Johnson & Johnson (JNJ) Earnings Call Transcript & Summary

Great. Good afternoon, everybody. Thanks for joining us. I'm Terence Flynn, the biopharma analyst at Goldman Sachs, and we're very pleased to be hosting Johnson & Johnson today at our virtual conference. Joining us from the company is Jennifer Taubert, who is Executive Vice President and Chairman of Pharmaceuticals. Jennifer, thank you very much for your time today, and thank you for everything that the company is doing to combat COVID. I know you're going to start with some opening remarks before we go into the fireside chat.

Well, thanks, Terence, and good morning to everyone listening in. I'm so glad we found new ways to connect virtually during these unprecedented times, and I'm happy to spend some time with you today to talk about our Pharmaceuticals business. I'd like to start by acknowledging all those who've been impacted by the recent events in the U.S. as well as the COVID-19 global pandemic, which has altered so many aspects of our professional and personal lives. On behalf of the more than 130,000 Johnson & Johnson employees throughout the world, I hope that you and those closest to you remain safe and healthy. As the largest and most broadly based health care company, we recognize our responsibilities as a global citizen, and we'll continue to work tirelessly to make a difference. Building on the groundbreaking science and scalable production platforms we already have in place from our work on the Ebola virus, Zika and HIV, we're accelerating the development of a safe and effective vaccine for the novel coronavirus through unprecedented efforts as well as collaboration with valued partners. And we're screening compounds from our library and those of other pharmaceutical companies in the hopes of identifying a treatment. And our commitment doesn't end there. We also remain steadfast in our decision to patients, doctors, nurses, our employees and our communities during the time when our support is needed most. We know that illnesses don't hit pause just because there's a global pandemic. So whether battling cancer, facing mental health challenges or living with an autoimmune disease, patients rely on our transformational medicines every day. The strategies that we've put in place to grow our business continue to guide us. And because our growth comes exclusively from volume, not price, increases in sales are also indicative of the increased number of patients we're reaching with our transformational medicines. And this is what drives us every day to do even more. Our strong first quarter results are just one reflection of J&J's sustainable business model. Our Pharmaceutical business, in particular, grew 10.1% operationally in the first quarter. And we delivered our eighth consecutive quarter with sales that exceeded $10 billion. Our growth was broadly based across therapeutic areas and regions and 9 of our key growth brands delivered double-digit growth. These are our oncology brands, such as DARZALEX, IMBRUVICA and ERLEADA; our immunology brands, such as STELARA and TREMFYA; and our pulmonary hypertension assets, such as OPSUMIT and UPTRAVI. Since we announced our first quarter results in April, we've continued to maximize the value of our industry-leading portfolio. This includes the approval of our subcutaneous form of DARZALEX in the U.S. and Europe, which delivers tremendous benefits for patients living with multiple myeloma, with administration time going from hours to only 3 to 5 minutes. We also received approval for IMBRUVICA in combination with rituximab for newly diagnosed patients with CLL. This is the 11th indication for IMBRUVICA in 6 years, and it really underscores the remarkable value that this product continues to bring. We've also continued to advance our pipeline of promising assets. So as we shared during our last Pharmaceutical Business Review this time last year, we had at least 10 NME filings or launches anticipated during the 2019 to 2023 time frame, each with more than $1 billion in potential. And as confident as we are about the potential of our current portfolio of marketed medicines and our near-term pipeline, we're always looking ahead to the future. Science and technology are evolving, and we're disrupting our own approaches to R&D by looking at both disease and biological pathways to address unmet needs. We also continue to seek out the best science to advance our next wave of innovation. We've got an outstanding track record of value-creating partnerships, acquisitions and collaborations, and we continue to plan to lead in this area. Recent examples are the deal that we just did with Fate Therapeutics for allogeneic cell therapy and XBiotech for immune-related disorders. So these are challenging times, but the fundamentals of our business remain strong. So despite the uncertainty due to COVID-19, we remain confident in our ability to grow above the market on the full year basis in 2020. So again, it's a pleasure to have this opportunity to connect with you today, and I look forward to your questions. Terence?

