Good morning and welcome to the Johnson & Johnson Third Quarter 2016 Earnings Conference Call. All participants will be in a listen-only mode 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. I'm Joe Wolk, Vice President of Investor Relations for Johnson & Johnson, and it is my pleasure to welcome you to the review of our business results for the third quarter of 2016. Joining me on the call today are, Dominic Caruso, Chief Financial Officer; Joaquin Duato, Worldwide Chairman, Pharmaceuticals; and Dr. Bill Hait, Global Head of Pharmaceutical Research & Development. A few logistics before we discuss the results. This review is being made available via Webcast accessible through the Investor Relations section of the Johnson & Johnson Web-site at investor.jnj.com. I will begin today's presentation by briefly reviewing the third quarter sales and earnings results for the corporation and sales results for each of our three business segments. Next, Joaquin and Bill will provide an update on our Pharmaceutical business, specifically highlighting how our focus on innovation to address unmet medical needs translates to current and future strong performance. Dominic will then provide some additional commentary on the results, review the income statement, and discuss guidance for 2016. Lastly, we will open the call to your questions. We expect today's call to last approximately 90 minutes. Included with the press release issued earlier this morning is the schedule of sales for key products and businesses to facilitate updating your models. These schedules are available on the Johnson & Johnson Web-site, 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 Web-site. I'd like to remind you that some of the statements made during this review are or may be considered forward-looking statements. The 10-K for fiscal year 2015 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 statements…

Thanks, Joe, and good morning everyone. I'm very pleased to share an update on our Pharmaceutical sector. Since May 2015, when we last met, our Pharmaceuticals business has continued to flourish and remains the primary growth engine of Johnson & Johnson. Our market-leading innovative medicines are the foundation of our strong performance, with a vast majority of their growth coming from volume gains. We continue to pursue significant growth opportunities in terms of both penetration within existing indications and planned line extensions. Additionally, we have launched DARZALEX, the first of our 10 potential $1 billion-plus NMEs. As a result, we remain confident that we'll continue to deliver a strong growth through 2019 despite biosimilar competition and market dynamics. Our success is a result of our strong track record of execution. Our industry-leading pipeline has delivered 12 NMEs since 2011 and eight breakthrough therapy designations since 2013. And for the fourth year, we are proud to have been named the #1 company in R&D and commercial productive innovation. Our focused execution has delivered 11 in-market $1 billion-plus brands. 10 of these brands are growing and six of them are growing double-digits. Cumulatively, sales from our medicines launched since 2011 are the second highest of any pharmaceutical company. Our R&D and commercial capabilities are a proven strong foundation for future growth. First, we will continue to focus on driving volume growth across our current market-leading brands through clinical differentiation. Second, we will accelerate the growth of these in-market brands through approximately 40 potential line extensions. Critically, 10 of these line extensions have more than $0.5 billion potential. Third, as we shared last year, we have a [indiscernible] pipeline investing in 10 potential $1 billion-plus NMEs, planned to be filed through 2019. Of these, we anticipate five to deliver significant growth opportunities in…

Thank you, Joaquin. Good morning, everyone. My name is Bill Hait and I am the Global Head of Research & Development for the Janssen Pharmaceutical Companies of Johnson & Johnson. As Joaquin indicated, at Janssen we believe that by continuing to execute our current strategy, we will consistently deliver valuable products to patients with serious unmet medical needs and that this will sustain our leadership in the pharmaceutical industry. Our strength is built on a blend of deep internal scientific expertise with industry-leading collaborations through the work of Johnson & Johnson Innovation. We continue to find efficiencies that produce savings that we invest in our pipeline and our strategic focus creates an enviable track record. We are delivering against our anticipated 2015 to 2019 NME and LE results that will produce a cadence of significant clinical data, regulatory filings and approvals. For these reasons and the results I will describe today, Janssen has become one of the most productive and most respected pharmaceutical companies. Before I share with you the details of our pipeline progress, let me explain how and why we have been able to sustain industry leading results. Our five end-to-end therapeutic areas span basic drug discovery through launch and lifecycle management. This structure produces a focused seamless R&D organization, promotes efficient phase transitions and ensures dedication to major unmet medical needs where there is compelling translatable science. These five therapeutic areas concentrate on 11 high priority disease areas through our disease area strongholds, nimble and efficient biotech like teams embedded in the broader context of the therapeutic areas. Each disease area stronghold undergoes rigorous triennial review by our external Scientific Advisory Board, receives a priority score and proportional funding of discovery and early development. Our therapeutic areas are supported by substantial research capabilities through our Centers of…

