强生提交2026财年三季报10-Q：核心业绩和55亿美元滑石粉和解计提均已在10月13日财报中披露并交易

----- jnj-20260927.htm -----
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
10-Q
☑
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
for the quarterly period ended
September 27, 2026
or
☐
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
for the transition period from            to
Commission file number
1-3215
Johnson & Johnson
(Exact name of registrant as specified in its charter)
New Jersey
22-1024240
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
One Johnson & Johnson Plaza
New Brunswick
,
New Jersey
08933
(Address of principal executive offices)
Registrant’s telephone number, including area code (
732
)
524-0400
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements                     for the past 90 days.
☑
Yes
☐
No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
☑
Yes
☐
No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☑
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicated by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
☐
Yes
☑
No
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Stock, Par Value $1.00
JNJ
New York Stock Exchange
1.150% Notes Due November 2028
JNJ28
New York Stock Exchange
2.700% Notes Due February 2029
JNJ29B
New York Stock Exchange
3.200% Notes Due June 2032
JNJ32
New York Stock Exchange
3.050% Notes Due February 2033
JNJ33B
New York Stock Exchange
1.650% Notes Due May 2035
JNJ35
New York Stock Exchange
3.350% Notes Due June 2036
JNJ36A
New York Stock Exchange
3.350% Notes Due February 2037
JNJ37B
New York Stock Exchange
3.550% Notes Due June 2044
JNJ44
New York Stock Exchange
3.600% Notes Due February 2045
JNJ45
New York Stock Exchange
3.700% Notes Due February 2055
JNJ55
New York Stock Exchange
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
On October 15, 2026,
2,407,310,266
shares of Common Stock, $1.00 par value, were outstanding.
JOHNSON & JOHNSON AND SUBSIDIARIES
Table of contents
Item
Page
Part I
Financial information
1
Item 1
Financial statements (unaudited)
1
Consolidated balance sheets —
September
2
7
, 2026 and December 28, 2025
1
Consolidated statements of earnings for the fiscal
third
quarters ended
Sept
e
m
ber
2
7
, 2026 and
September
2
8
, 2025
2
Consolidated statements of earnings for the fiscal
nine
months ended
Sept
ember
2
7
, 2026 and
September
2
8
, 2025
3
Consolidated statements of comprehensive income for the fiscal
third
quarters and fiscal
nine
months ended
September
2
7
, 2026 and
Septem
ber
2
8
, 2025
4
Consolidated statements of equity for the fiscal
third
quarters and fiscal
nine
months ended
Septem
ber
2
7
, 2026 and
September
2
8
, 2025
5
Consolidated statements of cash flows for the fiscal
nine
months ended
September
2
7
, 2026 and
September
2
8
, 2025
7
Notes to consolidated financial statements
8
Item 2
Management’s discussion and analysis of financial condition and results of operations
37
Item 3
Quantitative and qualitative disclosures about market risk
52
Item 4
Controls and procedures
53
Part II
Other information
54
Item 1
Legal proceedings
54
Item 2
Unregistered sales of equity securities and use of proceeds
54
Item 5
Other information
55
Item 6
Exhibits
55
Signatures
56
Cautionary note regarding forward-looking statements
This Quarterly Report on Form 10-Q and Johnson & Johnson’s other publicly available documents contain “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Management and representatives of Johnson & Johnson and its subsidiaries (the Company) also may from time to time make forward-looking statements. Forward-looking statements do not relate strictly to historical or current facts and reflect management’s assumptions, views, plans, objectives and projections about the future. Forward-looking statements may be identified by the use of words such as “plans,” “expects,” “will,” “anticipates,” “estimates,” and other words of similar meaning in conjunction with, among other things: discussions of future operations, expected operating results, financial performance; impact of planned acquisitions and dispositions; impact and timing of restructuring initiatives including associated cost savings and other benefits; the Company’s strategy for growth; product development activities; regulatory approvals; market position and expenditures.
Because forward-looking statements are based on current beliefs, expectations and assumptions regarding future events, they are subject to uncertainties, risks and changes that are difficult to predict and many of which are outside of the Company’s control. Investors should realize that if underlying assumptions prove inaccurate, or known or unknown risks or uncertainties materialize, the Company’s actual results and financial condition could vary materially from expectations and projections expressed or implied in its forward-looking statements. Investors are therefore cautioned not to rely on these forward-looking statements. Risks and uncertainties include, but are not limited to:
Risks related to product development, market success and competition
•
Challenges and uncertainties inherent in innovation and development of new and improved products and technologies on which the Company’s continued growth and success depend, including uncertainty of clinical outcomes, additional analysis of existing clinical data, obtaining regulatory approvals, health plan coverage and customer access, and initial and continued commercial success;
•
Challenges to the Company’s ability to secure and maintain adequate patent and other intellectual property rights for new and existing products and technologies in the United States and other important markets;
•
The impact of patent expirations, typically followed by the introduction of competing generic, biosimilar or other products and resulting revenue and market share losses;
•
Increasingly aggressive and frequent challenges to the Company’s patents by competitors and others seeking to launch competing generic, biosimilar or other products and increased receptivity of courts, the United States Patent and Trademark Office and other decision makers to such challenges, potentially resulting in loss of market exclusivity and rapid decline in sales for the relevant product sooner than expected;
•
Competition in research and development of new and improved products, processes and technologies, which can result in product and process obsolescence;
•
Competition to reach agreement with third parties for collaboration, licensing, development and marketing agreements for products and technologies;
•
Competition based on cost-effectiveness, product performance, technological advances and patents attained by competitors; and
•
Allegations that the Company’s products infringe the patents and other intellectual property rights of third parties, which could adversely affect the Company’s ability to sell the products in question and require the payment of money damages and future royalties.
Risks related to product liability, litigation and regulatory activity
•
Product efficacy or safety concerns, whether or not based on scientific evidence, potentially resulting in product withdrawals, recalls, regulatory action on the part of the United States Food and Drug Administration (U.S. FDA) (or international counterparts), declining sales, reputational damage, increased litigation expense and share price impact;
•
The impact, including declining sales and reputational damage, of significant litigation or government action adverse to the Company, including product liability claims and allegations related to pharmaceutical marketing practices and contracting strategies;
•
The impact of an adverse judgment or settlement and the adequacy of reserves related to legal proceedings, including patent litigation, product liability, personal injury claims, securities class actions, government investigations, employment and other legal proceedings;
•
Increased scrutiny of the healthcare industry by government agencies and state attorneys general resulting in investigations and prosecutions, which carry the risk of significant civil and criminal penalties, including, but not limited to, debarment from government business;
•
Failure to meet compliance obligations in compliance agreements with governments or government agencies, which could result in significant sanctions;
•
Potential changes to applicable laws and regulations affecting United States and international operations, including relating to: approval of new products; licensing and patent rights; sales and promotion of healthcare products; access to, and reimbursement and pricing for, healthcare products and services; environmental protection; and sourcing of raw materials;
•
Compliance with local regulations and laws that may restrict the Company’s ability to manufacture or sell its products in relevant markets, including requirements to comply with medical device reporting regulations and other requirements such as the European Union’s Medical Devices Regulation;
•
Changes in domestic and international tax laws and regulations, increasing audit scrutiny by tax authorities around the world may cause exposures to additional tax liabilities potentially in excess of existing reserves; and
•
The issuance of new or revised accounting standards by the Financial Accounting Standards Board and regulations by the Securities and Exchange Commission.
Risks related to the Company’s strategic initiatives, healthcare market trends and the planned separation of the Company's Orthopaedics Business
•
Pricing pressures resulting from trends toward healthcare cost containment, including the continued consolidation among healthcare providers and other market participants, trends toward managed care, the shift toward governments increasingly becoming the primary payors of healthcare expenses, significant new entrants to the healthcare markets seeking to reduce costs and government pressure on companies to voluntarily reduce costs and price increases;
•
Restricted spending patterns of individual, institutional and governmental purchasers of healthcare products and services due to economic hardship and budgetary constraints;
•
Challenges to the Company’s ability to realize its strategy for growth including through externally sourced innovations, such as development collaborations, strategic acquisitions, licensing and marketing agreements, and the potential heightened costs of any such external arrangements due to competitive pressures;
•
The potential that the expected strategic benefits and opportunities from any planned or completed acquisition or divestiture by the Company may not be realized or may take longer to realize than expected;
•
The potential that the expected benefits and opportunities related to past and ongoing restructuring actions may not be realized or may take longer to realize than expected.
•
The Company’s ability to satisfy the necessary conditions to consummate the planned separation of the Company’s Orthopaedics business on a timely basis or at all;
•
The Company’s ability to successfully separate the Company’s Orthopaedics business and realize the anticipated benefits from the planned separation; and
•
The structure of the separation transaction and the future operating and financial performance, market position and business strategy for each company.
Risks related to economic conditions, financial markets and operating internationally
•
The risks associated with global operations on the Company and its customers and suppliers, including foreign governments in countries in which the Company operates;
•
The impact of inflation and fluctuations in interest rates and currency exchange rates and the potential effect of such fluctuations on revenues, expenses and resulting margins;
•
Potential changes in export/import and trade laws, regulations and policies of the United States and other countries, including any increased trade restrictions or tariffs and potential drug reimportation legislation, and the impact of such changes on raw material prices, supply chains market volatility and the pace of product development;
•
The impact on international operations from financial instability in international economies, sovereign risk, possible imposition of governmental controls and restrictive economic policies, and unstable international governments and legal systems;
•
The impact of global public health crises and pandemics;
•
Changes to global climate, extreme weather and natural disasters that could affect demand for the Company’s products and services, cause disruptions in manufacturing and distribution networks, alter the availability of goods and services within the supply chain, and affect the overall design and integrity of the Company’s products and operations;
•
The impact of global or economic changes or events, including global tensions and war; and
•
The impact of armed conflicts and terrorist attacks in the United States and other parts of the world, including social and economic disruptions and instability of financial and other markets.
Risks related to supply chain and operations
•
Difficulties and delays in manufacturing, internally, through third-party providers or otherwise within the supply chain, that may lead to voluntary or involuntary business interruptions or shutdowns, product shortages, withdrawals or suspensions of products from the market, and potential regulatory action;
•
Interruptions and breaches of the Company’s information technology systems or those of the Company’s vendors, which could result in reputational, competitive, operational or other business harm as well as financial costs and regulatory action;
•
Reliance on global supply chains and production and distribution processes that are complex and subject to increasing regulatory requirements that may adversely affect supply, sourcing and pricing of materials used in the Company’s products; and
•
The potential that the expected benefits and opportunities related to restructuring actions may not be realized or may take longer to realize than expected, including due to any required approvals from applicable regulatory authorities.
Investors also should carefully read the Risk Factors described in Item 1A of the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 2025, for a description of certain risks that could, among other things, cause the Company’s actual results to differ materially from those expressed in its forward-looking statements. Investors should understand that it is not possible to predict or identify all such factors and should not consider the risks described above to be a complete statement of all potential risks and uncertainties. The Company does not undertake to publicly update any forward-looking statement that may be made from time to time, whether as a result of new information or future events or developments.
Table of Contents
Part I — Financial information
Item 1 — Financial statements
Johnson & Johnson and subsidiaries consolidated balance sheets
(Unaudited; Dollars in Millions Except Share and Per Share Data)
September 27, 2026
December 28, 2025
Assets
Current assets:
Cash and cash equivalents (Note 4)
$
16,910
19,709
Marketable securities
318
393
Accounts receivable, trade, less allowances $
187
(2025, $
183
)
18,987
17,178
Inventories (Note 2)
15,377
14,191
Prepaid expenses and other
4,759
4,153
Total current assets
56,351
55,624
Property, plant and equipment at cost
55,472
54,364
Less: accumulated depreciation
(
31,368
)
(
31,195
)
Property, plant and equipment, net
24,104
23,169
Intangible assets, net (Note 3)
46,652
50,403
Goodwill (Note 3)
48,474
48,772
Deferred taxes on income (Note 5)
6,748
6,874
Other assets
15,096
14,368
Total assets
$
197,425
199,210
Liabilities and shareholders’ equity
Current liabilities:
Loans and notes payable
$
8,852
8,495
Accounts payable
9,317
11,991
Accrued liabilities
12,255
8,594
Accrued rebates, returns and promotions
18,936
19,124
Accrued compensation and employee related obligations
4,121
4,534
Accrued taxes on income (Note 5)
1,976
1,388
Total current liabilities
55,457
54,126
Long-term debt (Note 4)
35,799
39,438
Deferred taxes on income (Note 5)
4,835
6,791
Employee related obligations (Note 6)
6,559
6,957
Long-term taxes payable (Note 5)
497
486
Other liabilities
12,749
9,868
Total liabilities
$
115,896
117,666
Commitments and Contingencies (Note 11)
Shareholders’ equity:
Common stock — par value $
1.00
per share (authorized
4,320,000,000
shares; issued
3,119,843,000
shares)
$
3,120
3,120
Accumulated other comprehensive income (loss) (Note 7)
(
13,765
)
(
14,930
)
Retained earnings and Additional paid-in capital
168,358
168,978
Less: common stock held in treasury, at cost (
712,725,000
and
711,904,000
shares)
76,184
75,624
Total shareholders’ equity
$
81,529
81,544
Total liabilities and shareholders’ equity
$
197,425
199,210
See Notes to Consolidated Financial Statements
Form 10-Q
1
Table of Contents
Johnson & Johnson and subsidiaries consolidated statements of earnings
(Unaudited; Dollars & Shares in Millions Except Per Share Amounts)
Fiscal Third Quarter Ended
September 27,
2026
Percent
to Sales
September 28,
2025
Percent
to Sales
Sales to customers (Note 9)
$
25,399
100.0
%
$
23,993
100.0
%
Cost of products sold
8,097
31.9
7,303
30.4
Gross profit
17,302
68.1
16,690
69.6
Selling, marketing and administrative expenses
6,285
24.7
5,922
24.7
Research and development expense
4,652
18.3
3,672
15.3
In-process research and development impairments
339
1.4
—
—
Interest income
(
186
)
(
0.7
)
(
227
)
(
0.9
)
Interest expense, net of portion capitalized
217
0.8
245
1.0
Other (income) expense, net
5,780
22.8
(
478
)
(
2.0
)
Restructuring (Note 12)
181
0.7
63
0.3
Earnings before provision for taxes on income
34
0.1
7,493
31.2
(Benefit from)/Provision for taxes on income (Note 5)
(
176
)
(
0.7
)
2,341
9.7
Net earnings
$
210
0.8
%
$
5,152
21.5
%
Net earnings per share (Note 8)
Basic
$
0.09
$
2.14
Diluted
$
0.09
$
2.12
Avg. shares outstanding
Basic
2,409.6
2,408.3
Diluted
2,448.6
2,428.6
See Notes to Consolidated Financial Statements
2
Table of Contents
Johnson & Johnson and subsidiaries consolidated statements of earnings
(Unaudited; Dollars & Shares in Millions Except Per Share Amounts)
Fiscal Nine Months Ended
September 27,
2026
Percent
to Sales
September 28,
2025
Percent
to Sales
Sales to customers (Note 9)
$
74,771
100.0
%
$
69,629
100.0
%
Cost of products sold
24,254
32.4
22,288
32.0
Gross profit
50,517
67.6
47,341
68.0
Selling, marketing and administrative expenses
18,751
25.1
16,923
24.3
Research and development expense
11,832
15.8
10,413
15.0
In-process research and development impairments
375
0.5
—
—
Interest income
(
634
)
(
0.8
)
(
819
)
(
1.2
)
Interest expense, net of portion capitalized
770
1.0
757
1.1
Other (income) expense, net
6,405
8.6
(
7,692
)
(
11.1
)
Restructuring (Note 12)
247
0.3
144
0.2
Earnings before provision for taxes on income
12,771
17.1
27,615
39.7
Provision for taxes on income (Note 5)
1,792
2.4
5,927
8.6
Net earnings
$
10,979
14.7
%
$
21,688
31.1
%
Net earnings per share (Note 8)
Basic
$
4.56
$
9.01
Diluted
$
4.49
$
8.94
Avg. shares outstanding
Basic
2,408.1
2,407.3
Diluted
2,445.8
2,424.8
See Notes to Consolidated Financial Statements
Form 10-Q
3
Table of Contents
Johnson & Johnson and subsidiaries consolidated statements of comprehensive income
(Unaudited; Dollars in Millions)
Fiscal Third Quarter Ended
Fiscal Nine Months Ended
September 27, 2026
September 28, 2025
September 27, 2026
September 28, 2025
Net earnings
$
210
5,152
$
10,979
21,688
Other comprehensive income (loss), net of tax
Foreign currency translation
479
(
1,292
)
2,017
(
5,031
)
Securities:
Unrealized holding gain (loss) arising during period
—
—
—
(
1
)
Net change
—
—
—
(
1
)
Employee benefit plans:
Prior service cost amortization during period
(
36
)
(
35
)
(
106
)
(
106
)
Gain amortization during period
77
82
229
238
Net change
41
47
123
132
Derivatives & hedges:
Unrealized gain (loss) arising during period
(
58
)
434
(
274
)
1,642
Reclassifications to earnings
(
276
)
(
121
)
(
701
)
(
238
)
Net change
(
334
)
313
(
975
)
1,404
Other comprehensive income (loss)
186
(
932
)
1,165
(
3,496
)
Comprehensive income
$
396
4,220
$
12,144
18,192
See Notes to Consolidated Financial Statements
The tax cost/(benefit) effects in other comprehensive income/(loss) for the fiscal third quarter were as follows for 2026 and 2025, respectively: Foreign Currency Translation: $(
162
) million and $
1.1
billion; Employee Benefit Plans: $
8
million and $
8
million; Derivatives & Hedges: $(
89
) million and $
83
million.