Great. Thanks so much, Jennifer, really appreciate the comments and setting the stage. It's a great segue into a lot of the topics we're going to cover today. Maybe the first, just given the timeliness of the news out this morning related to your COVID-19 vaccine. Congrats on speeding ahead with the time lines. I think now you're guiding to getting into the clinic later in July. I think previously, you said September. Maybe just walk us through kind of how that happened. And then the second is how to think about timing of data and then next steps, which everyone is focused on as well.

Yes. So thanks for noting our press release this morning. First, I think it is absolutely extraordinary how the entire biopharmaceutical industry worldwide has really stepped up to this challenge, to develop a vaccine or vaccines as well as treatments for the infection or complications of the infection. The most recent data I saw today indicated that there's 161 vaccines in development, and 238 or more treatments are being considered. And so I really think that this is extraordinary on behalf of the entire industry and definitely unprecedented. Regarding the J&J COVID vaccine, I am extremely proud of the terrific work that our Johnson & Johnson colleagues have been doing 24/7 to help us develop a safe and effective vaccine and to enable us to get it to market as soon as possible. And in March, we announced the selection of a lead candidate for the vaccine. We've been doing a lot of work in nonhuman primates to really understand the immune reaction. And we've announced partnerships with companies such as Emergent and Catalent to help us expand our manufacturing capacity. And today, we announced an acceleration of our first-in-human trials from September up to mid-July, which is a significant acceleration and is really based on the strength of the data that we're seeing to date and also in consultation with regulators worldwide. I think it's also really important to note that when we first came out with all of the information on the vaccine, we have pledged to provide at least 1 billion doses to the world by the end of 2021 and that we're planning to do so on a not-for-profit basis during this emergency pandemic period. So people will say, "Okay, it sounds like you've got a lot of confidence." And let me tell you a little bit about why I am so confident in the work that we're doing. And while nothing is certain, we've made significant investments in vaccines and our vaccine platform technology over the last decade. We actually started with the purchase of Crucell and really invested in that platform technology to develop our PER.C6 cell line and also our AdVac technology. Both of these are being used in this COVID vaccine. And we've got experience. This isn't all brand-new to us. We've actually used the PER.C6 cell line and the AdVac technology in our Ebola vaccine, which has been deployed in 65,000 people in Rwanda and the Democratic Republic of Congo in the current Ebola outbreak. And we just got a positive European Commission opinion on our filing on that just in the last weeks. And we're also deploying it in our HIV vaccine that's currently in Phase III clinical trials today. So in terms of what we've seen in the platform from a safety perspective and from a scalability standpoint, we've got real good confidence in those aspects. And so then we're a working on immune reaction -- or the immune response, excuse me, on that, and are really hopeful and optimistic for having a winner here. I think last on this, it's really important to note, our competition is the virus. And so while there are a lot of other ones that are in development as well from a vaccine perspective, we're really hopeful and rooting for a number of companies to be successful here because competition is the virus in this case, not anybody else. But really, really great news on behalf of J&J today and our ability to speed this up and get it into humans as soon as possible, which is now really the second part of July.

Great. Well, congrats on all the progress. And maybe just one follow-up is on the time lines of data. I know previously, you guys were saying by the end of this year for preliminary data. I'm assuming that's pulled forward as well. But any update when we could see initial data?

Yes. We're -- so first of all, we've got a real strong commitment on everything with data to ensure peer review and ensure publication. And so we continue to follow those types of rules and guidelines. With the acceleration into humans and hopefully the start of Phase III thereafter, I do anticipate that we'll be able to get the results a little bit earlier than we had thought before, and so we're still working on those time lines. But if successful, we should be having sort of the first batches available, should it be approved, for emergency of pandemic use in the first quarter. So things are looking really positive there.

Okay, great. Good to hear. I guess the other topic on the COVID front, before we move on to other things, is just as we think about some of the near- and long-term impacts to the health care system. Obviously, you touched on this, J&J has a wide-ranging business across the health care landscape. But as you think about any ways which COVID could shape either your business or the strategy, maybe you could just touch on that at a high level.

