Johnson & Johnson (JNJ) Earnings Call Transcript & Summary

Great. Thanks for joining us, everybody. I'm Terence Flynn, Morgan Stanley's U.S. biopharma analyst. I'm very pleased to be hosting Johnson & Johnson this afternoon. Joining us from the company, we have Joaquin Duato, the company's Chairman and CEO; and John Reed, Executive Vice President, Head of Pharma R&D. Thank you both so much for being here. Before we get started, for important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative.

Thank you both again so much for being here. Really appreciate it. A lot to talk about. We're catching up beforehand. And obviously, industry is front and center, again, for a number of reasons, a lot of innovation going on at J&J. And then there's also a lot on the policy side that I know investors are highly focused on here. I know a lot of companies, and I'm assuming you guys as well have been spending time in Washington, D.C. So maybe Joaquin to start, you could just give us your overview on kind of where we stand in the policy access right now because I know there are a lot of cross currents, both on tariffs, MFN. J&J has announced a lot of investments in the U.S. in terms of manufacturing, but maybe you could just help us think through some of these cross currents. And then how are you navigating this as a company?

Yes. Yes. Thank you, Terence, and good morning, everyone. And let me just mention that yesterday, we had the approval of a new product in INLEXZO, which is unique in as such that it uses our medical technology and pharmaceutical capabilities to develop a novel therapy for localized bladder cancer, which is an area of unmet medical need. And we have described that as a major breakthrough. As a matter of fact, it has 2 breakthrough designations by the U.S. FDA. It got priority review, and we think it's going to be more than $5 billion platform. And this is an area that we have some disconnect with the Street, although I read a report yesterday of one of your colleagues calling $8 billion potential, Terence. So...

No pressure, no pressure.

No pressure. No pressure. I'm quoting one of your colleagues. So -- and we come up from a very strong second quarter from Johnson & Johnson in which we have demonstrated that we are able to deliver significant growth, exceeding expectations, both in top line and in EPS, even though we are having the biosimilar entry to STELARA. So a nice trajectory of Johnson & Johnson in this first half of the year. So the environment overall, I have to say that we have 140 years of history, and we have dealt with 24 different administrations. Me, myself personally, I have dealt with the Obama administration, with the Trump administration before, with the Biden administration. So we are used to manage volatility perhaps more than other companies. When it comes to the current situation, I have to say that with this administration and like with the previous one, we do have an open door policy, and we connect with different government agencies, the White House, and we are able to express our opinion about how things should look like. So on the positive, we do have an open door policy, and we can connect with the right stakeholders in order to make our point of view seen. Do we have differences? Yes, we have differences. Is there a common ground for us to find solutions? I believe there's common ground to find solutions. What areas there's common ground to find solutions, for example, in manufacturing in the U.S. We have announced a $55 billion investment program in the next 5 years, which essentially it's going to make it so that all of our advanced medicines are manufactured in the U.S. that are used in the U.S. at the completion of that program. Are there opportunities to be able to improve patient affordability in the U.S.? Absolutely. And the administration has some good ideas like the direct-to-patient website, which was in the letter that we received that I think it would be good because it would bring some transparency to the pricing. It would actually focus on the real problem, which are the PBMs and the intermediaries. And I think there are good ideas there to improve affordability in the U.S. Are there opportunities to improve let's say, what the administration calls the European free riding on our prices? Absolutely, there are opportunities to do that. So I think there's elements of common ground, and I'm optimistic about finding the common ground that will continue to make the U.S. and I think that's a goal that both the administration and ourselves share the #1 country in terms of pharmaceutical life science innovation. I mean every time I talk to the administration, they go out of the way to tell me, "Joaquin, what we want to do is something that would detract from the U.S. being the #1 country, the global, let's say, country for pharmaceutical life science innovation". Yes.

