits certain manufacturing sites. It cost $74 million in Q3 and $274 million in the nine months, and about $0.3 billion to date, against an estimated total of $0.7–$0.8 billion through 2029.
• MedTech Surgery. $80 million in Q3 and $0.4 billion to date. It will now finish in Q4 2026 at a total of about $0.6 billion, below the $0.9–$1.0 billion estimate in the 10-K.
• MedTech Orthopaedics. $41 million in Q3 and about $0.9 billion to date. It will finish in Q4 2026 at about $1.0 billion.

Liquidity and capital

Nine-month operating cash flow was $18.9 billion. Capital expenditures were $3.7 billion, acquired IPR&D (Firefly) $1.0 billion, dividends $9.6 billion and share repurchases $6.0 billion, and net debt repayment was $2.9 billion. The financing outflows also included the Auris shareholder judgment paid in January 2026 ($0.8 billion including interest). Cash and equivalents fell to $16.9 billion, and cash plus marketable securities were about $17.2 billion. Debt was $44.6 billion, for net debt of $27.4 billion (versus $27.2 billion a year earlier). The company secured a new $12.5 billion 364-day credit facility in June 2026, expiring June 23, 2027, and can issue up to $20 billion of commercial paper. Named near-term funding needs are the talc reserve (about $9.0 billion), $3.2 billion of bonds currently due, the approximately $2.6 billion Sail purchase option and about $0.9 billion of remaining opioid settlements. In Q1 2026 the company also agreed with Royalty Pharma to receive up to $0.5 billion over 2026–2027 to co-fund JNJ-4804, a co-antibody therapy for immune-mediated diseases, in return for approval milestones of up to about $0.5 billion plus sales milestones and low-single-digit royalties. The quarterly dividend is $1.34 per share, up from $1.30 at the start of the year. Q3 open-market repurchases were 6,543,070 shares at an average $261.16, made under a systematic plan to meet compensation-program needs.

Guidance

July 15 and July 29 figures from the Forms 8-K with accessions 0000200406-26-000146 and 0000200406-26-000163. Full-year 2026 guidance has changed four times since it was issued on January 21, 2026 at an adjusted EPS midpoint of $11.53 (0000200406-26-000002). It was raised on April 14 to $11.55 (0000200406-26-000076) and on July 15 to $11.68. On July 29 the Firefly and Sail transactions cut it by $0.64 to $11.04. On October 13 the company raised it to $11.10 on operating performance. The table covers the last three updates:

The July 29 update attributed about $0.46 of 2026 dilution to Firefly and $0.18 to Sail. It also guided to about $1.36 of 2027 dilution ($0.08 Firefly, $1.28 Sail), which assumes Sail meets development milestones and J&J exercises its purchase option. Management said the third quarter gives it "clearer line of sight to double-digit growth by the end of the decade."

Notable corporate, regulatory and clinical events in the quarter

• Ovarian talc resolution (announced July 27, 2026). The MDL court ruled favorably, plaintiffs withdrew their specific-causation experts in the first bellwether cases, and on July 22 the court ordered plaintiffs to show why the remaining claims should not be dismissed. J&J then agreed with the plaintiff firms leading the MDL and related state proceedings on a resolution of the ovarian docket. It is conditioned on, among other things, express participation by at least 95% of remaining claims. The company would commit $5.5 billion in per-claim payments: a first payment of no more than $3 billion in 2027 and no further payments before 2028. The mesothelioma docket is not covered.
• Firefly Bio acquisition (completed July 29, 2026). J&J paid about $1.0 billion in cash for Firefly Bio, Inc., whose Firelink degrader antibody conjugate platform targets KRAS-driven and other hard-to-treat solid tumors. It was accounted for as an asset acquisition, with an IPR&D charge of about $1.0 billion.
• Sail Biomedicines collaboration (announced July 29, 2026). Sail develops in vivo CAR-T therapies for immune-mediated diseases. Initial payments total $785 million, including a $465 million equity investment by JJDC, with up to $140 million more on development milestones. J&J also holds an exclusive option to acquire Sail for $2.58 billion; the 10-Q rounds these to $0.8 billion, $0.5 billion and about $2.6 billion.
• Leadership. Jennifer Taubert, EVP and Worldwide Chairman, Innovative Medicine, retired. Tom Cavanaugh, previously Company Group Chairman, North America, succeeded her and joined the Executive Committee effective September 1, 2026.
• Regulatory and data. The FDA approved IMAAVY for warm autoimmune hemolytic anemia and granted Priority Review to RYBREVANT FASPRO in advanced head and neck cancer. In earlier-line relapsed/refractory multiple myeloma, TECVAYLI + TALVEY reduced the risk of progression or death by 89%. A single CARVYKTI infusion delivered five-year treatment-free remissions in 50% of patients in early-line relapsed/refractory multiple myeloma, and CAPLYTA reported positive Phase 3 results in bipolar mania.
• Orthopaedics separation. The 10-Q now guides to completion in mid-2027. Separation costs were $0.7 billion in the nine months.