Yes. So a number of things have changed with COVID, but what has not changed is the need for transformative therapies to treat patients with really serious diseases. So our strategy on the pharmaceutical side as a transformational medical innovator in areas of high unmet medical need remains unchanged. I don't see that changing. What I do see is potentially some of the hows changing. We've seen really accelerated adoption of new technologies across the value chain, within health care systems and clinical trial sites and so on. There's been increased focus on supply chain and ensuring robust supply chains, both locally as well as globally. The economic impact is still being assessed but will likely lead to continued pricing pressures. And we can also anticipate greater interest and greater focus on health, the importance of quality health care and global public health. So what are some of the things that we're doing about it? Back in January when things really started heating up in China, we quickly took our customer engagement efforts virtual worldwide. These are things like our e-detailing, medical in-services, medical education, virtual sampling, delivery of clinical study drug to home, using data sciences to help with patient recruitment and all different types of things to help ensure patients can get on and stay on our therapies during the pandemic. I expect that these technological advances to really stay and to continue to be built upon in ways that are going to be even better for the customer and more patient-centric going forward. In terms of value propositions and pricing and such, we really continue to drive the debate to demonstrate our commitment to innovation, patient value and overall health care savings and cost effectiveness. And so we anticipate continuing to partner throughout the health care system to really be a part of the solution, not a part of the problem. And we're really also looking at ways, how can we ensure our medicines are the least sort of medical resource-intensive as they can be? And so how can we make them even more patient-friendly and be able to move them into less resource-intensive settings? A very simple example of this would be DARZALEX in our subcu dose, where you go from a multiple-hour infusion and taking up chair time to something that's a 3- to 5-minute injection. And so you can imagine how that can lead to different savings in the health care system as well as being extremely patient-friendly. And then last, we've got a very long history and great track record in infectious diseases. We're really planning to stand up a vaccine business, not only for the coronavirus but also for RSV, hopefully for HIV and others. And we've long been having impact in global public health, and so we continue all -- we expect all of that to continue and even amplify. So we believe that we're really well positioned for impact going forward and really hopefully disproportionate impact to the market.

Great. Great. Well, best of luck with all those efforts. I think the other topic, high level, and again, you touched on this a little bit in your prepared remarks, but as some states and countries are starting to reopen now, maybe you could speak a little bit deeper about the environment you're seeing on the pharma side relative to expectations that you outlined on your first quarter call. And maybe how does this vary across the key end markets that you guys operate in, being cancer, immunology and PAH?

Thanks. We are starting to see things open up, and I think that, that's really good. So we're seeing offices open up. We're seeing elective surgeries begin to resume. We're seeing patients getting back in for necessary lab tests and patients starting to come back in, and not only continuing patients, but also new patients. And so I think the increases that we're seeing now are largely in line with our expectations. There's always going to be some puts and takes across the different therapeutic areas, but I've been really pleased with what we -- how we forecasted what we thought would happen and then what we're seeing ultimately. Very uncertain times, and I'm very pleased because things are shaping up to be largely in line with what we've said. If you look across the industry, we've seen sort of new-to-brand prescriptions decline about 45% really due to office closures, site closures and also reallocation of resources. In oncology, in some of the areas of oncology, they almost continued as if there wasn't much of a COVID pandemic. In others, there were some delays. Immunology, there definitely were some delays. And in PAH, pulmonologists were by and large pulled off to work on COVID cases. But we're seeing all of this start opening up right now. And we're seeing increases week-over-week in script volume as well as new patient starts. And so I think it bodes really well for recovery now as well as throughout the rest of the year.

Great. Well, that's great to hear. I guess the last one's just how are you guys thinking about the potential for a second wave of infections in the fall? I know that's the other thing we're all monitoring here as we watch the reopen. So how are you guys thinking about that? And any perspective you can share?

