Good morning and welcome to Johnson & Johnson’s Second Quarter 2015 Earnings Conference Call. All participants will be able to listen-only until the question-and-answer session of the conference. This call is being recorded. If anyone has any objections, you may disconnect at this time. [Operator Instructions] I would now like to turn the conference call over to Johnson & Johnson. You may begin.

Good morning and welcome. I am Louise Mehrotra, Vice President of Investor Relations for Johnson & Johnson and it is my pleasure this morning to review our business results for the second quarter of 2015. Joining me on the call today are Alex Gorsky, Chairman of the Board of Directors and Chief Executive Officer, Sandi Peterson, Group Worldwide Chairman, and Dominic Caruso, Vice President, Finance and Chief Financial Officer. A few logistics before we get into the details. This review is being made available via webcast accessible through the Investor Relations section of the Johnson & Johnson website at investor.jnj.com. I will begin by briefly reviewing second quarter for the corporation and for our three business segments. Alex will provide additional commentary on the business and our progress with regards to our near-term priorities. Next, Sandi will provide an update on our consumer and consumer medical device businesses. Lastly, Dominic will review the income statement and discuss guidance for 2015. We will then open the call to your questions. We expect the call to last approximately 90 minutes. Included with the press release that was issued earlier this morning is the schedule of sales for key products and/or businesses to facilitate updating your models. These schedules are available on the Johnson & Johnson website as is the press release. Please note we will be using a presentation to complement today’s commentary. The presentation is also available on our website. Before we begin, let me remind you that some of the statements made during this review are or may be considered forward-looking statements. The 10-K for the fiscal year 2014 and the company’s subsequent filings identify certain factors that could cause the company’s actual results to differ materially from those projected in any forward-looking statement made today. The company does not…

Thank you, Louise and good morning everyone. I really appreciate you taking the time to join our call today. And since we are at the midpoint of the year, I am excited to share the progress we have made against our near-term priorities. I will also use the time today to give some perspective on the environment that we are operating in and some of the macro level issues we are seeing and also discuss why we believe with our innovation model and breadth and scale of our business, the Johnson & Johnson is strongly positioned to drive continued growth and shareholder value. So I will start the discussion though where I always do with Our Credo. Our Credo serves as the moral compass for our company and expresses a set of values that bond our associates worldwide with a shared commitment to meet and really exceed the expectations of the more than 1 billion people a day that rely on our products as well as to support our fellow colleagues, the communities in which we live and work and generate solid return to our shareholders. Now back in January, I laid out our near-term priorities for the business and I am pleased with our progress towards them. Across the enterprise, we are very focused on delivering our financial and quality commitments. First, our commitment to ensuring our products meet the highest quality standards is of course non-negotiable. And as to our financial commitments thus far in the year, we generated sales of $35.2 billion, reflecting the strong underlying operational growth across the enterprise of about 6% when we adjust for the impact of Hepatitis C sales and acquisitions and divestitures. And for the first six months, we delivered adjusted net earnings of $9.2 billion and adjusted EPS of $3.27.…

Good morning. I am happy to have the opportunity to talk about our progress in our consumer-facing businesses, consumer diabetes solutions and vision care. I will also discuss the evolution in our approach to technology across the enterprise. Increasingly, as we lead through the disruptions and opportunities in global healthcare, we are fusing the power of technology with the power of science to deliver improved outcomes for patients, consumers and customers. First, our three consumer-facing businesses, as Alex said earlier, the future of these businesses looks promising. While they are at different stages of transformation, we believe that they are all well-positioned in attractive, growing global markets, and we are driving scale and growth in each. Let me start with consumer. Our iconic consumer brands are J&J’s face to the world. They are how we are known by millions around the globe. They are a first point of entry into emerging markets, so they really are very important to the overall enterprise. They are and will increasingly be important contributors to J&J’s financial performance. Demographic trends and changes in the way consumers make healthcare decisions are creating new opportunities for our consumer business. Our consumer expertise and insight are highly valuable to payers and providers, which differentiates us from our competitors. We view a healthy consumer business as a growth annuity for J&J with less volatility than other markets. As many of you know, we launched our new consumer strategy in 2013. We focused on stabilizing and revitalizing the business, re-mediating quality issues in U.S. OTC and being clear about where and how to compete and win around the world. We are executing successfully against that strategy. We are pleased to say that we have re-mediated and re-launched our U.S. OTC business. Over 80% of our brands have returned to…

