Johnson & Johnson (JNJ) Earnings Call Transcript & Summary

Okay. I think we're going to get started now. So good morning, and welcome to the 42nd Annual Raymond James Institutional Investors Conference. My name is Jayson Bedford. I cover the medical device sector at Raymond James. So it's really our pleasure to have J&J with us this morning, a name that's obviously been in the news quite a bit over the last few days for the great work they've done on the vaccine and the important role they'll play in getting us all back to a state of, let's call it, improved normalization. So with us from J&J, we have the company's CFO, Joe Wolk; the company's VP of Investor Relations, Chris DelOrefice; and Senior Director of Investor Relations, Lisa Romanko.

So with that, Joe, first, obviously, congratulations on the vaccine. The social benefit that it could do cannot be overstated here. So well done, and thank you. I hate to put a critical investment angle to this, but this is the forum we're in. So you stated that you sell the vaccine on a non-for-profit basis in a pandemic. So it certainly helps revenue, but technically, it wouldn't impact earnings, at least that's my interpretation of not-for-profit. So most investors do value J&J on earnings. So outside of the extremely important social good that J&J is delivering, why should investors in J&J care about the vaccine?

Yes. Good morning. Certainly a pleasure to here with you and your audience. I hope everybody is safe and well. And what an amazing feat by Dr. Paul Stoffels and his team, our manufacturing team, to just be in a position 1 year after the gene sequence was determined that we can sit here with a very viable option and an important tool in the kit of tools to combat the pandemic, and hopefully, get us back to some sense of normalcy. Your question's spot on in terms of the audience that we're speaking with today in terms of not-for-profit and why should investors care. I would say the first thing that investors should care about is you saw in our Medical Devices business last year, we were down about 35% year-on-year comparison. So the fact that the vaccine does offer an option with respect to, I'd say, stabilizing not only our Medical Device business in terms of elective procedures, but also Consumer business, when you look at the skin health section or franchise there, getting people back out traveling is certainly important to our success there. And then even in Pharmaceuticals where folks would forgo doctor visits, and therefore, diagnosis. So I think just stabilizing the society, if you will, has a benefit to our business. You should not interpret it though that just because we've come out with not-for-profit pricing that that's the model into perpetuity as it relates to the pandemic. It's difficult to say what it will be in terms of 2022 outlook. A lot of that is going to be determined by the pandemic itself. You can see now, even today, Pfizer and Moderna are looking at what's the next generation, will re-immunization be required, will there be booster shots? Will they be different than the versions we have out there today? Now that we've got our main platform out on the market, we're also going to assess those types of options for us as well. And then I think at that point, you could expect pricing that's much more in line with a commercial opportunity. We're following the Bill & Melinda Gates Foundation not-for-profit definition, that does allow us to recoup the cost. So that's how I would encourage investors to kind of look ahead to see what kind of commercial opportunity is there on the horizon, probably not in 2021 because I suspect that the pandemic period will be in place for the majority of this year, if not the entire piece of this year. But as we move to 2022, we are looking at it more as a business opportunity.

Okay. Joe, have you commented on how much you've spent so far on developing the vaccine?

We have not, Jayson. We're in partnerships, obviously, with the government. And at this point in time, we have not communicated the level of investment. It continues to be a fluid situation as we add capacity. That is part of what can be put into the not-for-profit model during a pandemic period as well. So we'll update at the appropriate time when we have a much more comprehensive look. And I would point people probably to the first quarter earnings call in April as a pretty good gauge when we'll have some more information.

Okay. And just you kind of touched on it in terms of the pandemic period. What needs to happen for the pandemic period to be over? I know that's a difficult question. But what are you looking at? And how do you define that?