Legal proceedings

From the Q3 2026 10-Q, Note 11, accession 0000200406-26-000197.

Talc

As of September 27, 2026, approximately 76,500 U.S. plaintiffs had direct talc claims pending. In 2021 the company placed ovarian and gynecological cancer claims in Red River Talc, LLC and mesothelioma and governmental claims in Pecos River Talc LLC, and filed three Chapter 11 cases. All three were dismissed, and in Q1 2025 the company reversed about $7.0 billion of its bankruptcy reserve. Tort litigation then resumed, leading to the July 2026 proposed ovarian resolution described above.

The total present value of the talc reserve is now about $9.0 billion. It covers the ovarian settlement, executed settlements, defense and other costs, and about half of it is current. Two related matters:

• Securities class action. The talc-disclosure suit (filed 2018) is in expert discovery. The Supreme Court declined in April 2026 to review the Third Circuit's affirmance of class certification.
• Imerys/Cyprus settlement. The global settlement with the bankrupt talc supplier Imerys and with Cyprus Mines was approved in October 2024. The insurers' appeal was denied by the District Court in August 2025 and dismissed by the Third Circuit in October 2026.

Intellectual property

• SPRAVATO. In August 2026 the District of New Jersey found the asserted patents infringed and not invalid against Sandoz. Sandoz appealed.
• SIMPONI/SIMPONI ARIA. In September 2026 the court preliminarily enjoined Accord BioPharma and Bio-Thera from launching biosimilars; trial is set for March 2028 and the defendants appealed the injunction. Separate suits continue against Alvotech, where a preliminary-injunction motion is pending and Teva has intervened. The USPTO instituted inter partes review of four other SIMPONI patents, with decisions expected by September 2027.
• ERLEADA. A Canadian trial against Sandoz took place in August–September 2026, with a decision pending. U.S. suits were filed against MSN (June 2026) and Lupin (October 2026).
• CAPLYTA. The suit against Zydus settled confidentially in August 2026.
• INVEGA SUSTENNA. The U.S. case against Eugia settled in June 2026. The Supreme Court of Canada dismissed Pharmascience's appeal in July 2026.
• DARZALEX. BIOCAD launched a biosimilar daratumumab in Russia at risk in September 2026 after withdrawing its unfair-competition claim.
• CARVYKTI. 2seventy bio's infringement suit in the Unified Patent Court, which the U.S. government joined as patent owner, has an oral hearing scheduled for March 2027.
• Abiomed. A jury returned a verdict for Abiomed in May 2026 in Maquet's Impella patent case; post-trial motions are pending.

Government and general litigation

• PREZISTA/INTELENCE qui tam. Judgment was entered on the federal off-label claims. The Third Circuit heard argument in March 2026 and ordered mediation in April 2026.
• REMICADE/SIMPONI ARIA qui tam. The court granted J&J summary judgment in full in September 2026; the relator has until October 30, 2026 to appeal.
• DePuy Synthes. A False Claims Act complaint filed in June 2026 in the Southern District of Florida (DOJ declined to intervene) is being defended.
• Anti-Terrorism Act (Iraq). The case continues. Defendants petitioned the Supreme Court in August 2026, and a second, similar suit was filed in September 2026.
• Biosense Webster. BWI is appealing an antitrust jury verdict and permanent injunction in favor of Innovative Health.
• Antitrust and contract matters. The STELARA biosimilar-delay class action is on appeal at the Fourth Circuit after partial summary judgment for Janssen. The TRACLEER antitrust class settlement received final approval in July 2026. The Xoma breach-of-contract suit over TREMFYA is proceeding.

Subsequent events

From the Q3 2026 10-Q (accession 0000200406-26-000197) and the October 13, 2026 Form 8-K (accession 0000200406-26-000189).