Thank you, Bill and Joaquin, and good morning everyone. As you just heard, our Pharmaceutical business is well positioned for continued above-industry growth as we made good progress against the pipeline expectations we communicated at our 2015 Pharmaceutical Business Review. With great leaders like Joaquin and Bill, our strong end market performance driven by excellent commercial capabilities and our robust R&D pipeline, you can see why we remain confident that our Pharmaceuticals business will continue to be a major driver of growth moving forward. I will now turn our discussion back to the quarter. We're pleased with our overall results. As you know, we had a strong start to the year, and as a result, last quarter we increased our sales and earnings guidance. I'm happy to say we're tracking with those higher expectations while continuing to invest in our business. As you've heard, our Pharmaceutical business delivered strong results this quarter with underlying operational growth of 10.7%. Let me now provide some comments on our other businesses. In our Consumer business, we continued to gain share this quarter. However, as reported by Nielsen, the industry saw slowdown in many markets with category growth rates in 2016 about half of the category growth rates we saw in Q3 of 2015. As Joe noted, our sales growth for the quarter was also impacted by lower trade inventory levels. These lower levels are the result of inventory builds in Q3 2015, as we discussed at that time, due to re-launches of certain products as well as inventory reduction programs being implemented at some of the larger retailers this past quarter. When excluding the impact of acquisitions and divestitures and the impact of the devaluation that occurred in Venezuela last year, and this overall impact with trade inventory reductions, overall Consumer growth was…

Thank you, Dominic. Michelle, can you please provide instructions for those on the line wishing to participate in the Q&A?

[Operator Instructions] Your first question comes from Larry Biegelsen with Wells Fargo.

So Dominic, I wanted to focus on the 2017 puts and takes. Dominic, in our Healthcare Conference in September, you said the only real delta from 2016 to 2017 is the rate at which biosimilar REMICADE could penetrate the market, assuming Pfizer launches at risk and you don't think the penetration will be dramatic. I took that to mean that you feel that you can grow sales in 2017 at a similar rate to 2016 minus the impact from biosimilar REMICADE. So my questions are, is that the right interpretation and what gives you the confidence that this level of growth will continue? And second, the biosimilar for Neupogen captured about 7% of the market in year one. Would you expect Inflectra penetration to be less than that? Any color that you can give on the expected penetration would be helpful, and I did have one follow-up on Pharma. Thank you.

Sure, Larry. Thanks for the question. I think the way you characterized it is accurate, that excluding the impact of any biosimilar launch, we would expect the business to grow at a rate similar to what we saw this year in the Pharma business overall, as well as I think we will see improved performance in the Medical Devices business and we're seeing continued share gains in the Consumer business. So I think that is a good way to characterize it. We'll provide more color on that when we talk about the 2017 guidance in our discussion in January. We do think that the rate of penetration for a biosimilar will be modest. I know several reasons for that. As we talked about before, 70% of the patients are treated well with REMICADE. There is no interchangeability available, that's another factor. And we're already in a highly competitive environment with respect to biologics, anti-TNF therapies, as you know. Before any comments on Neupogen, Joaquin, anything else you want to add to overall penetration of biosimilars?

We are confident that we have our readiness plan for our biosimilar launch in the U.S. What we have seen internationally in markets like Australia, Brazil where we market REMICADE is that our volume share has been in excess of 90%. So that is consistent with what you described. We are confident that we have a strong plan based on what Dominic described before, there's been 2.6 million patients treated with REMICADE worldwide, there is no interchangeability and there is a clear patient and physician preference. So it's highly unlikely that you're going to be seeing patients that are stable in REMICADE to switch it. So that is 70% of the patients. At the same time, we have a strong patient assistance program which will prove to be a market differentiator and we are ready to compete in every channel trying to bring patients the most affordable option in every situation. So we feel well-prepared to face the biosimilar, and as Dominic said, we are convinced that we will continue to grow our business in the face of biosimilar competition.

And Larry, I'm not sure whether Neupogen is a good analog or not. I mean, who knows, right. Obviously, we have Europe, we have a biosimilar in Europe that Merck is responsible for marketing I think there over about a two-year period. Merck has retained about 75% share. So that's one analog. You had a follow-up question you said on Pharma.