Yes. That's a really good question. Again, it's another one that's fluid. I think when we look at it, it's not going to be something that's dictated to us. So we think in terms of getting through this, I'd say, bolus of lockdown where people have been vaccinated to a pretty sizable percentage, I can't give you specific percentages today. And it could even vary by region. If you think about just what the U.S. has contracted for, if you just look at the pure numbers, what they've contracted for, they could vaccinate everyone in the U.S. about 1.6 times, right? And so that would, to me, would indicate a pretty clear sign that the pandemic period -- emergency pandemic period is over.

Okay. And just you mentioned contractual agreements. J&J, for what we know, and please correct me if I'm wrong, 100 million to the U.S., 200 million to Europe, 200 million to Gavi, for a total of about 500 million so far in 2021. First, is that correct? And then second, there's a bunch of headlines out there from a manufacturing standpoint. So can you just level set us on where you are in terms of manufacturing and where you want to end the year?

Yes. So you're correct with respect to the amounts that you've listed. Maybe some slight modifications is both the U.S. and Europe have options that they could pick up as well. And then with Gavi, the contract is actually for 500 million doses, of which 200 million was promised this year. In terms of the headlines that you're probably referencing related to this morning, neither ourselves nor Merck have made any announcements. So we'll just wait to see what happens there. But I will say we've been, really since this time last year, really working collaboratively with a number of partners -- Emergent, Catalent, GRAM, to ensure that we would have capacity should this prove, as it has, to be an effective therapy or treatment for the pandemic. Based on the current agreements that we have in place today which we've announced, we feel pretty good about getting to that 1 billion doses this year, give or take a little bit, by the end of this year. So we think we're in a very good position. If there's other agreements that can occur that can help amplify and support the capacity in a bigger way, we'll certainly entertain those. What I would caution folks is just because a deal may be signed today doesn't mean that manufacturing starts tomorrow. There's obviously tech transfer and some complexity. So if you think about what Alex Gorsky was on the airwaves with yesterday of 20 million doses in March and 100 million doses by the end of June for the U.S., I think that's what people should hang their hat on, as that's really what the current supply network could fashion today.

Okay. And international is a bigger component this year. Longer term, do you expect the vaccine to be partially due to the handling and logistical benefits of the product? Do you expect this to be more of an international product than a U.S. product?

Yes. I would say just the pure numbers of population would dictate it likely will be. You do note that because our refrigeration requirements are a little less demanding that, that does benefit some parts of the world. So I think it's probably a fair assumption that we would have more international people vaccinated just simply because of the demand.

Joe? Joe, can you hear me?

I can hear you, Jayson. Can you hear me?

Yes. It may have been my Internet on my side. So let's keep going here.

Did you get the answer to my last question or...?

I did. I did. So I guess you mentioned the indirect benefit that the vaccine will have on your device business and areas of Consumer. I guess I'm wondering, do you think that the vaccine will pull through additional revenue, specifically international markets, where oftentimes you're selling to the government?

Boy, you'd like to think so, right, Jayson? But I think that would be a little bit of a bridge too far. We continue to face pricing pressures and negotiations no matter what market we're in. We did it because it was the right thing to do. It was a credo-based action. And we had expertise in a specific platform which we had a very high degree of confidence would be safe and tolerable, which has proven to be. And we also had a pretty good sense it was going to be efficacious, and that's borne out as well. So we didn't really view it as saying -- when we sat down this time last year or a little bit earlier, we didn't sit down and say, "Well, how much can we expect a lift in our Medical Device, pharma, Consumer business because of it?" Again, we thought we had a responsibility as the world's largest health care company to step up, much like we did with Ebola a number of years ago. And when you think about just the stabilizing effect that it could have on society where people may be more comfortable to go visit a doctor, to go out on vacation or simply get that elective procedure instead of putting it off, which is important for their health, that's where we saw the true benefit. But to say that we've incorporated any kind of halo effect or think this is going to help us in the next tough negotiation, I'd like to think so, but I think that would be a little bit too optimistic.