Can you speculate on are we getting closer to resolution? Because I think when I look at the whole sector, it's obviously been an overhang as investors think about investing in the space. And so do you think we're getting nearer to resolution? You mentioned a lot of areas of common ground. It seems like a lot of these areas make sense. And so are we getting closer to a point where you can kind of reach agreement on some of these and we can all move forward?

Yes. It's very difficult to speculate in that regard, Terence, because things change a lot. I cannot put a time line into that. I tell you that there's enough common ground and enough areas of common solutions that I think will get us to the right place. But I cannot put a time line into that, and I don't want to go into the specifics neither because this is an ongoing discussion. But I see the common ground and I see the possibility of getting into a win-win solution.

Yes. Okay. All right. Good to hear. One other high-level point I want to talk through is on the second quarter call, I think you guys mentioned that the pipeline progress you've seen through the year, and now you just mentioned TAR-200 as well, increases your conviction to achieve or beat the upper end of the growth targets that you guys outlined back in end of 2023 from your EBR Day. So maybe you could just talk about high level on the drivers of that -- that gave you that conviction to provide that commentary to investors. And then I'm sure we're going to dig into a lot of these in more detail here, but maybe just start very high level and kind of what gave you the confidence there to make that statement?

Yes. High level, in the Innovative Medicine side, we have 3 focus areas: oncology, immunology and neuroscience. So if I start with oncology, and we have stated that we want to become the #1 oncology company by 2030 with $50 billion of sales. We play both in solid tumors and hematology. So starting with hematology, our multiple myeloma franchise is doing really well. DARZALEX is the biggest product in the company today, and it had very significant growth. CARVYKTI show exceeding expectations. We are unrestricted now from a manufacturing standpoint. We have already demonstrated overall survival in second line. Going into our bispecifics, we continue to grow our bispecific penetration. We are aiming to go into the community with our bispecifics. So all well in the multiple myeloma side. On the solid tumor side, we continue to grow with our prostate cancer franchise with ERLEADA. We are launching our combination in non-small cell lung cancer EGFR mutated with RYBREVANT and LAZCLUZE, which is doing really well. And our surveys that we do every month indicate very high intention to prescribe in first line, and we can comment about that later. And now we are going to increase our penetration in solid tumors with LAZCLUZE, which is this therapy that releases with a device, a chemotherapeutic localized into the bladder. So that's in the oncology side. And I'm sure John can tell you more about what opportunities we have, and he'll go that in a moment. On the immunology side, our #1 focus is TREMFYA and the launch in IBD, and we are doing really well, both in ulcerative colitis and in Crohn's disease, and you see the trajectory of TREMFYA. And very importantly, we have filed icotrokinra, which is the first oral that has the ability to block IL-23 and has the efficacy, the safety of a biologic, but with convenience of an oral therapy. And that's going to be a major, major driver of our growth. And we continue to make progress in other areas that John will describe. And then in the neuroscience side, we're doing really well with SPRAVATO. Everybody is trying to copy our model. I think so many things about other companies working in that area. And we are about to get the approval of CAPLYTA, which is the antipsychotic that we acquired through the Intra-Cellular acquisition in adjunctive therapy in major depressive disorder that we think is going to be a significant opportunity for growth for CAPLYTA, and it's going to drive also CAPLYTA to be an asset of more than $5 billion. So those are the assets that we have today. And I'm going to let John talk about the pipeline.