The tax cost/(benefit) effects in other comprehensive income/(loss) for the fiscal nine months were as follows for 2026 and 2025, respectively: Foreign Currency Translation: $(
885
) million and $
2.3
billion; Employee Benefit Plans: $
24
million and $
29
million; Derivatives & Hedges: $(
259
) million and $
373
million.
4
Table of Contents
Johnson & Johnson and subsidiaries consolidated statements of equity
(Unaudited; Dollars in Millions)
Fiscal Third Quarter Ended September 27, 2026
Total
Retained
Earnings and Additional Paid-in Capital
Accumulated
Other
Comprehensive
Income (AOCI)
Common Stock
Issued Amount
Treasury
Stock
Amount
Balance, June 28, 2026
$
84,971
171,665
(
13,951
)
3,120
(
75,863
)
Net earnings
210
210
—
—
—
Cash dividends paid ($
1.34
per share)
(
3,227
)
(
3,227
)
—
—
—
Employee compensation and stock option plans
1,101
(
290
)
—
—
1,391
Repurchase of common stock (including excise tax)
(
1,712
)
—
—
—
(
1,712
)
Other comprehensive income (loss), net of tax
186
—
186
—
—
Balance, September 27, 2026
$
81,529
168,358
(
13,765
)
3,120
(
76,184
)
Fiscal Nine Months Ended September 27, 2026
Total
Retained
Earnings and Additional Paid-in Capital
Accumulated
Other
Comprehensive
Income (AOCI)
Common Stock
Issued Amount
Treasury
Stock
Amount
Balance, December 28, 2025
$
81,544
168,978
(
14,930
)
3,120
(
75,624
)
Net earnings
10,979
10,979
—
—
—
Cash dividends paid ($
3.98
per share)
(
9,585
)
(
9,585
)
—
—
—
Employee compensation and stock option plans
3,391
(
2,014
)
—
—
5,405
Repurchase of common stock (including excise tax)
(
5,965
)
—
—
—
(
5,965
)
Other comprehensive income (loss), net of tax
1,165
—
1,165
—
—
Balance, September 27, 2026
$
81,529
168,358
(
13,765
)
3,120
(
76,184
)
Form 10-Q
5
Table of Contents
Fiscal Third Quarter Ended September 28, 2025
Total
Retained
Earnings and Additional Paid-in Capital
Accumulated
Other
Comprehensive
Income
Common Stock
Issued Amount
Treasury
Stock
Amount
Balance, June 29, 2025
$
78,473
165,371
(
14,305
)
3,120
(
75,713
)
Net earnings
5,152
5,152
—
—
—
Cash dividends paid ($
1.30
per share)
(
3,132
)
(
3,132
)
—
—
—
Employee compensation and stock option plans
1,620
(
110
)
—
—
1,730
Repurchase of common stock (including excise tax)
(
1,904
)
—
—
—
(
1,904
)
Other comprehensive income (loss), net of tax
(
932
)
—
(
932
)
—
—
Balance, September 28, 2025
$
79,277
167,281
(
15,237
)
3,120
(
75,887
)
Fiscal Nine Months Ended September 28, 2025
Total
Retained
Earnings and Additional Paid-in Capital
Accumulated
Other
Comprehensive
Income
Common Stock
Issued Amount
Treasury
Stock
Amount
Balance, December 29, 2024
$
71,490
155,791
(
11,741
)
3,120
(
75,680
)
Net earnings
21,688
21,688
—
—
—
Cash dividends paid ($
3.84
per share)
(
9,250
)
(
9,250
)
—
—
—
Employee compensation and stock option plans
2,876
(
948
)
—
—
3,824
Repurchase of common stock
(
4,031
)
—
—
—
(
4,031
)
Other comprehensive income (loss), net of tax
(
3,496
)
—
(
3,496
)
—
—
Balance, September 28, 2025
$
79,277
167,281
(
15,237
)
3,120
(
75,887
)
See Notes to Consolidated Financial Statements
6
Table of Contents
Johnson & Johnson and subsidiaries consolidated statements of cash flows
(Unaudited; Dollars in Millions)
Fiscal Nine Months Ended
September 27,
2026
September 28,
2025
Cash flows from operating activities
Net earnings
$
10,979
21,688
Adjustments to reconcile net earnings to cash flows from operating activities:
Depreciation and amortization of property and intangibles
6,080
5,492
Stock based compensation
1,115
1,045
Asset write-downs
801
123
Charges for acquired in-process research and development assets
964
109
Net gain on sale of assets/businesses
(
27
)
(
131
)
Deferred tax provision
(
2,110
)
5,215
Credit losses and accounts receivable allowances
5
(
6
)
Changes in assets and liabilities, net of effects from acquisitions and divestitures:
Increase in accounts receivable
(
1,759
)
(
2,172
)
Increase in inventories
(
1,152
)
(
1,404
)
Increase in accounts payable and accrued liabilities
1,449
1,111
Decrease/(Increase) in other current and non-current assets
1,421
(
7,653
)
Increase/(Decrease) in other current and non-current liabilities
1,084
(
6,196
)
Net cash flows from operating activities
18,850
17,221
Cash flows used for investing activities
Additions to property, plant and equipment
(
3,732
)
(
2,995
)
Proceeds from the disposal of assets/businesses, net (Note 10)
88
408
Acquisitions, net of cash acquired (Note 10)
(
352
)
(
14,459
)
Acquired in-process research and development assets / related milestones (Note 10)
(
995
)
(
385
)
Purchases of investments
(
1,218
)
(
677
)
Sales of investments
676
1,442
Credit support agreements activity, net
873
(
2,338
)
Other (including capitalized licenses and milestones)
(
199
)
(
99
)
Net cash used for investing activities
(
4,859
)
(
19,103
)
Cash flows used for financing activities
Dividends to shareholders
(
9,585
)
(
9,250
)
Repurchase of common stock
(
5,958
)
(
4,029
)
Proceeds from short-term debt, net
15,422
10,673
Repayment of short-term debt, net
(
16,310
)
(
10,524
)
Proceeds from long-term debt, net of issuance costs
—
9,138
Repayment of long-term debt
(
2,004
)
(
1,755
)
Proceeds from the exercise of stock options/employee withholding tax on stock awards, net
2,274
1,831
Credit support agreements activity, net
(
32
)
(
246
)
Other
(
587
)
(
8
)
Net cash used for financing activities
(
16,780
)
(
4,170
)
Effect of exchange rate changes on cash and cash equivalents
(
10
)
178
Decrease in cash and cash equivalents
(
2,799
)
(
5,874
)
Cash and cash equivalents, beginning of period
19,709
24,105
Cash and cash equivalents, end of period
16,910
18,231
See Notes to Consolidated Financial Statements
Form 10-Q
7
Table of Contents
Notes to consolidated financial statements
Note 1
—
The accompanying unaudited interim consolidated financial statements and related notes should be read in conjunction with the audited Consolidated Financial Statements of Johnson & Johnson and its subsidiaries (the Company) and related notes as contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2025. The unaudited interim financial statements include all adjustments (consisting only of normal recurring adjustments) and accruals necessary in the judgment of management for a fair statement of the results for the periods presented.
Columns and rows within tables may not add due to rounding. Percentages have been calculated using actual, non-rounded figures.
Recently Adopted Accounting Standards
ASU 2025-07: Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606)
Effective beginning fiscal year 2026, the Company prospectively adopted the amended guidance issued by the FASB that adds a scope exception to exclude from derivative accounting non-exchange-traded contracts with variables (underlyings) that are based on operations or activities specific to one of the parties to the contract. The adoption of this new accounting standard did not have a material impact on the Company’s consolidated financial statements.
Recently Issued Accounting Standards Not Yet Adopted
There were no new material accounting standards issued in the fiscal nine months of 2026.
Supplier finance program obligations
The Company has agreements for supplier finance programs with third-party financial institutions. These programs provide enrolled suppliers with the ability to finance payment obligations from the Company with the third-party financial institutions. The Company is not a party to the arrangements between the suppliers and the third-party financial institutions. The Company’s obligations to its suppliers, including amounts due, and scheduled payment dates (which have general payment terms of
90
days), are not affected by a participating supplier’s decision to join in the program.
Confirmed obligations under the program as of September 27, 2026, and December 28, 2025, were $
0.8
billion and $
0.8
billion, respectively. The obligations are presented as Accounts payable on the Consolidated Balance Sheets.
Note 2 —
Inventories
(Dollars in Millions)
September 27, 2026
December 28, 2025
Raw materials and supplies
$
2,483
2,530
Goods in process
3,930
3,828
Finished goods
8,964
7,833
Total inventories
$
15,377
14,191
8
Table of Contents
Note 3 —
Intangible assets and goodwill
Intangible assets that have finite useful lives are amortized over their estimated useful lives. The latest annual impairment assessment of goodwill and indefinite lived intangible assets was completed in the fiscal fourth quarter of 2025. Future impairment tests for goodwill and indefinite lived intangible assets will be performed annually in the fiscal fourth quarter, or sooner, if warranted.
(Dollars in Millions)
September 27, 2026
December 28, 2025
Intangible assets with definite lives:
Patents and trademarks — gross
$
60,575
59,156
Less accumulated amortization
(
34,676
)
(
32,507
)
Patents and trademarks — net
$
25,899
26,649
Customer relationships and other intangibles — gross
21,153
21,361
Less accumulated amortization
(
15,465
)
(
14,998
)
Customer relationships and other intangibles — net
(1)
$
5,688
6,363
Intangible assets with indefinite lives:
Trademarks
1,726
1,772
Purchased in-process research and development
13,339
15,619
Total intangible assets — net
$
46,652
50,403
(1)
The majority is comprised of customer relationships
Goodwill as of September 27, 2026 was allocated by segment of business as follows:
(Dollars in Millions)
Innovative
Medicine
MedTech
Total
Goodwill at December 28, 2025
$
14,967
33,805
48,772
Goodwill, related to acquisitions
—
20
20
Currency translation/Other
(
219
)
(
99
)
(
318
)
Goodwill at September 27, 2026
$
14,748
33,726
48,474
The weighted average amortization period for patents and trademarks is approximately
12
years. The weighted average amortization period for customer relationships and other intangible assets is approximately
19
years. The amortization expense of amortizable intangible assets included in the cost of products sold was $
1.2
billion and $
1.0
billion for the fiscal third quarters ended September 27, 2026 and September 28, 2025, respectively. The amortization expense of amortizable intangible assets included in the cost of products sold was $
3.7
billion and $
3.4
billion for the fiscal nine months ended September 27, 2026 and September 28, 2025, respectively.
The estimated amortization expense for approved products, before tax, for the five succeeding years is approximately:
(Dollars in Millions)
2026
2027
2028
2029
2030
$
5,100
4,400
3,700
3,600
3,500
See Note 10 to the Consolidated Financial Statements for additional details related to acquisitions and divestitures.
Form 10-Q
9
Table of Contents
Note 4 —
Fair value measurements
The Company uses forward foreign exchange contracts to manage its exposure to the variability of cash flows, primarily related to the foreign exchange rate changes of future intercompany product and third-party purchases of materials denominated in a foreign currency. The Company uses cross currency interest rate swaps to manage currency risk primarily related to borrowings. Both types of derivatives are designated as cash flow hedges.
Additionally, the Company uses interest rate swaps as an instrument to manage interest rate risk related to fixed rate borrowings. These derivatives are designated as fair value hedges. The Company uses cross currency interest rate swaps and forward foreign exchange contracts designated as net investment hedges. Additionally, the Company uses forward foreign exchange contracts to offset its exposure to certain foreign currency assets and liabilities. These forward foreign exchange contracts are not designated as hedges, and therefore, changes in the fair values of these derivatives are recognized in earnings, thereby offsetting the current earnings effect of the related foreign currency assets and liabilities.
The Company does not enter into derivative financial instruments for trading or speculative purposes, or that contain credit risk related contingent features. The Company maintains credit support agreements (CSA) with certain derivative counterparties establishing collateral thresholds based on respective credit ratings and netting agreements. As of September 27, 2026, the cumulative amount of cash collateral paid by the Company under the CSA amounted to $
3.8
billion net, related to net investment and cash flow hedges. On an ongoing basis, the Company monitors counter-party credit ratings. The Company considers credit non-performance risk to be low because the Company primarily enters into agreements with commercial institutions that have at least an investment grade credit rating. Refer to the table on significant financial assets and liabilities measured at fair value contained in this footnote for receivables and payables with these commercial institutions. As of September 27, 2026, the Company had notional amounts outstanding for forward foreign exchange contracts, cross currency interest rate swaps and interest rate swaps of $
44.3
billion, $
34.0
billion and $
7.0
billion, respectively. As of December 28, 2025, the Company had notional amounts outstanding for forward foreign exchange contracts, cross currency interest rate swaps and interest rate swaps of $
40.6
billion, $
38.9
billion and $
8.0
billion, respectively.
All derivative instruments are recorded on the balance sheet at fair value. Changes in the fair value of derivatives are recorded each period in current earnings or other comprehensive income, depending on whether the derivative is designated as part of a hedge transaction, and if so, the type of hedge transaction.
The designation as a cash flow hedge is made at the entrance date of the derivative contract. At inception, all derivatives are expected to be highly effective. Foreign exchange contracts designated as cash flow hedges are accounted for under the forward method and all gains/losses associated with these contracts will be recognized in the income statement when the hedged item impacts earnings. Changes in the fair value of these derivatives are recorded in accumulated other comprehensive income until the underlying transaction affects earnings and are then reclassified to earnings in the same account as the hedged transaction.
Gains and losses associated with interest rate swaps and changes in fair value of hedged debt attributable to changes in interest rates are recorded to interest expense in the period in which they occur. Gains and losses on net investment hedges are accounted for through the currency translation account within accumulated other comprehensive income. The portion excluded from effectiveness testing is recorded through interest (income) expense using the spot method. On an ongoing basis, the Company assesses whether each derivative continues to be highly effective in offsetting changes of hedged items. If and when a derivative is no longer expected to be highly effective, hedge accounting is discontinued.
The Company designated its Euro denominated notes with due dates ranging from 2028 to 2055 as a net investment hedge of the Company's investments in certain of its international subsidiaries that use the Euro as their functional currency in order to reduce the volatility caused by changes in exchange rates.
As of September 27, 2026, the balance of deferred net loss on derivatives included in accumulated other comprehensive income was $
1.3
billion after-tax. For additional information, see the Consolidated Statements of Comprehensive Income and Note 7. The Company expects that substantially all of the amounts related to forward foreign exchange contracts will be reclassified into earnings over the next 12 months as a result of transactions that are expected to occur over that period. The maximum length of time over which the Company is hedging transaction exposure is
18
months, excluding interest rate contracts and net investment hedge contracts. The amount ultimately realized in earnings may differ as foreign exchange rates change. Realized gains and losses are ultimately determined by actual exchange rates at maturity of the derivative.
