Johnson & Johnson Medical Device Business Update

8/16/2019 Johnson & Johnson Medical Device Business Update

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Cautions Concerning Forward-looking StatemThese presentations contain “forward-looking statements” as defined in the Private Securities Litigation Reforegarding, among other things, future operating and financial performance, product development, market posstrategy. The viewer is cautioned not to rely on these forward-looking statements. These statements are basexpectations of future events. If underlying assumptions prove inaccurate or known or unknown risks or unce

actual results could vary materially from the expectations and projections of Johnson & Johnson. Risks and ubut are not limited to: challenges and uncertainties inherent in new product development, including uncertainand decisions of regulatory authorities regarding approval, labeling and other matters that could affect the avcommercial potential of product candidates; uncertainty of commercial success for new and existing productscompany to successfully execute strategic plans, including restructuring plans; competition, including technonew products and patents attained by competitors; impact of business combinations and divestitures; challenchanges to applicable laws and regulations, including global health care reforms; trends toward health care cchanges in behavior and spending patterns or financial distress of purchasers of health care products and seefficacy or safety concerns resulting in product recalls or regulatory action; manufacturing difficulties or delay

litigation or government action, including related to product liability claims; financial instability of international systems; and increased scrutiny of the health care industry by government agencies. A further list and descruncertainties and other factors can be found in Johnson & Johnson’s Annual Report on Form 10 -K for the fisJanuary 3, 2016, including in Exhibit 99 thereto, and the company’s subsequent filings with the Securities an

Commission. Copies of these filings are available online at www.sec.gov, www.investor.jnj.com, or on reques& Johnson. Any forward-looking statement made in these presentations speaks only as of the date of these pJohnson & Johnson does not undertake to update any forward-looking statement as a result of new informator developments.


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Notice Regarding Non-GAAP Statements

Notice Regarding Trademarks

Third-party trademarks used herein are trademarks of their respective owne

These presentations may refer to certain non-GAAP financial measures. Thnon-GAAP financial measures should not be considered replacements for,

read together with, the most comparable GAAP financial measures. A recocertain of these non-GAAP financial measures to the most directly comparafinancial measures can be found in the Investor Relations section of the Co

website at www.investor.jnj.com.

Note: Operational sales growth excludes translational currency impact and non-GAAP financial measure.


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Strategic Partnerships, Collaborations and

Licensing Arrangements

During the course of this morning’s presentations, we will discuss a numbe

developed in collaboration with strategic partners or licensed from other coFollowing is an acknowledgement of those relationships.

Diabetes CareINVOKANA® licensed from Mitsubishi Tanabe Pharma Corporation; ANIMAS®

partnership with Dexcom; ONETOUCH VERIO FLEX™ uses Bluetooth®

Orthopaedics

MONOVISC® and ORTHOVISC® licensed from Anika Therapeutics, Inc.; Kick®

Navigation co-developed with Brainlab AG; Various products in connection with

Agreement with the AO Foundation; TRUMATCH® developed in collaboration wand Materialise; CARTO® software in partnership with Siemens

Surgery SURGIFLO® research collaboration with Ferrosan Medical Devices A/S

Consumer ZYRTEC® licensed from UCB Inc. and its affiliates; RHINOCORT® licensed fro


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Hospital Medical Devices

Gary Pruden

Executive Vice President and Worldwide Chairman


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Our Credo defines ourresponsibility to the doctors,nurses and patients we serve


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Johnson & Johnson Hospital Medical Device


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Leading from a Position of StrengthKey Takeaways

• MedTech market is attractive & growing

• Strong global leadership position

• Unique, broad-based approachto innovation:

– Focus on disease states,new technologies

– Deliver novel commercial models – Leverage Johnson & Johnson

innovation footprint

– Build strategic customer partnerships

• Current pipeline of products 2018 has sales potential grethan $6 billion

• More than 20+ major filings pthrough 2018

• Expanding new product freshindex from 25%1 to >30% by

• Strategic partnerships drivingmulti-product contracts, expato ~40% of the business by 2

Poised to Deliver Above Market GrowthSource: Internal estimates

1. Percent of 2015 sales from products launched in the last five years; 2. Representing US Orthopaedic and Surgery businesses


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Medical Devices OrganizationBusiness Unit Focused Approach to the Customer