Yes. So some of the things that are a little earlier, but if I start again with hematologic malignancies where J&J ranks #1, myeloma, as you know, our company has put 5 innovative medicines on the market for myeloma. And it's interesting to look back when we launched VELCADE, the world's first proteasome inhibitors, the average life expectancy for a patient with myeloma was only 2 years. With our latest 4-drug regimen that includes DARZALEX and VELCADE, the estimated progression-free survival now for the transplant eligible is 2 decades almost, 17, 18 years and for the transplant in a decade. We're really excited about moving some of these medicines in combination regimens into earlier lines. And recently, we showed, for example, if we took DARZALEX, the CD38, world's first biologic for myeloma, together with either of our T cell engagers, first-in-class T cell engagers that grab the myeloma with one arm and the T cells with another, we were getting 100% minimal residual disease negativity in early lines. Now we have a trispecific ramantamig that has the features of both tec and tau engineered into a single molecule. And there, we saw 100% overall response rate in heavily pretreated patients. So we're going to be moving into earlier lines of therapies with some of these combinations that we think can actually position us for the goal that nobody ever thought would be achievable, which is really cure in myeloma. So very excited about that. Other things cooking in hematology. And since I saw one of our partners here, I just mentioned, we also have in the CAR-T world, a Bi-CAR that targets both CD19 and CD20 in a single construct in which is delivering what looks like a best-in-disease opportunity with the best complete response rates that have been reported so far, and we're going to push that now forward into Phase III. So a lot of stuff cooking there. And then in the solid tumor space, Joaquin referenced RYBREVANT, which is the world's first bispecific antibody ever approved for a solid tumor indication, neutralizing 2 different growth factors approved for non-small cell lung cancer, but we have proof-of-concept in colorectal, the third largest cancer indication, also in head and neck, the sixth largest cancer indication. And those are now progressing in the Phase III programs. So we think there's a lot of mileage still with that really innovative bispecific antibody. So very excited about what's cooking there and then other things too that we can get into. Joaquin mentioned in immunology, icotrokinra, we'll be showing the inflammatory bowel disease data soon, where we have proof of concept there, moving into a Phase III program. We've already filed for psoriasis. We're pursuing psoriatic arthritis as well and really excited about that. And to get an indication of how much demand there could be for an oral drug that has the efficacy and safety of the biologics, our psoriasis studies, we enrolled those in 1/3 the time it normally takes to the study, and we're seeing the same thing happening with our psoriatic arthritis now. So it's -- it really indicates there's a lot of interest on the part of patients and investigators for that. We have an oral IL-17 in the clinic now, too, that's progressing nicely. And then some really nifty bispecifics as we try to enter atopic dermatitis, which is the largest of the immunoderm indications. We're in Phase II with an IL-4 plus IL-31. Those are 2 validated targets bringing together to try to break through efficacy ceilings of the monotherapies. And then also a TSLP plus IL-13. So that brings a mechanism that TEZSPIRE-like mechanism and an [indiscernible] like mechanism that have played in both asthma and atopic dermatitis and what we think, again, could be a real game changer that breaks through the efficacy ceilings that have been seen with those. So really excited about those. And then in neuro, I would say we don't yet know what the outcome will be, but we will have data this year, Phase II data on our anti-tau antibody for Alzheimer's posdinemab that will have both clinical cognitive performance endpoints as well as imaging endpoints with PET imaging of the tau spread. So a big unveil coming later this year around that, which could be a real moment for patients with Alzheimer's if we're able to move the needle there.

So flagging that one.

Yes. Super exciting.

So I mean when you look at that and you look at how we are doing post STELARA biosimilars, our view, as we discussed in the EBR is that '26 is going to be better than '25 and '27 is going to be better than '26. So we are now -- as we leap behind the STELARA biosimilars better than anybody expected, we are entering into a cycle of revitalized growth for our Innovative Medicine group.

Okay. Great. I've got a few follow-ups on some of these. But I guess the first, just given how important myeloma is as a franchise, as you noted, you guys have been there as a company for a very long time going all the way back to VELCADE and now DARZALEX. I think one of the big picture questions we're all still trying to figure out is how does that frontline market evolve? Because obviously, you have so many different options now. You have the bispecifics, but you have a trispecific coming, you have CARVYKTI. And so is this something that becomes more segmented? Or is this something that there becomes a new backbone effectively that either on top of DARZALEX or supplants DARZALEX? Just use the crystal ball. Help us think about how this evolves as you think about myeloma in the next 5 years.