10
Table of Contents
The following table is a summary of the activity related to derivatives and hedges for the fiscal third quarters ended September 27, 2026 and September 28, 2025, net of tax:
September 27, 2026
September 28, 2025
(Dollars in Millions)
Sales
Cost of
Products
Sold
R&D
Expense
Interest
(Income)
Expense
Other
(Income)
Expense
Sales
Cost of
Products
Sold
R&D
Expense
Interest
(Income)
Expense
Other
(Income)
Expense
The effects of fair value, net investment and cash flow hedging:
Gain (Loss) on fair value hedging relationship:
Interest rate swaps contracts:
Hedged items
$
—
—
—
(
38
)
—
—
—
—
130
—
Derivatives designated as hedging instruments
—
—
—
38
—
—
—
—
(
130
)
—
Gain (Loss) on net investment hedging relationship:
Cross currency interest rate swaps contracts:
Amount of gain or (loss) recognized in income on derivative amount excluded from effectiveness testing
—
—
—
40
—
—
—
—
47
—
Amount of gain or (loss) recognized in AOCI
—
—
—
40
—
—
—
—
47
—
Gain (Loss) on cash flow hedging relationship:
Forward foreign exchange contracts:
Amount of gain or (loss) reclassified from AOCI into income
(
2
)
128
9
—
6
1
19
(
21
)
—
(
10
)
Amount of gain or (loss) recognized in AOCI
1
(
130
)
(
3
)
—
(
2
)
(
6
)
100
2
—
—
Cross currency interest rate swaps contracts:
Amount of gain or (loss) reclassified from AOCI into income
—
—
—
94
—
—
—
—
85
—
Amount of gain or (loss) recognized in AOCI
$
—
—
—
36
—
—
—
—
291
—
Form 10-Q
11
Table of Contents
The following table is a summary of the activity related to derivatives and hedges for the fiscal nine months ended September 27, 2026 and September 28, 2025, net of tax:
September 27, 2026
September 28, 2025
(Dollars in Millions)
Sales
Cost of Products Sold
R&D Expense
Interest (Income) Expense
Other (Income) Expense
Sales
Cost of Products Sold
R&D Expense
Interest (Income) Expense
Other (Income) Expense
The effects of fair value, net investment and cash flow hedging:
Gain (Loss) on fair value hedging relationship:
Interest rate swaps contracts:
Hedged items
$
—
—
—
(
33
)
—
—
—
—
370
—
Derivatives designated as hedging instruments
—
—
—
33
—
—
—
—
(
370
)
—
Gain (Loss) on net investment hedging relationship:
Cross currency interest rate swaps contracts:
Amount of gain or (loss) recognized in income on derivative amount excluded from effectiveness testing
—
—
—
132
—
—
—
—
145
—
Amount of gain or (loss) recognized in AOCI
—
—
—
132
—
—
—
—
145
—
Gain (Loss) on cash flow hedging relationship:
Forward foreign exchange contracts:
Amount of gain or (loss) reclassified from AOCI into income
(
3
)
291
14
—
7
2
(
103
)
(
36
)
—
(
13
)
Amount of gain or (loss) recognized in AOCI
(
11
)
(
515
)
74
—
41
8
671
(
106
)
—
(
40
)
Cross currency interest rate swaps contracts:
Amount of gain or (loss) reclassified from AOCI into income
—
—
—
259
—
—
—
—
243
—
Amount of gain or (loss) recognized in AOCI
$
—
—
—
5
—
—
—
—
964
—
12
Table of Contents
As of September 27, 2026, and December 28, 2025, the following amounts were recorded on the Consolidated Balance Sheet related to cumulative basis adjustment for fair value hedges:
Line item in the Consolidated Balance Sheet in which the hedged item is included
Carrying Amount of the Hedged Liability
Cumulative Amount of Fair Value
Hedging Gain/ (Loss) Included in the
Carrying Amount of the Hedged Liability
(Dollars in Millions)
September 27, 2026
December 28, 2025
September 27, 2026
December 28, 2025
Long-term Debt
$
7,278
8,318
(
738
)
(
694
)
The following table is the effect of derivatives not designated as hedging instruments for the fiscal third quarters ended 2026 and 2025:
Gain/(Loss)
Recognized In
Income on Derivative
Gain/(Loss)
Recognized In
Income on Derivative
(Dollars in Millions)
Location of
Gain /(Loss)
Recognized in
Income on Derivative
Fiscal Third Quarter Ended
Fiscal Nine Months Ended
Derivatives Not Designated as Hedging Instruments
September 27, 2026
September 28, 2025
September 27, 2026
September 28, 2025
Foreign Exchange Contracts
Other (income) expense
$
14
33
(
85
)
76
The following table is the effect of net investment hedges for the fiscal third quarters ended in 2026 and 2025:
Gain/(Loss)
Recognized In
Accumulated OCI
Location of Gain or (Loss)
Reclassified from Accumulated OCI Into Income
Gain/(Loss) Reclassified From
Accumulated OCI
Into Income
(Dollars in Millions)
September 27, 2026
September 28, 2025
September 27, 2026
September 28, 2025
Debt
$(
16
)
—
Interest (income) expense
—
—
Cross Currency interest rate swaps
$
54
123
Interest (income) expense
—
—
The following table is the effect of net investment hed
ges fo
r the fiscal nine months ended in 2026 and 2025:
Gain/(Loss)
Recognized In
Accumulated OCI
Location of Gain or (Loss)
Reclassified from Accumulated
OCI Into Income
Gain/(Loss) Reclassified From
Accumulated OCI
Into Income
(Dollars in Millions)
September 27, 2026
September 28, 2025
September 27, 2026
September 28, 2025
Debt
$
361
(
1,119
)
Interest (income) expense
—
—
Cross Currency interest rate swaps
$
399
264
Interest (income) expense
—
—
Form 10-Q
13
Table of Contents
The Company holds equity investments with readily determinable fair values and equity investments without readily determinable fair values. The Company has elected to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.
The following table is a summary of the activity related to equity investments:
December 28, 2025
September 27, 2026
(Dollars in Millions)
Carrying Value
Changes in Fair Value Reflected in Net Income
(1)
(Sales)/ Purchases/Other
(2)
Carrying Value
Non Current Other Assets
Equity Investments with readily determinable value
$
665
211
(
52
)
824
824
Equity Investments without readily determinable value
$
910
(
130
)
545
1,325
1,325
(1)
Recorded in Other (income)/expense, net. Equity Investments without readily determinable val
ue i
ncludes the option premium related to Sail Biomedicines (Sail).
(2)
Equity Investments without readily determinable val
ue i
ncludes equity investment in Sail. Other includes impact of currency
Fair value is the exit price that would be received to sell an asset or paid to transfer a liability. Fair value is a market-based measurement determined using assumptions that market participants would use in pricing an asset or liability. In accordance with ASC 820, a three-level hierarchy was established to prioritize the inputs used in measuring fair value. The levels within the hierarchy are described below with Level 1 inputs having the highest priority and Level 3 inputs having the lowest.
The fair value of a derivative financial instrument (i.e., forward foreign exchange contracts, interest rate contracts) is the aggregation by currency of all future cash flows discounted to its present value at the prevailing market interest rates and subsequently converted to the U.S. Dollar at the current spot foreign exchange rate. The Company does not believe that fair values of these derivative instruments materially differ from the amounts that could be realized upon settlement or maturity, or that the changes in fair value will have a material effect on the Company’s results of operations, cash flows or financial position. The Company also holds equity investments which are classified as Level 1 and debt securities which are classified as Level 2. The Company holds acquisition related contingent liabilities based upon certain regulatory and commercial events, which are classified as Level 3, whose values are determined using discounted cash flow methodologies or similar techniques for which the determination of fair value requires significant judgment or estimations.
The following three levels of inputs are used to measure fair value:
Level 1 — Quoted prices in active markets for identical assets and liabilities.
Level 2 — Significant other observable inputs.
Level 3 — Significant unobservable inputs.
14
Table of Contents
The Company’s significant financial assets and liabilities measured at fair value as of September 27, 2026 and December 28, 2025 were as follows:
September 27, 2026
December 28, 2025
(Dollars in Millions)
Level 1
Level 2
Level 3
Total
Total
(1)
Derivatives designated as hedging instruments:
Assets:
Forward foreign exchange contracts
$
—
541
—
541
686
Interest rate contracts
(2)
—
627
—
627
589
Total
—
1,168
—
1,168
1,275
Liabilities:
Forward foreign exchange contracts
—
639
—
639
413
Interest rate contracts
(2)
—
4,121
—
4,121
5,848
Total
—
4,760
—
4,760
6,261
Derivatives not designated as hedging instruments:
Assets:
Forward foreign exchange contracts
—
71
—
71
38
Liabilities:
Forward foreign exchange contracts
—
83
—
83
46
Other Investments:
Equity investments
(3)
824
—
—
824
665
Debt securities
(4)
—
3,456
—
3,456
2,854
Other Liabilities:
Contingent consideration
(5)
$
—
—
729
729
753
Gross to Net Derivative Reconciliation
September 27, 2026
December 28, 2025
(Dollars in Millions)
Total Gross Assets
$
1,239
1,313
Credit Support Agreement (CSA)
(
1,066
)
(
1,308
)
Total Net Asset
173
5
Total Gross Liabilities
4,843
6,307
Credit Support Agreement (CSA)
(
4,821
)
(
5,903
)
Total Net Liabilities
$
22
404
Summarized information about changes in liabilities for contingent consideration for the fiscal third quarters ended September 27, 2026 and September 28, 2025 is as follows:
September 27, 2026
September 28, 2025
(Dollars in Millions)
Beginning Balance
$
753
1,217
Changes in estimated fair value
(6)
(
94
)
(
57
)
Additions
70
—
Payments
—
(
50
)
Ending Balance
$
729
1,110
(1)
2025 assets and liabilities are all classified as Level 2 with the exception of equity investments of $
665
million, which are classified as Level 1 and contingent consideration of $
753
million, classified as Level 3.
(2)
Includes cross currency interest rate swaps and interest rate swaps.
(3)
Classified as non-current other assets.
Form 10-Q
15
Table of Contents
(4)
Classified within cash equivalents and current marketable securities.
(5)
Classified as non-current other liabilities.
(6)
Ongoing fair value adjustment amounts are primarily recorded in Research and Development expense or Other (income) expense, net.
As of September 27, 2026, and December 28, 2025, cash and cash equivalents include money market funds of $
4,936
million and $
5,993
million, respectively, which would be considered level 1 in the fair value hierarchy.
The Company's cash, cash equivalents and current marketable securities as of September 27, 2026 comprised:
(Dollars in Millions)
Carrying
Amount
Estimated
Fair Value
Cash & Cash
Equivalents
Current
Marketable
Securities
Cash
$
3,276
3,276
3,276
—
Non-U.S. sovereign securities
7
7
—
7
U.S. reverse repurchase agreements
4,774
4,774
4,774
—
Money market funds
4,936
4,936
4,936
—
Time deposits
(1)
779
779
779
—
Subtotal
13,772
13,772
13,765
7
U.S. Gov’t securities
2,995
2,995
2,983
12
Other sovereign securities
224
224
117
107
Corporate and other debt securities
237
237
45
192
Subtotal available for sale debt
(2)
$
3,456
3,456
3,145
311
Total cash, cash equivalents and current marketable securities
$
17,228
17,228
16,910
318
(1)
Held to maturity investments are reported at amortized cost and gains or losses are reported in earnings.
(2)
Available for sale debt securities are reported at fair value with unrealized gains and losses reported net of taxes in other comprehensive income.
As of the fiscal year ended December 28, 2025, the carrying amount of cash, cash equivalents and current marketable securities was the same as the estimated fair value.
Fair value of government securities and obligations and corporate debt securities was estimated using quoted broker prices and significant other observable inputs.
The Company classifies all highly liquid investments with stated maturities of three months or less from date of purchase as cash equivalents and all highly liquid investments with stated maturities of greater than three months from the date of purchase as current marketable securities. Available for sale securities with stated maturities of greater than one year from the date of purchase are available to fund current operations and are classified as current marketable securities.
The contractual maturities of the available for sale securities as of September 27, 2026 are as follows:
(Dollars in Millions)
Cost Basis
Fair Value
Due within one year
$
3,452
3,452
Due after one year through five years
4
4
Due after five years through ten years
—
—
Total debt securities
$
3,456
3,456
16
Table of Contents
Financial instruments not measured at fair value
The following financial liabilities are held at carrying amount on the consolidated balance sheet as of September 27, 2026:
(Dollars in Millions)
Carrying
Amount
Estimated
Fair Value
Financial Liabilities
Loans and Notes Payable
$
8,852
8,800
Non-Current Debt
2.90
% Notes due 2028
1,499
1,465
1.150
% Notes due 2028 (
750
MM Euro
1.1372
)
851
812
4.55
% Notes due 2028
749
748
4.80
% Notes due 2029
1,147
1,144
6.95
% Notes due 2029
299
317
2.70
% Notes due 2029 (
600
MM Euro
1.1372
)
682
669
1.30
% Notes due 2030
1,710
1,516
4.70
% Notes due 2030
997
988
4.90
% Notes due 2031
1,147
1,138
3.20
% Notes due 2032 (
700
MM Euro
1.1372
)
794
767
4.85
% Notes due 2032
1,244
1,230
4.95
% Notes due 2033
499
494
4.375
% Notes due 2033
853
807
3.050
% Notes due 2033 (
700
MM Euro
1.1372
)
794
754
4.95
% Notes due 2034
847
833
1.650
% Notes due 2035 (
1.5
B Euro
1.1372
)
1,697
1,396
5.00
% Notes due 2035
1,244
1,218
3.35
% Notes due 2036 (
800
MM Euro
1.1372
)
905
849
3.587
% Notes due 2036
920
856
5.95
% Notes due 2037
995
1,039
3.625
% Notes due 2037
1,404
1,280
3.350
% Notes due 2037 (
1.0
B Euro
1.1372
)
1,135
1,048
3.40
% Notes due 2038
994
817
5.85
% Notes due 2038
697
717
4.50
% Notes due 2040
542
488
2.10
% Notes due 2040
886
654
4.85
% Notes due 2041
298
273
4.50
% Notes due 2043
497
431
3.55
% Notes due 2044 (
1.0
B Euro
1.1372
)
1,128
1,000
3.60
% Notes due 2045 (
700
MM Euro
1.1372
)
791
700
3.73
% Notes due 2046
1,980
1,473
3.75
% Notes due 2047
857
734
3.50
% Notes due 2048
744
521
2.25
% Notes due 2050
833
529
5.25
% Notes due 2054
844
775
3.70
% Notes due 2055 (
1.0
B Euro
1.1372
)
1,131
964
2.45
% Notes due 2060
1,087
613
Other
78
81
Total Long Term Debt
$
35,799
32,138
Form 10-Q
17
Table of Contents
The weighted average effective interest rate on non-current debt is
3.68
%.
The excess of the carrying value over the estimated fair value of debt was $
1.7
billion at December 28, 2025.
Fair value of the non-current debt was estimated using market prices, which were corroborated by quoted broker prices and significant other observable inputs.
The current debt balance as of September 27, 2026, includes $
5.6
billion of commercial paper which has a weighted average interest rate of
3.76
% and a weighted average maturity of approximately
two months
. The current debt balance as of December 28, 2025, included $
6.5
billion of commercial paper which had a weighted average interest rate of
3.81
% and a weighted average maturity of approximately
two months
.
Note 5 —
Income taxes
The worldwide effective income tax rates for the fiscal nine months of 2026 and 2025 were
14.0
% and
21.5
%, respectively. The primary drivers for year over year change in the Company’s effective tax were:
•
In the fiscal third quarter of 2026, the Company recorded a $
5.5
billion accrual related to the proposed resolution of talc ovarian litigation which reduced the 2026 year to date effective tax rate by approximately
2.5
% versus an accrual reversal of approximately $
7.0
billion related to the talc reserve in the fiscal first quarter of 2025 which increased the 2025 effective tax rate by approximately
0.3
%.
•
In the fiscal third quarter of 2025, the United States enacted the One Big Beautiful Bill Act (OBBBA). The OBBBA included provisions modifying the corporate income tax code, including the immediate expensing of domestic research and development expenditures for tax purposes, 100% bonus depreciation for qualified assets, and an increase in the statutory tax rate on foreign earnings from 10.5% to 12.6%. As a result, the Company remeasured its deferred tax balances for the changes in the tax rate and recorded a one-time remeasurement cost of approximately $
1.0
billion which increased the 2025 effective tax rate by approximately
3.6
%.
•
Additional tax benefits in the fiscal first nine months of 2026 and 2025 related to the Company’s share-based equity compensation programs that either vested or were exercised during the fiscal nine months of 2026 and 2025, which reduced the effective tax rate by
3.7
% and
0.4
%, respectively.