Yes. No one knows for sure whether the virus is going to return or not. But our thinking is that if it does return, it's not going to have the same level of global impact that's been experienced over the last few months. This assumption is based on opinions that have been shared with us by numerous experts that we've spoken to as well as in a number of different forums. And I think they believe, as we do as well, that if the virus does return later in the year, the world should be much better prepared, right? Testing should be more readily available. There will be adequate supply of PPE and other necessary medical equipment. Things -- isolation and other preventative measures should be able to be implemented with more precision. And there may also be good therapeutic options that are available for treatment. And so at a minimum, we should be in a much better place if it returns than where we were when the virus first started beginning of the year. So I think more to come on that later in the year. But if it does return, we don't think it will have the same impact that it did this time around.

Okay. Understood. Really helpful perspective. I guess moving on to the portfolio now. You touched on this at the beginning, the subcu version of DARZALEX that you received approval for. Congrats on that front. Would be curious if you could share any of the maybe initial commentary in terms of how the conversion is going from the IV to the subcu now. And has COVID actually helped accelerate that trend? As I would think it has because of the timing aspect, where you're talking about minutes versus hours. So maybe that's the first part of the question, and I had one follow-up.

Sure. So DARZALEX is part of our oncology business. And as a reminder for everybody, our oncology business is our second-largest business in pharma, and it's also our fastest-growing. And so we were really excited to get approval of the subcutaneous form of DARZALEX in the United States actually ahead of the PDUFA date and then also in Europe most recently. And so I know we've seen, in other cases, people have been delaying launches. We think this is such an important innovation. We've got next-day launches. And so the second that those approvals came through, we were ready and working to try to be able to get this to patients in the market. And I'm really proud of our team not allowing something like COVID to get in the way on this. And so as you noted, the benefit here is taking that infusion and taking it from what can be a number to several hours of time to a 3- to 5-minute injection, which is much better for patients and much better for the health care system. The reaction from customers has been very, very good to date. We've been doing in-service training with nurses and physicians on the injections. We've got some usage already. And the launch is really rolling out as anticipated and as good as we think that it should be. So we think that products such as this actually position themselves well now, given the COVID pandemic, because it does use so much less in terms of health care resources and time. And we think it's also really good for patients going forward, particularly as we look to get in the frontline settings for DARZALEX. DARZALEX right now is the line 2 leader worldwide in terms of therapy. And we're really looking to penetrate that key frontline setting. We've got indications in transplant-eligible and transplant-ineligible patients, and we think that this is going to be a great catalyst there for frontline growth. I think also important to note on DARZALEX is we're not stopping there. We've also got trials underway and data to come, taking a look at DARZALEX in amyloidosis and also smoldering myeloma. So a lot of good things to come on DARZALEX.

Great. And maybe again just on the follow-up in terms of the conversion, I mean, do you expect that to be fairly rapid? Or is this going to be something that's staggered over the course of years? Just trying to think about that kind of pace of conversion of the market.

Yes. It's going to depend probably by market and speed of reimbursement and then new patients versus existing patients and current practice patterns and stuff. So we do anticipate over time that, that business, largely because of the advantage to patients and because of the advantage in terms of resource utilization, that, that should shift over. On the matter of time, right now, it's a little bit too early, it's too soon in the period to have really solid data on that. But I can tell you that based on where we are versus what the teams had projected, we're right on track with where we should be.

Okay. Great. And then on the frontline market. I know, again, it sounds like based on your comments, that's the next key growth opportunity here. Subcu will obviously help there. But how should we think about that kind of opportunity relative to kind of where you are now, or how to think about the rate of uptake? I guess, similar-type question in frontline on the forward because I know it's a really important opportunity.

Yes. So DARZALEX is a great example of us putting our really significant R&D resources and our true development engine to work. And so the breadth of indications that we have for DARZALEX and the performance, proven performance and indications that we have across not only lines of care, but also in combinations with all of the individual regimens, is really extraordinary. And so as I mentioned, we do have those frontline indications both in transplant-eligible and transplant-ineligible patients. And so I think this, combined with the subcu dosage form, really helps make this a great choice for those frontline patients. And we know that the number of frontline patients is greater than second-line patients, et cetera. So we see this as a great growth opportunity for DARZALEX going forward.