Thanks Sandi and good morning everyone. As you have heard on the call, we are certainly pleased with the progress we continue to make in the execution against our priorities, which is reflected in the solid underlying financial results we have achieved thus far in 2015. And as Alex and Sandi discussed, we are well-positioned for continued growth in this dynamic healthcare environment. I will take the next few minutes to review our financial performance in the second quarter and we will also then provide guidance for you to consider in refining your models for the balance of the year. Turning to the next slide, you can see our condensed consolidated statement of earnings for the second quarter of 2015. As we expected and as many of you on the sell side also reflected in your updated models, direct comparisons to our second quarter of 2014 are challenging due to the exceptional uptake of OLYSIO that we recorded last year as well as currency headwinds and the impact of not having Ortho-Clinical Diagnostics in our results for 2015. Our sales results for the second quarter 2015 were essentially in line with analyst estimates as reflected in First Call. On an operational basis, excluding the impact of acquisitions and divestitures and excluding the impact of hep C products, sales were up 5% for the quarter. Please now direct your attention to the boxed section of the schedule, where we have provided earnings adjusted to exclude special items and intangible amortization expense. Adjusted net earnings of $4.8 billion in the quarter are down 6% compared to Q2 2014 and adjusted earnings per share of $1.71 versus $1.78 a year ago are down approximately 4%. However, the adjusted EPS results exceeded the mean of the analyst estimates as published by First Call. And…

Thank you, Dominic. And Holly, can you please give the instructions for the Q&A session?

[Operator Instructions] Your first question comes from Glenn Novarro with RBC Capital Markets.

Good morning, Glenn.

Good morning. Question for Alex, in your first couple of years, Alex, you’ve spent a lot of time with divestitures divesting cardio devices, diagnostics, pharmaceuticals and consumer brands. As you look at the enterprise now, do you think we are finished with the divestitures? Question one. And question two do we now enter a period where the company is more focused on acquisitions? Thank you.

Hey, good morning Glenn, Alex here and thank you very much for your question. Glenn, 3 years ago when we started looking at our strategies going forward, we tried to outline a very clear path ahead that would really consist of multiple components. One is obviously continuing to invest in our organic businesses, both in sales and marketing and research and development and I think we demonstrated that in spite of a lot of different puts and takes that we have continued to do that in a responsible way as Dominic outlined earlier when he was taking you through the P&L. An area where we did have a lot of focus was on making sure that our businesses were competitive, then of course, we tried to be very clear in that criteria there that look we want to be number one and number two in the marketplace. We want to have a clear innovation or technology path to really help patients or consumers or very importantly, we wanted the business to be complementary to something else that we are doing in another area of the enterprise and of course just fundamentally be a strong business. And if they didn’t meet those criteria, then of course we consider other options where they maybe better served in someone else’s hands. And as you noted, we have demonstrated that we are willing to do that as well. We think that’s an ongoing process in the business. We would expect there, business our size is in excess of $70 billion involved in the numerous platforms. That’s something that you will see as part of our natural cadence and flow going forward. But clearly, we are always also interested in growth opportunities. And when we see strong innovations that really make a difference for patients that also where we feel it offers a great complement to one of our existing franchises or frankly a platform for significant growth into the future, we have got the balance sheet, we have got the wherewithal to make those investments and that’s always the priority for us and will remain so into the future.

And just as a follow-up to that, if you look at the pipeline of M&A potential, number one, would you call the pipeline meaningful, in other words there are a lot of rich targets out there. And then as you look at these targets, what do you see in terms of the valuation of these targets, are these targets getting stretched and is that maybe one of the reasons why you haven’t done as much M&A here in the last few years? Thank you.

