Good morning. Welcome to Johnson & Johnson's Fourth Quarter 2019 Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference call over to Johnson & Johnson. You may begin.

Good morning. This is Chris DelOrefice, Vice President of Investor Relations for Johnson & Johnson. Welcome to our company's review of business results for the fourth quarter and full year of 2019. Joining me on today's call are Alex Gorsky, Chairman of the Board of Directors and Chief Executive Officer; and Joe Wolk, Executive Vice President, 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, where you can also find additional materials, including today's presentation and associated schedules. Please note that today's presentation includes forward-looking statements. We encourage you to review this cautionary statement regarding such statements included in today's presentation as well as the company's Form 10-K, which identifies certain factors that may cause the company's actual results to differ materially from those projected. Our SEC filings, including our 2018 Form 10-K and our most recent 10-Q, along with reconciliations of the non-GAAP financial measures utilized for today's discussion to the most comparable GAAP measures are also available at investor.jnj.com. Several of the products and compounds discussed today are being developed in collaboration with strategic partners or licensed from other companies. This slide acknowledges those relationships. Moving to today's agenda. I will review the fourth quarter sales and P&L results for the corporation and the 3 business segments. Alex will then provide some perspective on our overall results and business highlights for the year. Joe will conclude by providing insights about our cash position, capital allocation deployment, and our guidance for 2020. The remaining time will be available for your questions. We anticipate the webcast will last up to 90 minutes. Worldwide sales were $20.7 billion for the fourth quarter of 2019, an increase…

Thank you, Chris, and thanks to all of you for joining us today. We're very pleased to be highlighting our fourth quarter and full year performance. We delivered strong revenue and earnings growth in 2019, exceeding the financial performance metrics that we set at the beginning of the year. Now we accomplished this while also making strategic investments that advance the pipeline of opportunities and innovation across all 3 of our business segments and as we faced a variety of challenges: from debates about the health care system in our country to uncertainty with global trade, to today's litigious environment, to name a few. Now I'm very proud that despite the challenges we still remain focused and delivered on our credo, commitments and responsibilities to our patients, employees, communities and shareholders, ultimately driving our purpose to advance health for humanity. And I'm confident that we are well positioned to build on this momentum and solid foundation as we move into 2020 and beyond. We remain focused on the long term, a mindset we've maintained for more than a century; a mindset that is directly linked to our focused execution, our relentless pursuit of innovation, our talented and passionate people, our culture of caring for the world and our unwavering focus on value creation for all our stakeholders. In fact, I'm proud to highlight that 2019 marked our 36th consecutive year of adjusted operational earnings growth for Johnson & Johnson. Now this performance is indicative of the strength of our broad-based business, and we remain focused on driving the next generation of innovation across our entire portfolio in new markets, in markets where we have greater opportunity to compete and in the markets where we lead, which include our 26 platforms that each deliver $1 billion or more in sales annually.…

Thank you, Alex. Hello, everyone. We appreciate you joining today's call. I will be providing additional context around our 2019 performance, including our year-end cash position and the capital allocation actions that we executed throughout the year and then conclude with our guidance for 2020. As Alex and Chris mentioned, we delivered solid fourth quarter results, which capped a strong year of performance for Johnson & Johnson. Our full year results reflect a continued commitment to our long-term strategic objectives. Throughout the quarter and the year, we maintained our focus on delivering life-saving and life-changing products to patients and consumers across the globe. Heading into 2020, we are confident in our overall strategy and ability to drive results across the enterprise that will yield strong shareholder returns. Our solid results during the year generated strong cash flow, our highest level ever of free cash flow, of nearly $20 billion. With respect to our cash position, at the end of 2019, we had approximately $8.4 billion of net debt, consisting of approximately $19.3 billion of cash and marketable securities and approximately $27.7 billion of debt. Although we don't provide cash flow guidance, for transparency, as we come off a record year of free cash flow generation, we do expect a decline in 2020 of approximately 10% as we are planning for a payment related to the agreement in principle to settle opioid litigation, as previously disclosed. In 2019, we executed on all 4 elements of our capital allocation strategy. Our first objective within that framework is to invest in growth opportunities to solidify and advance our current business. Delivering transformative health care solutions and creating access is the top priority for Johnson & Johnson. And as Alex mentioned, we invested more than $11 billion in R&D during 2019. As investors in…

Thank you, Joe. We will now move to the Q&A portion of the webcast. Operator, can you please provide instructions for those on the line wishing to ask a question?