• 16 Business units

• 15 Management B

• 3 OUS regions

• Limited Centers of

• Non-integrated su


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A Leading Hospital Medical Devices Organiz

Today

Novel Commercial Models Aligned to the Customer

Orthopaedics

CV & Specialty

Surgery • 3 Global franchises

• 4 Regions with inte

• 1 R&D inclusive of

Regulatory COEs

• 1 Integrated supply


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Accelerating Innovation & Growth, Increasing ERestructuring in Action

• Prioritize and reallocateresearch and developmentresources

• Source external innovation

Accelerate Paceof Innovation

• Consolidate footprint andmaintain quality standards

• Reduce complexity

StreamlineOperations

• One Strategic CustomerTeam

• Three global franchises andintegrated regional P&Ls

Strengthen Our NovelGo-to-market Model

• Increaplatfo

• Exit n

FurtPlatfo

On Track: $800MM-$1B Annual Savings – Majority by 2


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Gaining Momentum and Accelerating Growt

5-year CAGR (10-15): 1.7%

3-year CAGR (12-15): 2.5%

Hospital Medical Devices Adjusted Sales Growth

2011 2012 2013 2014 2015 2016

0.6% 0.5%

1.8%

2.7%3.0%

4.2%

Note: Growth figures are operational and adjusted for acquisitions / divestitures / Venezuela (2016 only)


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Our Opportunity


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Surgery Globally

“Surgery is an indivisible,

indispensable part of health

care and can help millions

of people lead healthier,

more productive lives”

– Jim Kim, President of the World Bank


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32 percentof the global burden of diseasecan be attributed to surgicallytreatable conditions

The Lancet Global Surgery Commission, 2015

people lack access to safsurgical care when neede

5 billion

additional surgical procedures areneeded each year to save lives andprevent disability143 million


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of surgeons are now

employed by hospitals

63 percent

Medscape Physician Compensation Report 2015, for USA only


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new solutions that address unmet patient

needs globally, and create value

Innovating


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Reach More Patients,

Restore More Lives


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Global MedTech Growth is Building Momen

MedTech Market Size ($US Billions)

~$250

2005

~$340

2010

~$370

2015

~$4

20

Note: MedTech market growth per internal estimates; MedTech dollars at as reported rates; MedTech growth rates are operational (2015 base year)


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Significant Opportunity to Improve Patient

Care in Emerging Markets

2015

Global Population7.3 Billion

MedTech Spending$370 Billion

87%

23%

DevelopedEmerging

Emerging

Developed

Source: MedTech market size per EvaluateMedTech; MedTech developed vs. emerging per BMI; Population per U.S. Census Bureau, International Database


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Global Markets Are Significantly Under-pene

2015

Minimally Invasive Surgery(General Surgery)

Ablation(% with AF Diagnosis)

2%34%

Patients not re

Patients receiv

Total Knee R(% with Symptom

1

Source: Internal estimates; GlobalData


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ANZBrazil

ChinaUS

UK Germany

France Italy Japan

Our Strategy for GrowthCV & SPECIALTYSURGERY ORTHOPAEDICS

Sustain Growthin Core Platforms

Accelerate Growthin Priority Platforms

Drive AboveMarket Growthin Nine KeyGeographies

Leverage OBreadth and

• Nove

• Strapartn

• Risk

FoKe

Endocutters

Energy

Robotics

Knees

Trauma

Electrophysiology

Biosurgery

Wound Closure

Hips Sterilization /Disinfection

Accelerate Cadenceof Innovation

• Strengthening our nearterm pipeline

• Leverage J&J enterpriseinnovation framework

• Externally sourcenew technology

• S• O

• SD

• O

• O


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Disciplined Portfolio Focused Approach

B

Spine

Mechanical

Neuro

Breast Aest

CMF

Shoulders

#2

#1

#2

#2

#1

#2

CORE

Biosurgicals

Hips

Sterilization / Disinfection

Wound Closure

$2.6B 6%

$6.4B 2%

$4.2B 4%

$3.7B 3%

#1

#2

#1

#1

Market Position

Worldwide Market Size 2015 ($US)

Market CAGR (5 years to 2020)

PRIORITY

Endocutters

Energy

Knees

Electrophysiology

Trauma

Robotics

$2.3B 9%

$3.7B 5%

$7.3B 3%

$3.3B 11%

$6.7B 4%

$2.4B 11%

#11

#2

#2

#1

#1

NA

Source: Internal estimates

1. Tied for #1 position with competitor


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Focus on Innovation Drives GrowthExpanding New Product Freshness Index1 from 25% to >30% by 202