Okay. Okay. Maybe just one more on the myeloma front before we move on to other areas is you guys presented new data for your BCMA CAR-T at ASCO, which was pretty exciting. Maybe just remind us of kind of the key takeaway here and then how you're preparing for commercialization and some of the hurdles to CAR-T therapy as we've seen with some other companies.

Yes. So indicative of the times. We just had our first virtual ASCO. So the -- one of the key oncology meetings for the year. And we had a number of key data readouts that were quite positive. And the one that, Terence, you just referenced was for our CARTITUDE-1 study for our BCMA CAR-T product that we are developing in concert with Legend as well. And so what we reported was our longer-term data. So we had a first readout earlier. This was our longer-term data. And I've got to tell you that the profile of the product continues to look very strong, and it looks like we'll have a differentiated asset here in terms of CAR-T in the multiple myeloma space. So the results that were reported at ASCO was 100% of the patients in the study responded to treatment. 86% of patients had a stringent complete response at 11.5 months. 86% were progression-free at 9 months. And median time to first response was at 1 month. And so we do think that this is continuing to perform well and do so over time. And based on really what we know about the assets and what we know about them mechanistically, we do think that we're going to have a differentiated profile. This product has 2 binding domains for BCMA and also potentially has a delayed CRS response. And so our hope is that having that delayed cytokine release syndrome response may enable an outpatient approach down the road. So we'll have to see as the rest of the trials pan out and understand it more. But because of that, we do think that it may be, again, more patient-friendly and better from a health care utilization perspective. In terms of planning for commercialization. So the teams are working and really have been working on this because it really is a new and a different model. I've got to tell you, the teams from R&D, supply chain and commercial are the most integrated that I've ever seen in my 30-plus years working in the industry. And so they're really working together as one team for one integrated approach and a highly patient-centric approach. And we're really optimistic to be able to file this asset by year-end this year. So really looking forward to that. So a lot of work still to be done [Audio Gap] from what has happened from those who have come in front as well as putting together really, really robust plans for this asset going forward. So I think we'll be able to be in good shape to get it to the patients who need it if and when we get approval.

Okay. Maybe just one follow-up there is on the, you mentioned, potential for outpatient -- an outpatient approach. Would you guys have to generate additional data on that front? Or do you think you'd have enough data to provide the doctors comfort with moving to that kind of a setting? Because I know in lymphoma, we've seen a little bit of outpatient use, but it's mainly been inpatient so far with the other drugs.

I think the initial studies and probably initial filings will be for inpatient. I think the additional work that we have going on in our ongoing clinical development program would -- will hopefully yield the right information that we need to go back to take a look at if it's possible for us to get to the outpatient setting.

Okay. Understood. Maybe just moving on to another one of your key cancer assets, IMBRUVICA. Obviously, it's been a really strong growth driver for you guys. And similar to as we talked about DARZALEX, a big focus has been moving into the frontline setting here for CLL. So maybe just would love any perspective on how to think about the forward outlook here. And how much of the frontline market can you continue to penetrate?

Yes. So real, real proud of how well IMBRUVICA has done in the market. And it currently is really a key asset for us. And we believe that there's still a lot of potential here. As I mentioned in the beginning remarks, we just received our 11th indication for IMBRUVICA in 6 years' time, which is really terrific. And as we've taken a look and really gone through and penetrated the various lines of therapy and continued to develop it, as we get into those frontline settings and stuff, we continue to best the existing standard of care across many regimens and head-to-head trials, across patient age and risk groups. And so we think that there's still a lot of growth potential for IMBRUVICA going forward. And we also have the only agent that has the convenience of once-a-day dosing. And when you're taking a look at long-term chronic therapy, that really can make a difference. And so we think between our extraordinary data sets, the 11 indications, how we've continued to best the standard of care across so many different regimens and patient ages and risk groups, we continue to believe that this is going to be a strong growth driver for us going forward.