No Glenn, thank you. Look, we do feel that there are several significant opportunities really across each one of our segments that offer potential for growth and that are consistent with the strategic outline that I mentioned earlier. At the same time, I think we demonstrated that we want to be thoughtful and disciplined about our approach. And we intend to continue that path going forward.

Next question please.

Your next question comes from the line of Kristen Stewart with Deutsche Bank.

Good morning, Kristen.

Hi, good morning everybody. I was just wondering Dominic, if you can maybe just walk us through just again with the disposition of Cordis, just kind of what you are assuming in terms of timing of the sale of the business and then the dilution, how we should think about that, should we think about that similar with the OCD business in terms of the use of the proceeds perhaps with another round of repurchase to offset dilution again or kind of how we are thinking still about cardiovascular?

Sure, Kristen. Well, we expect that the Cordis divestiture will close in the latter part of the year. We still have some regulatory approvals and customary closing conditions. So we would expect that towards the end of the year, that’s been consistent with our previous discussion, nothing has changed there. The dilution of not having Cordis as part of the business is not that significant, quite frankly not as much as it was for OCD. As you know, that business after we exited the drug-eluting stent business is a relatively small portion of our business. And then with respect to use of proceeds, as we do typically when we do divestitures we wait after the transactions are complete, look at other opportunities we have for the use of cash and then make our decisions then as we prepare our plans for the coming year. So as of now, I really can’t comment on what we might do with any of the proceeds.

Hi, Kristen, this is Alex. I just might also add that cardiovascular remains an area of strategic importance for us. We have a very strong Biosense Webster business. In fact, if you look at the quarterly performance for the second quarter, which is once again double-digit. I think this reflects almost 3 years or 4 years now of consecutive improvements in that performance at a very similar level, a great flow of new technologies that’s really making a difference for patients. We also think cardiovascular, so look it still remains a global healthcare issue with a lot of innovation. So it’s an area where we remain interested and we still feel we have very solid footing with our Biosense Webster EP business.

Got it. And then just maybe can you give us a little more color just on REMICADE, I know that that’s obviously been a key concern of investors just what you are seeing in the quarter and kind of expectations ahead just with respect to the business over in Europe with biosimilars?

So in the quarter, Kristen we had in the export sales, we actually had an inventory change that negatively impacted the reported results there for the pharmaceutical group by about 2%, what we are seeing in Europe is as expected, so for the countries that went off patent in February 2015, we are seeing about market share for the biosimilars in the mid single-digits, so as expected.

Okay, perfect. Thank you.

Okay. Next question please.

Your next question comes from the line of Mike Weinstein with JPMorgan.

Good morning Mike.

Hi, good morning. Let me turn to the pharma side for a minute, I think two products that people focused on in the first half of the year for impact of the competition were STELARA and INVOKANA, INVOKANA looks like the momentum has continued and continues to look fantastic, STELARA looks like it slowed this quarter, so could you just comment on both?

Yes, Mike, Alex. Look, we still see STELARA growth at over 15%, strong growth in the U.S. and particularly strong growth outside of the United States at almost 27%. There was a slight sequential decrease in share we are projecting, but overall if we look at the competitive profile of the product, how we are doing combined, frankly with our overall franchise presence that we see in this area, we remain really confident in it.

And any comments on INVOKANA?

INVOKANA is the same, I think look we continue to highlight the profile. We have a got great reimbursement, well in excess of 50% to 60% in both commercial as well as the Medicare side of the business. We have continued to see strong TRx trends, both in primary care well as endocrinology. So overall, we are seeing strong uptake and we think it’s a big opportunity, Mike.

Okay. Alex, while I have got you here, it’s been 3 years since you guys closed the Synthes acquisition and I am sure as you commented, you are not thrilled by the first half performance in trauma and spine, so can you just talk a little bit about how you are feeling about that deal and what it will take to get it back on track? Thanks.