Okay. That's a fair and appropriate answer, Joe. [Operator Instructions] So maybe just shifting gears a little bit away from the vaccine, the growth algorithm. Excluding COVID -- the COVID dynamic, I've long viewed the growth algorithm at J&J as kind of 4% to 6% top line growth or 4% to 5% top line growth, with 6% to 8% for EPS growth. Is there anything that you see to disrupt this growth algorithm over the next few years?

No. I think with the size of our business, Jayson, you probably have it pegged pretty well. I do like that you've noted that our earnings would grow a little bit faster than sales. It is something that we try to do on a consistent basis over a number of years. We try to hit each and every year, but sometimes there's just so good of an investment opportunity in a particular year where it may be closer to a 1:1 factor versus a 1.2 or a 1.5 factor. I do think that, as I look at each of the segments, in Pharm, I feel very good about the current portfolio that we have on market, and I think there's even more promise to come with respect to some of the products that we will file either for submission or have filed and we expect approval on. Consumer, I would expect that there is a little bit of a new normal with respect to personal health. We've seen an uptick in brands that have sanitary features or fight germs, such as a LISTERINE. And then in Medical Devices, we were on a very good trajectory, I thought, from '17 on where we were adding 1 point to 1.5 point of growth. Now we had some work to do there, admittedly. But Ashley and her team have done a nice job in being focused on execution and also reinvigorating that pipeline within innovation for a firmer outlook as well. So I would say that I think we're in pretty good shape to hit that 4% to 6%, and I don't see that slowing down. Matter of fact, when we look at our business, we want to make sure that we're keeping each segment and their leadership kind of accountable to be better than the peers in which they compete against. So that 4% to 6% would be a very healthy rhythm for Pharm, Medical Device and Consumer should we hit that. What I do feel very good about as a CFO is probably -- it's the strongest I felt in my tenure of about 3 years now, that all 3 sectors at the same time could potentially be at or above market in the very near term.

Okay. That's helpful. Okay. In terms of margins -- and I want to get to each of the segments, but just in terms of margins because you mentioned the earnings strength. So in 2021, the implied op margin, I think is in 32.5% to 33% range, which I believe is J&J's highest ever, or at least it's been a long time since you've seen that level of margin, certainly a 200 basis point improvement from 2020. Why let the op margin expand so much in '21? And then I guess the corollary to that is, are you seeing efficiencies in the business being driven by COVID?

Yes. So Jayson, that's a fair question. When we looked at it, to compare it to '20 would have been very misleading. So what we did is we went back to 2019. And I think it's about, if I remember correctly, 80 to 90 basis points above where we were in 2019. But you're right. We -- because of the pandemic, we are working differently. All of us are here not doing this in person, we're doing this over a Zoom call, which has some efficiencies associated with it. I also think that there's more opportunity with respect to technology and clinical trials being more specific in terms of who we recruit, how we develop drugs. There's opportunities there. So when we looked at the size of our business, the scale, again, I would think investors have an expectation that given our size, we should leverage each and every year if we've got a respectable growth rate. What I love about the equation is we don't cut on R&D. Last year, even in a year of pandemic, we went up about $800 million, which was a pretty sizable increase given the year it was. So we're very much focused on the long term. And when we can get more efficient in administrative functions or the clinical trial development or even as we go to our customers now, some of this is happening by technology, not all of it. And I'm not suggesting that we're going to be one of these companies that declare we're 100% work from home. We are a company that's based on innovation. Ideating in person, I think, is very important to our success. But there are opportunities where you can see things on the margin that don't impact our long-term outlook and the products and services that we can offer as health care solutions, such as travel and meeting expense, those will likely be reduced going forward.

Okay. And these efficiencies, I assume, are kind of long lasting, meaning when you look a year ago pre-COVID and you look at the op margin potential of the business, it feels like it's higher today than it was pre-COVID. Is that a fair assumption?