And do you think that this could be a larger market than myeloma? I know that myeloma's another -- you guys have been in myeloma for a long time with -- going all the way back to Velcade.

With Velcade, yes.

First targeted drug. So as you think about CLL, are there any similarities you can draw? And how to think about the ultimate market opportunity for these newer, safer targeted drugs.

Yes. So CLL is about 30% of the size of multiple myeloma market now. And so we'll have to see how that grows over time. I think it's important for IMBRUVICA as a BTKI to also realize it's -- that it is for CLL and SCL. It's also for mantle cell lymphoma, for marginal zone. We've got an indication in Waldenstrom's, graft-versus-host disease and others. And so we think that the opportunity in CLL and really as standard of care is big and offers a lot of growth potential. There's also growth as we take a look at -- across the other indications as well.

Okay. And maybe the other topic that has come up somewhat over the last kind of 12 months or so is the competitive landscape for IMBRUVICA as there were a couple of approvals from AstraZeneca and BeiGene, and there are some earlier-stage non-covalent inhibitors. But maybe just remind us of kind of the key advantages or hurdles that IMBRUVICA presents to some of these later comers.

Yes. So I think with IMBRUVICA, we've got 5-plus years of strongly established safety and tolerability as well as 11 indications; and from an efficacy perspective, besting the standard of care over and over and over again. And so this product has really continued to perform, perform for the patients who need it, perform for the clinicians who are prescribing it. And so there really is an extraordinary track record, ability to use. We've got very strong access for the product, not only in the United States, but globally and very, very strong expertise throughout. So yes, there are new competitors, but we anticipate we're going to continue to be able to compete very, very strongly based on the profile of this product and how it's performed. The additional element is that we've got the convenience of once-a-day dosing. And so I think that also is much better from a patient perspective than BID dosing, or offers the potential to be. So we feel real good about IMBRUVICA going forward.

Okay, great. Maybe moving on to immunology. Obviously, another important segment of your franchise here. And STELARA has been a significant growth driver, particularly recently on the IBD front. So is that really the key area we should be focused on as we think about the forward outlook for STELARA? And bigger picture question is on IBD. I know this is a newer segment of the immunology market. Could this ultimately rival or eclipse kind of what we've seen with dermatology?

Yes. So great questions there. So immunology is our largest business at Janssen and continues to grow very, very well with STELARA actually being our largest asset, not only at Janssen but for Johnson & Johnson. And so STELARA has performed extraordinarily well, not only in psoriasis and psoriatic arthritis, but as you mentioned, also in Crohn's disease, and we most recently got approval as well for ulcerative colitis. So the major driver behind STELARA's strong performance over the last year or 2 has been the IBD indication, and here, Crohn's disease because ulcerative colitis wasn't -- hadn't been approved yet. And so the performance, what this is bringing to patients really is extraordinary, and I think that there's a lot of growth potential to be seen going forward. So it's important to realize 2 out of 3 patients on anti-TNFs are not in remission at 1 year. And we've proven with STELARA in Crohn's that we've got superior efficacy. So things like rapid response as well as sustained remission with the proven safety and tolerability profile of STELARA have really proved to be a winner here. And so yes, so the really, really strong growth for this asset is predominantly being driven by IBD. And now with the addition of ulcerative colitis, we think that, that's going to be really, really beneficial. It brings additional patients into the fold. And as we've seen in other areas, having both Crohn's disease and ulcerative colitis approved gets you not only business in ulcerative colitis, but it can also be a really positive further catalyst for Crohn's disease as well. So yes, so we've got high -- we've got really strong expectations for STELARA for continued growth in IBD, particularly that need on the unmet need that still exists as well as the number of patients who've been treated with other lines of therapy, i.e., anti-TNFs, who either are not in remission now or will not be in the near future.