[Operator Instructions]. Your first question comes from Chris Schott with JPMorgan.

Great. The first was just on pharma. Can you just elaborate a little bit more on your expectations for growth in 2020? I guess, specifically, what are you expecting in terms of patent exploration headwinds for this year? And can you also elaborate on the competitive dynamics you're expecting for both TREMFYA and STELARA in psoriasis with the launch of Skyrizi?

Chris, thanks for the question. Thanks for joining us today. So with pharmaceuticals, as I mentioned in some of my prepared remarks, we do expect a continued growth above the market. I think, as we would have sat here last year, we expected a bigger impact in 2019 from the loss of exclusivity and generic and biosimilar competition. To our products and to our team's credit, based on the data, the safety, the efficacy, the familiarity of the products and comfortability for physicians and patients, those products were able to retain that business a little bit longer. We would expect that to bleed into 2020. And -- but we still do, even with that, I'll call it, a neutralized headwind. It's not a tailwind per se, but I'll call it a neutralized headwind. Compared to 2019, I think we do certainly expect that the portfolio of products will continue to outperform the general market of pharmaceuticals in general.

Chris, this is Alex. Just to add one comment on to that. Look, we're extremely proud, overall, the performance of our pharmaceutical group, particularly our immunology group within pharma. If you just step back a moment and look over the past several years, at -- first of all, the way that they were able to manage the biosimilar impact with REMICADE while simultaneously launching multiple new indications for compounds like STELARA, launching TREMFYA. To note, that TREMFYA had 55% growth in the quarter, STELARA at 19% growth. And frankly, also, it's the clinical development and the competitive differentiation with TREMFYA, for example, having comparative trials, not only versus our own compounds, but also against Humira and Cosentyx. And I think what's really important is that in areas that -- where these products are used, it's not only the short-term results, but it's particularly important for the long-term results. So many patients on psoriasis will shift from product to product and are suffering from this condition for a long time and having in excess of 48 months' worth of duration and treatment effect, by a compound like TREMFYA, I think, really helps explain its uptake and continued confidence and use by physicians and patients in the marketplace. So if we combine that with the penetration rate of probably somewhere in the 30% to 40% rate in this overall category, we think that there's still a lot of unmet need. We think that there's still a lot of opportunity with these compounds. And that doesn't even include some of the additional clinical development programs that we're having in areas such as GI as well for these, where, particularly for a compound like STELARA, we're seeing great impact. We think that there is a lot of opportunity ahead.

Great. Great. And I can do one other really quick one here. Other income, $1.5 billion to $1.7 billion. I think that's still a bit above your historic levels of other income. I know this number can be a bit lumpy, but should we think about this type of level as a new norm or could we think about that number declining further as we look beyond 2020?

Chris, thanks for the question. I would say it's certainly down from what we experienced in 2019. And I would expect not to provide any insights into 2021 just yet, but I would expect that number to come further down as we look out. So as you see, this year, we're improving our operating margins by nearly 100 basis points to offset some of the effect that we had the benefit of in 2019, and I think we'll continue to do that. But to be truthful, we continually look and manage our portfolio in a very rigorous fashion, making sure that we're the best owners of the assets that we have, and that works both ways. So, we look to complement our portfolio, but we'll also look to take underperforming businesses and create value for shareholders in other ways.

Your next question comes from Larry Biegelsen with Wells Fargo.

Just one on the extra week and one on the litigation. Joe, can you talk about the impact of the extra week in 2020? In 2015, it was about 4% in Q4, 1% for the full year and neutral to EPS. Does it impact U.S. more than international? Does it impact some businesses more than others? I heard your comments on Consumer, but I'm thinking more about pharma and med tech. And I have one follow-up.