As of September 27, 2026, the Company had approximately $
2.8
billion of liabilities from unrecognized tax benefits. The Company conducts business and files tax returns in numerous countries and currently has tax audits in progress in several jurisdictions. With respect to the United States, the Internal Revenue Service has completed its audit for the tax years through 2016 and the audit for tax years 2017 through 2020 is ongoing. In other major jurisdictions where the Company conducts business, the years that remain open to tax audit go back to the year 2014.
18
Table of Contents
Note 6 —
Pensions and other benefit plans
Components of net periodic benefit cost
Net periodic benefit costs for the Company’s defined benefit retirement plans and other benefit plans include the following components:
Fiscal Third Quarter Ended
Fiscal Nine Months Ended
Retirement Plans
Other Benefit Plans
Retirement Plans
Other Benefit Plans
(Dollars in Millions)
September 27, 2026
September 28, 2025
September 27, 2026
September 28, 2025
September 27, 2026
September 28, 2025
September 27, 2026
September 28, 2025
Service cost
$
235
223
81
72
706
656
241
216
Interest cost
359
358
52
54
1,079
1,065
156
161
Expected return on plan assets
(
636
)
(
604
)
(
1
)
(
2
)
(
1,913
)
(
1,790
)
(
5
)
(
5
)
Amortization of prior service cost/(credit)
(
46
)
(
46
)
—
—
(
138
)
(
138
)
(
1
)
(
1
)
Recognized actuarial (gains)/losses
69
86
26
16
208
254
78
47
Curtailments and settlements
1
—
—
1
1
—
—
Net periodic benefit cost/(credit)
$(
18
)
17
158
140
(
57
)
48
469
418
The service cost component of net periodic benefit cost is presented in the same line items on the Consolidated Statement of Earnings where other employee compensation costs are reported, including Cost of products sold, Research and development expense, and Selling, marketing and administrative expenses. All other components of net periodic benefit cost are presented as part of Other (income) expense, net on the Consolidated Statement of Earnings.
Company contributions
For the fiscal nine months ended September 27, 2026, the Company contributed $
94
million and $
15
million to its U.S. and international retirement plans, respectively. The Company plans to continue to fund its U.S. defined benefit plans to comply with the Pension Protection Act of 2006. International plans are funded in accordance with local regulations.
Form 10-Q
19
Table of Contents
Note 7 —
Accumulated other comprehensive income
Components of other comprehensive income/(loss) consist of the following:
(Dollars in Millions)
Foreign
Currency
Translation
Gain/
(Loss) On
Securities
Employee
Benefit
Plans
Gain/
(Loss) On
Derivatives
& Hedges
Total
Accumulated
Other
Comprehensive
Income/(Loss)
December 28, 2025
$(
13,947
)
—
(
693
)
(
290
)
(
14,930
)
Net change
2,017
—
123
(
975
)
1,165
September 27, 2026
$(
11,930
)
—
(
570
)
(
1,265
)
(
13,765
)
Amounts in accumulated other comprehensive income are presented net of the related tax impact. Foreign currency translation is not adjusted for income taxes where it relates to permanent investments in international subsidiaries. For additional details on comprehensive income see the Consolidated Statements of Comprehensive Income.
Details on reclassifications out of Accumulated Other Comprehensive Income:
Gain/(Loss) On Securities - reclassifications released to Other (income) expense, net.
Employee Benefit Plans - reclassifications are included in net periodic benefit cost. See Note 6 for additional details.
Gain/(Loss) On Derivatives & Hedges - reclassifications to earnings are recorded in the same account as the underlying transaction. See Note 4 for additional details.
Note 8 —
Earnings per share
The following is a reconciliation of basic net earnings per share to diluted net earnings per share:
Fiscal Third Quarter Ended
Fiscal Nine Months Ended
(Shares in Millions)
September 27, 2026
September 28, 2025
September 27, 2026
September 28, 2025
Basic net earnings per share
$
0.09
2.14
4.56
9.01
Average shares outstanding — basic
2,409.6
2,408.3
2,408.1
2,407.3
Potential shares exercisable under stock option plans
95.1
124.3
93.8
89.3
Less: shares which could be repurchased under treasury stock method
(
56.1
)
(
104.0
)
(
56.1
)
(
71.8
)
Average shares outstanding — diluted
2,448.6
2,428.6
2,445.8
2,424.8
Diluted net earnings per share
$
0.09
2.12
4.49
8.94
(Shares in Millions)
The diluted net earnings per share calculation excluded the following number of shares related to stock options, as the exercise price of these options was greater than the average market value of the Company’s stock.
0.0
0.0
5.6
38.8
20
Table of Contents
Note 9 —
Segments of business and geographic areas
The Company is organized into
two
business segments: Innovative Medicine and MedTech.
The Company’s chief operating decision maker (CODM) is the Chief Executive Officer (Principal Executive Officer). For the Innovative Medicine and MedTech segments, the CODM uses segment income before tax to allocate resources (including employees, financial, and capital resources) for each segment predominantly in the annual forecasting process. The CODM considers planning-to-actual variances on a quarterly basis to assess performance and make decisions about allocating resources to the segments.
Sales by segment of business
Fiscal Third Quarter Ended
Fiscal Nine Months Ended
(Dollars in Millions)
September 27,
2026
September 28,
2025
Percent
Change
September 27,
2026
September 28,
2025
Percent
Change
INNOVATIVE MEDICINE
Oncology
U.S.
$
4,267
3,468
23.0
%
$
11,951
9,866
21.1
%
International
3,335
3,060
9.0
10,030
8,652
15.9
Worldwide
7,602
6,529
16.4
21,981
18,519
18.7
DARZALEX
U.S.
2,528
2,088
21.1
7,171
5,934
20.9
International
1,711
1,584
8.0
5,239
4,514
16.1
Worldwide
4,239
3,672
15.4
12,410
10,448
18.8
CARVYKTI
U.S.
472
396
19.4
1,377
1,072
28.5
International
238
128
85.3
587
260
*
Worldwide
710
524
35.5
1,964
1,332
47.4
TECVAYLI
U.S.
236
115
*
549
334
64.4
International
77
62
24.0
225
160
40.6
Worldwide
312
177
76.6
774
494
56.7
TALVEY
U.S.
112
85
31.6
325
235
38.1
International
59
37
62.9
172
79
*
Worldwide
171
122
40.9
497
314
58.3
RYBREVANT/ LAZCLUZE
U.S.
201
136
47.9
566
388
46.1
International
119
61
94.5
300
130
*
Worldwide
320
198
62.3
866
518
67.4
ERLEADA
U.S.
423
378
11.8
1,161
1,048
10.8
International
600
558
7.7
1,806
1,567
15.3
Worldwide
1,023
936
9.4
2,967
2,615
13.5
IMBRUVICA
U.S.
145
211
(
31.6
)
437
685
(
36.3
)
International
420
483
(
13.2
)
1,386
1,453
(
4.7
)
Form 10-Q
21
Table of Contents
Fiscal Third Quarter Ended
Fiscal Nine Months Ended
(Dollars in Millions)
September 27,
2026
September 28,
2025
Percent
Change
September 27,
2026
September 28,
2025
Percent
Change
Worldwide
563
695
(
18.8
)
1,822
2,139
(
14.8
)
OTHER ONCOLOGY
(1)
U.S.
149
61
*
365
171
*
International
111
147
(
24.4
)
314
488
(
35.7
)
Worldwide
262
207
26.3
680
659
3.2
Immunology
U.S.
2,804
2,676
4.8
7,031
7,377
(
4.7
)
International
1,417
1,493
(
5.1
)
4,414
4,492
(
1.7
)
Worldwide
4,221
4,168
1.3
11,445
11,868
(
3.6
)
TREMFYA
U.S.
1,772
989
79.1
4,279
2,384
79.5
International
624
434
43.7
1,771
1,181
49.9
Worldwide
2,396
1,424
68.3
6,050
3,566
69.7
SIMPONI / SIMPONI ARIA
U.S.
269
309
(
13.2
)
798
906
(
11.9
)
International
299
377
(
20.6
)
1,035
1,130
(
8.4
)
Worldwide
568
687
(
17.3
)
1,833
2,036
(
10.0
)
REMICADE
U.S.
258
326
(
20.8
)
742
923
(
19.6
)
U.S. Exports
12
19
(
37.1
)
40
63
(
36.6
)
International
124
132
(
6.2
)
372
413
(
9.8
)
Worldwide
394
476
(
17.3
)
1,154
1,398
(
17.5
)
STELARA
U.S.
368
1,022
(
64.0
)
924
3,081
(
70.0
)
International
349
549
(
36.5
)
1,188
1,768
(
32.8
)
Worldwide
716
1,570
(
54.4
)
2,112
4,848
(
56.4
)
OTHER IMMUNOLOGY
U.S.
126
12
*
249
21
*
International
21
0
*
48
0
*
Worldwide
147
12
*
297
21
*
Neuroscience
U.S.
1,733
1,367
26.8
4,886
3,712
31.6
International
642
658
(
2.4
)
2,001
2,011
(
0.5
)
Worldwide
2,375
2,024
17.3
6,887
5,722
20.3
SPRAVATO
U.S.
559
405
37.9
1,479
1,047
41.3
International
66
53
22.7
197
146
34.8
Worldwide
624
459
36.1
1,676
1,193
40.5
CAPLYTA
(2)
U.S.
398
240
66.1
1,029
451
*
International
—
—
—
—
—
—
Worldwide
398
240
66.1
1,029
451
*
22
Table of Contents
Fiscal Third Quarter Ended
Fiscal Nine Months Ended
(Dollars in Millions)
September 27,
2026
September 28,
2025
Percent
Change
September 27,
2026
September 28,
2025
Percent
Change
INVEGA SUSTENNA / XEPLION / INVEGA TRINZA / TREVICTA
U.S.
739
664
11.4
2,235
2,021
10.6
International
258
267
(
3.0
)
816
804
1.5
Worldwide
998
929
7.3
3,051
2,824
8.0
CONCERTA / methylphenidate
U.S.
6
14
(
56.3
)
40
76
(
47.3
)
International
138
127
8.1
386
376
2.4
Worldwide
143
140
2.1
425
452
(
5.9
)
OTHER NEUROSCIENCE
U.S.
32
46
(
30.6
)
104
119
(
12.6
)
International
180
210
(
14.3
)
602
684
(
12.0
)
Worldwide
212
256
(
17.3
)
706
803
(
12.1
)
Pulmonary Hypertension (PH)
U.S.
588
815
(
27.8
)
2,233
2,358
(
5.3
)
International
309
300
2.9
942
895
5.2
Worldwide
897
1,115
(
19.5
)
3,175
3,253
(
2.4
)
UPTRAVI
U.S.
383
392
(
2.2
)
1,154
1,139
1.3
International
100
92
8.9
306
272
12.7
Worldwide
483
484
(
0.1
)
1,460
1,411
3.5
OPSUMIT/OPSYNVI
U.S.
193
409
(
52.8
)
1,042
1,175
(
11.3
)
International
179
168
5.9
538
507
6.0
Worldwide
372
578
(
35.7
)
1,580
1,682
(
6.1
)
OTHER PULMONARY HYPERTENSION
U.S.
12
13
(
7.3
)
37
44
(
15.5
)
International
30
39
(
23.8
)
98
116
(
15.6
)
Worldwide
42
53
(
19.7
)
135
160
(
15.6
)
Infectious Diseases (ID)
U.S.
317
326
(
2.7
)
959
961
(
0.2
)
International
496
501
(
1.2
)
1,506
1,472
2.3
Worldwide
813
829
(
1.8
)
2,465
2,434
1.3
EDURANT / rilpivirine
U.S.
5
7
(
31.6
)
15
21
(
30.1
)
International
382
378
1.0
1,131
1,082
4.5
Worldwide
386
385
0.4
1,145
1,103
3.8
PREZISTA / PREZCOBIX / REZOLSTA / SYMTUZA
U.S.
307
315
(
2.5
)
937
932
0.6
International
74
81
(
8.9
)
259
264
(
1.9
)
Worldwide
381
397
(
3.8
)
1,196
1,196
0.0
Form 10-Q
23
Table of Contents
Fiscal Third Quarter Ended
Fiscal Nine Months Ended
(Dollars in Millions)
September 27,
2026
September 28,
2025
Percent
Change
September 27,
2026
September 28,
2025
Percent
Change
OTHER INFECTIOUS DISEASES
U.S.
5
4
29.9
7
8
(
11.4
)
International
40
42
(
6.2
)
116
126
(
8.0
)
Worldwide
46
47
(
3.0
)
124
135
(
8.2
)
Cardiovascular / Metabolism / Other (CVM)
U.S.
736
750
(
1.9
)
2,235
2,381
(
6.1
)
International
112
149
(
24.3
)
378
461
(
17.9
)
Worldwide
849
899
(
5.6
)
2,614
2,842
(
8.0
)
XARELTO
U.S.
653
635
2.7
1,959
1,946
0.7
International
—
—
—
—
—
—
Worldwide
653
635
2.7
1,959
1,946
0.7
OTHER
U.S.
84
115
(
27.2
)
276
435
(
36.5
)
International
112
149
(
24.3
)
378
461
(
17.9
)
Worldwide
197
264
(
25.5
)
655
896
(
26.9
)
Total PH, ID, CVM
U.S.
1,643
1,891
(
13.2
)
5,428
5,700
(
4.8
)
International
917
950
(
3.5
)
2,826
2,828
(
0.1
)
Worldwide
2,560
2,843
(
9.9
)
8,254
8,529
(
3.2
)
TOTAL INNOVATIVE MEDICINE
U.S.
10,447
9,402
11.1
29,297
26,655
9.9
International
6,310
6,161
2.4
19,270
17,983
7.2
Worldwide
16,757
15,563
7.7
48,567
44,638
8.8
MEDTECH
Cardiovascular
U.S.
1,397
1,306
7.0
4,222
3,931
7.4
International
910
908
0.2
2,866
2,698
6.2
Worldwide
2,307
2,213
4.3
7,088
6,629
6.9
ELECTROPHYSIOLOGY
U.S.
771
720
7.0
2,290
2,145
6.8
International
717
698
2.8
2,219
2,064
7.5
Worldwide
1,487
1,418
4.9
4,509
4,209
7.1
ABIOMED
U.S.
335
336
(
0.3
)
1,066
1,035
3.0
International
78
86
(
10.4
)
275
256
7.2
Worldwide
412
423
(
2.3
)
1,340
1,291
3.8
SHOCKWAVE
U.S.
261
220
18.8
771
659
17.0
International
64
59
9.3
194
169
14.8
Worldwide
325
278
16.8
965
828
16.6
24
Table of Contents
Fiscal Third Quarter Ended
Fiscal Nine Months Ended
(Dollars in Millions)
September 27,
2026
September 28,
2025
Percent
Change
September 27,
2026
September 28,
2025
Percent
Change
OTHER CARDIOVASCULAR
U.S.
31
30
3.6
96
93
3.2
International
50
65
(
21.9
)
177
209
(
15.0
)
Worldwide
81
95
(
13.9
)
273
302
(
9.4
)
Surgery
U.S.
1,070
1,031
3.7
3,210
3,076
4.3
International
1,459
1,511
(
3.4
)
4,483
4,417
1.5
Worldwide
2,528
2,542
(
0.6
)
7,692
7,493
2.7
ADVANCED
U.S.
500
477
5.1
1,476
1,411
4.7
International
654
688
(
5.0
)
1,991
1,991
0.0
Worldwide
1,155
1,165
(
0.9
)
3,467
3,402
1.9
GENERAL
U.S.
568
555
2.4
1,733
1,666
4.0
International
805
823
(
2.2
)
2,492
2,426
2.7
Worldwide
1,373
1,378
(
0.3
)
4,225
4,092
3.3
Vision
U.S.
596
571
4.3
1,740
1,694
2.7
International
865
828
4.4
2,537
2,354
7.8
Worldwide
1,461
1,400
4.4
4,277
4,048
5.6
CONTACT LENSES / OTHER
U.S.
465
456
1.9
1,378
1,337
3.1
International
588
562
4.7
1,669
1,565
6.6
Worldwide
1,053
1,018
3.5
3,047
2,902
5.0
SURGICAL
U.S.
132
116
13.6
363
358
1.4
International
276
266
3.8
867
789
10.0
Worldwide
408
383
6.8
1,230
1,147
7.3
Orthopaedics
U.S.
