And we received FDA breakthrough designation for TARIS-200 in 2023. And then we continue our progress in our multiple myeloma franchise. We talk about CARVYKTI, but it’s important to recognize how well [Technical Difficulty] with the impressive per sales data that we presented in first-line in newly diagnosed transplant eligible multiple myeloma patients. So we are looking at CAR-T in autoimmune diseases to your question, yes, but it’s early data. As you know, we did a deal earlier in 2023 to partner two CAR-Ts, a CD19 and a CD19/CD20 BiCAR. So we are looking at that, and it’s early data. It looks promising. We are interested in radiopharmaceuticals. We believe that the avenue that we are doing with antibody drug conjugates, it’s an important therapeutic option.
And when it comes to radiopharmaceuticals, we did a deal earlier this year with Nanobiotics for a radio enhancer that this still been developing head and neck cancer. We expanded our rights at the end of the year. And this could be another avenue to be there for us in which we could combine our expertise in medical devices, in medical technology and pharmaceuticals. And we plan to do a broader development plan of our radio enhancing, and we’ll provide you more information about it as we continue to move. So overall, we are very pleased with the progress that we see in our oncology franchise, both in solid tumors and in hematology. And it remains a core strength of our Innovative Medicine group.
Operator: Thank you. Next question is coming from Matt Miksic from Barclays. Your line is now live.
Matt Miksic: Hi. Thanks so much for taking the question. I wanted to follow up on some of the comments you made about MedTech trends and margins. And I think you mentioned some of the headwinds there were patient mix. Would love to get an idea of maybe kind of in the middle of the P&L and the operating line in terms of margin progression throughout the year, which ones of those of your business lines being kind of more reflecting that negative mix that you described and how that progresses during the year? Thanks.
Joseph Wolk: Yeah, Matt. I apologize, but it was a little bit tough to hear your question entirely. I think it was around margins, specifically in MedTech and how that may progress through the year. So as I stated earlier, I would say that the margin profile is going to be impacted by inflationary pressures that were incurred really in 2022, sit on our balance sheet as inventory and then kind of flow through the P&L throughout the corresponding 2023 and probably a good piece of 2024. That being said, Tim and the team are doing magnificent work in terms of finding efficiencies across the business. I highlighted one of the earlier ones with respect to orthopedics. But we’re quite frankly doing that across the entire MedTech portfolio at this point in time, looking for opportunities whether it be aided by artificial intelligence or just infrastructure overall as to how we can further improve the MedTech profitability profile.
Right now, we stand a little bit above the middle of the pack in terms of our peer set on margin, and we’re looking to get towards the upper end of that peer set.
Operator: Thank you. Our next question today is coming from Geoff Meacham from Bank of America. Your line is now live.
Geoff Meacham: Great. Thanks so much for the question. I just wanted to ask you about the XARELTO patient mix that you guys called out. Just help us with kind of current dynamics and maybe looking forward whether this trend you expect to continue? Thank you.
Jessica Moore: Yeah, Geoff. I can answer that one. So specifically on XARELTO in the quarter, we would say there’s two items. It’s patient mix, but there is also a one-time entry. Moving forward in 2024, we do expect that there will be a decline but not to the extent that you saw in Q4.
Operator: Thank you. Next question is coming from Danielle Antalffy from UBS. Your line is now live.
Danielle Antalffy: Hey. Good morning, everyone. Thanks so much for taking the question. Joe, sorry to harp on the MedTech margin side of things. I appreciate everything you’re saying for going forward. But just as we look at Q4 specifically, even adding back Laminar, we’re still getting to sort of down 400 basis points year-over-year in the quarter. And I was just hoping maybe you could bridge us a little bit more. Is there any component of that is sort of price increases taken in late ’22 into ’23 rolling off or anything that you would highlight there? Thanks so much.
Joseph Wolk: No, Danielle. I think it’s really the inflationary impact, so out of the 9% drop that you saw in Q4, 5 points are really Laminar. The other — the balance of 4 points, I would chalk up to the inflationary impact that I spoke of earlier and then the mix component, whereby orthopedics, which is our lowest margin portfolio within the MedTech portfolio overall, performed a little bit better. So there’s really nothing magical behind it other than the explanations that were already given on the call. Again, we are looking at cost improvement initiatives, specifically in orthopedics, but across the entire portfolio as we move through 2024. But there’s nothing that happened – maybe this is the best way to state it. There’s nothing that happened in Q4 that has us concerned about our outlook or calls around margin profile or EPS for the balance of this upcoming year.
Operator: Thank you. Our next question is coming from David Risinger from Leerink Partners. Your line is now live.
David Risinger: Yes. Thanks very much and thanks for all of the details today. So notwithstanding the recently announced Ambrx acquisition, in recent years, J&J has executed more MedTech M&A than pharma M&A. And I don’t mean to belabor the point, I know that you got some specific therapeutic area questions. But could you just comment at a high level on what has held J&J back in pharma M&A in recent years and whether we should expect greater cash deployment to accelerate long-term pharma revenue growth going forward? Thank you.
Joaquin Duato: So thank you, David. And M&A has been — M&A and external innovation has been a core of our pharma portfolio growth and transformation. As I said initially, we are agnostic to sector. In the case of pharma, our preferred mode has been trying to go to assets that were around proof of concept. So generally speaking, from a size perspective, it’s been about deals that have been either of a smaller size or have been different modalities like client senses or partnerships. Just last year, we completed overall at Johnson & Johnson more than 50 deals. The thing is that the headlines are only made by the ones that are M&A. So we’ve done multiple deals in our pharmaceutical side in order to be able to enhance our existing portfolio.