The Q3 10-Q contains no separate subsequent-events note. Events after the September 27, 2026 quarter-end that the filings disclose:

• Dividend. On October 13, 2026 the Board declared a quarterly dividend of $1.34 per share, payable December 8, 2026 to holders of record on November 24, 2026.
• Results and guidance. On October 13, 2026 the company reported Q3 results and raised full-year 2026 guidance to estimated reported sales of $101.0–$101.4 billion and adjusted EPS of $11.05–$11.15 (see Guidance above).
• Talc supplier settlement. In October 2026 the Third Circuit dismissed the insurers' appeal of the order approving the Imerys/Cyprus global talc settlement.
• ERLEADA patent suit. In October 2026 Aragon Pharmaceuticals and Janssen Biotech sued Lupin in the District of New Jersey over its ANDA for a 60 mg generic ERLEADA.
• Post-quarter product items. The earnings release lists CE marking for ACUVUE OASYS MAX reusable contact lenses and new two-year ICOTYDE (icotrokinra) psoriasis data as announced after the quarter.
• Share count. 2,407,310,266 common shares were outstanding on October 15, 2026.

Neither the 10-Q nor the October 13 earnings release reports an acquisition, divestiture or new financing after quarter-end. The July 2026 Firefly acquisition, Sail collaboration and talc resolution fell within the quarter and are covered above.

Filings that contain financial statements

• Form 8-K filed October 13, 2026 (accession 0000200406-26-000189): Exhibit 99.2 carries the condensed consolidated statement of earnings and sales schedules for the third quarter and nine months ended September 27, 2026. It holds no balance sheet or cash flow statement. Free cash flow in the release is an estimate, and the release says cash flow from operations will appear in later filings.
• Form 10-Q filed October 21, 2026 (accession 0000200406-26-000197): full financial statements for the quarter ended September 27, 2026.
• Form 8-K filed July 15, 2026 (accession 0000200406-26-000146): Exhibit 99.2 carries the condensed statement of earnings and sales schedules for the second quarter ended June 28, 2026.
• Form 8-K filed April 14, 2026 (accession 0000200406-26-000076): Exhibit 99.2 carries the same schedules for the first quarter ended March 29, 2026.
• Form 8-K filed January 21, 2026 (accession 0000200406-26-000002): Exhibit 99.2 carries the same schedules for the fourth quarter and full year 2025.

Earnings and guidance

• October 13, 2026 - third-quarter results (0000200406-26-000189). Reported sales were $25,399 million, up 5.9% (operational +6.0%, adjusted operational +6.1%). Innovative Medicine sales were $16,757 million (+7.7%) and MedTech $8,642 million (+2.5%). Net earnings were $210 million against $5,152 million a year earlier, and diluted EPS was $0.09 against $2.12. Adjusted EPS was $2.59 against $2.80. The company attributes the GAAP drop to the talc charge, the Firefly Bio acquisition and the Sail Biomedicines collaboration. Full-year 2026 guidance was raised: estimated reported sales of $101.0-$101.4 billion (midpoint $101.2 billion, +7.4%) and adjusted EPS of $11.05-$11.15 (midpoint $11.10, up from $11.04 set on July 29).
• July 15, 2026 - second-quarter results (0000200406-26-000146). Sales were $25,310 million (+6.6%), net earnings $5,534 million, diluted EPS $2.27 and adjusted EPS $2.90. Guidance was raised, with adjusted EPS at a midpoint of $11.68 and estimated reported sales at a midpoint of $101.1 billion.
• April 14, 2026 - first-quarter results (0000200406-26-000076). Sales were $24,062 million (+9.9%), net earnings $5,235 million (against $10,999 million in the prior-year quarter, which included a roughly $7.0 billion talc reserve reversal), diluted EPS $2.14 and adjusted EPS $2.70. Guidance was raised to an adjusted EPS midpoint of $11.55. The company announced an Enterprise Business Review for December 8, 2026.
• January 21, 2026 - fourth-quarter and full-year 2025 results (0000200406-26-000002). Full-year 2025 sales were $94,193 million (+6.0%), net earnings $26,804 million and diluted EPS $11.03. Initial 2026 guidance was estimated reported sales of $100.5 billion and adjusted EPS of $11.53 at the midpoints.