1,448
1,396
3.8
4,353
4,200
3.6
International
898
878
2.2
2,794
2,620
6.6
Worldwide
2,345
2,274
3.2
7,146
6,820
4.8
HIPS
U.S.
271
262
3.5
831
796
4.4
International
148
144
2.6
465
440
5.7
Worldwide
419
405
3.1
1,296
1,235
4.9
KNEES
U.S.
221
216
2.1
688
673
2.2
International
165
160
3.0
528
482
9.7
Worldwide
386
377
2.5
1,216
1,155
5.3
Form 10-Q
25
Table of Contents
Fiscal Third Quarter Ended
Fiscal Nine Months Ended
(Dollars in Millions)
September 27,
2026
September 28,
2025
Percent
Change
September 27,
2026
September 28,
2025
Percent
Change
TRAUMA
U.S.
555
512
8.6
1,623
1,515
7.1
International
288
281
2.4
880
818
7.6
Worldwide
844
793
6.4
2,504
2,333
7.3
SPINE, SPORTS & OTHER
U.S.
401
406
(
1.2
)
1,211
1,216
(
0.4
)
International
296
293
1.3
920
881
4.5
Worldwide
697
698
(
0.1
)
2,131
2,096
1.7
TOTAL MEDTECH
U.S.
4,512
4,306
4.8
13,525
12,902
4.8
International
4,130
4,124
0.1
12,679
12,089
4.9
Worldwide
8,642
8,430
2.5
26,204
24,991
4.9
WORLDWIDE
U.S.
14,959
13,708
9.1
42,822
39,557
8.3
International
10,440
10,285
1.5
31,949
30,072
6.2
Worldwide
$
25,399
23,993
5.9
%
$
74,771
69,629
7.4
%
*    Percentage greater than 100% or not meaningful
(1)
Includes the sales of ZYTIGA which were previously disclosed separately
(2)
Acquired with Intra-Cellular Therapies on April 2, 2025
Adjustments to revenue recognized as a result of changes in estimates for the Company's most significant U.S. rebates and discounts liability balances for products shipped in previous years were approximately
0.4
% and
2.4
% of U.S. Innovative Medicine revenue during the fiscal third quarter of 2026 and 2025, respectively and approximately
2.6
% and
3.1
% of U.S. Innovative Medicine revenue during the fiscal nine months of 2026 and 2025, respectively.
In October 2025, the Company announced its intention to separate its Orthopaedics business and expects the separation to be completed in mid-2027.
26
Table of Contents
Segment income before tax
Fiscal Third Quarter Ended
(Dollars in Millions)
September 27,
2026
September 28,
2025
Innovative Medicine
(1)
MedTech
(2)
Total
Innovative Medicine
(1)
MedTech
(2)
Total
Sales to customers
$
16,757
8,642
15,563
8,430
Cost of products sold
4,486
3,597
3,672
3,612
Selling, marketing and administrative
3,035
3,014
2,869
2,801
Research and development expense
3,888
764
2,944
728
Other segment items
(3)
282
491
(
368
)
2
Segment income before tax
$
5,066
776
5,842
6,446
1,287
7,733
(Income)/Expense not allocated to segments
(4)
5,808
240
Earnings before provision for taxes on income
$
34
$
7,493
Fiscal Nine Months Ended
Sales to customers
$
48,567
26,204
44,638
24,991
Cost of products sold
13,172
11,035
11,670
10,576
Selling, marketing and administrative
9,083
8,989
7,919
8,319
Research and development expense
9,576
2,256
8,361
2,052
Other segment items
(3)
104
732
(
520
)
132
Segment income before tax
$
16,632
3,192
19,824
17,208
3,912
21,120
(Income)/Expense not allocated to segments
(4)
7,053
(
6,495
)
Earnings before provision for taxes on income
$
12,771
$
27,615
(1)
Innovative Medicine includes:
•
Intangible amortization expense of $
0.8
billion and $
0.6
billion in the fiscal third quarters of 2026 and 2025, respectively.
Intangible amortization expense of $
2.3
billion and $
2.0
billion in the fiscal nine months of 2026 and 2025, respectively.
•
Restructuring related charge of $
0.1
billion and $
0.3
billion in the fiscal third quarter and fiscal nine months of 2026, respectively. Refer to Note 12 for additional details.
•
Acquired in-process research and development expense of approximately $
1.0
billion related to the acquisition of Firefly Bio, Inc. in the fiscal third quarter and fiscal nine months of 2026. Refer to Note 10 for additional details.
•
Expense of $
0.3
billion related to the strategic collaboration with Sail Biomedicines (Sail) in the fiscal third quarter and fiscal nine months of 2026. Refer to Note 10 for additional details.
(2)
MedTech includes:
•
Intangible amortization expense of $
0.5
billion in both the fiscal third quarters of 2026 and 2025.
Intangible amortization expense of $
1.4
billion in both the fiscal nine months of 2026 and 2025.
•
Orthopaedics Separation related costs of $
0.4
billion and $
0.7
billion in the fiscal third quarter and fiscal nine months of 2026, respectively as compared to $
0
in the fiscal third quarter and fiscal nine months of 2025.
•
In-process research and development impairment charges of $
0.3
billion and $
0.4
billion in the fiscal third quarter and fiscal nine months of 2026, respectively, primarily related to PreCardia, a non-strategic asset acquired as part of the Abiomed acquisition in 2022.
•
Impact of tariff recoveries of approximately $
0.2
billion in the fiscal third quarter and fiscal nine months of 2026.
(3)
Other segment items for each reportable segment include other income and expense (gains and losses on divestitures and sales of assets), restructuring activities and impairment charges related to in-process research and development
(4)
Amounts not allocated to segments include interest (income)/expense and general corporate (income)/expense. The fiscal third quarter and fiscal nine months of 2026 includes a charge of $
5.5
billion related to the proposed talc ovarian litigation resolution. The fiscal nine months of 2025 includes approximately $
7.0
billion related to the talc reserve reversal.
Form 10-Q
27
Table of Contents
Identifiable Assets
(Dollars in Millions)
September 27, 2026
December 28, 2025
Innovative Medicine
$
78,944
78,057
MedTech
86,214
86,482
Total
165,158
164,539
General corporate
(1)
32,267
34,671
Worldwide total
$
197,425
199,210
(1)
General corporate includes cash, cash equivalents, marketable securities and other corporate assets.
Additions to Property,
Plant & Equipment
Depreciation and
Amortization
Fiscal Nine Months Ended
(Dollars in Millions)
September 27, 2026
September 28, 2025
September 27, 2026
September 28, 2025
Innovative Medicine
$
1,865
1,166
$
3,258
2,757
MedTech
1,701
1,674
2,638
2,564
Segments total
3,566
2,840
5,896
5,321
General corporate
166
155
184
171
Worldwide total
$
3,732
2,995
$
6,080
5,492
Sales by geographic area
Fiscal Third Quarter Ended
Fiscal Nine Months Ended
(Dollars in Millions)
September 27, 2026
September 28, 2025
Percent
Change
September 27, 2026
September 28, 2025
Percent Change
United States
$
14,959
13,708
9.1
%
$
42,822
39,557
8.3
%
Europe
5,405
5,440
(
0.6
)
16,979
15,937
6.5
Western Hemisphere, excluding U.S.
1,385
1,231
12.5
3,987
3,604
10.6
Asia-Pacific, Africa
3,650
3,614
1.0
10,983
10,531
4.3
Total
$
25,399
23,993
5.9
%
$
74,771
69,629
7.4
%
Note 10 —
Acquisitions, divestitures and other arrangements
Business combinations
Acquisitions of a business are accounted for as business combinations applying the acquisition method of accounting. Under this method, the assets acquired and liabilities assumed are recorded at their respective fair values as of the acquisition date in the Company’s consolidated financial statements. The excess of the purchase price over the fair value of the acquired net assets, where applicable, is recorded as goodwill. The results of operations of these acquisitions have been included in the Company’s financial statements from their respective dates of acquisition.
In the fiscal nine months of 2026, there were no material business combinations.
2025 Transactions
During the fiscal year 2025, the Company acquired Halda Therapeutics OpCo, Inc. (Halda Therapeutics) and Intra-Cellular Therapies, Inc. (Intra-Cellular) for a total of $
17.5
billion, net of cash acquired.
Halda Therapeutics
On December 26, 2025, the Company completed the acquisition of Halda Therapeutics, a clinical-stage biotechnology company with proprietary Regulated Induced Proximity TArgeting Chimera (RIPTAC
TM
) platform to develop oral, targeting therapies for
28
Table of Contents
multiple types of solid tumors, including prostate cancer, in an all-cash merger transaction for total consideration transferred of approximately $
3.05
billion, net of cash acquired. The acquisition was accounted for as a business combination and the results of operations and goodwill are included in the Innovative Medicine segment as of the acquisition date. Included in the total consideration transferred was $
0.2
billion of acquisition-related costs, primarily related to post-closing compensation expense due to the acceleration of equity awards. This expense was recorded in Other (income) expense, net. Acquisition related costs before tax for the fiscal nine months of 2026 were not material.
The fair value of the assets acquired is $
3.4
billion, which primarily relates to acquired in-process research and development (IPR&D) of $
2.8
billion and goodwill of $
0.6
billion. The fair value of the liabilities assumed is $
0.6
billion, primarily related to deferred taxes. These values are preliminary and based on the best estimate of management, which is subject to change within the measurement period. As of the fiscal nine months ended September 27, 2026, there have been no material measurement period adjustments.
Intra-Cellular
On April 2, 2025, the Company completed the acquisition of Intra-Cellular, a biopharmaceutical company focused on the development and commercialization of therapeutics for central nervous system disorders. This acquisition advances the Company’s industry-leading portfolio in mental health with the addition of CAPLYTA (lumateperone), the first and only U.S. FDA-approved treatment for bipolar I and II depression as an adjunctive therapy and monotherapy and is also approved for the treatment of schizophrenia in adults. This acquisition also includes a promising clinical-stage pipeline with best-in-class potential in generalized anxiety disorder and Alzheimer’s disease-related psychosis and agitation.
The Company acquired all the outstanding shares of Intra-Cellular’s common stock for $
132.00
per share in an all-cash merger transaction for total consideration transferred of $
14.5
billion. The acquisition was accounted for as a business combination and the results of operations and goodwill are included in the Innovative Medicine segment as of the acquisition date. In addition, acquisition-related costs before tax incurred during the fiscal year 2025 were $
0.4
billion, of which $
0.1
billion related to post-closing compensation expense due to the acceleration of equity awards and were recorded to Other (income) expense, net. Acquisition related costs before tax for the fiscal nine months of 2026 were not material.
The fair value of the assets acquired is $
17.5
billion, which primarily relates to acquired in-process research and development (IPR&D) of $
8.3
billion, an amortizable intangible asset of $
5.2
billion, goodwill of $
2.9
billion and other current and non-current assets of $
1.1
billion. The fair value of the liabilities assumed is $
3.0
billion, primarily related to deferred taxes. During the fiscal fourth quarter of 2025, the U.S. FDA approved CAPLYTA as an adjunctive therapy with anti-depressants for the treatment of major depressive disorder in adults. This IPR&D asset was reclassified to a definite lived asset and began amortizing in the fiscal fourth quarter of 2025.
Asset acquisitions
If it is determined that the acquired set does not meet the definition of a business under the acquisition method of accounting, the transaction is accounted for as an asset acquisition. In this case, no goodwill is recorded, acquired in-process research and development (IPR&D) with no alternative future use is immediately recorded as research and development expense and contingent consideration is recorded when the related event occurs.
Firefly Bio
On July 29, 2026, the Company completed the acquisition of Firefly Bio, Inc. (Firefly), a biotechnology company advancing its proprietary Firelink™ degrader antibody conjugate (DAC) platform, for approximately $
1.0
billion in cash. The Company recorded an IPR&D charge of approximately $
1.0
billion, and the results of operations are included in the Innovative Medicine segment as of the acquisition date.
In the fiscal nine months of 2025, there were no material asset acquisitions.
In the fiscal nine months of 2026 and 2025, there were no material divestitures.
Other arrangements
Royalty Pharma
In the fiscal first quarter of 2026, the Company entered into a co-funding agreement with Royalty Pharma plc. (Royalty Pharma) under which the Company will receive up to a total of $
0.5
billion during the fiscal years 2026 and 2027 to support the clinical development of JNJ-4804, a co-antibody therapy in development to treat chronic immune-mediated diseases. As there is a substantive and genuine transfer of risk to Royalty Pharma, the development funding is recognized as an obligation to perform contractual services. Accordingly, the funding the Company receives is recognized as a reduction to Research and development expense as the Company performs its contractual services.
Form 10-Q
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Table of Contents
If successful, upon regulatory approval of certain indications in the U.S. or other major markets, Royalty Pharma will receive approval-based fixed milestone payments up to approximately $
0.5
billion and will also be eligible to receive sales-based milestone payments and low-single digit royalties based on commercial sales. The funding received during the fiscal nine months of 2026 was not material.
Sail Biomedicines
In the fiscal third quarter of 2026, the Company entered into strategic agreements and collaboration with Sail Biomedicines (Sail), a biotechnology company developing in vivo CAR-T therapies for immune-mediated diseases. The Company is collaborating with Sail to advance its lead immune-mediated disease program and broader platform technology, with incentives to expand the application of Sail's in vivo CAR-T platform across additional therapeutic targets over time. Under the terms of the agreements, the Company made total initial payments of $
0.8
billion, including a $
0.5
billion equity investment recorded within Other assets, and the remainder, primarily related to an option premium payment, is recorded within Other (income) and expense, net on the Consolidated Statement of Earnings. On the Consolidated Statement of Cash Flows, the transaction of $
0.8
billion is primarily recorded within purchases of investments and the option premium is recorded as an adjustment to Net Earnings within Asset Write-downs. Additionally, the Company has been granted an exclusive option to acquire Sail for approximately $
2.6
billion.
Note 11 —
Legal proceedings
Johnson & Johnson and certain of its subsidiaries are involved in various lawsuits and claims regarding product liability; intellectual property; commercial; indemnification and other matters; governmental investigations; and other legal proceedings that arise from time to time in the ordinary course of their business.
The Company records accruals for loss contingencies associated with these legal matters when it is probable that a liability will be incurred, and the amount of the loss can be reasonably estimated. As of September 27, 2026, the Company has determined that the liabilities associated with certain litigation matters are probable and can be reasonably estimated. The Company has accrued for these matters and will continue to monitor each related legal issue and adjust accruals as might be warranted based on new information and further developments in accordance with ASC 450-20-25. For these and other litigation and regulatory matters discussed below for which a loss is probable or reasonably possible, the Company is unable to estimate the possible loss or range of loss beyond the amounts accrued. Amounts accrued for legal contingencies often result from a complex series of judgments about future events and uncertainties that rely heavily on estimates and assumptions including timing of related payments. The ability to make such estimates and judgments can be affected by various factors including, among other things, whether damages sought in the proceedings are unsubstantiated or indeterminate; scientific and legal discovery has not commenced or is not complete; proceedings are in early stages; matters present legal uncertainties; there are significant facts in dispute; procedural or jurisdictional issues; the uncertainty and unpredictability of the number of potential claims; ability to achieve comprehensive multi-party settlements; complexity of related cross-claims and counterclaims; and/or there are numerous parties involved. To the extent adverse awards, judgments, or verdicts have been rendered against the Company, the Company does not record an accrual until a loss is determined to be probable and can be reasonably estimated.
In the Company’s opinion, based on its examination of these matters, its experience to date, and discussions with counsel, the ultimate outcome of legal proceedings, net of liabilities accrued in the Company’s balance sheet, is not expected to have a material adverse effect on the Company’s financial position. However, the resolution of, or increase in accruals for, one or more of these matters in any reporting period may have a material adverse effect on the Company’s results of operations and cash flows for that period.
Matters concerning talc
As of September 27, 2026, there are approximately
76,500
plaintiffs in the United States with direct claims against the Company and its affiliates in pending lawsuits regarding injuries allegedly due to the use of body powders containing talc, primarily JOHNSON’S Baby Powder.
In talc cases that have gone to trial, the Company has obtained a number of defense verdicts, but there also have been verdicts against the Company, many of which have been reversed on appeal. The Company continues to believe that it has strong legal grounds to contest all the talc verdicts that it has appealed. Notwithstanding the Company’s confidence in the safety of its talc products, in certain circumstances the Company has settled cases.