Yes. So Larry, with respect to the fiscal 53rd week, that translates to about 2 to 3 shipping days. I would say that's pretty much the norm for the Medical Device and Pharmaceutical units that you've asked about. It's a little bit less in Consumer in terms of impact because it doesn't impact stocking during the holiday season. So -- and you're absolutely correct. We have the same assumptions around EPS. It's pretty much neutral because you still have a full week of expenses without really the benefit of a full week of sales.

And Alex, just one on litigation. Just what's the latest on the opioid litigation, the latest on the $4 billion settlement you had previously announced? Any important dates, milestones we should think about. And just lastly, on talc, when do you expect the decision from the Daubert hearing? Thanks for taking the questions.

Hey Larry, this is Joe. I'll take that. So thanks for the questions. With respect to the opioid settlement and agreement in principle that was announced shortly after our Q3 earnings, where we set aside $4 billion, we continue to work with the negotiating committee of the state Attorney Generals to finalize the agreement in principle. We remain, I would say, cautiously optimistic that that's progressing very well. We're highly engaged to the extent we can be to finalize that agreement in principle, and we hope to hear more over the coming months from the lead negotiators representing not just the states, but as you know, the counties and municipalities. With respect to talc and the Daubert litigation, we are awaiting Judge Wilson's verdict in that. Again, as you know, that's an evidentiary standards hearing, so we'll be able to make sure that there's great clarity and certainty as to the type of scientific evidence that needs to be presented, as you know, and you probably saw in the Journal of American Medical Association, the article published just a few weeks ago, probably one of the most comprehensive reports evaluating all studies from independent sources, found no link between talc and cancer. So we think that's, again, another independent source. And we think those facts, those -- that data, that scientific research will bear out in the end.

Your next question is from David Lewis with Morgan Stanley.

Great. Just a couple of questions this morning. Joe, just one clarification and one qualitative on revenue. So the 5% to 6% operational guidance for 2020, the way to think about that is that includes about 50 to 100 basis points of the net effect of selling days adjusted for the Consumer SKUs?

That's exactly right, David.

Okay. And just a follow-up on revenue. And then one more quick one after that. Just qualitatively, Joe, can you sort of help us understand 2020, how you see it framing up from a Pharmaceutical, Consumer Medical Device business? And historically, you've given us a sense of sort of which businesses are likely to accelerate and which businesses are sort of more stable. So across Pharma or MD&D and Consumer, how do you see sort of the qualitative parameters driving the 2020 guide?

Yes. Thanks for the question, David. So we have, I think, great narratives across all 3 of our businesses. If you look at Pharmaceuticals, we will continue to accelerate growth. I would say we'll be above market. It's probably not as robust as we would have thought this time last year, again, because we were able to retain some of the business that was subject to generic and biosimilar competition. But again, very healthy growth above market. And we'll be looking to complement the portfolio certainly with advancing our pipeline. We've got a couple of things that are -- hopefully will be filed this year around Ponesimod for multiple sclerosis. We hope to gain approval on the DARZALEX subcutaneous formulation, which is a tremendous benefit for patients. And we'll see continued uptake of BALVERSA and SPRAVATO. In Medical Devices, we're very pleased. And just to put it into some context for the analyst community here, in 2017, we grew 1.6%. And in 2018, I'm sorry, we grew 2.7%, and now we're up to 3.9%, and we're not done. So we're going to continue to accelerate growth, be towards that in the middle of the market range that we believe is on the horizon for 2020. And that's before we have the opportunity to launch what we think will be a very differentiated offering around digital robotic surgery. In Consumer, again, as Alex mentioned in some of his remarks, we have focused on profitability there. We focused putting investment behind our stronghold categories of skin health and self-care. So that would be TYLENOL and MOTRIN for self-care, AVEENO and NEUTROGENA for skin health. Those brands continue to do extremely well. I would suspect we grow more in line with the market for that category, except for the SKU rationalization, where we'll be looking to deprioritize some less productive brands.

Okay. And then Joe, just one a quick question, follow-up on margins. In some of the years, you've had sort of other income headwinds, you've been able to offset it with more significant SG&A gains driving margins. You're talking about, about 100 basis points of margin expansion in 2020. Medical Devices, but the JV agreement continues to track well. Other just spending dynamics and more visibility on sort of the 100 basis points of underlying margin expansion in 2020 headwinds and tailwinds that we should be thinking about?