Yes. We think the regimens will evolve. We see the CD38, DARZALEX will be a piece of that, a T cell engager starting with our bispecifics, but evolving to the trispecific. So far, we have been maintaining an image somewhere in the mix in that frontline setting. So we think that the future regimens will look more like that. So you probably won't necessarily need a proteasome inhibitor or the glucocorticoid. And then instead of bridging to an autologous stem cell transplant, if you do something beyond that, you're probably going to do CARVYKTI or CAR-T. And of course, we have studies ongoing now to test that right now, CARTITUDE-5 and with the idea that, that could be the final step to mop up any residual cells and really see then if you can't get to something approaching a functional cure for these patients. Yes.

And do you feel like the other thing is DARZALEX is great from a safety tolerability standpoint. Do you think these new regimens will be able to match that? Because I think there's some question -- obviously, 80% of myeloma is treated amongst the community oncologists. Do you think these new regimens are going to be -- have that profile that allows the community physicians to adopt them broadly?

I think we will get there. If you look back even on DARZALEX at its time, it was considered something that was -- required some experience to master how to handle. But the T cell engagers are really the element of that, that the community is learning more and more how to manage that. We often are doing dose titrations, covering with IL-6 inhibitors, toci, other things to make it more manageable and tolerable for the vast majority of patients. So -- but we see the community going on that journey with us and finding how to safely and effectively use these regimens in the outpatient setting. So it will be a learning curve for the whole community, but we think just the efficacy will compel health care providers to figure out how to master using this type of agent.

Okay. Great. I want to go to immunology. But before I do that, I just ask another broader one here for Joaquin is I think when you started in the CEO position, you mentioned that one of your priorities was going to be the MedTech portfolio, and you guys have been very active on that front, both internal innovation, external innovation. So maybe just as you think about where you are in that journey, give us kind of an update on the outlook there and what you're focused on for the MedTech segment. And then the derivative question is just business development. You guys are always very opportunistic about whether it's MedTech or pharma. And so where are you focused these days in terms of the -- from the BD lens?

Yes. So when I became CEO in 2022, I said that we want to have the best MedTech company in the industry, and that's a stated goal. Johnson & Johnson is unique in as much that we are the only company that has the capabilities to develop a medicine or a treatment like INLEXZO. So we are the only ones that can go to -- from cell therapy to robotic surgery. No other company can expand the patient journey like Johnson & Johnson does. So it's very important for us that component of medical technology at Johnson & Johnson. And it gives us not only capabilities but also insights into the disease, the patient, the treatments that are very helpful for us to expand our impact in the areas that we are focused. So our goal in MedTech has been moving our portfolio into high innovation, high-growth markets. That's the areas where Johnson & Johnson does well. We have to go to areas where there's a significant innovation and the possibility to improve the standard of care and that creates growth and business opportunity for us. So we've moved the majority of our portfolio now into high-growth markets. And that's how you have to read the efforts that we have done in business development, which for the most part, have been in the cardiology area. Cardiology is one together with robotic surgery, one of the most exciting markets in MedTech, and that's where we have moved in an effort to move our portfolio into high-growth, high-innovation markets. Our MedTech business has 4 pillars. And in all of them, we are #1 or #2 company. The biggest one is our surgical business. And we are leaders in open and endoscopic surgery and also in sutures, wound closure and in hemostats. We are working now in a robotic surgery platform that we call OTTAVA and we are now in clinical trials, and we plan to, as soon as we finish the clinical trials, submit to the FDA. We are fully determined to compete in that area. It may take us 1 year, 2 years, 3 years, 4 years, 5 years, we are fully determined to compete in that area and to become a leader in every aspect of surgery, open, laparoscopic and robotic. The other area, it's orthopedics. We are the largest orthopedics company. The market of orthopedics would not be considered a fast-growing market, although it does have segments that is growing nicely. And our goal there has been be able to improve our margins. And we have a program that we have discussed in the past that is gradually getting us to have better margins in orthopedics. There's a number of innovations that are coming into our orthopedics platform. For example, we're launching a new [ UI ] robot. We are launching a new plating system called VOLT in the trauma space. We are launching a new spine robot and a new system called TriALTIS in spine. So we have a number of innovative products that are coming in orthopedics altogether as we speak, and that is going to help us accelerating our growth via innovation. The third platform is cardiovascular. Our growth in cardiovascular in the second quarter was 22%, and we have one of the largest and most interesting cardiovascular platform in the industry. We are in atrial fibrillation in ablation. We are in heart failure with Abiomed, and we are in calcified arterial disease with Shockwave. Our acquisitions of Shockwave and Abiomed are tracking even ahead of our expectations. And we see nice trajectory, and we can go more into that, great innovation with new catheters coming of Shockwave, great clinical data also coming from Abiomed with DanGER study. We just presented some update of the DanGER study in the European Society of Cardiology showing that patients that went through cardiogenic shock and using Impella in a 10-year follow-up, they were able to leave 600 days more. So that's taking us higher in the guidelines. So we have a very robust cardiovascular franchise, and we also demonstrated growth in our atrial fibrillation franchise with 10% growth. So for investors that thought we were rolling over, we are not. We are going to compete there. We have a series of catheters coming in, and we have the largest and more extensive clinical support specialists in the industry, and we are going to maintain our leadership there and regain leadership in PFA. So that's our cardiovascular franchise. Vision, which we play both in contact lenses and intraocular lenses. We are leaders in contact lenses. It's a high-growth, high-margin area. And we are having a very successful launch of our intraocular lenses, gaining market share versus our competitors there. So those are the 4 platforms that form our MedTech business. Our projections in MedTech is that we are going to be able to grow 5% to 7%. And as I see things today, I'm more biased towards the higher end of that range than towards the low end of that range. So we are going to advance. We have significant opportunities in cardiovascular, and we are very focused on establishing a strong presence in robotic surgery as another important step in making our MedTech group a best-in-class group. And I'm very, very, very convinced that we are going to be able to achieve that.