In an effort to expeditiously resolve the litigation for the overwhelming majority of claimants, beginning in October 2021, the Company underwent a series of corporate restructurings which ultimately resulted in two entities, Red River Talc, LLC (Red River) and Pecos River Talc LLC (Pecos River), being assigned all liabilities related in any way to injury or damage, or alleged injury or
30
Table of Contents
damage, sustained or incurred in the purchase or use of, or exposure to, talc, including talc contained in any product, or to the risk of, or responsibility for, any such damage or injury, except for any liabilities for which the exclusive remedy is provided under a workers’ compensation statute or act. As a result of the restructurings, all claims in North America related to ovarian and other gynecological cancers were separated and allocated to Red River, and mesothelioma, governmental unit, and certain other claims in North America were allocated to Pecos River. In connection with these restructurings, the Company filed a series of three Chapter 11 bankruptcy proceedings. Ultimately, each of the bankruptcy proceedings was dismissed and, as a result, the Company reversed substantially all, or approximately $
7.0
billion, from amounts previously reserved for the bankruptcy resolution in the fiscal first quarter of 2025.
Following the third bankruptcy dismissal, litigation in the tort system recommenced with both ovarian cancer and mesothelioma trials scheduled in various state courts throughout 2026 and beyond. In July 2026, following certain favorable rulings in the multi-district litigation (MDL) pending in the United States District Court for the District of New Jersey and plaintiffs' withdrawal of their causation experts in the first bellwether matters, the Company announced a plan to resolve the ovarian cancer docket. Specifically, the Company reached an agreement with plaintiff firms leading the MDL and related state court proceedings conditioned on, among other things, the express participation of at least
95
% of the remaining claims. The proposed resolution calls for a $
5.5
billion commitment by the Company. The proposed agreement does not impact the mesothelioma docket, which remains ongoing. The Company also faces litigation in Canada.
As of the third quarter of 2026, the total present value of the reserve for talc related matters is approximately $
9.0
billion, comprising the ovarian settlement agreement, executed settlement agreements, litigation defense, and other costs. Approximately half of the reserve is recorded as a current liability.
In February 2018, a securities class action lawsuit was filed against the Company and certain named officers in the United States District Court for the District of New Jersey alleging that the Company violated the federal securities laws by failing to disclose alleged asbestos contamination in body powders containing talc, primarily JOHNSON’S Baby Powder, and that purchasers of the Company’s shares suffered losses as a result. In April 2019, the Company moved to dismiss the complaint. In December 2019, the court denied, in part, the motion to dismiss. In December 2023, the court granted plaintiffs’ motion for class certification. In July 2025, the Third Circuit affirmed the court's order granting class certification. In September 2025, the Company petitioned the Third Circuit for rehearing or rehearing en banc, which was denied in October 2025. In February 2026, the Company filed a writ of certiorari with the United States Supreme Court regarding the Third Circuit’s decision, which the Supreme Court denied in April 2026. Expert discovery is proceeding.
In February 2019, the Company’s talc supplier, Imerys Talc America, Inc., and two of its affiliates, Imerys Talc Vermont, Inc. and Imerys Talc Canada, Inc. (collectively, Imerys), filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. In February 2021, Cyprus Mines Corporation (Cyprus), which sold certain talc mines and assets to Imerys, filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code in the Delaware Bankruptcy Court. In July 2024, the Company, Imerys, Cyprus, and certain of their affiliates (including their parent entities), and the tort claimants' committees and future claimants' representatives appointed in the Imerys debtors' and Cyprus debtors' respective Chapter 11 cases, entered into a global settlement agreement (the Imerys Settlement Agreement) to resolve the parties' ongoing disputes, including disputes raised in the Imerys and Cyprus bankruptcies regarding (i) the Company's alleged obligations to indemnify Imerys and Cyprus for personal injury claims allegedly caused by exposure to talc contained in the Company's products and (ii) entitlements to proceeds of certain of the Company's insurance policies. In October 2024, the Delaware Bankruptcy Court entered an order approving the Imerys Settlement Agreement (the Settlement Order). Certain insurers appealed the Settlement Order and sought a stay of the Settlement Order pending appeal, which the Delaware Bankruptcy Court denied in January 2025. In August 2025, the United States District Court for the District of Delaware denied the insurers' appeal of the Settlement Order. The insurers appealed that decision and, in October 2026, the Third Circuit dismissed the appeal.
Intellectual property
Certain subsidiaries of the Company are involved in legal proceedings and claims related to patent, trademark, and other intellectual property matters arising out of their businesses. Many of these matters involve challenges to the scope and/or validity of patents that relate to various products and/or to allegations that certain of the Company’s products infringe the intellectual property rights of third parties. Although these subsidiaries believe that they have substantial defenses to these challenges and allegations with respect to all significant patents, there can be no assurance as to the outcome of these matters. A loss in any of these cases could adversely affect the ability of these subsidiaries to sell their products, result in loss of sales due to loss of market exclusivity, require the payment of past damages and future royalties, and may result in a non-cash impairment charge for any associated intangible asset.
Form 10-Q
31
Table of Contents
Innovative Medicine
INVEGA SUSTENNA
Beginning in January 2018, Janssen Pharmaceutica NV and Janssen Pharmaceuticals, Inc. (collectively, Janssen) filed patent infringement lawsuits in United States district courts against generic manufacturers who have filed ANDAs seeking approval to market generic versions of INVEGA SUSTENNA before expiration of the Orange Book listed patent. The following entities are named defendants: Eugia Pharma Specialities Ltd. and Eugia US, LLC. The following U.S. patent is included: 9,439,906. In June 2026, Janssen entered into a confidential settlement with Eugia Pharma Specialities Ltd. and Eugia US, LLC.
Beginning in February 2018, Janssen Inc. and Janssen Pharmaceutica NV initiated a Statement of Claim under Section 6 of the Patented Medicines (Notice of Compliance) Regulations against generic manufacturers who have filed ANDSs seeking approval to market generic versions of INVEGA SUSTENNA before expiration of the listed patent. Pharmascience Inc. is a named defendant. The following Canadian patent is included in one or more cases: 2,655,335. In September 2024, the Supreme Court of Canada granted Pharmascience's motion to appeal the Federal Court's decision that the 2,655,335 Patent is not invalid. In July 2026, the Supreme Court of Canada dismissed Pharmascience's appeal.
ERLEADA
Beginning in January 2025, Aragon Pharmaceuticals, Inc., Janssen Inc. (collectively, Janssen Inc.), and Sloan-Kettering Institute for Cancer Research (SKI) initiated Statements of Claims under Section 6 of the Patented Medicines (Notice of Compliance) Regulations against Sandoz Canada Inc. (Sandoz) in response to Sandoz’s filing of ANDSs seeking approval to market 60 mg and 240 mg generic versions of ERLEADA before the expiration of CA Patent Nos. 3,008,345; 2,875,767; 2,885,415; and 3,128,331. Janssen Inc. and SKI are seeking orders enjoining Sandoz from marketing 60 mg and 240 mg generic versions of ERLEADA before the expiration of the relevant patents. Trial took place in August and September 2026. A decision is pending.
Beginning in June 2026, Aragon Pharmaceuticals, Inc., Janssen Biotech, Inc., and Sloan-Kettering Institute for Cancer Research initiated a patent infringement lawsuit in the United States District Court for the District of New Jersey against MSN Pharmaceuticals Inc., MSN Laboratories Private Limited, and Novadoz Pharmaceuticals, LLC who filed an ANDA seeking approval to market 60 mg and 240 mg generic versions of ERLEADA before the expiration of certain Orange Book listed patents. The following U.S. patents are included in the case: 9,481,663; 11,963,952; 12,303,493; and 12,303,497.
Beginning in October 2026, Aragon Pharmaceuticals, Inc. and Janssen Biotech, Inc. initiated a patent infringement lawsuit in the United States District Court for the District of New Jersey against Lupin Limited and Lupin Pharmaceuticals, Inc. who filed an ANDA seeking approval to market 60 mg generic versions of ERLEADA before the expiration of certain Orange Book listed patents. The following U.S. patents are included in the case: 12,303,493 and 12,303,497.
SPRAVATO
Beginning in May 2023, Janssen Pharmaceuticals, Inc. and Janssen Pharmaceutica NV filed patent infringement lawsuits in United States district courts against generic manufacturers who have filed ANDAs seeking approval to market generic versions of SPRAVATO before expiration of certain Orange Book listed patents. The following entities are named defendants: Sandoz Inc. (Sandoz) and Alkem Laboratories Ltd. The following U.S. patents are included in one or more cases: 10,869,844; 11,173,134; 11,311,500; and 11,446,260. A trial against Sandoz took place in February 2026. In August 2026, the United States District Court for the District of New Jersey issued a decision finding that the asserted patents are infringed and not invalid. In September 2026, Sandoz appealed.
CAPLYTA
Beginning in March 2024, Intra-Cellular Therapies, Inc. (Intra-Cellular) filed patent infringement lawsuits in the United States District Court for the District of New Jersey against generic manufacturers who have filed ANDAs seeking approval to market generic versions of CAPLYTA before expiration of certain Orange Book listed patents. The following entities are named defendants: Zydus Pharmaceuticals (USA) Inc. and Zydus Lifesciences Ltd. The following U.S. patents are included: RE 48,825; RE 48,839; 8,648,077; 9,168,258; 9,199,995; 9,616,061; 9,956,227; 10,117,867; 10,464,938; 10,960,009; 11,026,951; 11,753,419; 11,980,617; 12,070,459; 12,090,155; 12,122,792; 12,128,043; 12,409,176; and 12,410,195. In August 2026, Intra-Cellular, Zydus Pharmaceuticals (USA) Inc., and Zydus Lifesciences Ltd. entered into a confidential settlement agreement and the case was dismissed.
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CARVYKTI
In January 2026, 2seventy bio, Inc. filed suit in the Unified Patent Court, Local Division of Brussels, against the Company, Janssen Biotech, Inc., Janssen Pharmaceuticals Inc., Janssen-Cilag International NV, Janssen Pharmaceutica NV, Janssen-Cilag NV, Janssen Biologics B.V., Janssen-Cilag B.V., Janssen-Cilag GmbH, Janssen-Cilag, Janssen-Cilag SpA, Janssen-Cilag A/S, Janssen-Cilag Aktiebolag, Janssen-Cilag Farmaceutica Lda., Legend Biotech Corporation, Legend Biotech USA Inc., Legend Biotech Ireland Limited, and Legend Biotech Belgium BV alleging that the manufacture and sale of CARVYKTI infringes EU Patent No. 3 689 383. In the suit, the exclusive licensee, 2seventy bio, Inc., seeks damages and an injunction. In May 2026, The United States of America, including the Department of Health and Human Services, Office of Technology Transfer, as the patent owner, intervened in the action. An oral hearing is scheduled for March 2027.
DARZALEX
In February 2026, BIOCAD JSC (BIOCAD) and PK-137 LLC filed a lawsuit against Genmab A/S and Johnson & Johnson LLC in the Arbitrazh Court of Moscow Region seeking: (1) a declaration of entitlement to use the inventions claimed in Genmab’s EA Patent No. 015584 in the manufacture/marketing of their drug “Daratumia” (INN daratumumab) starting from March 24, 2026, on the basis that patent EA 015584 expires March 23, 2026; (2) a declaration that Genmab’s and Johnson & Johnson LLC’s actions in obtaining PTE extending Genmab’s EA Patent No. 037929 and sending warning letters to BIOCAD asserting infringement risks after March 24, 2026 constitute unfair competition under Article 14.8 of Law on Protection of Competition (EA 037929 has PTE until March 23, 2031); and (3) an order restraining Genmab and Johnson & Johnson LLC from creating obstacles to BIOCAD’s introduction of “Daratumia” into civil circulation starting from March 24, 2026. In September 2026, BIOCAD and PK-137 LLC withdrew their unfair competition claim and BIOCAD launched its biosimilar daratumumab product at risk.
SIMPONI
In March 2026, Janssen Biotech, Inc. and Janssen Sciences Ireland Unlimited Company (collectively, Janssen) filed a patent infringement lawsuit in the United States District Court for the District of Delaware against Accord BioPharma, Inc. (Accord) and Bio-Thera Solutions, Ltd. (Bio-Thera) in response to Accord’s filing of an aBLA seeking approval to market biosimilar versions of SIMPONI and SIMPONI ARIA and providing notice of commercial marketing pursuant to 42 U.S.C. § 262(l)(8)(A) for those biosimilar products. The following U.S. patents are included in the case: 8,017,325; 8,586,356; 8,852,889; 8,956,830; 9,170,249; 9,217,168; 9,475,858; 9,487,810; 9,663,810; 9,890,410; 12,129,292; 12,139,735; and 12,180,271. The following U.S. patents were dismissed without prejudice: 11,014,982; 11,041,020; 12,122,824; and 12,291,566. Janssen sought an order enjoining defendants from marketing their biosimilar versions of SIMPONI and SIMPONI ARIA before the expiration of the asserted patents. In September 2026, the court preliminarily enjoined Accord and Bio-Thera pending trial. Trial is scheduled for March 2028. Accord and Bio-Thera appealed the injunction.
In March 2026, Accord BioPharma, Inc., Intas Pharmaceuticals Ltd., and Bio-Thera Solutions, Ltd. submitted four petitions requesting inter partes review (IPR) of U.S. patent nos. 11,014,982; 11,041,020; 12,122,824; and 12,291,566. In September 2026, the U.S. Patent & Trademark Office instituted review of the patents. A final written decision is expected by September 2027.
In June 2026, Janssen Biotech, Inc. and Janssen Sciences Ireland Unlimited Company (collectively, Janssen) filed a patent infringement lawsuit in the United States District Court for the Eastern District of Virginia against Alvotech hf. and Alvotech USA Inc. (Alvotech USA) in response to Alvotech USA’s filing of aBLAs seeking approval to market biosimilar versions of SIMPONI and SIMPONI ARIA and providing notice of commercial marketing pursuant to 42 U.S.C. § 262(l)(8)(A) for those biosimilar products. The following U.S. patents are included in the case: 8,017,325; 8,852,889; 8,956,830; 9,170,249; 9,217,168; 9,475,858; 9,487,810; 9,663,810; 9,890,410; 10,421,986; 11,225,516; 12,139,735; 12,534,524; and 12,595,454. Janssen is seeking an order enjoining defendants from marketing their biosimilar versions of SIMPONI and SIMPONI ARIA before the expiration of the asserted patents. In July 2026, Janssen filed a motion for preliminary injunction pending trial. In September 2026, Teva Pharmaceuticals USA Inc. intervened seeking a declaratory judgment of noninfringement and invalidity. No trial date has been set.
MedTech
In March 2016, Abiomed, Inc. filed a declaratory judgment action against Maquet Cardiovascular LLC (Maquet) in the United States District Court for the District of Massachusetts seeking a declaration that certain Impella products do not infringe Maquet patents. Maquet counterclaimed for infringement against Abiomed, Inc., Abiomed Europe GmbH, and Abiomed R&D, Inc. The following U.S. patents are at issue: 8,888,728; 9,327,068; 9,545,468; 9,561,314; and 9,597,437. In February 2026, the U.S. Court of Appeals for the Federal Circuit remanded the case after considering the district court's claim constructions. Discovery will begin based on the altered constructions.
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In November 2017, Maquet Cardiovascular LLC filed suit against Abiomed, Inc., Abiomed R&D, Inc., and Abiomed Europe GmbH in the United States District Court for the District of Massachusetts alleging that certain Impella products infringe Maquet patents. U.S. Patent No. 10,238,783 remains in the suit, and trial was held in May 2026. The jury returned a verdict in Abiomed's favor. Post-trial motions are pending.
Government proceedings
Like other companies in the pharmaceutical and medical technologies industries, the Company and certain of its subsidiaries are subject to extensive regulation by national, state, and local government agencies in the United States and other countries in which they operate. Such regulation has been the basis of government investigations and litigations. The most significant litigation brought by, and investigations conducted by, government agencies are listed below. It is possible that criminal charges and substantial fines and/or civil penalties or damages could result from government investigations or litigation.
MedTech
In June 2026, three Relators filed an Amended False Claims Act Complaint in the United States District Court for the Southern District of Florida alleging the Company and DePuy Synthes, along with Tenet Healthcare Corporation, Delray Medical Center, and West Boca Medical Center caused the submission of false claims to federal and Florida healthcare programs. The Relators are sales representatives for competitor companies, and the complaint was served following a decision by the Department of Justice to decline intervening in the case. The Company and DePuy Synthes disagree with and are defending themselves against these claims.