It is. But remember, I don't say -- some of it is what I just referenced in terms of COVID has changed the way we've worked and probably will have some impact going forward. Also recall, though, a few years ago, Jayson, we had a restructuring charge in our supply chain. So one of our key areas of focus is around gross margin improvement, both in our Consumer and Medical Device businesses specifically. And so those investments that we made a few years back are now starting to kick in, in '21, more in '22 and '23.

Fair enough. So let's dig into some of the segments here. Med Devices, consensus for '21 has growth of 2% over 2019. I realize you don't guide by segment. But I guess what's factored into your thinking on 2021 procedure volumes? And how do you envision volumes trending throughout the year in devices?

Yes. So the guidance that I provided back in January, I would say, specific to Med Devices -- and you're right, we don't guide by segment, but it did take into account some moderate COVID headwinds persisting that we saw coming out of the fourth quarter. And then continuous improvement in the surgical markets over the balance of the year with growth in each quarter versus the prior year. It will be most pronounced in the second quarter, where we did see, in 2020, a 33% drop in business. Some of this will be dependent upon the procedures type. It will be dependent upon geography in some cases. So I think the efficacy of the vaccines has been established, but then the speed at which vaccinations roll out is critically important and how can we get patients comfortable going back to seek care. One thing we are watching is anything that could occur with instability in employment, so any job loss that may lead to insurance loss is something that we are keeping an eye on. Nothing notable as of yet. And just the ability for hospitals and again, if you -- I'm sure you've heard either myself or others from Johnson & Johnson say, just the tremendous resiliency that the hospital and hospital administrators demonstrated throughout last year. I remember the early days of March and April, where hospitals were essentially shut down waiting for those COVID patients to come. They quickly adapted their models and were able to get these important procedures done and have a piece of their hospital dedicated to COVID, but not the entire hospital. So I think we're in a good position to have a very solid year. Math will take you there alone, assuming the recovery comes about as I just called for.

Okay. Joe, you mentioned geographical differences. Can you just maybe comment on where you see the lift coming the quickest and maybe the slowest, either from a U.S., Europe, emerging market standpoint?

Yes. I would say probably the quickest and best-performing market for us, and you saw a little bit of this in the fourth quarter, would be our Asia Pacific region. So they had the biggest hit in the early part of last year, but they were probably the quickest to recover. We see that recovery continuing to take place. So I would say that's probably the area where I'd be least concerned. In terms of slowest recovery, you'd probably point to either Latin America or select parts of Europe.

And is part of that just the lack of available vaccine right now? Or is it just those -- the other things that were hit the hardest?

I think in EMEA, specifically, right, you've got some health systems and the governments have expressed some concerns related to the new strains, which are extending mobility restrictions, some stay-at-home measures through the first quarter. But there are positive signs that some of the major countries, such as Germany, U.K. and Italy, are seeing less hospitalizations, less case count. So again, it's going to be, I think, a little bit more spotty in Europe than it will be, let's say, Asia Pacific or even a U.S. recovery.

And in the U.S., are you starting to see a bit of a recovery today? Meaning, obviously, in the fourth quarter, we had some pockets of softness. I'm just wondering what does this slope look like? And are you starting to see it now?

Yes. I think, Jayson, the best thing I can point to, rather than comment on our business given that we're in mid-quarter, is the fact that hospitalizations and case counts have come down as reported publicly from the early days of January. So there's -- that's a positive sign. I would also say one thing to consider, which isn't a concern because it was the middle month of the quarter versus the last month of the quarter, is the weather in the U.S. has been a little bit of a hindrance. So again, I think those will be -- those procedures that possibly were delayed by or thereto will recover in March. But that is something that it's hard to get a really good gauge here as we stand on March 2 versus, let's say, last winter where there really wasn't an impact from -- in the U.S. at least, around weather concerns.

Fair enough. Fair enough. I wanted to ask about backlog, specifically in devices and procedures. I guess how do you define backlog? Do you feel like you have visibility into a backlog of patients who have deferred treatment because of COVID?