~45%

~25%

Priority P

grew

in 2

Total Hospital MD Priority Platforms

Electrop

grew

in 2

Electrophysiology

~45%

Source: Internal estimates

1. Percent of 2015 sales from products launched in the last five years; 2. Operational growth

~25%

~35%


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FROM: MULTIPLE TOUCH POINTSFRAGMENTED

TO: SINGLE LEADCOORDINATED

Dedicated Health System FocusSingle point of contact with customers toidentify needs and deliver tailored solutions

Portfolio Breadth and DepthUnique contracting modelsand risk share

Integrated Solutions to needs acros

Novel Commercial ModelsThe New Value Framework for Hospital Medical Devices

DirectorStrategic

Accounts

Fie

Professionaleducation

Health Economics& Market Access

Commercialoperations

Solutions DePuy SynthesFranchise Acct

Mgr.

EthiconStrategic Acct

Mgr

Johnson& Johnson

Health CareSystems

Contracting

EnterpriseCustomer

Group.

Supply Chain

DePuy Synthes Field Sales

Ethicon Field Sales

Cardiovascular &Specialty Solutions

Field Sales

HealthSystem


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Innovating in Our Commercial Offering

Multi-product line contracts outperform our base

and are projected to represent ~40% ofthe US business1

Progressive Cross-portfolioContracting

Single lead accountable for bringing best of

Hospital Medical Devices to Health Systems

Simplified CustomerExperience

Supporting Health Syst

integrate care acros

Integrated Sand Solutio

Pre-op Testing

Discharge Planning

Hospital Preparation

Surgery Education

Nutrition

IN-DECISION PRE-ADMISSION IN

Evaluation

Decision Making

Surgery Planning Disc40%

Notable Strategic Partnerships:

1. Note: Representing US Orthopaedic and Surgery businesses

http://www.google.com/url?url=http://vector.me/browse/75160/grupo_angeles&rct=j&frm=1&q=&esrc=s&sa=U&ved=0ahUKEwjiwYL1vtDMAhVC1x4KHSlVCIcQwW4IGDAB&sig2=oJtupAkbRnkvVD-K9kNk2g&usg=AFQjCNEKa6nMxnfLR6pVUz-iWFrU3MrPbghttp://nebh.org/


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Global Reach and Capability

• #1 in Medical Devices sales

• ~15% 2012-2015 OPS CAGR

• Leadership share in key platforms:

6 platforms >50% share

• Strengthening go-to-market model

• Global professional education support,~55K surgeons trained in China1

CHINA LEADERSHIP

Sales

2015 2020

2x

• China Lung Cancer R&D Center

• Leveraging Johnson & Johnson

enterprise capabilities• Multiple Global R&D sites

• Products tailored to specific

needs of patients / surgeons in

Asia / Emerging Markets

– Launched CORAIL® Hip

system with shorter neck

for smaller anatomies

ENTERPRISE R&D ONE J&J SO

• Leverages Joh

in smaller mar

• Johnson & Jostrategy by cu

• One voice to k

and policy ma

• Hospital Medic

double-digit sa

1. Internal estimates; 2. Operational


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Accelerating Pace of Externally Sourced InnoLeveraging Breadth and Scale of Johnson & Johnson

• Boston

• California

• London

• Shanghai

• 6 sites in North America

• ~140 companies in residence

• Toronto / Houston:Medical Devices focus

• #1 Ranked V

• Invested ~$2on behalf of tbusinesses othree years

Johnson Developm

Innovation Centers JLABS

1. Source: Lake Whillans research; MedCity June 2015


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Unique and Broad-based Approach to InnovaAccelerate Our Cadence of Innovation

Focusing on innovation and

technology to a

Leveraging Johnson & Johnsoninnovation footprint and convergence

Building novel commercial modelsand strategic customer

partnerships and solutions


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Appendix

i i l


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Biosurgicals

Strategic Initiatives

• Build on hemostasis expertise to addressunmet needs in leaks and tissue healing