Yes. I don't know. Chris, do you want to add something?

I just wanted to amplify on Consumer. Just examples of that, TYLENOL and NEUTROGENA for the full year this past year. NEUTROGENA at 6% growth. Tylenol, 9% growth, just to build on what you were sharing on Consumer.

Right. Okay. Thanks, Chris. With respect to margin expansion, David, I think we would look to certainly manufacturing capabilities, improving our productivity there. I would point to the consumer SKU rationalization, the design behind that is specifically to improve profitability. And then we'll continue to look at other opportunities for enabling functions across finance, HR, information technology and procurement to get savings. So we think we're in pretty good shape to deliver that for 2020.

Your next question comes from Kristen Stewart with Barclays.

Just one clarification. The extra week with the SKU rationalization, it's a net impact overall. It's 50 to 100 to the top line. Is that correct?

That's correct, Kristen.

Okay. Perfect. Just want to clarify that. And then just a big-picture, I guess, question, just portfolio and capital allocation. I know you had mentioned just in terms of models need to take into consideration with the share count, no further share repurchase activity. You guys are in a pretty good position, obviously, from a share -- sorry, cash flow perspective, generating $20 billion this year. It sounds like your expectation is to pay out the opioid settlement. But I guess, why not get more aggressive from a share repurchase perspective? Just how should we think about capital allocation going forward?

Kristen, this is Alex. Thank you very much for the question. And look, we're really proud of our strong performance across our businesses. And frankly, as it relates to our capital allocation model this year, and we're very confident in it going forward. As we mentioned in the results earlier, if you think about the free cash flow spin-off that we had in 2019, I think it is indicative of not only great discipline across our various lines. And you see the P&L in front of you. So overall, it was quite healthy. But it's also important to note that we did that in the context of also continuing to invest in more than 11 acquisitions, about 6 licensing agreements, where we invested almost $7.5 billion just in the course of the year. So as we talked about in the past, we'll continue to invest in our brands and in research and development at an appropriate rate. If you go back over the last 4 years, I think if you add the numbers up in R&D, we've invested more than $45 billion during that time frame. And we think that based upon the number of new product launches in our Pharma, Medical Device business and our Consumer business, that we've gotten a good return on that. We continue to keep a healthy dividend, at the same time, we realize how important that is. During that same time frame, 4 years, it's a pretty similar number to our R&D. It's about $40 billion to $45 billion. And of course, after that, we always take a look at value-creating acquisitions. And again, during that same time frame, I think the number comes to about $50 billion that we've invested. Over the past year of note was -- you might say the additional…

Yes. Kristen, just a quick comment out, and thanks for noticing the comments around share count. I have to tip my hat and complement the investment community because when we go through the consensus P&L, the income in terms of absolute dollars was almost spot on. It was eerily close, in fact. And then where the disconnect came in the form of share count, where the average share count used in consensus was about 14 million shares less, which translates to about $0.05 or $0.06. So we thought we were very much in line with what consensus' expectations were. And while we don't provide guidance assuming any share repurchase that's not currently authorized, it seems that a few analysts may have made that assumption.

Next question is from the line of Josh Jennings with Cowen.

First is on robotics, and you clearly have put a stake in the ground in with investments. You're pursuing leadership in digital surgery ecosystem. I just wanted to see if I understand we're going to get a big update at the Med Device Day in May. But if you could wet our appetite at all today, just give any updates on progress of the Auris launch, a time line for Orthotaxy? And then any indications that you see where robotics is not in play today that could come into play over the next 3 to 5 years in your portfolio? And then second question is, just for Joe and Alex, I guess, is just on the other income line has been a focus. I think the concerns are where that could fall up next year within the out years. And when you talk about your process for a portfolio review and then pruning maybe underperforming assets or assets that don't fit under your roof. If you could just talk about that process and how regiment it is? Is there a formula? Is there 1% of the portfolio that gets pruned every year? Or is it just a strategic and opportunistic annually? I apologize for the background noise.