Yes. So if you think about where the procedures in which we play or where our products play, they're really addressing chronic or life-threatening, in some cases, medical intervention. So these can include surgeries to remove tumors or cancerous tissues. It's -- sometimes it's related to debilitating pain, such as hip or knee replacement; heart failure, potentially reducing the risk of stroke; or cataracts, which is 1 of the 5 senses that people are most fearful of losing is their sight. So there's really not been significant changes to the rates in which these diagnoses are occurring in the populations, but there has been a disruption from COVID in terms of the patients getting either the routine screenings, as I mentioned earlier or just, even when it's diagnosed, going and getting the necessary procedures done. Again, credit to Ashley and her team for continually reaching out to the customer. We did it in the very early days of the pandemic all throughout last year, and we continue to do that to this day as to how we can be a partner. You mentioned a little bit earlier -- you asked about the vaccine having a halo effect. That's one area where I hope we do see a halo effect, is the relationships we're able to solidify with hospitals and administrators in our Medical Device business. We were there. We were able to supply -- while many work from home, about 1/3 of our workforce remained open for business, supplying these products on a reliable basis so they were there where needed. But the backlog, I think, is really going to be dependent on some of the recovery measures that I mentioned earlier.

Okay. And are you anticipating once the vast majority of the U.S. has been vaccinated, are you expecting a bolus of procedures? Or is it a slow gradual increase?

I think it's more of a slow gradual. One, I might expect more of a bolus if 2020, let's say, third and fourth quarter didn't rebound as much as it did. As you saw in some of the guidance that we provided last year, I remember coming out in April and saying, we expect it to be maybe 10% or 15% off of where we would have liked to be in the fourth quarter. That was closer to 5% off. So again, the bolus of backlog, I don't think, is going to come back with such ferocity because it wasn't as deep as maybe we had thought this time last year.

Okay. And just quickly, you've got a lot of new products coming. Can you just talk generally about hospital receptivity to new products? Meaning, I feel like 2020 was an unfortunately difficult year to launch new products. I'm just curious as to how willing are hospitals to take time to learn and acquire new products.

Yes. So are you speaking specifically for Medical Devices, given the major...

Correct.

Yes. Listen, I think it -- they're always willing to listen to learn about new products and innovation. Matter of fact, we have to continually challenge ourselves to ensure that we're innovating. There'll be more of an appetite going forward. If I look at some of our businesses where I feel pretty good in some new innovation is on the horizon. I look in Orthopaedics, we're pretty excited about the FDA clearance of our VELYS robotic-assisted solution for knee replacement. We think that, in combination with the ATTUNE platform, this could be a differentiator in the marketplace. It's a smaller footprint. I think there's a reduced cost. And the team is being very novel and creative in terms of how we can get those systems placed in hospitals, even at alternate sites of care. In our surgery business, I think that you still have the same needs where you want to stop bleeding or leak. And so SURGICEL Powder out of our -- in our hemostat platform will be very good. The ECHELON staple line will be a reinforcement of products. So I do think that hospitals will continue to be very receptive and, quite frankly, demand innovation. And not just innovation that is newer or slicker to use, but has proven better outcomes. I think that will be critically important as we continue to refine health care.

And health of hospitals, your primary end customer here in devices, do you feel like hospitals are healthy from a capacity standpoint as well as just a capital standpoint?

I do. Yes. If you think about -- part of their resiliency was self-preservation too, right? When the COVID hit, patients didn't come as expected and the hospitals were shut down, they realized that there is a significant financial impact on not doing the elective procedures. So I do feel that they course corrected quickly enough, and they have an appreciation for just how important it is to their business. So I do feel good about the financial capacity of the hospital systems. And probably the best thing I can point you to, Jayson, with respect to evidence is, in the first quarter, we had a significant bad debt reserve. We wound up reversing most of that by the end of the year. So we anticipated something much worse, and it just did not come to fruition.

Okay. That's a good example. Just lastly on devices. I realize that you're always looking at optimizing the portfolio, but how close are we to a fully optimized portfolio? Meaning, do you anticipate any portfolio moves over the next couple of years?