• Selectively globalize, including strong growthin Emerging Markets

• Expand Depuy Synthes collaboration acrossplatforms and geographies

2015SALES CHANGE*

2015 WWMARKET POSITION**

WW MARKET2015-2020 CAGR**

TOTARE

7.8% #1 ~6%

* Operational and includes BCS, TAH, AP

** Internal estimates

E


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Energy


• Strengthen core offerings in HARMONIC® and ENSEAL® through innovation focus on sealing, dissection, andease-of-use

• Penetrate mid-value markets through a segmented

portfolio and sustainable solutions

• Expand into new specialties such as hepatobiliaryand orthopaedics

2015SALES CHANGE*



TOTARE

4.3% #2 ~5%

* Operational


E d


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Endocutters


• Deliver tissue-specific innovation that reduces patientcomplications in the most challenging oncologic andbariatric cases

• Expand evidence generation and dissemination to

increase the penetration of obesity surgery

• Increase penetration of minimally-invasive surgicalapproaches by balancing device performance and cost

2015SALES CHANGE*



TOTARE

15.1% #1*** ~9%

* Operational


*** Tied for #1 position with competitor

W d Cl


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Wound Closure


• Elevate standard of care by leveraging evidence to drivecustomer upgrades to the Plus Antibacterial SuturePortfolio, STRATAFIX® Knotless Tissue Control Devices,and PRINEO® Skin Closure System

• Reduce variability and improve efficiency in minimally-invasive procedures by automating laparoscopic suturing

• Expand presence in orthopaedics through collaborationwith Depuy Synthes

2015SALES CHANGE*



TOTARE

1.6% #1 ~3%

* Operational


Hi


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Hips


• Drive growth in CORAIL® and PINNACLE® Power Brands

• Global expansion of the Anterior Approach

• Launch of the ACTISTM Total Hip System in 2017

• Deliver Enabling Technologies to improve outcomesand reduce costs

2015SALES CHANGE*



TOTARE

3.2% #2 ~2%

CORAIL® Hip wi

CERAMAX ® Ceramic Total

* Operational


K


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Knees


• Continued global expansion of ATTUNE® Primary KneeSystem (Brazil and China)

• Capture and leverage evidence to demonstrate thevalue of ATTUNE

• Complete the ATTUNE Platform, including revision

• Transform knee procedures for outcomes and cost toserve via INTUITION SOLO™

2015SALES CHANGE*



TOTARE

2.8% #2 ~3%

ATTUNE ® Knee Syst

INTUITION SOLO™

Instruments* Operational


Note: Knees includes TKA, excludes HA and Sports Emerging Technologies

Sho lde s


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Shoulders

2015SALES CHANGE*



TOTARE

4.9% #2 ~7%


• Enhance key growth drivers

‒ DELTA XTEND™ Reverse Shoulder System

‒ GLOBAL UNITE™ Platform Shoulder System

• Launch GLOBAL ICON™ Stemless Shoulder OUS

D

R

S* Operational** Internal estimates

Note: also includes sales related to ankles, fingers, wrists and elbows

Trauma


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Trauma


• Increase cadence of new product introductions and buildstrong innovation platforms

• Drive growth in core platforms with TFN-ADVANCED™ Proximal Femoral Nail and introduction of anatomic

VA Locking Hand System• Offer a competitive, complete portfolio for the elective foot

market

• Strengthen position in high growth geographies

2015SALES CHANGE*



TOTARE

1.9% #1 ~4%

TFN-ADVAN

Proximal Fe

System

Variable Angle (VA)

Locking Hand System* Operational


Spine


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Spine


• Strengthen Our Core

̶ Close key portfolio gaps with targeted M&A

̶ Upgrade our key platforms

̶ Simplify our current portfolio (brand reduction)

• Less Invasive Surgery ̶ Reduce the impact of surgery on patients

̶ Improve clinical and cost outcomes

̶ Normalize surgeon variation

̶ Move to outpatient

2015SALES CHANGE*



TOTARE

(2.6)% #2 ~3%

• Address The Aging Spine

̶ Better diagnostics

̶ Slow / halt / reverseDDD

* Operational


Sports Medicine


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Sports Medicine


• Drive market leading growth with MONOVISC® andORTHOVISC® in the U.S.