Great. Based on that and where we just talked about on the pharma side, it sounds like from a BD perspective, you guys feel pretty good about opportunity set internally right now and what you've accomplished. And so it seems like maybe lean and be opportunistic, but it seems like you feel pretty good about.

Our focus in BD, and I have Nauman here, who is our Head of BD here.

I got to talk.

I was able to talk to him and John. Our focus in BD it's always into earlier-stage opportunities in which we can create significant value. I think and Nauman can correct me, in the last 18 months, we did 60 early-stage opportunities. The 2 latest blockbuster products that we are about to launch, INLEXZO and icotrokinra, we didn't even issue a press release when we did the deal. So we didn't issue a press release. So those are smaller deals that we have demonstrated that we can create significant value. So that is our focus. Unlike other companies, we don't need to do large M&A in pharma because we are delivering the growth. And John can tell you -- he's always asking for more money in order to develop more medicines. So there's not -- there's more than enough to be able to do. In MedTech, we already have done 2 significant acquisitions. And look, we are in the process of making sure that we make these acquisitions work. So I mean, as far as M&A, our focus is to be able to go into early-stage opportunities that we can nurture with our scale in every area, clinical development, manufacturing, commercialization, and that's where we are going.

Okay. Great.

I would just say a lot of our partnerships start quite early where there's a lot of polishing of the gem to be done. If you look at INLEXZO, the drug device for bladder cancer, for example, that was a 13-year journey. We acquired the company when they have a preclinical prototype with a lot of work by our chemists and in collaboration with our MedTech colleagues, we were able to optimize the device, scale the manufacturing, get the quality at commercially required levels, then design the development campaign, et cetera, et cetera. With icotrokinra, same thing. The collaboration there started with a compound from a partner that didn't make it in the early going. It was a 4-year journey, optimizing compounds. I think we made like close to 30 co-crystal structures and then a whole process chemistry journey to get the manufacturing to the point where that could be commercially viable, getting into some really nifty innovative chemistry there for that. So these are a journey, but through these collaborations, we're able to really harness the power of what the external innovator can bring together with what J&J can bring and then get those things. I like to say we tend to look at things when if you use the baseball metaphor, we're maybe not even on first space yet or we're kind of swing at the plate and then once we can get the first base, then we can take it all the way home and really see that, that innovation gets to patients.