Innovative Medicine
In July 2016, the Company and Janssen Products, LP were served with a qui tam complaint pursuant to the False Claims Act filed in the United States District Court for the District of New Jersey alleging the off-label promotion of two HIV products, PREZISTA and INTELENCE, and anti-kickback violations in connection with the promotion of these products. The complaint was filed under seal in December 2012. The federal and state governments have declined to intervene, and the lawsuit is being prosecuted by the relators. The court denied summary judgment on all claims in December 2021. Daubert motions were granted in part and denied in part in January 2022, and trial commenced in May 2024. In June 2024, a jury found no liability regarding the anti-kickback violations but found liability for a portion of the off-label promotion claims. The Company challenged the verdict on the off-label claims in post-trial briefing. In March 2025, the court dismissed the state law portion of the claims but entered judgment on the federal claims. The Company appealed the remainder of the verdict to the Third Circuit. The federal government has intervened for the limited purpose of defending the qui tam provision of the False Claims Act. Briefing is complete and oral argument was held in March 2026. A decision is pending. In April 2026, the Third Circuit ordered the parties to engage in mediation.
In March 2017, Janssen Biotech, Inc. (JBI) received a Civil Investigative Demand from the United States Department of Justice (DOJ) regarding a False Claims Act investigation concerning management and advisory services provided to rheumatology and gastroenterology practices that purchased REMICADE or SIMPONI ARIA. In August 2019, the DOJ notified JBI that it was closing the investigation. Subsequently, the United States District Court for the District of Massachusetts unsealed a qui tam False Claims Act complaint, which was served on the Company. The DOJ declined to intervene in the qui tam lawsuit in August 2019. In September 2026, the court denied relator/plaintiff's motion for summary judgment and granted the Company's motion for summary judgment in full, thus obviating the need for a trial. Relator/plaintiff has until October 30, 2026 to file a notice of appeal.
General litigation
The Company or its subsidiaries regularly face claims in legal proceedings related to contracts, trade secrets, antitrust, unfair competition, consumer protection, and environmental issues, the most significant of which are listed below. Although the Company and its subsidiaries believe that they have substantial defenses to these cases, there can be no assurance as to the outcome of these matters. A loss in any of these cases could require the payment of damages, injunctions, and/or other relief.
In October 2017, certain United States service members, civilians, and their families brought a complaint against a number of pharmaceutical and medical devices companies, including the Company and certain of its subsidiaries in the United States District Court for the District of Columbia, alleging that the defendants violated the United States Anti-Terrorism Act. The complaint alleges that the defendants provided funding for terrorist organizations through their sales practices pursuant to pharmaceutical and medical device contracts with the Iraqi Ministry of Health. In July 2020, the district court dismissed the operative complaint. In January 2022, the United States Court of Appeals for the District of Columbia Circuit reversed the district court’s decision. In June 2024, the Supreme Court vacated the D.C. Circuit's decision and remanded the case to the D.C. Circuit for reconsideration. In January 2026, the D.C. Circuit affirmed its reversal of the district court's dismissal of the complaint. In August 2026, defendants
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filed a petition for a writ of certiorari to the Supreme Court. In September 2026, defendants filed an additional motion to dismiss certain claims in the operative complaint.
In September 2026, additional United States service members, civilians, and their families filed an action against the same defendants in the United States District Court for the District of Columbia alleging similar claims, including violation of the Anti-Terrorism Act.
In February 2024, a putative class action was filed against the Company and the Pension & Benefits Committee of Johnson & Johnson in the United States District Court for the District of New Jersey. The complaint alleges that the defendants breached fiduciary duties under the Employee Retirement Income Security Act (ERISA) by allegedly mismanaging the Company’s prescription-drug benefits program. The complaint seeks damages and other relief. In March 2025, plaintiffs filed a second amended complaint. In November 2025, the court granted defendants' motion to dismiss plaintiffs' fiduciary duty claims. Plaintiffs voluntarily withdrew their remaining claim, and the court entered final judgment in defendants' favor in January 2026. Plaintiffs appealed to the United States Court of Appeals for the Third Circuit.
MedTech
In October 2020, Fortis Advisors LLC, as representative of the former stockholders of Auris Health Inc. (Auris), filed a complaint against the Company alleging breach of contract, fraud, and other causes of action in connection with Ethicon’s acquisition of Auris in 2019. In January 2026, the Company paid a $
0.8
billion judgment, inclusive of interest.
In October 2019, Innovative Health, LLC filed a complaint against Biosense Webster, Inc. (BWI) in the United States District Court for the Central District of California. The complaint alleges that certain of BWI's business practices and contractual terms violate the antitrust laws of the United States and the State of California by restricting competition in the sale of High-Density Mapping Catheters and Ultrasound Catheters. In May 2025, a jury returned its verdict in favor of Innovative Health. In August 2025, the court issued a permanent injunction concerning BWI's business practices. BWI appealed both the jury verdict and the permanent injunction. In June 2026, briefing of the appeal was completed.
Innovative Medicine
In October 2018, two separate putative class actions were filed against Actelion Pharmaceuticals Ltd., Actelion Pharmaceuticals US, Inc. and Actelion Clinical Research, Inc. (collectively, Actelion) in the United States District Court for the District of Maryland and the United States District Court for the District of Columbia. The complaints allege that Actelion violated state and federal antitrust and unfair competition laws by allegedly refusing to supply generic pharmaceutical manufacturers with samples of TRACLEER. TRACLEER is subject to a Risk Evaluation and Mitigation Strategy required by the U.S. Food and Drug Administration, which imposes restrictions on distribution of the product. In January 2019, plaintiffs dismissed the District of Columbia case and filed a consolidated complaint in the United States District Court for the District of Maryland. In September 2024, the district court granted plaintiffs' motion for class certification. In February 2026, the parties agreed to settle the matter. In July 2026, the court granted final approval of the settlement.
In December 2023, a putative class action lawsuit was filed against the Company and Janssen Biotech Inc. (collectively, Janssen) in the United States District Court for the Eastern District of Virginia. The complaint alleges that Janssen violated federal and state antitrust laws and other state laws by delaying biosimilar competition with STELARA through Janssen's enforcement of patent rights covering STELARA. The complaint seeks damages and other relief. In August 2024, the court granted in part and denied in part Janssen's motion to dismiss plaintiffs' amended complaint. In December 2025, the court granted plaintiffs' motion for class certification. In January 2026, the court granted summary judgment for Janssen on plaintiffs' claim regarding patents obtained through the acquisition of Momenta Pharmaceuticals, Inc. in 2020. In March 2026, plaintiffs appealed to the United States Court of Appeals for the Fourth Circuit.
In December 2018, Janssen Biotech, Inc., Janssen Oncology, Inc., Janssen Research & Development, LLC, and the Company (collectively, Janssen) were served with a qui tam complaint on behalf of the United States, certain states, and the District of Columbia. The complaint alleges that Janssen violated the federal False Claims Act and state law when providing pricing information for ZYTIGA to the government in connection with direct sales and reimbursement programs. The federal and state governments have declined to intervene, and the lawsuit is being prosecuted by the relator. In December 2021, the United States District Court for the District of New Jersey denied Janssen's motion to dismiss. Daubert proceedings are ongoing.
In August 2025, Xoma Corporation (Xoma) filed a complaint against Janssen Biotech, Inc. (Janssen) in the United States District Court for the Eastern District of Pennsylvania. The complaint alleges breach of contract, unjust enrichment, and declaratory relief
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claims against Janssen regarding the alleged failure to obtain a license from Xoma in connection with Janssen's commercialization of TREMFYA. In December 2025, the court denied Janssen's motion to dismiss.
Note 12 —
Restructuring
In the fiscal second quarter of 2026, the Company initiated a supply chain restructuring program primarily in the Innovative Medicine segment to exit certain manufacturing locations as part of its optimization efforts to streamline operations. The pre-tax restructuring expense in the fiscal third quarter of 2026 primarily related to exit costs. Total project costs of approximately $
0.3
billion have been recorded since the restructuring was announced. The program is expected to be substantially complete by the end of 2029 with estimated costs between $
0.7
billion and $
0.8
billion, and include site and supplier exit costs, decommissioning and asset impairments costs.
In fiscal 2025, the Company initiated a restructuring program of its Surgery franchise within the MedTech segment to simplify and focus operations by exiting certain non-strategic product lines and optimize select sites across the network. The pre-tax restructuring expense in the
fiscal third quarter of 2026 and 2025 primarily included costs related to product exits. Total project costs of approximately $
0.4
billion have been recorded since the restructuring was announced. This program will be completed as of the fiscal fourth quarter of 2026 at a total project cost of approximately $
0.6
billion.
In fiscal 2023, the Company initiated a restructuring program of its Orthopaedics franchise within its MedTech segment to streamline operations by exiting certain markets, product lines and distribution network arrangements. The pre-tax restructuring expense in the
fiscal third quarter of 2026 primarily included costs related to market and product exits. The pre-tax restructuring expense in the fiscal third quarter of 2025 primarily included asset impairments as well as market and product exits. Total project costs of approximately $
0.9
billion have been recorded since the restructuring was announced. This program will be completed as of the fourth quarter of 2026 at a total cost of approximately $
1.0
billion.
The following table summarizes the restructuring expenses for 2026 and 2025:
(Pre-tax Dollars in Millions)
Q3 2026
Q3 2025
Q3 YTD 2026
Q3 YTD 2025
Innovative Medicine supply chain
(1)
$
74
—
274
—
MedTech Segment Surgery franchise
(2)
80
128
194
157
MedTech Segment Orthopaedics franchise
(3)
41
40
65
145
Total Programs
$
195
168
533
302
(1)
Included $
103
million in Restructuring, a reversal of $
18
million expense in Cost of products sold and a reversal of $
11
million expense in Other (Income)/Expense on the Consolidated Statement of Earnings in the fiscal third quarter of 2026. Included $
171
million in Other (Income)/Expense and $
103
million in Restructuring on the Consolidated Statement of Earnings in the fiscal nine months of 2026.
(2)
Included $
44
million in Restructuring, $
6
million in Cost of products sold and $
30
million in Other (Income)/Expense on the Consolidated Statement of Earnings in the fiscal third quarter of 2026. Included $
105
million in Restructuring, $
30
million in Cost of products sold and $
59
million in Other (Income)/Expense on the Consolidated Statement of Earnings in the fiscal nine months of 2026. Included $
35
million in Restructuring and $
93
million in Other income and expense on the Consolidated Statement of Earnings in the fiscal third quarter of 2025. Included $
64
million in Restructuring and $
93
million in Other income and expense on the Consolidated Statement of Earnings in the fiscal nine months of 2025.
(3)
Included $
34
million in Restructuring and $
7
million in Cost of products sold on the Consolidated Statement of Earnings in the fiscal third quarter of 2026. Included $
39
million in Restructuring, $
25
million in Cost of products sold and $
1
million in Other (Income)/Expense on the Consolidated Statement of Earnings in the fiscal nine months of 2026. Included $
28
million in Restructuring and $
12
million in Cost of products sold on the Consolidated Statement of Earnings in the fiscal third quarter of 2025. Included $
80
million in Restructuring, $
35
million in Cost of products sold and $
30
million in Other (Income)/Expense on the Consolidated Statement of Earnings in the fiscal nine months of 2025.
Restructuring reserves as of September 27, 2026 and December 28, 2025 were insignificant.
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Item 2 — Management’s discussion and analysis of financial condition and results of operations
Results of operations
Sales to customers
Analysis of consolidated sales
For the fiscal nine months of 2026, worldwide sales were $74.8 billion, a total increase of 7.4%, including an operational* increase of 6.0% as compared to 2025 fiscal nine months sales of $69.6 billion. Currency fluctuations had a positive impact of 1.4% for the fiscal nine months of 2026. In the fiscal nine months of 2026, acquisitions and divestitures had a net positive impact of 0.3%, on worldwide operational sales growth, primarily related to CAPLYTA. In the fiscal nine months of 2026, the negative impact of the STELARA sales decline, due to biosimilar competition, on worldwide operational sales was approximately 4.7%.
Sales by U.S. companies were $42.8 billion in the fiscal nine months of 2026, which represented an increase of 8.3% as compared to the prior year. In the fiscal nine months of 2026, acquisitions and divestitures had net positive impact of 0.7% on U.S. operational sales growth, primarily related to CAPLYTA. In the fiscal nine months of 2026, the negative impact of the STELARA sales decline, due to biosimilar competition on U.S. operational sales was approximately 6.6%. Sales by international companies were $31.9 billion, which represented an increase of 6.2%, including an operational increase of 3.0%, and a positive currency impact of 3.2% as compared to the fiscal nine months sales of 2025. In the fiscal nine months of 2026, the net impact of acquisitions and divestitures on international operational sales growth was a negative 0.1%. In the fiscal nine months of 2026, the negative impact of the STELARA sales decline, due to biosimilar competition, on international operational sales was approximately 2.4%.
In the fiscal nine months of 2026, sales by companies in Europe achieved growth of 6.5%, which included an operational increase of 2.3% and a positive currency impact of 4.2%. Sales by companies in the Western Hemisphere, excluding the U.S., achieved growth of 10.6%, which included an operational increase of 4.5% and a positive currency impact of 6.1%. Sales by companies in the Asia-Pacific, Africa region achieved growth of 4.3%, including operational growth of 3.6% and a positive currency impact of 0.7%.
Fiscal nine months 2026
sales by geographic region (in billions)
Fiscal nine months 2026
sales by segment (in billions)
Note: values may have been rounded
*operational excludes the effect of translational currency
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For the fiscal third quarter of 2026, worldwide sales were $25.4 billion, a total increase of 5.9%, which included operational growth of 6.0% and a negative currency impact of 0.1% as compared to 2025 fiscal third quarter sales of $24.0 billion. In the fiscal third quarter of 2026, the net impact of acquisitions and divestitures on worldwide operational sales growth was a negative 0.1%. In the fiscal third quarter of 2026, the negative impact of the STELARA sales decline, due to biosimilar competition, on worldwide operational sales was approximately 4.2%.
Sales by U.S. companies were $15.0 billion in the fiscal third quarter of 2026, which represented an increase of 9.1% as compared to the prior year. In the fiscal third quarter of 2026, there was no net impact from acquisitions and divestitures on U.S. operational sales growth. In the fiscal third quarter of 2026, the negative impact of the STELARA sales decline, due to biosimilar competition on U.S. operational sales was approximately 5.9%. Sales by international companies were $10.4 billion, a total increase of 1.5%, which included operational growth of 1.8% and a negative currency impact of 0.3%. In the fiscal third quarter of 2026, the net impact of acquisitions and divestitures on international operational sales growth was a negative 0.1%. In the fiscal third quarter of 2026, the negative impact of the STELARA sales decline, due to biosimilar competition, on international operational sales was approximately 2.1%.
In the fiscal third quarter of 2026, sales by companies in Europe experienced a sales decline of 0.6%, which included operational growth of 1.0% offset by a negative currency impact of 1.6%. Sales by companies in the Western Hemisphere, excluding the U.S., achieved growth of 12.5%, which included operational growth of 8.0% and a positive currency impact of 4.5%. Sales by companies in the Asia-Pacific, Africa region achieved growth of 1.0%, which included operational growth of 1.0% and 0.0% impact from currency.
Q3 2026
Sales by Geographic Region (in billions)
Q3 2026
Sales by Segment (in billions)
Note: values may have been rounded
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Table of Contents
Analysis of sales by business segments
Innovative Medicine
Innovative Medicine segment sales in the fiscal nine months of 2026 were $48.6 billion, an increase of 8.8% as compared to the same period a year ago, with an operational increase of 7.4% and a positive currency impact of 1.4%. U.S. Innovative Medicine sales increased 9.9% as compared to the same period a year ago. International Innovative Medicine sales increased by 7.2%, including an operational increase of 3.6% and a positive currency impact of 3.6%. In the fiscal nine months of 2026, the net impact of acquisitions and divestitures on the Innovative Medicine segment operational sales growth was a positive 0.5%, primarily related to CAPLYTA. In the fiscal nine months of 2026, the negative impact of the STELARA sales decline, due to biosimilar competition, was an approximate 7.8%, 10.4% and 4.2% on worldwide, U.S. and international Innovative Medicine segment operational sales, respectively.