Great. And maybe a similar question as before on the IMBRUVICA side is there are a number of competitor agents coming, both Skyrizi, which competes in the psoriasis space versus TREMFYA, but also some oral drugs coming out now for the IBD side, and then potential Humira biosimilars in 2023. So maybe just as you think about the competitive set, what are the key things that you're watching or focused on?

So really important to remember with STELARA in Crohn's is that we've really got unique dosing there. So we've got an IV induction dose that really helps patients get into rapid remission. So works very quickly, rapid response for rapid remission. And then we've got the subcu dosing that can help patients sustain that remission over time. And we've really seen extraordinary efficacy in these patients. And so we think that, that is going to continue to remain. If you think versus new product, Humira biosimilars, 2 out of 3 patients on anti-TNFs are not in remission. And so whether they're on sort of existing anti-TNFs or whether they end up ultimately on a biosimilar, they will end up falling out of remission. And we think STELARA is great in this case both for bio-naive patients as well as for switches when patients who are on another therapy that's not working for them. So we think that there's a lot of potential momentum there in the Crohn's space. As it pertains to psoriasis, when we launched TREMFYA on the IL-23 mechanism, we really think that, that is the next wave of growth and really offers a differentiated profile versus the IL-12/23s. And so we've really been putting the bulk of our efforts in psoriasis on TREMFYA rather than STELARA. We think that, that's going to be a great driver going forward. And if you take a look at the uptake curves on both TREMFYA and Skyrizi, I think both products have done very well and the market will tell you that, that mechanism is really being very well received. We believe that we've got a very competitive profile and a lot of growth potential ahead for TREMFYA based on the data that we have. First off, we've already got 4 years of data on this. So that's -- it's rare this early in a product's life cycle that you're actually able to have 4-year data. We've proven superiority in different elements across all of the different classes of therapies, be it anti-TNFs, be it IL-12/23s or the IL-17s on different dimensions. And so we really think that what TREMFYA brings to market in terms of both an efficacy and a safety profile is really going to be great and help enable this to continue to be a strong growth asset for us going forward. And then we see with Skyrizi, we see good competition. And we welcome good competition. And we think that IL-23 is the right mechanism here for patients, and that we've got just tremendous data to help propel us. The other thing, I think, is important to note here is that we have filed for psoriatic arthritis as well. And so we're optimistic for an approval in the second half of the year. And I think psoriatic arthritis will be not only an additional market to penetrate there, but will hopefully serve as even a further catalyst in psoriasis, as we've seen with other agents when they've got PSA indications as well.

Great. Well, maybe just in the interest of time, the last question I had just relates to the business development outlook. You mentioned in your remarks Fate and XBiotech. We talked about your partnership with Legend for the BCMA CAR-T. Are those the types of deals that you guys are focused on the forward? Or does -- has anything changed in terms of your strategy?

Yes. So we continue to scout the landscape for terrific innovation. And based on the strength of Johnson & Johnson and our position, we believe that we're in a really good spot to continue to do the type of deals that we believe are value-creating, both will be really valuable and transformational for patients as well as generating value for Johnson & Johnson and for shareholders. I think when we are at our best in how we can create the greatest value and kind of our sweet spot is when we can bring assets in, put our very strong R&D capabilities to bear, be able to really build out the right indication set and to maximize the potential of the asset. And then we can put our commercial capabilities to bear as well so that not only are we getting rapid approvals globally, but we've got the right value propositions for the asset, we're able to get rapid market access and drive the market share gains and usage globally. I think that is -- when we can do all of that, that is really our sweet spot. We do look for things earlier and we do look at things later, and it really has to do with the level of transformation. Based on our extremely strong track record of strong partnerships and acquisitions, we're in a really, really good spot. Usually, when there's stuff that we want to go after, we've got a really good shot at being able to get it. So we continue to be very active in the space and have very, very high hurdles that things need to meet in order to be truly transformational for patients going forward. So hopefully, more good stuff to come.

Great. Well, I think we're up on time. But thank you so much for joining us, Jennifer, and best of luck over the coming months with all the work at the company on the vaccine front and with the business. And take care.

Great.