Josh, thank you very much for the question. Look, I'm really glad that you mentioned robotics and digital in terms of an entire platform for us because, of course, that's exactly what it is. And let's start first with our acquisition of Auris Health. And overall, what we would say, it's off to a great start, where we couldn't be more thrilled to have the robotics pioneer and former CEO, Fred Moll and his team at J&J. The Monarch platform is off to a very good start. It's going to play a critical role in our lung cancer initiative. And when you just look at the science and the technology and what it can do with the distal parts of the lung, what it brings in terms of potentially ablation, leveraging it with our NeuWave technology, and even longer term, having the potential to dispense oncolytic viruses in treating cancer in very new and unique ways is exciting. Physicians have performed more than 2,000 bronchoscopy procedures with them on our platform. And we're really pleased with what we're seeing with it. Second, you saw our announcement on Verb. And we think combining Auris and Verb really helps ensure that we have a very strong role in the next-generation of the digital surgery platform and ongoing development. Our teams are working now together in a really comprehensive way. We do look -- sorry for that feedback. But we do look at this as a platform that is something that will be in place for the next several decades. Therefore, it's really important that we step through this in the right way. And what I would say is the early results from the collaboration and the partnership that we're seeing between these teams is very encouraging. And that's why we're excited to give you this preview that Joe mentioned on May 13 in New York because we think it will provide a very clear, transparent kind of tangible evidence of not only the machines, but also the digital platform component of this as well. Next, we're really excited about the progress that's being made with VELYS in our Orthopaedics robotics platform as well. It's an exciting technology. We think that it's going to offer a portable, low-cost system that's easy to use, will improve accuracy. It also is a nice combination to ensure the surgeon remains intimately involved. And if we look at the training and technical support, it's something that will be easily coordinated between ORs and surgeons. So we're progressing towards a mid-year 2020 regulatory submission for this. So really, if you just step back and you think about what we have going with Auris and Monarch, if you think about the plans now that we have in placed with VELYS in Orthopaedics, longer term, as we bring out that next generation of digital and robotics platform more broadly across surgery, we're very excited about it.

And Josh, to address your question regarding the management of our portfolio, so I would say it's rigorous. It's not formulaic, though. So we meet as a management team and executive committee monthly on what additions or deletions from our portfolio makes sense. And makes sense probably should be defined in terms of we have aspirations in all the markets we play in to be either number one or number two in that space with the promise of bringing better solutions in that space to patients and consumers across the globe. We have plans in place for all of our businesses to do that. But after a period of time where those plans don't come to fruition, we'll assess other alternatives. I would say, under Alex's leadership, we've gotten very disciplined in this rigor, and that's proved to be pretty productive, I think, in terms of how we've been able to take underperforming businesses, turn that into gains and reinvest back in businesses and areas that we think we've got a differentiated right to win.

Your next question is from Matt Miksic with Crédit Suisse.

So I just had 1 follow-up on one of your business lines in the Med Devices. Then in Orthopaedics, clearly, it looks like you were able to deliver a pretty solid improvement in knees, in the U.S. And I just was wondering if you'd be willing to offer any color on the spine growth within the sort of spine and other category, like which parts of that were the drivers of the decline. And then I had 1 follow-up, if I could, for Alex on digital health.

So thanks for the question, Matt. Good to speak with you. So we are very proud of the knees performance. If you look, that was a declining business in 2018. We've had almost a 2-point improvement there. So the team has done a very nice job. We have ATTUNE both the primary as well as the Revision platform available for patients. We've also made an entry into the cementless side of the business, which, as you know, is the fastest-growing piece of that business. And as Alex mentioned, we look forward to what VELYS could do on the horizon. With respect to spine, I think you have to take into account the impact of a 2018 U.S. rebate adjustment, which impacted comparative growth about 250 basis points. If you look at the growth, on the U.S., it was probably about half of the decline of what you saw based on that comparison. We continue to see pretty good growth outside the U.S., specifically in Asia Pacific. I don't know, Chris, if there's any other commentary in spine out there.

Yes, Matt, I would just say, if you adjust for that, I would say the business has stabilized at low single-digit declines. Where we're seeing success is where we have new innovation, in particular, in degenerative spine with our 3D cage and our VIPER PRIME Systems. I think the next level of improvements will come from SYMPHONY system in posterior cervical, which was launched later this year. So we really didn't get that benefit in this year at all, and we'll expect to see that continued improvement through next year and beyond.