Acquisitions and collaborations

• Firefly Bio, Inc. - closed July 29, 2026 (0000200406-26-000163, Exhibit 99.1). The company announced "the successful completion of its acquisition" of Firefly Bio, a developer of degrader antibody conjugates, for $1 billion in cash. It is accounted for as an asset acquisition, with an in-process research and development charge of about $1 billion in the third quarter. The 10-Q (0000200406-26-000197) confirms completion on July 29, 2026.
• Sail Biomedicines - agreements signed July 29, 2026 (0000200406-26-000163, Exhibit 99.2). The agreements cover an in vivo CAR-T collaboration and an equity investment, and give J&J an exclusive option to acquire Sail for $2.58 billion. Initial payments were $785 million, including a $465 million equity investment, with up to $140 million of contingent milestone payments. This is an option, not an acquisition, and no purchase of Sail has been made. The 10-Q reports initial payments of $0.8 billion made, of which $0.3 billion was expensed, mainly the option premium.
• Guidance update on July 29, 2026 (0000200406-26-000163, Item 7.01). The two transactions were expected to lower 2026 adjusted EPS by about $0.64 ($0.46 Firefly, $0.18 Sail). They were expected to lower 2027 adjusted EPS by about $1.36 ($0.08 Firefly, $1.28 Sail, assuming the option is exercised). The 2026 adjusted EPS midpoint was cut from $11.68 to $11.04, and adjusted operating margin was now expected to fall about 75 bps against a prior expectation of a 75 bps increase.

Legal

• Proposed resolution of ovarian talc litigation - announced July 27, 2026 (0000200406-26-000155, furnished with a July 28 filing date). J&J reached an agreement with the plaintiff firms leading the federal multi-district litigation and related state proceedings. It is conditioned on participation of at least 95% of the remaining claims (about 76,000 claims). The company commits $5.5 billion, with a first payment of no more than $3 billion in 2027 and no further payments before 2028. It follows a July 22, 2026 order from the MDL court requiring plaintiffs to show why the remaining claims should not be dismissed for failure to prove specific causation. The mesothelioma docket is not covered.
• Accounting (10-Q, 0000200406-26-000197). J&J recorded a $5.5 billion accrual in the third quarter. The total present value of the talc reserve was about $9.0 billion at September 27, 2026, roughly half of it current. In October 2026 the Third Circuit dismissed the insurers' appeal of the Imerys settlement order.

Management, governance and capital returns

• August 4, 2026 (0000200406-26-000167). Jennifer Taubert, Executive Vice President and Worldwide Chairman, Innovative Medicine, will retire. Tom Cavanaugh succeeds her and joins the Executive Committee effective September 1, 2026.
• April 28, 2026 (0000200406-26-000089). Results of the April 23, 2026 annual meeting: all 12 director nominees were elected, say-on-pay was approved, PricewaterhouseCoopers LLP was ratified as auditor for 2026, and a shareholder proposal for an independent board chair was not approved.
• April 14, 2026 (0000200406-26-000076, Exhibit 99.3). The quarterly dividend was raised 3.1%, from $1.30 to $1.34 per share ($5.36 annualized), the 64th consecutive annual increase, payable June 9, 2026 to holders of record May 26, 2026.
• Share repurchases (10-Q). In the third quarter J&J repurchased 6,543,070 shares in open-market transactions under a systematic plan to meet compensation program needs. Net debt was $27.4 billion at quarter end ($44.6 billion of debt less $17.2 billion of cash and marketable securities).

About this file

JNJ annual income statement, balance sheet and cash flow

Taken from the SEC filings and normalized to actual dollars.

• Period label, FY2025. Fiscal year 2025 (52 weeks ended December 28, 2025)
• Period label, FY2024. Fiscal year 2024 (52 weeks ended December 29, 2024)
• Period label, FY2023. Fiscal year 2023 (53 weeks ended December 31, 2023)
• Source form, FY2025. 10-K filed 2026-02-11
• Source form, FY2024. 10-K filed 2026-02-11 (comparative columns)
• Source form, FY2023. 10-K filed 2026-02-11 (comparative columns; balance sheet not presented for this year)
• Cash flow: note, FY2023. The 10-K states that amounts presented for 2023 in the statement of cash flows have not been recast to exclude discontinued operations, so the fiscal 2023 cash flow figures include the Consumer Health business separated as Kenvue.
• Balance sheet note, FY2023. The FY2025 10-K balance sheet presents only December 28, 2025 and December 29, 2024, so no fiscal 2023 balance sheet is reported here.

JNJ quarterly income statement, balance sheet and cash flow

Taken from the SEC filings and normalized to actual dollars.

• Period label, Q3 FY2026. Fiscal third quarter 2026 (13 weeks ended September 27, 2026)
• Period label, Q3 FY2025. Fiscal third quarter 2025 (13 weeks ended September 28, 2025), prior-year comparative

JNJ year-to-date income statement and cash flow

Taken from the SEC filings and normalized to actual dollars.