Sure, Mike. Thanks for the question. Look, overall we absolutely believe it was the right move when to bring Synthes in and create the largest and most diversified Orthopaedics company. And when we reflect back there, there have been changes that have taken place in the market. One is just the market growth across all these segments. If you remember back in 2008, 2009, 2010, we saw high single-digit growth really for our hips, knees, trauma as well as spine. That has changed significantly. We are now seeing that in the 3% to 4% range. I am pleased with the performance overall that we have seen through the integration. Whenever you bring two large organizations together, there is always a lot of moving pieces. But I think over the last 3 years if you take a look at the overall disruption and the way that we have been able to manage it, I think the team has done a very good job. And now we are really focused on what do we do to ensure that we are best positioned for the future. And frankly, we are doing it at a time when a lot of our competitors are just getting ready to go through a significant amount of integration and transition. And this is where we are excited. And I think it starts with innovation. We have had a nice cadence of innovation. In fact, we are in the midst – we just launched the TFNA, the transfemoral nail in trauma that we are excited about. We think will be an important addition to the bag – to the portfolio that part of the business. In the U.S., we were encouraged by the performance that we saw in knees and hips at 5% and 4% growth, respectively for the quarter. And also going forward, I think we are also quite excited about the opportunity to work with customers in new, unique and different ways across that portfolio. And I also think it’s fair to say that in all those areas we are going to continue to look for ways to drive that business through innovation, but also through increasing our effectiveness and efficiencies across all areas as well. So I think we are pleased, we are not satisfied, there is more work that we need to do and that’s where we are focused right now.

Thanks Alex.

Next question please.

Your next question comes from the line of Larry Biegelsen with Wells Fargo.

Good morning Larry.

Good morning. Thanks for taking the questions. Two clarifications, on the utilization comments about the fourth consecutive quarter of improving utilization, is that through Q1 or Q2. And then second on REMICADE outside the U.S., by our math we had total international and export sales growth in Q2 down about 18% constant currency, Louise you talked about that 2% impact from the inventory reduction, was that to that 18 or so percent, was that just the REMICADE outside the U.S., could you help clarify those two points, that would be great? And I have just one follow-up for Alex after that.

So Larry, that 2% is on total pharmaceutical sales. So, it’s a large reduction in the inventory.

Total worldwide pharma?

Yes, yes.

Okay. And then on the utilization, was that through Q1 or Q2?

Yes, Larry, Alex here. That was through Q2. And again, you know this data as well as we do and we are trying to triangulate from multiple different sources, but what we see is, for example, around 4% growth in hospital admissions. If you take a look at hospital surgical procedures, we are thinking probably between 2.5% and 3% and if we look at overall outpatient procedure growth, probably around 3%. So, it’s still positive. In some cases, it’s flat, perhaps a slight decrease versus what we saw in Q1, but we think overall the trends are relatively constant what we have seen thus far.

Good, good. That’s helpful. And I appreciate your comments earlier on M&A and the M&A environment, but you have $15 billion in net cash, which is obviously not earning much. I know your first priority for cash is the dividend and then M&A. But at what point do you consider using your cash to repurchase shares, Alex? Thanks for taking the questions.

Sure, Larry. I think look overall, ultimately, we want to create more value for shareholders. And as we look at our capital allocation strategy you just iterated, we have a strong commitment to dividends. We have done that for a long time. You know our statistics and our track record there. Regarding M&A, it’s also another area obviously that we keep our eye on. I mentioned earlier in the discussion that we are always looking for the right opportunity and we try to do that in a balanced approach. Of course, we want innovation. Of course, we want complementary things to add to our portfolio of growth opportunities, but we also want to ensure that we maintain the discipline and the perspective of our approach that I think has served us well over a lot of years. And even if you look at the internal versus external investment in the company, I think if you look over a 20, a 10 or even the near-term period, about 45% of our growth comes from what I call organic investment in our research and development versus slightly over half through M&A. And so that will continue to be our approach.

Also Larry, I would say that if you look at it over long periods of time, I think we are very proud of the fact that over a decade, we have returned about 70% of our free cash flow to shareholders. So, I think it’s important to keep that in mind although we may be evaluating opportunities all the time, we are always mindful of the fact of appropriate return to shareholders consistently over long periods of time.

Yes. And I think even recently through some of the announcements that we have made about share repurchases, we have demonstrated that, that’s part of our mix and we will continue to be so going forward.

Thanks for taking the questions.

Next question, please.