Great. Maybe 2 on the immunology side. The first is on icotrokinra -- make sure I pronounced that correctly. The question, I think, is positioning, obviously. You guys have TREMFYA obviously in the space. So maybe just how are you thinking about positioning that in psoriasis? And then I know you have some upcoming UC data that you mentioned Phase II coming up at a conference. What should we be most focused on when we see that data vis-a-vis maybe the injectables?

So the position of TREMFYA and icotrokinra, our understanding is there's room for both. So we're going to continue to focus on TREMFYA and we're going to focus on icotrokinra. With icotrokinra initially will be in plaque psoriasis and later in IBD, as John will describe, but there is room. There's patients that prefer an oral therapy, and we believe that's an untapped market. I have talked to many physicians about this issue about injectable versus orals. And there's no question in my mind and the demonstration is how quickly we recruit in the clinical trials that icotrokinra is going to expand the market for advanced therapies. And please do not compare icotrokinra, although we have head-to-head studies with the TYK2s or with the Otezlas. I mean, this is different. This is the first time that you can put the 3 things together. You can put the efficacy and the safety of a biologic with the convenience of an oral. So I think this is going to be one of our biggest products ever, and it's going to open a new era in immunology, and this is endorsed by a company like us that has been there for 3 decades. We did REMICADE, STELARA, SIMPONI, TREMFYA and now we come with icotrokinra. So in some areas, we are new. But in this one, we know what we are talking about.

You're setting a high bar for yourself.

Yes. We know what we are talking about. I was there launching REMICADE. So we know what we are talking about. Maybe other companies don't, but we know what we are talking about when we talk about immunology.

I think one of the things to bear in mind is that across most autoimmune diseases, if you look at the population that's eligible for a biologic, about 70% are eligible, but not taking one. And surveys show that the biggest reason is they don't want to do an injectable. The second is concerns about safety. With ico, we actually had more adverse events on the placebo arms of the studies than we had on the treatment arms. So we've got the convenience of an oral option for patients with the safety, which we think, as Joaquin said, is going to expand into population of patients just aren't getting an advanced therapy today.

Yes. And then just a follow-up is on the IBD. UC data. What should we be focused on for this data set vis-a-vis like TREMFYA? Is that the benchmark?

Very similar. We'll have both the clinical remission endpoints as well as the colonoscopy, the mucosal healing endpoints. Those are often used as a composite endpoint in the long run. And we'll have both induction and some degree of maintenance data that you can kind of see how you're tracking in terms of the pace with which you start to get the remission and the mucosal healing and the induction and then the stability of that over time, along, again, with the safety profile as well. So I think that's what we're looking for. And again, we're looking for profiles that can really compete with the best of the best biologic.

I think IBD is another example as we did in multiple myeloma, where we are going to be able to span the whole spectrum of disease. So you'll have icotrokinra, TREMFYA and also the core antibody therapeutic that combines a TNF and IL-23 in a single vial, importantly, that we already have some Phase II data. I think it was in UC with a significant improvement in the magnitude of effect. So we are going to be able to span the whole potential for different type of patients in IBD.

So are you for that combo because again, I think you are pretty unique. You're one of the few companies that started very early in looking at these combinations in immunology. We haven't seen much success here, but it sounds like you feel pretty comfortable. And should we assume you're going to move into Phase III with that now?