• Period label, 9M FY2026. Fiscal nine months 2026 (39 weeks ended September 27, 2026)
• Period label, 9M FY2025. Fiscal nine months 2025 (39 weeks ended September 28, 2025)

JNJ trailing twelve month income statement and cash flow

Derived by AI from the figures the filings report. No filing prints these, so none of them is linked.

• Period label. Trailing twelve months ended September 27, 2026 (derived)
• Derivation. Fiscal year 2025 (from the FY2025 10-K, accession 0000200406-26-000016) plus fiscal nine months 2026 less fiscal nine months 2025 (both from the fiscal third quarter 2026 10-Q, accession 0000200406-26-000197).

Adjustments

Notes

• All figures are stated in actual U.S. dollars. The filings present dollar amounts in millions and weighted average share counts in millions; those have been multiplied out here. Balance-sheet share counts (shares issued and treasury shares) are printed as full share counts in the filings and are carried across unchanged.
• Coverage reflects exactly what the two filings behind this page print. The FY2025 10-K (accession 0000200406-26-000016) presents fiscal 2025, 2024 and 2023 on the statements of earnings, cash flows and segment tables, but only December 28, 2025 and December 29, 2024 on the balance sheet, so no fiscal 2023 balance sheet is reported. The fiscal third quarter 2026 10-Q (accession 0000200406-26-000197) presents the fiscal third quarters of 2026 and 2025, the fiscal nine months of 2026 and 2025, and a balance sheet at September 27, 2026.
• The fiscal third quarter 2026 is the 13 weeks from June 29, 2026 to September 27, 2026; the year-ago quarter is the 13 weeks from June 30, 2025 to September 28, 2025. The fiscal nine-month periods run from December 29, 2025 and December 30, 2024 respectively.
• The 10-Q presents cash flows only for the fiscal nine months, so cash flow figures appear in the nine-month (year-to-date) block and the trailing-twelve-month block, not in the quarterly entries.
• Fiscal third quarter 2026 earnings before taxes were $34 million and net earnings $210 million (diluted earnings per share $0.09), against $7.493 billion and $5.152 billion ($2.12) a year earlier. The 10-Q attributes this mainly to a charge of approximately $5.5 billion for the proposed resolution of the talc ovarian cancer litigation, recorded in other (income) expense, net, and to about $1.0 billion of acquired in-process research and development expense from the acquisition of Firefly Bio, Inc., recorded in research and development expense. The quarter also carried a tax benefit of $176 million on near-zero pre-tax earnings.
• Fiscal nine months 2025 pre-tax and net earnings were lifted by approximately $7.0 billion from the reversal of a previously accrued talc reserve in the fiscal first quarter of 2025, recorded in other (income) expense, net ($7.692 billion of net other income for the nine months). Fiscal nine months 2026 carries the opposite: $6.405 billion of net other expense including the $5.5 billion talc charge. Nine-month net earnings therefore fell from $21.688 billion to $10.979 billion while sales rose 7.4%, from $69.629 billion to $74.771 billion.
• Johnson & Johnson does not present an operating income subtotal on the face of its consolidated statements of earnings. The 'operating_income_derived' figures are computed as gross profit less selling, marketing and administrative expenses, research and development expense, in-process research and development impairments and restructuring. Each derived figure reconciles exactly to the reported pre-tax earnings once interest income, interest expense and other (income) expense, net are taken into account.
• Sign conventions: interest income, capital expenditures, acquisitions, acquired in-process research and development payments, dividends paid, share repurchases and accumulated depreciation are stated as positive amounts. 'other_income_expense_net' keeps the filing's (income) expense presentation, so a negative value is net other income and a positive value is net other expense. 'provision_for_taxes_on_income' is negative where the filing reports a tax benefit. 'income_expense_not_allocated_to_segments' also keeps the filing's (income) expense presentation.
• Fiscal 2023 net earnings of $35.153 billion include $21.827 billion of net earnings from discontinued operations, essentially the separation of the Consumer Health business as Kenvue, including a $20.984 billion gain on that separation. Continuing-operations net earnings for fiscal 2023 were $13.326 billion and continuing-operations diluted earnings per share were $5.20. The 10-K states that fiscal 2023 cash flow statement amounts have not been recast to exclude discontinued operations.
• Fiscal 2025 pre-tax and net earnings include $7.209 billion of net other income, largely the talc reserve reversal described above. Fiscal 2024 pre-tax earnings were depressed by $4.694 billion of net other expense and by research and development expense of $17.232 billion, which included large acquired in-process research and development charges.
• Research and development expense is reported as printed on the face of the statement of earnings ($14.665 billion in fiscal 2025; $4.652 billion in the fiscal third quarter of 2026). In the SEC's XBRL company facts the plain 'ResearchAndDevelopmentExpense' concept carries only the much smaller charge for acquired in-process research and development, so it is not used here.
• Total debt is not a line item in the filings; it is derived as loans and notes payable plus long-term debt. Net debt is derived as total debt less cash and cash equivalents and marketable securities. Book value per share is derived as total shareholders' equity divided by shares issued less treasury shares.
• Cash dividends paid per share come from the consolidated statements of equity: $1.34 in the fiscal third quarter of 2026 ($1.30 a year earlier), $3.98 in the fiscal nine months of 2026 ($3.84 a year earlier), and $5.14, $4.91 and $4.70 in fiscal 2025, 2024 and 2023. The 10-Q discloses a further $1.34 per share quarterly dividend declared on October 13, 2026, payable December 8, 2026.
• The trailing-twelve-month figures are derived as fiscal year 2025 plus the fiscal nine months of 2026 less the fiscal nine months of 2025. Because fiscal 2025 includes the $7.0 billion talc reserve reversal only in its first nine months, which this arithmetic removes, and the fiscal nine months of 2026 include the $5.5 billion talc charge, trailing-twelve-month earnings are well below fiscal 2025 earnings.
• A Form 8-K dated October 13, 2026 (accession 0000200406-26-000189) carried the fiscal third quarter 2026 earnings release. The 10-Q filed October 21, 2026 covers the same period and is the source used here; no figure in this file comes from the press release.
• The 10-Q states that the Company announced in October 2025 its intention to separate its Orthopaedics business and expects the separation to be completed in mid-2027. That business is still consolidated in every figure reported here. The MedTech segment's fiscal third quarter 2026 results include $0.4 billion of Orthopaedics separation related costs and $0.3 billion of in-process research and development impairment charges.
• Segment 'other segment items' as reported by the Company can be negative, which reduces segment expense and raises segment income before tax. Segment income before tax for the two segments does not sum to consolidated pre-tax earnings; the difference is the income and expense the Company does not allocate to segments, reported separately here. In the fiscal third quarter of 2026 that unallocated amount was $5.808 billion of expense, including the $5.5 billion talc charge.