So under Alex's tenure over the last almost decade now, I would say he's been rigorous about ensuring that we not just add to our portfolio but call when necessary. And I think you've seen that throughout the last couple of years, specifically in Medical Devices, it started with probably the acquisition of Synthes, right, prior to his tenure. And then we divested OCD, ASP and the diabetes business because we just didn't have the innovative platforms going forward to win in those markets. We want to be #1 or #2 in any of the markets in which we play. In terms of optimizing the portfolio of Med Devices, we're always looking to complement all of our businesses, quite frankly, where areas that make strategic sense for us where we've got an expertise, whether that be clinical or scientific knowledge or maybe a commercial advantage, and then make sure that we garner a return that will reward investors for the risk that we're bearing on their behalf. So that construct will be in place. We're continually looking. I think, over the last 5 years, while they haven't been major deals, maybe save for one, I would say, we've done 46 acquisitions, I believe. About a -- let's call it, anywhere from 1/3 to 1/2 of our growth comes from inorganic opportunities, whether that be through acquisitions. And we also include major licensing deals in that component as well, and we've had tremendous success there. So we'll continue to look. I guess by optimize, maybe you're suggesting more complete or be all things to everybody in Medical Devices. I think we look for opportunities to do that. We've got to make sure, though, that, that last component that I mentioned that we earn a fair return for the risk that we're bearing on shareholders' behalf is in place. And sometimes it gets a little bit difficult to do because these businesses that we'd like to have as part of our portfolio are pretty well run and fairly valued by you guys.

Okay. That's a fair answer. Just last one on devices, I guess. When you look at the segments within devices, Interventional, Orthopaedics, Surgery, Vision, where do you feel you're best positioned to take share?

Yes. So I would say a couple of places. I would go back to Orthopaedics and the VELYS robotic system in ATTUNE. We also have a full cementless platform. So I feel really good about our opportunity to take share in the knee category. And we have been, I would say, disadvantaged in the past with some of our offerings. And now I think there's the complete portfolio there where we could see some noticeable gains. In electrophysiology, I would not put a task, Shlomi Nachman and his team, to continue to gain share there. They've done it continuously for over a decade. We've got some new products coming out there with the THERMOCOOL SMARTTOUCH ablation catheter. And I see them probably able to continue to gain share. Again, we spoke earlier about innovation. They lead the market in electrophysiology on innovation. In our surgery business, I would say, again, some of the products that I mentioned, whether it be the SURGICEL Powder, the ECHELON staple line, we are #1 or #2, depending on what geography you're looking at. And then lastly, I'm optimistic about our Vision business. So contact lenses continues to innovate and continues to lead the market. But I also think we can do a little bit better with the Medical Optics surgical platform that we acquired from Abbott a few years back. We've got some new products there with TECNIS Eyhance, which is the first monofocal intraocular lens in 20 years in TECNIS Synergy, which is a continuous range of intraocular lens that will provide patients with the ability to see ranges of distance, so longer distances. So I do feel that those -- if I go to knees and I go to surgical optics, I think those where we've lagged a little bit that have the platform and are set up for success going forward.

That's great. That's very helpful. Let's shift gears a bit to pharma. Our sense is that market growth in the areas you compete, it's roughly about 5%. You've managed to grow faster than this rate for many years. You do have some LOEs coming up in the middle part of the decade. So I guess the first question is, do you believe you can grow above market through these LOEs?