Yes. We are going to have the -- so we had a Phase IIa exploratory study. And for those, just to contextualize this, so for patients with IBD on average, 1/3 or less actually achieve a durable complete remission. So there's a lot of room for improvement. The idea was then to take complementary mechanisms. We took our TNF inhibitor, SIMPONI, which inhibits innate immune mechanisms. And it's essentially TREMFYA, guselkumab, which inhibits adaptive immune mechanisms. And based on a lot of transcriptional profiling stuff, we thought, okay, this combo could be both safe and effective. In that Phase IIa, we broke through that efficacy ceiling had more than half the patients achieving remission. So now we are going to read out very soon some large rigorous Phase IIb studies, one in UC, one in CD, where we're further testing that hypothesis. And we've done head-to-head against our TNF, our IL-23 and then the combo. So it's basically 3 arms where we'll have the head-to-head data to see if this combination gets the job done for these patients who have failed frontline therapy and are needing something more than the monotherapy. So we're reasonably confident, but we'll have the data very shortly, and that will then dictate our decision about whether we go forward to Phase III. But...

Maybe the last one just because, again, you guys -- when you get excited about something, I pay attention. And the one comment that caught my attention is this anti-tau antibody with some Phase II data. So tau has been a very tough target for the industry historically. And obviously, Abeta was tough, but tau, I'd say is just as tough, but you sound fairly excited about this. And so maybe just contextualize that any more for us.

Yes. So with -- I think not unlike Abeta, there are various schools of thought as to how to tackle it. So we have an antibody that binds to a particular phosphorylated version of tau that is the pathological form and that prevents the propagation of the seeding of these insoluble forms. So the -- it's tough to get these antibodies across the blood-brain barrier. We did try preclinically some other tricks, but frankly, we got just as good with the naked antibody. So that's what we're doing. We're testing 2 doses, one of which is 3.5 grams. So really pushing the envelope there on the dose. And we'll test the hypothesis with this that if we can capture that pathological forms of tau as they spread from cell to cell and they move through the brain that we'll be able to intervene. So we'll have the tau PET imaging sort of before and after to see did we slow that spreading as well as the usual cognitive endpoints, et cetera, functional endpoints to help guide our decision-making. So -- and we have other shots on goal, too. We have a partnership with, essentially a vaccine that tries to get your own immune system to make antibodies against these pathological forms of tau. That's in a Phase II study and we have some other things too that are almost in the clinic, but we are trying several ways to get a crack -- try to crack tau and feel that, that's kind of the best target out there right now. And so we are going at it hard and see if we can make a dent on this Alzheimer's problem. As you know, there are 55 million people around the world already with Alzheimer's and with the demographic of populations becoming more aged, we know that's going to very rapidly double or triple. So we -- society needs some help there. So we're giving it a try and these are not faint-of-heart investments. Each of these studies is measured in the billions of dollars. So whenever people are asking about rewarding innovation, et cetera, the importance of it, I mean, you're seeing it right front and center there with these high stakes and bets we're making on things like trying to crack Alzheimer's with a tau therapy.

This is exactly the type of problem that companies like us can do, right? We have the financial muscle in order to be able to tackle something that really is, in my view, the biggest health problem that we have in front of us. I mean everybody is aging and then the percentage of people that once you age has any type of neuro cognitive disorder is very high. And neuro-degeneration is an area that requires more investment. There's not so many targets that one can interact. I think that we are doing also things on basic research to be able to identify newer targets. And I'm enthusiastic because if that were positive, it would be simply the most important thing that we may have accomplished this decade. So it would be really fantastic to be able to have something that is a new way of trying to address this major social problem.

Yes. One of the exciting enablers is they're now blood tests for detecting these abnormal forms of tau. So it really sets the stage for early diagnosis, intervene before it's too late. So we really see this kind of analog as if you're going to get your cholesterol checked to then go on an intervention that might prevent you from having a heart attack or a stroke. We hope that, that's the way the field of Alzheimer's eventually move. So it's exciting to see the progress, and we'll know before end of the year, whether this first crack at it has proven successful or not.

Great. Well, thank you so much both for your time. Really appreciate it. Always a pleasure. Thank you.

Thank you very much.

Thank you.