Uncertainties

• Operating income is a derived figure, not a subtotal the Company reports. A reader who prefers to exclude restructuring, in-process research and development impairments, or intangible amortization from operating income would arrive at a different number. The components are all reported here so the derivation can be recomputed.
• No effective tax rate is shown for the fiscal third quarter of 2026: the Company recorded a $176 million tax benefit on $34 million of pre-tax earnings, so the ratio of the two is not meaningful. Effective tax rates shown elsewhere are computed as provision for taxes on income divided by earnings before provision for taxes on income, and are not the rates the Company discusses in its tax note (which reports 14.0% and 21.5% for the fiscal nine months of 2026 and 2025, consistent with the figures here).
• Trailing-twelve-month diluted earnings per share of $6.58 is an approximation, the sum of fiscal 2025 and fiscal nine months 2026 diluted earnings per share less fiscal nine months 2025 diluted earnings per share, each of which uses a different weighted average diluted share count. The trailing-twelve-month revenue, earnings and cash flow figures are exact period arithmetic and carry no such caveat.
• Three-month cash flow figures for the fiscal third quarter are not reported, because the 10-Q presents cash flows only on a nine-month basis and the six-month figures needed to derive the quarter are not printed in the filings behind this page.
• Balance-sheet 'shares outstanding' is derived as shares issued less treasury shares at the balance sheet date (2,407,118,000 at September 27, 2026). The cover page of the same 10-Q reports 2,407,310,266 shares outstanding as of October 15, 2026, a later date; both are shown so the difference is visible.
• Fiscal 2023 identifiable assets by segment are not reported because the segment identifiable-assets table in the FY2025 10-K presents only fiscal 2025 and fiscal 2024. Segment identifiable assets are reported at September 27, 2026 on the fiscal third quarter 2026 entry; segment additions to property, plant and equipment and depreciation and amortization are reported only for the nine-month periods, which is how the 10-Q presents them.

Company details

Fiscal period

Source filings