Yes, maybe for Joaquin. So on INVOKANA, I saw in the presentation that you expect to present the CANVAS and the CANVAS-R data in mid-2017. So my questions are, are you going to present CANVAS and CANVAS-R separately before mid-2017 and did you have any plan to issue a press release with top line results before the presentation? And lastly, what's your confidence that we'll see a similar cardiovascular benefit as we did with EMPA-REG OUTCOME as well as the lack of significant amputation risk? Thanks for taking the questions.

INVOKANA remains the leading SGLT2, as I have described in the conference call, and to talk about CANVAS and CANVAS-R and the cardiovascular benefit, I'm going to pass the question to Bill.

This is Bill Hait. So we plan to evaluate CANVAS and CANVAS-R together as one net analysis. We're in discussions right now on the degrees of statistical confidence with the FDA. We have very strong reason to suspect based on CANVAS that the combination will give data very similar to what was reported with EMPA.

The next question comes from Kristen Stewart with Deutsche Bank.

I was just going back to I guess REMICADE and just again through the pipeline I guess, what are some of the things that you feel confident on to the extent that the biosimilar could take I guess greater share than what you are expecting that could start to fill-in I guess some of the gaps from that perspective?

I described part of the reasons for optimism during my conversation before. We not only feel that we are going to be able to grow in the face of biosimilars in the pharmaceutical business overall, but we also are confident that we're going to be able to grow our immunology franchise in the face of biosimilars. Let me give you some examples of why going into the three segments, rheumatology, psoriasis and gastroenterology. In rheumatology, SIMPONI and SIMPONI ARIA are doing very well. As a matter of fact, SIMPONI ARIA is already leading in new-to-brand share in rheumatology in the U.S., and SIMPONI is gaining share in all international markets. We plan to file two line extensions of SIMPONI ARIA in ankylosing spondylitis and in psoriatic arthritis by 2017, and also we just filed sirukumab with EMEA and we plan to file it here in the U.S. before the end of the year. So that gives us a strong confidence that we're going to continue to grow in rheumatology. Then moving into psoriasis, STELARA continues to be the leading in new-to-brand share in the U.S. and it's leading in most markets internationally. Together with that, we plan to file Guselkumab that we have presented very impressive data at the last EADV. We plan to file Guselkumab before the end of the year. So that's another reason why we feel real confident that we will continue to grow in psoriasis. And finally gastroenterology, which by the way for us is the largest and fastest-growing segment, we just had the approval of STELARA in Crohn's disease and we are now launching it in the U.S. and we anticipate to be launching it in Europe pretty soon. So that is another reason which we believe that we are going to be able to continue to grow in immunology. So overall, we have line extensions, we have continuous penetration and also we have the filing of sirukumab and Guselkumab in the second half of the year.

The next question comes from Mike Weinstein with J.P. Morgan.

So Dominic, I wanted to just follow up on all the discussion on the Pharmaceutical business. You made some comments at an investor conference in September that caught my attention. You talked about the five major therapeutic categories the Company is in today, and you opened up I think for the first time that the potential of the Company would consider adding a new therapeutic category. Just want to get a sense of your interest in doing that, and maybe the rest of the team wants to chime in as well.

Sure, Mike. I remember that discussion pretty well. I just want to put it in the context for everyone. So this was a discussion about the success of our Pharmaceutical business, which has largely been driven by collaboration, licensing, co-development, et cetera, and not at all by any major acquisition, right. And the question that I got posed to me was, well, that's been very successful, why would you ever change that or is there any reason to consider a change in that strategy? And my comment was, to the extent we have five major therapeutic areas today, if we decided that another major therapeutic area was of importance to us and we wanted to get into that therapeutic area and we felt we could add a lot to it based on our overall scientific knowledge more broadly, that I would see that perhaps being done not by necessarily a licensing strategy but more of an acquisition type strategy. So it would enhance the overall portfolio of Johnson & Johnson's Pharmaceutical business beyond the current therapeutic areas that we currently are in, and by doing that, that might require a more significant acquisition than we've been doing in the Pharma business. So that's the context for that.

What is important to remember is that our focus is in medical innovation, and therefore our areas in which we'll operate will depend on where science is going and our own internal capabilities on the development on the commercial side. So, from that perspective, we are constantly evaluating in which therapeutic areas we are in and its affluent situation. The focus is in transformational medical innovation and the actual therapeutic areas can change over time.