Your next question comes from the line of Jami Rubin with Goldman Sachs.

Good morning, Jami.

Good morning. Good morning, everyone. Just a couple of follow-up questions on sort of the major themes of the earnings call, Alex and I appreciate your taking the time to be on the call. Just if you look at the MD&D business, the MD&D business has underperformed its peers for at least the last 4 to 5 years and maybe longer, I am not sure, but I can’t imagine you are pleased with that performance. And I am just wondering, what is your interest level in moving up the technology curve out of what you are in which are mostly commodity businesses? When I look across where the major growth opportunities are in MedTech, you guys aren’t there, robotics, transcatheter heart valves, et cetera. So, I appreciate valuations are high and you want to be disciplined, but at the same time, J&J’s MD&D business continues to under perform. So, if you could comment on that, please? And then secondly to you, Dominic, you are looking about $2 billion in non-operating income in 2015 largely related to divestitures, how do you repeat that performance in 2016 without creating again a very difficult comparison? Thanks very much.

Hey, Jamie, thank you for the questions. Look, first of all, as I said regarding our medical device businesses, we think this is an important business and remains a very solid growth opportunity going forward. And look as you look across that entire business, we have a number of very exciting areas, frankly, that are doing quite well. We highlighted some of them earlier whether it’s Biosense Webster, whether it’s what we are seeing in areas like biosurgicals, energy, our Endocutter business, we are starting to see the turnaround in areas such as vision care and we don’t think those are commodity businesses. We think those are driven by innovation, technology, and they have been a steady strain. Now, are there other areas where we are interested? Well, you know that we have made an investment in the robotics space. We have announced an exciting opportunity with Google. It’s still early days. We recognized that, but we think that there is a lot of opportunity there given our expertise in general surgery overall and combining it with some of the expertise that those new technology partners can add. And we are also interested in other areas beyond that. We have demonstrated the ability in the past that when we see them, we will participate and acquire them. And I think we have also demonstrated over the past few years that in areas where we don’t see that path forward that we will be active on the divestiture front as well. So, we think that there is room for improvement. We know that we have got businesses like diabetes care, for example that had a significant impact from pricing a few years ago, vision care, that’s still in the midst of a turnaround, but we think that we have got the strategies, the innovation in place to turn those around, and these can be very solid and strong performance going forward.

And Jami, with respect to the other income and expenses, $2 billion roughly that you quoted, I think we were very clear early in the year that we were going to use those divestiture gains to offset some pretty significant headwinds and in particular the major headwind of currency this year. Going forward, I don’t believe we will have the same level of divestiture income, but we will still have some. As Alex have mentioned earlier, we are continuously reviewing our portfolio and making decisions of where we want to participate and where we think the assets would be better off in someone else’s hands and where we could get value for our shareholders by selling the assets. So, I think for ‘16, we would still see some level of divestiture income, but again in ‘16 versus ‘15, we won’t have – we don’t believe we will have the significant headwinds of currency that we just experienced in ‘15 nor will we have the tough comparisons of not having OLYSIO. So, I think you will continue to see it as part of our strategy to reevaluate our portfolio and deploy those gains against higher growth opportunities.

Thank you. And I just want to clarify something on the inventory for the pharmaceuticals. The 2% negative impact includes also some inventory reductions for OLYSIO. So, if you just look at the REMICADE export, total U.S. impact would be about 1%, about half of that, okay? Thank you. Next question, please.

Your next question will come from the line of Josh Jennings with Cowen & Company.

Good morning, Josh.

Good morning. Thanks so much for taking the questions. I would like to have first one for Dominic, just as we look into 2016 and beyond and the annualization of OLYSIO and other headwinds experienced in ‘15, how should we be thinking about leveraging the P&L driving a higher level of EPS growth relative to revenue growth? Should we be anticipating consistent constant currency EPS growth in 100, 200 basis points range or could that spread improve as you experience operating improvements in consumer and the device franchises and the continued strength in the pharma unit?