That's great. And then just a follow-up. I appreciate the update and overview on the robotic surgery strategy, Alex. But I guess, one of the things that we've noticed is just how quickly -- and I realize it's sort of a buzz-worthy term, and we see it in a lot of magazines, but artificial intelligence in digital health. For whatever reason, implementation and innovation, but it seems to be moving perhaps the fastest of the categories of digital surgery and digital health. And just wondering, one of your competitors is partnered with a smaller innovator in that space around stroke. I'm sure you're watching it. I'm sure you're making investments and looking at it. I'm just curious if you could give us an update or a preview perhaps of what you'll talk about in the spring.

Sure. Thanks again for the question, Matt. Look, I -- there are few areas across our different innovation or technology platforms that are not being touched by some of this new technology, whether it's AI, whether it's ML, whether it's digital, whether it's the cloud. I mean if you think about just our Pharmaceutical portfolio, for example, and you've talked to Paul Stoffels or Mathai Mammen or Bill Hait, I think what they would tell you is one of the most important areas supporting that is our data sciences' capabilities. And the insights that we can gain from reviewing these large data sets and coming and developing much better insights, frankly, is helping lead us to a much faster and more productive identification of new targets. And it certainly is helping us when we apply those same skills and capabilities of the clinical development programs as you work with hospitals and large medical systems, and you can review medical health records, for example, in a much more detailed way in terms of patient selection and tracking through development. So we're certainly excited about it there. As it relates to Medical Devices, we've been, I think, very consistent in sharing our thinking that, again, this next generation is certainly about the robotics component that helps facilitate perhaps having more consistency in an exact procedure, perhaps getting into a tighter space, having better access. But we think, longer term, the digital AI component of that in terms of helping preoperatively and developing a very detailed plan, even being applied intraoperatively, in terms of additional guidance systems. And by the way, then that can -- not only to help a surgeon get to a particular area, but it could also be to help him or her stay away from areas that may and could cause a problem. And then, of course, how that information can be utilized by large health care systems to really ensure that they've got the most effective and efficient and value-added health care delivery programs in place, we think, will be more important than ever. So hence, our reason for partnering with Verb and Verily and Alphabet, in building those capabilities. And again, it's something that more broadly across Johnson & Johnson, we're spending a lot of time thinking about how all those capabilities are going to become more and more part of our doing business, of our doing research and development across each one of our sectors.

Your next question is from Danielle Antalffy with SVB Leerink.

Just wanted to talk a little bit more about Medical Devices. Specifically, you guys saw a pretty strong sales growth acceleration on an operational adjusted basis this year. How do we think about the next year? I know Ashley have said, in the past, it's not linear quarterly, but I suspect we should be looking for another uptick. Can you help talk about that what specifically will be the drivers in 2020 of that?

Sure, Danielle. Thank you very much for the question. Look, we're -- again, we're really proud of the progress that Ashley and her team has made over the last several years. Joe took you through the improvement from 2017 to '18 to 2019. And we certainly expect that trajectory to continue in the coming years. If I just got to 0 down for a moment, though, on 2019, we saw first half growth of about 3.8%, and we saw growth in the second half at 4%. And while there's a little bit of lumpiness in the quarters, and consistent with Ashley's comments -- and look, we're still taking a look at Q4, we think that the timing of the holidays and a few other things, I think you always have to be careful what you attribute. But if you just look at the number of days between some of those, we think that, that could potentially have had an impact. But it really doesn't change the overall trend of accelerated growth in second half versus first half. Now if we look at our business, it's really being driven by a number of factors. In our surgery business, what you're seeing is strong performance in areas like electrophysiology, another 14% growth in this quarter with great new technology. We expect a continuous launch in the coming year as well with new products. You also saw good performance in our energy business at just about 3% growth, and biosurgery coming in at about 4% growth. We think one of the growth drivers, frankly, is just overcoming our supply issue in 2020. That probably cut our biosurgery growth rate in half, especially in the latter part of the year. So we think once we work our way through that, that's going to be…

Your next question is from Terence Flynn with Goldman Sachs.