And so, is that – I mean, Dominic, that comment, is that just an indicator of that there is an open-end sort of interest in new therapeutic areas more so today than maybe in the last five years?

I think there's always an interest in new therapeutic areas where there is medical innovation where we think we can make a difference to patients in the health care system. So I'm not sure that that's changed dramatically, although over the last several years, we've built these very prominent disease strongholds within the therapeutic areas that we have today and obviously they take some time to build. Bill, any other comments on that?

In fact, to get to where we are today, we had to focus down from approximately 33 different diseases we were investing broadly but thinly to 11 diseases where we developed extremely deep expertise internally, from basic discovery right through launching, commercialization and market understanding, to where we are always considering first, is there a room for further massive innovation because of the development of transformational science or new knowledge that we can go after. And number two is, we become very familiar with adjacencies to the areas we are in, and if they look attractive, they are often the ones we take the hardest look at. So we are always looking to see if there's still massive innovation left to go in our disease areas and therapeutic areas and we're always looking closely at adjacencies.

The next question comes from David Lewis with Morgan Stanley.

Two questions, first for Joaquin and then Dominic, some commentary on Medical Devices utilization. So Joaquin, I found your commentary on the strategy to defend REMICADE pretty compelling. So, should we take from your comments that your existing strategy is sufficient or should we expect more proactive pricing strategies to emerge in 2017 and beyond?

Our strategy is three-pronged, as I described. The first one is the fact that we believe based on the track record of REMICADE and the lack of interchangeability, it's unlikely that patients are going to switch if they are stable. So that's a very important component for us. The second element is that we plan to compete in all channels, and in planning to compete in all channels, we are going to be utilizing innovative contracting and utilizing the full breadth of our portfolio. And then finally, we plan to utilize market differentiators such as patient assistance programs that are going to enable affordability. So with these three components, we feel confident that we are going to be able to have a very strong plan to face the biosimilar. The second element of that overall is what I just described before, what are the elements that lead us to believe that we'll continue to grow in immunology too, and I described the different line extensions and NMEs that we have in the three areas, rheumatology, gastroenterology and psoriasis. So combined, we feel strongly that we'll be able to continue to grow in immunology and overall the Pharmaceutical business will grow in the face of the biosimilars.

Okay. So if you had to use price next year more aggressively, Joaquin, that would be an incremental surprise to you?

This is already a very competitive market as it is today. As you can imagine, there is already significant competition in the market today, both in the subcu area and in the IV area. So we believe that the level of discounting that is today makes it already a high bar for any new entrant.

Thank you, very clear. And then Dominic, you made a series of comments on utilization. I just want to clarify both the near-term and kind of longer-term environment. So if I heard you correctly, it seems like there was some softening potentially in the Medical Devices business in the summer but that got better in September. I wonder if you could just help us out in terms of how you would characterize the environment here in September and entering into October. Is it stable with what you saw in the first half of the year or different? And then the second part of that question is, you also said, in 2017 you actually expect some improvement in the Medical Devices business, and maybe you could share with us your confidence level and the areas that you would expect to improve in 2017?

Sure. So what we saw, David, is that through published sources, many of which are from firms such as yours and many of the sell-side that publish, we saw actually utilization rates as depicted in hospital admissions and hospital surgical procedures with the first quarter of this year being the highest by far and then a slowdown in the second quarter, a slowdown even below the level at which most estimates were depicting or forecasting. And then the third quarter was even slower than the second quarter overall but with a very marked difference in September. So once September hit, the data showed quite a rebound from the summer months, and the rate of growth in September was actually faster than what we saw in the first quarter, which was the highest growth quarter year-over-year in terms of penetration. Now whether that remains at that level or whether it's a rebound effect from the summer, we'll have to see. But I think this is all well-chronicled in the multiple reports that many of you I'm sure have seen. So overall, I'd say we're now in a stable environment in hospital procedures. Going into 2017, I expressed confidence in our Medical Devices business growing faster, and quite frankly, you know we have a plan for that business to return to growth at above market for the Medical Devices sector and it's continuing to improve. What gives me confidence there is that the area that we focused the most on, the growth platforms and priority platforms, just this quarter they grew at 9%, and within those, three of those in particular, electrophysiology, energy and endocutters, each grew at double-digit growth. So we obviously have very robust growth coming in the priority platforms, which we expect to continue and drive us to above market growth in 2017.