Yes, thanks, Josh. Well, as we have said many times, we always plan our business to grow our top line at a rate faster than the competitive set and then grow the bottom line at a rate of growth that’s slightly faster than the top line growth. That depends each year on what investments we want to make to continue the growth trajectory of the business. So, I can’t give you a formula to think about, but I think you have seen us be very consistent in our ability to continue to grow earnings at a rate that’s appropriately at a level faster than sales, again, depending on what the market is doing and then depending on what particular investments we have. We do see increased profitability in the consumer business, but as you mentioned it in your comments and Sandi had referred to it earlier, now that we are through many of the issues in the consent decree, we saw the increase in the profitability last year and we expect that business will continue to contribute more profitability in the future.

Thanks. And just a follow-up on the pharma product specific question, there is some recent ANDA filers for ZYTIGA, can you just talk about any inherent risk of a generic coming to the U.S. market prior to ‘16 and just an update on your patent positioning for that asset? Thanks a lot.

Okay. So, just to repeat what I said in the prepared remarks, the composition of matter patent expires in December 2016 and the method of treatment patent expires in August 2027. We would not speculate on any ANDA approval timing or outcome of any litigation. However, if we decide to file a lawsuit, the 30-month stay would begin April 2016 at the earliest and the length of which will be of course subject to any outcome of any litigation.

Thank you and next question.

Your next question will come from the line of Vamil Divan with Credit Suisse.

Good morning Vamil.

Hi, good morning. Thanks so much for taking the question. So just two here, if I could. One, you talked a little bit about INVOKANA earlier, I know Mike asked about this as well, but just about halfway through the quarter, we did have the FDA comment around ketoacidosis and just curious I mean obviously performance was fine this quarter but any on a qualitative basis it gives sense from any sort of questions or changes in prescribing habits as a result of what the FDA has stated at this point. And then second, I appreciate your comments on Greece, I was just curious also regarding Puerto Rico, just some of that kind of macro issues that are going on there I know you guys have some manufacturing down there, do you sense any sort of risk or concerns there depending how that sort of plays out over the next few weeks or months?

We will take first the questions on the DKA, it’s early on, but our Phase 3 trial is actually included about 10,000 patients and we saw very few cases of it.

Right. And with respect to Puerto Rico, you are right we have a significant manufacturing presence there and significant employment on the island, of course as a result. But I don’t see that as a major factor in our ability to continue progressing with our plans. So it's not on our radar screen as a major issue to contend with.

Next question please.

Your next question comes from the line of Jayson Bedford with Raymond James.

Good morning and thanks for taking the questions. I think I heard Alex mention $1 billion in cost savings by 2018, I just wanted a little clarity, is that a new program or is that a program that I thought you introduced a couple of years ago?

This is Dominic, Jayson. It’s the program that we introduced a couple of years ago. We are a couple of years into it now and so we are already seeing some of those cost benefits. And Alex is describing the same program where we the looked that by 2018 if you compared it to base year of 2013, the overall cost reduction would be in the aggregate of $1 billion.

And how far along are you, are you at 50%, 60%?

We kicked it off in ‘13. We did a lot of planning, of course in ‘14. So we are just starting to ramp it up this year into the next couple of years.

Okay. And then maybe a question for Sandi on the consumer side, you have added investment over the last few years to support the are-launch of the OTC products, but margin seem to improve nicely over the last few quarters, does the added investment wind down to generate better margins or just the growth pick up to improve margins?

Thanks for the question. The way in which we are looking at this is the – as we are sun-setting the consent decree, it enables us to improve the productivity of our manufacturing footprint. So a large part of where you will see continued improvement in the profitability of the business is by improving our COGS and our gross margins for the business. So that’s one aspect of it. The other aspect of it is we are – we have undertaken over the last couple of years an approach to globalize our brands and to globalize how we manage them, which drives increased efficiency in every single marketing dollar. So our perspective on this is we need to continue to invest behind these brands, both the U.S. OTC portfolio as well as the global portfolio. So you will not see us reduce our investments behind our brand building of all of our core brands, but what you will see is improved leverage in our manufacturing footprint and actually how we are spending those dollars to drive improved profitability across the sector.