I do. It's funny, Jayson. I'm smirking a little bit here because it wasn't all that long ago where we were facing an LOE of biosimilar with our largest product, REMICADE. The middle of the decade that you referenced is really around STELARA, which is now our largest product. We were able to manage REMICADE pretty well. It's a persistent, let's call it, 15% to 20% decline each year, but not the cliff that we maybe all had feared. But I really point to just the portfolio that we have today and then what's kind of on the come, if you will, within our pipeline. So there, if you look amivantamab for small cell lung cancer, we just presented some data not too long ago at the world lung conference, ESMO a few months back. That could be partnered with lazertinib to be a meaningful offering in small cell lung cancer. And we expect that to be a $1 billion platform. I do think we've kind of jumped over a bridge here with vaccines, where we could be much more of a vaccine player going forward. Not-for-profit aside for this year, I do think if you look at some of the work that we've done on the adenovirus AdVac 26 platform with RSV and HIV, those can look very promising as well. We're very excited about the acquisition we did in the third quarter of last year, Momenta, and the lead asset there around nipocalimab. Again, we think that has better than $1 billion potential. And then probably most near term would be the CAR-T that we licensed from Legend, which is on a rolling submission for approval. So we feel pretty good about our ability to continue to have success in multiple myeloma, which is already a very strong portfolio for us.

Okay. So as I kind of -- we could obviously spend a lot more time on pharma on each of the drugs. But when I think of the segments here, you've got devices growing kind of 4%, 5%; pharma 5-plus, that certainly getting back to the earlier comment, certainly gives us confidence here that the business should be able to grow the top line in that kind of 4% to 5%, 4% to 6% range.

That would be our expectation.

Okay. A couple of questions from the audience. I guess the first one, do you expect any change in the U.S. corporate tax rate in 2022?

In '22? Okay. That's an astute question. '21, I don't. I just think it's -- there's other things that seem to be the priority for the new administration. I probably do expect something. I couldn't say today what it is. What I do hope is we have a fact-based dialogue. As we reduced corporate tax rates to the levels that they are today, that still just puts us in the middle of the pack for OECD. One of the things that we did at Johnson & Johnson was invest more in the U.S., about 25% more than we had the previous 4 years in the subsequent 4 years. This would be year 4 of that, and we're on track to do that. We think that leads to a healthier business certainly, but also a healthier economy. And since we've reduced rates in the U.S. a few years back, countries that -- 7 countries that we compete with for employment for IT have reduced their rates further as well. So I just hope there's a good semblance of dialogue and fact-based assessment of where the corporate rates actually stand and the type of employment opportunities that it does provide for the country.

Okay. Another question that we had come in was emerging markets across health care have been a little sluggish here, understandably due to COVID. How do you see the return to growth in emerging markets? And how does J&J view that geography from a growth perspective?

Yes. It's an important part to our growth. I mean the biggest one I would say we've had success -- I don't know if we still consider some of the markets still emerging. But I would say we were on a good trajectory there. There is access, specifically for our pharmaceutical products being advanced and being received very well by governments in some of those markets. I would expect that, that may accelerate, quite frankly, as COVID-19 has taken everybody -- has forced everyone to take a step back and realize just how important good health is. If you looked at the people who suffered most from COVID were people who were probably unfortunately unhealthy to begin with. We've got to make sure that we create greater access, whether that be through government systems or market-based systems, to ensure that good health is affordable and certainly within reach. It doesn't do anybody good, including our business, if we've got great solutions but people can't access them.

Okay. That's fair. Joe, I think we're bumping up against our allotted time. It certainly seems to me that there should be -- and this isn't a question, it's more of a comment. There should be a halo effect from this vaccine throughout -- in multiple areas of your business, in multiple geographies. So that's kind of my observation from this conversation. Is there anything else you'd like to add in the minute we have left?

No, Jayson. Like I said, it wasn't our mission to say how can the vaccine help our other businesses other than to stabilize society and get us to some sense of normalcy and to ensure that we use some of our scientific expertise and advantage to provide better health care. If there happens to be a financial benefit to that, we certainly won't say no to that. We'll hope for that. I hope your assessment is correct. But that wasn't the motivation as we started this.

Okay. Joe, thank you so much. Good luck with the rollout. We're all cheering for you.

Great. Thanks, Jayson. Appreciate your support. Have a good day, everyone.