Your next question comes from Glenn Novarro with RBC Capital Markets.

Just a follow-up on REMICADE, because Dominic, you said REMICADE, where the biosimilars would be a launch risk, so can you remind us what's next in the legal process? And then you also did a good job of discussing the impact you thought for the top line. Can you talk about the profitability of REMICADE today? Is this a drug that is still heavily marketed? I can't imagine there is a lot of R&D behind REMICADE.

A couple of things where we stand on the legal front, as you know we have an upcoming trial on the media related to the production of the biosimilar and that trial is scheduled for mid-February of 2017, and we're also appealing the ruling recently in the Massachusetts Court regarding the patent being invalid, and that will proceed. But we're also separately, and we had been involved in this process for quite some time, we're continuing the appeals process within the U.S. Patent Office and that process has several more steps to go. Joe, anything else you want to add to that?

Yes, just with some specific dates, Glenn. So the oral arguments in front of the PTO was heard on September 28. We expect that decision to be rendered anywhere from one to three months. In the courts, on the 471 patent, the final judgment just came from the bench on September 27. So that triggers the time in which we have to appeal, and we are going through that process now.

Okay, and with regard to profitability, obviously the product like REMICADE is an important product that obviously delivers significant profitability to the Company, but of course we have a number of new launches. We have some that are already launched and are progressing and rapidly growing and their relative cost does not grow at the rate of their sales growth, and overall we have to manage through this period of time when eventually when a biosimilar launches and a patent expires, we'll have to prepare ourselves for that in any event. So we are very well prepared to adjust accordingly, and as you know, our major focus always is to grow our sales at a rate faster than the rate in which our markets grow, so gain share, and then grow our earnings at a rate faster than sales. So that's the level at which we plan for each and every year.

So is there some restructuring that may come out over the next, announcements that may come out that could serve as an offset to REMICADE and any potential lost profitability?

We don't see any major restructuring related to the REMICADE situation on the horizon, Glenn, not at all.

Okay, great. Thank you.

Your next question comes from Jami Rubin with Goldman Sachs.

Dominic, just a couple of questions for you. With the upcoming election, obviously it's been a major area of focus for healthcare investors. I'm just curious to your thoughts on Proposition 61, and as you know, I think that polls are showing that that actually might pass in the state of California, and just curious to know what you think the industry's response will be to that. And then secondly, I'm interested in your thoughts on the potential for an international tax reform as part of an infrastructure bill. Obviously, you would be huge beneficiaries of such a bill because of repatriation. Can you give us your thoughts on the likelihood of that happening? We had multiple discussions over the years about tax reforms, which never happens, maybe it will happen this time, just curious to know what your Washington folks are saying. And are we correct in assuming that if you were to do a large mega transaction adding that sixth tool to your Pharmaceutical division, are you more likely to wait until we get visibility on that or is your decision irrespective of potential legislation? Thanks.

Okay, Jami, let me take a minute and reverse a little. So whether or not we do a major transaction, we'll not be dependent on waiting for international tax reform. Obviously we have plenty of borrowing capacity and obviously any transaction that's done outside the U.S. would be an effective use of that OUS cash. And as you know, we've had the benefit of being able to structure transactions and effectively use our OUS cash in a tax efficient manner and we did that [indiscernible] transaction, we've done that recently with the two transactions that we recently announced. With respect to international tax reform and what we're hearing, I can tell you that I visit in Washington often and speak with members of the House Ways and Means Committee and the Senate Finance Committee and the tax staffs are busily working and working very collaboratively with U.S. multinationals on an appropriate tax reform package. We think there is more [by-parts] [ph] to support now than there has been in the past. We think that often we hear, as you mentioned, the benefit of investing in U.S. infrastructure as a result of those repatriated earnings coming back into the U.S. So that would be a positive. And we think that overall the climate for international tax reform post the election, quite frankly, is more positive than it's been in the last year or so. And then with respect to Proposition 61, there are several opponents to that proposition and we would prefer to have pricing that is more related to outcomes. Evidence-based medicine is something that we are advocates of, and therefore, outcome-based pricing is a logical consequence of that. But Joaquin, any other thoughts on Prop 61?