Jason, this is Alex. If I can just add, I really want to commend Sandi and Jorge and their teams for the job that they are doing on these re-launches. I think when we were having these calls several years ago, there was probably a fair amount of skepticism on our ability to re-launch against private label, making sure that we can work our way through the consent decree requirements. And if you look at the progress that’s been made over the past few years, obviously it starts with great products. I think now we have over 80% of our brands return to the shelf, a lot of new recent launches, particularly along the TYLENOL line. If you combine that with the way that we have achieved all the consent decree requirements, I think we worked closely with the agency. We have done that. In fact, I think we will be the – if not the one of the only large over-the-counter companies to ever be able to do that successfully. And really good news is that when you look – as we re-launch these brands, the share uptake is strong. I think we are back up to now about 60% of the share that we achieved in areas like pain. So we are building our way back up. And when you combine that with some of the new innovations that we have, we definitely see a nice growth opportunity in that part of the business.

So with respect to everyone’s time, we will take two more questions. Next question please.

Your next question comes from the line of David Lewis with Morgan Stanley.

Good morning David.

Good morning. Thanks Louise for squeezing me in, maybe just a question for Alex and Sandi and a quick follow-up for Dominic, but the Consumer business is clearly recovering, that’s the big message I think of this call and I think the commentary, I think you have made publicly these last few months seems to be that for M&A in Consumer, it’s going to center more on brands and not company, so you see more willing in consumer at least from our estimation to rule out large M&A, am I reading that right and why is that the case?

So our first – the way in which we are thinking about acquisitions in consumer is a combination of things. We are going to clearly stay focused on our priority consumer need states and geographies. So the way we look at it is a combination, are there brands that are appropriate to tuck into our infrastructure to drive growth in certain markets or in certain areas at the consumer need state. But we also will look at technologies that we can license in like we have done in other parts of J&J. And lastly, we do look at companies to acquire, whether they are mid-size companies or whether they are larger companies. And we are highly disciplined about looking at those and understanding the benefit of doing those kinds of larger acquisitions versus mid-size or smaller acquisitions. So we haven’t ruled out any particular part of the marketplace. We are looking at a variety of different opportunities given that the business is now stabilizing, growing again. We believe we are sort of in a position where we can look at these things a little bit more on an ongoing basis.

Yes. And David, I would just add onto that that the Consumer area remains one of strong strategic importance for Johnson & Johnson. When you think about the role of consumers and healthcare utilization going forward, when you think about the way that you are able to drive innovation and frankly when you think about the reach that it gives you, particularly in the emerging markets and the fast growing markets. And by the way, for Johnson & Johnson, it not only operates that way to drive growth in consumer, but it acts also as a way to increase our uptake in our other businesses, particularly in those growth markets. We think there are a lot of opportunities. And I think mission one over the past few years has been getting it on the right track. As you mentioned yourself, we think we made a lot of progress there. We are feeling much, much better. And now we are obviously looking for ways how do we expand that, how do we take it to the next level.

Okay, very helpful. Thank you for that color. And then, Dominic just a quick question, I am just thinking about international growth, this quarter was a little slower, I am just wondering if you can give us an update on what you are seeing macro in emerging markets maybe specifically China just given the events the last month, have you seen any acute slowdown or is it relatively stable? Thank you.

So we have seen in China some slowdown. I wouldn’t call it acute. There are some dynamics, of course of generic competition in China and an overall slower growth in economic growth. So we are seeing that, but I think we are well positioned. We have been in China for many, many years. We have a good footprint there. We obviously manufacture there as well and our brands continue to get good uptick there. And of course, we are not in the generic part of the pharmaceutical business in China because we are focused more on innovation in that market. So I wouldn’t call it acute, but I would say we have seen some slowdown in the overall market growth in China.

Thank you very much.

Last question please.

And your next question will come from the line of Rick Wise with Stifel.

Thanks so much for taking the question. Good morning everybody. Alex, maybe just a question for you and then one for Sandi, you talked again and you highlighted your focus on the OR the future and talking about the Google JV and robotics, can you maybe give us a little more concrete color, I mean is there a grand plan, does it require acquisitions, are we going to see some tangible products or launches that are going to impact sales and earnings over the next 6 months to 12 months, how do you want us to think about it?