• Continue global launch of visualization tower

• Deliver pipeline of innovation in minimallyinvasive mobility therapies

2015SALES CHANGE*



TOTARE

7.1% #3 ~5%

* Operational


Neuro


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Neuro


• Continue growth in Neurosurgery through product launches inhydrocephalus, cranial procedures and neuro critical care(e.g. CERTAS Plus, DirectLink)

• Accelerate growth in Neurovascular through product launches in

hemorrhagic and ischemic stroke (e.g. ENTERPRISE 2 VRD,CODMAN SPECTRA family of coils, InNeuroCo intermediatecatheters and REVIVE SE thrombectomy device in Japan / China)

• Expansion of partnership with AO Neuro collaboration inneurosurgical education globally

2015SALES CHANGE*



TOTARE

0.5% #2 ~5%

Codman ENTERP

Vascular Reconstruct* Operational** Internal estimates, excludes Neuro Modulation

Craniomaxillofacial (CMF)


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Craniomaxillofacial (CMF)


• Extend Market Leadership in Core Platforms(Maxillofacial & Neuro)

• Establish technology leadership in personalizedsolutions – TRUMATCH®

• Strengthen position in high growth Thoracic Market

• Broaden global market access with OR-efficient, costeffective portfolio

2015SALES CHANGE*



TOTARE

0.7% #1 ~4%

TRUMATCH – Patient-Spe* Operational


Power Tools


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Power Tools

ANSPACH ® EG1 Hig

Speed Electric Syste


• Collaborate across Medical Devices toexpand commercial channels and deliver greater valueto our customers

• Accelerate the commercialization of new integrated

technologies to improve surgical procedure efficiency• Develop power solutions for target surgical procedures

2015SALES CHANGE*



TOTARE

5.2% #3 ~3%

* Operational


Breast Aesthetics


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• Focusing on R&D programs and innovative solutionsfor breast reconstruction to drive leadership inbreast surgery

• Recent launch of latest generation expander platform

ARTOURA®

and ATHENA IDE™

trial providing uniqueimplant solutions for high BMI patients

• Leveraging ability to meet wide range of plastic surgeryneeds (e.g., implants, sutures)

Breast Aesthetics

2015SALES CHANGE*



TOTARE

10.6% #2 ~3%

* Operational


Ear Nose and Throat (ENT)


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Ear, Nose, and Throat (ENT)


• Focus on US market & accelerate innovation cadencewith multiple new product introductions to continueleadership in BSP

• Leveraging Navigation Platform capabilities from

Biosense Webster to bring most advanced navigationsystem & consumables to ENT Drs & their patients

• Capitalize on Surgical Navigation platform launch toestablish Acclarent as a broad ENT player across BSP& FESS surgery

2015SALES CHANGE*



TOTARE

(7.0)% #2 4%

* Operational


Electrophysiology


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Electrophysiology

2015SALES CHANGE*



TOTARE

12.5% #1 ~11%


• Continue CARTO® 3 System penetration around the world with innovativesoftware enhancements including our Multi-Electrode Mapping,CARTOUNIVU™, PASO™, VISITAG™ and CONFIDENSE™ Modules

• Launch next generation ablation solutions to address safety, efficacy andease of use needs for AF and VT

• Expand AF leadership beyond Paroxysmal AF to include persistent AFindication in the US

• Establish leadership position along the AF Care continuum and capitalizeon AF adjacent categories (example: Left Atrial Appendage DeviceCoherex acquisition)

* Operational


Infection Prevention


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Infection Prevention


• Focus on core instrument processing segment: high-leveldisinfection and sterilization

• Set new standards in operational efficiency with nextgeneration high-level disinfection and sterilization

solutions (hardware and consumables)

2015SALES CHANGE*



TOTARE

3.1% #1 ~4%

* Operational, excludes divestitures


Reprocessing


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Reprocessing

2015SALES CHANGE*



TOTARE

4.3% #2 ~7%


• Accelerate revenue growth and drive market share gains

– Focus on highest growing / highest value procedure and product marketsthe Operating Room and the Electrophysiology and Cath Labs

– Increase pipeline volume and velocity and speed to market afterOEM product introduction

• Create pull-through strategies and collaboration opportunities

– Close partnership with Johnson & Johnson Operating Companies to drivecustomer value through increased focus on Certified Reprocessed Programs

– New account acquisition / conversion and account penetration

* Operational, represents total Johnson & Johnson reprocessing growth, including Sterilmed and Johnson & Johnson affiliates



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Johnson & Johnson Medical Device Business Update

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