Thank you. I mean as you were saying, Dominic, despite of the rhetoric about pharmaceutical pricing, it's always good to take some perspective on that. Pharmaceuticals represent 14% of total expenditures and we understand that we need to work with different stakeholders in order to try to manage our healthcare cost and we have advanced different ideas in that area as you were describing, Dominic, such as value-based contracting, and we need to work there in order to try to eliminate the regulatory barriers that do not help in that area. As far as Proposition 61, as an example of that rhetoric, as Dominic said, there are different groups that oppose that measure that includes even veteran groups and seniors and unions, the reason being it's unclear what the effects of Proposition 61 would be. It is clear that it would be difficult to operationalize and also would create some access barriers to patients. So overall, we don't see Proposition 61 as the right way to try to work on pharmaceutical pricing. We think it's a misguided action.

Being respectful of everyone's time, we'll take one more question, Michelle.

Our final question comes from Matt Miksic with UBS.

I have one just quick clarification here on REMICADE, and then I have one on sort of capital allocation. So Dominic and Joaquin, if I could just make sure I'm understanding your comment on pricing and expected biosimilar competition. As you've gone through a number of times here on the call, the perception is that REMICADE pricing will face some kind of new downward pressure or abrupt pressure here as a result of this launch. It sounds like what you're saying is, the net price for the drug is already quite competitive. There will be obviously penetration but it doesn't sound like you're expecting to see any kind of significant or abrupt changes in pricing because of the competitive launch. Is that a fair characterization of what you're saying?

I think you got it right. All drugs, all medicines face price pressure. This is a particularly competitive market as it is today and we think that the price level is already quite competitive. So I think you characterized the situation quite right. I think the competition is going to move into other discussions such as other market differentiators, but the market is already quite competitive as it is.

Got it. Thank you. And then on capital allocation, just broadly speaking, Dominic, as we get this question quite often, you've made a number of comments throughout September about the kinds of things that you would be interested in strategically. You of course have said previously you'd be interested in ophthalmology and you are now pursuing that. If you wouldn't mind just for the record kind of ticking through your major divisions, and just I think you've touched on Pharma already, your preference there, but maybe on Consumer and Devices, just remind us the kinds of things that you are still interested in, their size and maybe area?

Matt, as a broadly-based company in human healthcare, we have an equal amount of interest across each of the businesses, and the way we compensate for that is basically looking at an appropriate risk-adjusted return for the particular assets that we're interested in, and that is the same even regardless of size. I mean, obviously size matters for a couple of reasons. One is that the asset may be well understood, the business may be well-penetrated, the premium required for the asset may be excessive, and therefore to generate value for our shareholders would be a challenge, but it doesn't mean we wouldn't try to do that or we wouldn't look for areas where that may in fact be available for us. So that would be across any of the businesses. Within Consumer and Medical Devices in particular, Consumer, just like we have in Pharma, we have specific areas of focus. We have 11 need states. The primary focus for us is growing internationally in emerging markets, so strong brands in emerging markets. A focus on over-the-counter medications and the beauty space particularly in Asia are of interest to us. We just did a recent transaction with Dr.Ci:Labo in Japan where we have an interest in that Asian marketplace and utilizing that brand throughout broader, throughout Asia beyond Japan where it's currently marketed, just as an example of one. In the Medical Devices, as you know we have a very strong presence in orthopaedics and in general surgery. We keep looking for additional bolt-on acquisitions there and we have a very strong electrophysiology business in cardiovascular but there are other areas within cardiovascular that seem attractive in structural heart and other areas, but the valuation would be something we'd always consider. So we'd also be very disciplined about doing a transaction where the valuation seem pretty high, which is what they are today.

Thank you for the questions, Matt. That concludes the Q&A. I will now turn the discussion back over to Dominic for some closing remarks.

Okay. Thanks Joe. As I noted earlier, we're very pleased with our overall performance this quarter and we are tracking well through the second half of the year. I would like to thank Joaquin and Bill for their outstanding leadership and for the great presentation they gave this morning about the continued progress we are making in our pharmaceutical business. I would also like to thank all of our colleagues around the world for their extraordinary achievements and dedication to the success of Johnson & Johnson. Thank you for your time today and I look forward to updating you on our full-year results in January. Have a great day.

Thank you. This concludes today's Johnson & Johnson's third quarter 2016 earnings conference call. You may now disconnect.