Rick, when you think about this as a really strategic investment in the future for robotic surgery and we – as we see the surgical suite continue to develop in today’s environment, I would say there is a pretty clear line of demarcation between what you would say as standard surgery and robotic surgery. And we think as technology develops in the future, whether it’s real-time data collection, whether it’s visualization, whether it’s incorporating some of the new technologies in areas, such as energy and hemostats, combining these in very new and unique approaches we think offers a real significant opportunity to improve patient outcomes ultimately to grow our business. We also think there was some inherent limitations to today’s robotic surgery environment when you frankly look at the size and the scale of some of the existing innovation. And if you look at what’s happened with other technology platforms as they have become smaller, more flexible, more mobile, and frankly have a better ability to integrate various activities around the OR, that’s where we think we can really make a difference. We realize, of course, that we bring certain capabilities to the table, but we are also thinking – working with partners like Google and others. It expands our capabilities significantly. And so, look, we see this as really not something to have an impact, where I would say over the next 6 to 12 months, this is likely more over a 2-year to 3-year plus timeframe, but we – this is something that we are quite committed to that our partners are committed to and that we see as a real opportunity to fundamentally change the way we think about surgery and robotics in the future.

I really appreciate that. And just last quickly, Sandi, I mean, it seems clear that VIBE is off to a strong start, I think you launched it in the U.S. late last year, maybe just talk if you could give us a little more color on the rollout where are you, are you fully rolled out, are you converting your own patients to VIBE, or are you gaining new accounts just – and maybe what’s next beyond VIBE? Thanks so much.

Thanks. So, as you – in insulin delivery in total, what we have done is as you know we have launched the product in Europe and also in Canada over the last couple of years. And both in Europe and in Canada, it also has a pediatric indication, which clearly gives it some unique differentiation in the marketplace. We effectively launched it in the United States really at the beginning of this year. So, we have seen significant positive growth in uptake of the product in the U.S., which is a combination of existing patients upgrading to the new product as well as gaining new – basically new to therapy insulin pumpers as well as there we have seen a lot of conversion from other pump platforms to our platform. We, in the second quarter, also filed for the pediatric indication for the U.S. product. And so obviously, the FDA will go through its review process, but we are hopeful that before the end of this year, we should have the pediatric indication, which will be a further uptick in the business in the U.S. and be very helpful to us in the U.S. As I also mentioned earlier, there is two other things in insulin delivery that we are very focused on, actually three, but two of them are working in partnership with Dexcom on a next-generation pump that really brings the best of what we have learned of how to make this much more user-friendly and effective with a patient as well as ensuring that we have got the right algorithm in the pump for insulin delivery. Combining that with the next generation of sensor, our current pump has that with Dexcom. And then we are also and have done a lot of work not just in the insulin side, but also in the BGM side of really creating a much better ecosystem for the patient to have information and data that helps them manage their condition much more effectively. And so we are using information technology in a smarter way going forward and we are seeing very positive impact of that, not just in the insulin delivery side, but in our core BGM business. So, that’s another place that we will see a number of different things that we are going to be doing in this business. And last but not least, I mentioned that the Calibra patch pump is another great growth platform we believe for us, because it’s really a unique to the marketplace way to help type 2 diabetics who are insulin-dependent, have a new way of getting their insulin delivered to them in a much more discreet way. So, there are lot of things in the works, there is a lot of things in our pipeline in insulin delivery.

Appreciate it. Thanks.

Thank you. We will have some closing remarks by Alex.

Okay. Well, thank you everyone. And look, in closing, I want to again extend our appreciation to all of you for joining today’s meeting. We are pleased with the solid results we reported this morning, which as we discussed today, really do reflect the strong underlying growth we are seeing across the enterprise. And when you combine this with the actions we have taken to even further strengthen our core businesses and advance our pipeline, Johnson & Johnson is well-positioned to continue to drive growth over the long-term. So, I wish everyone a great day and thank you very much.

Thank you. This concludes today’s Johnson & Johnson second quarter 2015 earnings conference call. You may now disconnect.