Maybe just two for me. You guys presented additional data at ASH from your BCMA CAR-T program in myeloma and recently got breakthrough designation or planning to file for approval later this year. Would love your initial thoughts on overcoming some of the hurdles faced by other CAR-T drugs and longer term where you see this drug playing a role in the treatment paradigm. The second question relates to the FDA announcement of a meeting next month on testing methods for asbestos and talc. I was just wondering if the company is participating. And then what do you think the key issues that are going to be discussed there?

Sure, Terence. Thank you very much. Let me take the first one regarding the CAR-T data at ASH. As I'm sure you saw when we released the data, we were very excited when we saw those results. And again, here, too, I think it's maybe important to just step back and think about the steps that our team has taken over the last several years regarding CAR-T therapy. And when you look at the different development programs that are out there, how we were able to support or source this from Legend, the way that we were able to accelerate the development time lines, the ongoing and great work that our supply chain is doing as well to ensure that we've got the strong integrity of that supply chain, the dependability that's put in place, we're really proud of the progress they made. And I think the results that we shared at ASH demonstrate our increasing confidence. And by the way, we think this is great news for patients, particularly those who have failed multiple other treatment lines in a very difficult-to-treat condition like multiple myeloma. And as we think about it going forward, look, we think that this is truly an opportunity to transform the way patients are treated in this space. We've got a lot of confidence in our reimbursement teams. I think we demonstrated in other areas that we can work with payers in a very collaborative way. We're also innovative not only in the products that we're bringing, but frankly, in the reimbursement programs that we introduced as well. And we intend to work just that way with payers and providers both in the United States, but also abroad, ultimately to make sure that this therapy is available for patients that they can get access to it. And that it's not only as effective as the data that you -- that we saw at ASH, but it's also cost-effective to the overall health care system.

Joe, do you want to...

Sure. And Terence, with respect to the meeting, I believe it's next month, February 4, regarding testing methods around talc. We certainly welcome any discussion around the safety and efficacy of the product, specifically. We will not be active participants at that meeting. However, I can say that our current internal testing methods exceed that of current FDA standards for cosmetic talc.

That last question will be coming from Louise Chen with Cantor Fitzgerald.

So my first question for you is, what your view on M&A is this year? And what areas you're most interested in? Is it pharma, consumer or devices or all of the above? And then my second question is how optimistic are you regarding a universal settlement for opioids.

Okay. Let me take the first part of that, Louise. Thanks a lot for the question. Look, I think we demonstrated in 2019, as I mentioned earlier, that we remained active really across all 3 areas. I think we did 11 acquisitions, 6 licensing agreements and putting more than $7 billion worth of capital to work. We have continued, I think, our pattern of tuck-in acquisitions where we get new technologies, as you saw that we did with both XBiotech and other opportunities in our Pharmaceutical business. We would expect to continue that. We also did -- had a fair amount of activity in our Medical Device group, led by Auris that we did earlier in the year. And then in our Consumer group, of course, that was led by Dr. Ci Labo, which also gave us a great toehold that you might say, into the premium beauty segment, particularly in Asia, but with plans to expand that into the United States. So we'll be looking across all three of our segments, but we would expect there to be an ongoing cadence of M&A activity in those different areas.

And Louise, with respect to the opioid settlement. So we continue to work with the negotiating committee of the state attorney generals to finalize the agreement in principle. I would say we remain optimistic and confident that the agreement is moving forward, but certainly can't predict when that agreement in principle will be finalized. So we'll continue to monitor that, engage as needed and hopefully come to a resolution.

Thanks to everyone for your questions and continued interest in our company. Apologies to those we couldn't get to because of time, but don't hesitate to reach out to the Investor Relations team as needed. I'll now turn the call back to Alex just for some closing comments.

Well, thank you, everybody, for your ongoing support across 2019. As we mentioned earlier, we're very proud of our strong performance. But we're even more excited and more confident about what the prospects hold for 2020 and beyond. I think we had a chance to review a lot of the opportunities that lie in front of us, and we look forward to continuing to keep you updated throughout the year as we progress through our plan. So thank you very much, everybody, and have a great day.

Thank you. This concludes today's Johnson & Johnson's Fourth Quarter 2019 Earnings Conference Call. You may now disconnect.