Major Innovative Medicine therapeutic area sales — Fiscal Nine Months Ended
(Dollars in Millions)
September 27, 2026
September 28, 2025
Total
Change
Operations
Change
Currency
Change
Oncology
$21,981
$18,519
18.7
%
16.8
%
1.9
%
DARZALEX
12,410
10,448
18.8
17.0
1.8
CARVYKTI
1,964
1,332
47.4
45.5
1.9
TECVAYLI
774
494
56.7
55.7
1.0
TALVEY
497
314
58.3
57.5
0.8
RYBREVANT/ LAZCLUZE
866
518
67.4
67.5
(0.1)
ERLEADA
2,967
2,615
13.5
10.8
2.7
IMBRUVICA
1,822
2,139
(14.8)
(17.5)
2.7
Other Oncology
(1)
680
659
3.2
2.9
0.3
Immunology
11,445
11,868
(3.6)
(4.8)
1.2
TREMFYA
6,050
3,566
69.7
67.9
1.8
SIMPONI/ SIMPONI ARIA
1,833
2,036
(10.0)
(11.6)
1.6
REMICADE
1,154
1,398
(17.5)
(18.4)
0.9
STELARA
2,112
4,848
(56.4)
(57.2)
0.8
Other Immunology
297
21
*
*
*
Neuroscience
6,887
5,722
20.3
19.5
0.8
SPRAVATO
1,676
1,193
40.5
39.7
0.8
CAPLYTA
(2)
1,029
451
*
*
—
INVEGA SUSTENNA/ XEPLION/ INVEGA TRINZA/ TREVICTA
3,051
2,824
8.0
7.4
0.6
CONCERTA/methylphenidate
425
452
(5.9)
(7.0)
1.1
Other Neuroscience
706
803
(12.1)
(14.2)
2.1
Pulmonary Hypertension
3,175
3,253
(2.4)
(3.0)
0.6
UPTRAVI
1,460
1,411
3.5
2.6
0.9
OPSUMIT/ OPSYNVI
1,580
1,682
(6.1)
(6.6)
0.5
Other Pulmonary Hypertension
135
160
(15.6)
(15.4)
(0.2)
Infectious Diseases
2,465
2,434
1.3
(1.1)
2.4
EDURANT/rilpivirine
1,145
1,103
3.8
0.0
3.8
PREZISTA/ PREZCOBIX/ REZOLSTA/ SYMTUZA
1,196
1,196
0.0
(0.9)
0.9
Other Infectious Diseases
124
135
(8.2)
(11.7)
3.5
Cardiovascular / Metabolism / Other
2,614
2,842
(8.0)
(8.5)
0.5
XARELTO
1,959
1,946
0.7
0.7
—
Other
655
896
(26.9)
(28.5)
1.6
Total Innovative Medicine Sales
$48,567
$44,638
8.8
%
7.4
%
1.4
%
Form 10-Q
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Table of Contents
Innovative Medicine segment sales in the fiscal third quarter of 2026 were $16.8 billion, an increase of 7.7% as compared to the same period a year ago, including an operational increase of 7.9% and a negative currency impact of 0.2%. U.S. Innovative Medicine sales increased 11.1% as compared to the same period a year ago. International Innovative Medicine sales increased by 2.4%, including an operational increase of 3.0% and a negative currency impact of 0.6%. In the fiscal third quarter of 2026, the impact of divestitures on the worldwide Innovative Medicine segment operational sales growth was a negative 0.1%. In the fiscal third quarter of 2026, the negative impact of the STELARA sales decline, due to biosimilar competition, was an approximate 6.9%, 9.2% and 3.8% on worldwide, U.S. and international Innovative Medicine segment operational sales, respectively.
Major Innovative Medicine therapeutic area sales — Fiscal Third Quarter Ended
(Dollars in Millions)
September 27, 2026
September 28, 2025
Total
Change
Operations
Change
Currency
Change
Oncology
$7,602
$6,529
16.4
%
16.7
%
(0.3)
%
DARZALEX
4,239
3,672
15.4
15.6
(0.2)
CARVYKTI
710
524
35.5
35.2
0.3
TECVAYLI
312
177
76.6
77.3
(0.7)
TALVEY
171
122
40.9
42.1
(1.2)
RYBREVANT/ LAZCLUZE
320
198
62.3
63.5
(1.2)
ERLEADA
1,023
936
9.4
9.4
0.0
IMBRUVICA
563
695
(18.8)
(18.4)
(0.4)
Other Oncology
(1)
262
207
26.3
26.7
(0.4)
Immunology
4,221
4,168
1.3
1.4
(0.1)
TREMFYA
2,396
1,424
68.3
68.2
0.1
SIMPONI/ SIMPONI ARIA
568
687
(17.3)
(17.1)
(0.2)
REMICADE
394
476
(17.3)
(17.6)
0.3
STELARA
716
1,570
(54.4)
(54.0)
(0.4)
Other Immunology
147
12
*
*
*
Neuroscience
2,375
2,024
17.3
17.6
(0.3)
SPRAVATO
624
459
36.1
36.0
0.1
CAPLYTA
398
240
66.1
66.1
—
INVEGA SUSTENNA/ XEPLION/ INVEGA TRINZA/
TREVICTA
998
929
7.3
7.5
(0.2)
CONCERTA/ methylphenidate
143
140
2.1
2.9
(0.8)
Other Neuroscience
212
256
(17.3)
(16.2)
(1.1)
Pulmonary Hypertension
897
1,115
(19.5)
(19.2)
(0.3)
UPTRAVI
483
484
(0.1)
(0.2)
0.1
OPSUMIT/ OPSYNVI
372
578
(35.7)
(35.2)
(0.5)
Other Pulmonary Hypertension
42
53
(19.7)
(17.7)
(2.0)
Infectious Diseases
813
829
(1.8)
(1.1)
(0.7)
EDURANT/rilpivirine
386
385
0.4
1.8
(1.4)
PREZISTA/ PREZCOBIX/ REZOLSTA/
SYMTUZA
381
397
(3.8)
(3.6)
(0.2)
Other Infectious Diseases
46
47
(3.0)
(4.5)
1.5
Cardiovascular / Metabolism / Other
849
899
(5.6)
(5.5)
(0.1)
XARELTO
653
635
2.7
2.7
—
Other
197
264
(25.5)
(25.3)
(0.2)
Total Innovative Medicine Sales
$16,757
$15,563
7.7
%
7.9
%
(0.2)
%
*percentage greater than 100% or not meaningful
(1)
Includes sales of ZYTIGA which were previously disclosed separately
(2)
Acquired with Intra-Cellular Therapies on April 2, 2025
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Oncology products achieved operational sales growth of 16.7% as compared to the same period a year ago. Contributors to the growth were: DARZALEX (daratumumab) driven by strong share gains and market growth, CARVYKTI (ciltacabtagene autoleucel) driven by share gains and continued site expansion, TECVAYLI (teclistamab-cqyv) driven by share gains from the U.S. TECVAYLI + DARZALEX FASPRO approval, TALVEY (talquetamab-tgvs) driven by share gains from expansion in the community setting, RYBREVANT (amivantamab)/LAZCLUZE (lazertinib) driven by launch uptake and share gains, ERLEADA (apalutamide) due to continued share gains and market growth partially offset by unfavorable patient mix and Other Oncology driven by the U.S. launch uptake of INLEXZO (gemcitabine intravesical system). Growth was partially offset by a decline in IMBRUVICA (ibrutinib) sales due to share loss from competitive pressures and unfavorable patient mix.
Immunology products achieved operational sales growth of 1.4% as compared to the same period a year ago due to the growth of TREMFYA (guselkumab) driven by share gains across all indications with significant IBD launch momentum and market growth as well as growth in Other Immunology driven by IMAAVY (nipocalimab) and ICOTYDE (icotrokinra) launch uptake in the U.S. Growth was partially offset by a decline of STELARA (ustekinumab) driven by the impact of biosimilar competition and increasing adoption of novel classes as well as declines of SIMPONI/SIMPONI ARIA (golimumab) and REMICADE (infliximab) driven by share loss, biosimilar competition, and unfavorable patient mix partially offset by market growth.
The Company expects STELARA biosimilars to continue to negatively impact the Company’s sales of STELARA. Biosimilars for SIMPONI have entered the European market in the second quarter of 2026, with a potential U.S. entrant later in 2026. This will likely result in a reduction in future sales.
Neuroscience products achieved operational growth of 17.6% as compared to the same period a year ago. The sales growth of SPRAVATO (esketamine) was driven by continued share gains, supported by increased patient demand due to strong physician adoption. Growth of CAPLYTA (lumateperone) was driven by strong continued momentum in the adjunctive treatment of Major Depressive Disorder (aMDD) launch and continued demand across bipolar disorder and schizophrenia. Growth of INVEGA SUSTENNA / XEPLION / INVEGA TRINZA / TREVICTA was primarily driven by favorable patient and inventory dynamics partially offset by share loss.
Pulmonary Hypertension products experienced an operational sales decline of 19.2% as compared to the same period a year ago. The sales of UPTRAVI (selexipag) were flat due to unfavorable patient mix partially offset by market and share growth. There are potential generic entrants in 2027 in the U.S. and Europe which will likely result in a reduction in future sales. The sales decline of OPSUMIT (macitentan)/OPSYNVI (macitentan/tadalafil) was driven by lower demand following U.S. generic entrants late in the second quarter of 2026. There are potential generic entrants in 2027 in Europe which will likely result in a reduction in future sales.
Infectious disease products experienced an operational sales decline of 1.1% as compared to the same period a year ago. The sales decrease of PREZISTA/ PREZCOBIX/ REZOLSTA/
SYMTUZA was driven by declines in share and market partially offset by favorable patient mix.
Cardiovascular / Metabolism / Other products experienced an operational sales decline of 5.5% as compared to the same period a year ago. The sales decline was partially offset by an increase in XARELTO (rivaroxaban) sales primarily driven by favorable patient mix partially offset by continued share erosion. There are potential generic entrants in 2027 in the U.S. which will likely result in a reduction in future sales.
The Company recently announced a policy revising the 340B pricing offer on its covered outpatient drugs to require covered entities to submit limited, commercially standard claims data for each 340B-eligible drug dispense or administration. Subject to each covered entity’s submission of appropriate claims data, the Company will continue to offer the covered entity access to 340B pricing on the Company’s covered outpatient drugs up-front at the time of purchase. The Company also recently updated its 340B contract pharmacy policy, which permits covered entities to designate up to one contract pharmacy for dispensing of the Company’s 340B-priced covered outpatient drugs. A covered entity may continue to purchase and receive 340B pricing on such drugs dispensed or administered at its own eligible locations. Both policies include exceptions for certain covered entities.
The Company believes these policies are necessary to identify and address duplicate discounts, diversion, and other non-compliance and improve program oversight and dispute resolution. The 340B Drug Pricing Program is a U.S. federal government program that requires drug manufacturers to provide significant discounts on covered outpatient drugs to covered entities as a condition of manufacturers receiving reimbursement for their drugs under Medicaid and Medicare Part B.
Form 10-Q
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MedTech
The MedTech segment sales in the fiscal nine months of 2026 were $26.2 billion, an increase of 4.9% as compared to the same period a year ago, with an operational increase of 3.5% and a positive currency impact of 1.4%. U.S. MedTech sales increased by 4.8%. International MedTech sales increased by 4.9%, including an operational increase of 2.2% and a positive currency impact of 2.7%. In the fiscal nine months of 2026, the net impact of acquisitions and divestitures on the MedTech segment operational sales growth was a negative 0.1%.
Major MedTech franchise sales — Fiscal Nine Months Ended
(Dollars in Millions)
September 27, 2026
September 28, 2025
Total
Change
Operations
Change
Currency
Change
Cardiovascular
$7,088
$6,629
6.9
%
5.8
%
1.1
%
Electrophysiology
4,509
4,209
7.1
5.6
1.5
Abiomed
1,340
1,291
3.8
3.5
0.3
Shockwave
965
828
16.6
16.6
0.0
Other Cardiovascular
273
302
(9.4)
(11.3)
1.9
Surgery
7,692
7,493
2.7
0.8
1.9
Advanced
3,467
3,402
1.9
0.2
1.7
General
4,225
4,092
3.3
1.3
2.0
Vision
4,277
4,048
5.6
4.8
0.8
Contact Lenses/Other
3,047
2,902
5.0
4.4
0.6
Surgical
1,230
1,147
7.3
5.9
1.4
Orthopaedics
7,146
6,820
4.8
3.6
1.2
Hips
1,296
1,235
4.9
3.6
1.3
Knees
1,216
1,155
5.3
4.2
1.1
Trauma
2,504
2,333
7.3
6.2
1.1
Spine, Sports & Other
2,131
2,096
1.7
0.4
1.3
Total MedTech Sales
$26,204
$24,991
4.9
%
3.5
%
1.4
%
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MedTech segment sales in the fiscal third quarter of 2026 were $8.6 billion, an increase of 2.5% as compared to the same period a year ago, which included operational growth of 2.5% and currency impact of 0.0%. U.S. MedTech sales increased by 4.8%. International MedTech sales increased by 0.1%, including operational growth of 0.1% and a currency impact of 0.0%. In the fiscal third quarter of 2026, the net impact of acquisitions and divestitures on the MedTech segment operational sales growth was 0.0%.
Major MedTech franchise sales — Fiscal Third Quarter Ended
(Dollars in Millions)
September 27, 2026
September 28, 2025
Total
Change
Operations
Change
Currency
Change
Cardiovascular
$2,307
$2,213
4.3
%
4.1
%
0.2
%
Electrophysiology
1,487
1,418
4.9
4.4
0.5
Abiomed
412
423
(2.3)
(1.5)
(0.8)
Shockwave
325
278
16.8
17.2
(0.4)
Other Cardiovascular
81
95
(13.9)
(14.7)
0.8
Surgery
2,528
2,542
(0.6)
(1.0)
0.4
Advanced
1,155
1,165
(0.9)
(1.3)
0.4
General
1,373
1,378
(0.3)
(0.8)
0.5
Vision
1,461
1,400
4.4
5.1
(0.7)
Contact Lenses/Other
1,053
1,018
3.5
4.3
(0.8)
Surgical
408
383
6.8
7.1
(0.3)
Orthopaedics
2,345
2,274
3.2
3.4
(0.2)
Hips
419
405
3.1
3.3
(0.2)
Knees
386
377
2.5
3.1
(0.6)
Trauma
844
793
6.4
6.5
(0.1)
Spine, Sports & Other
697
698
(0.1)
0.1
(0.2)
Total MedTech Sales
$8,642
$8,430
2.5
%
2.5
%
0.0
%
The Cardiovascular franchise achieved operational sales growth of 4.1% as compared to the prior year fiscal third quarter. Electrophysiology sales growth was driven by procedure growth, commercial execution and new product performance (VARIPULSE, TRUPULSE, CRYSTAL and DUAL ENERGY STSF) partially offset by competitive pressures in Pulsed Field Ablation catheters and inventory dynamics outside the U.S. Abiomed sales decline was driven by lower patient volumes partially offset by sustained adoption of Impella 5.5. Shockwave sales growth was driven by strong adoption of Coronary and Peripheral portfolios and new product launches.
The Surgery franchise experienced an operational sales decline of 1.0% as compared to the prior year fiscal third quarter. The Advanced Surgery operational decline was primarily driven by China volume-based procurement, the impact of the surgery transformation program and disruptions in the Middle East across all platforms as well as competitive pressures in Endocutters and Energy. This was partially offset by the strength of the portfolio and commercial execution in Biosurgery and new product launches in Energy and Endocutters. The operational decline in General Surgery was primarily driven by China volume-based procurement partially offset by technology penetration and upgrades within the differentiated Wound Closure portfolio coupled with market expansion.
The Vision franchise achieved operational sales growth of 5.1% as compared to the prior year fiscal third quarter. The Contact Lenses/Other operational growth was driven by strong performance in the ACUVUE OASYS 1-Day family of products including recent launches and strategic price actions partially offset by inventory dynamics. The Surgical operational growth was primarily driven by the strength of recent product innovations, robust demand for premium IOLs and strong commercial execution partially offset by disruptions in the Middle East.
The Orthopaedics franchise achieved operational sales growth of 3.4% as compared to the prior year fiscal third quarter. The operational growth in Hips was due to new product launches. The operational growth in Knees was driven by the strength of the ATTUNE portfolio driven in part by pull through related to the VELYS Robotic assisted solutions. The operational growth in Trauma was primarily driven by recently launched products and commercial execution partially offset by inventory dynamics outside the U.S. The operational growth in Spine, Sports & Other was driven by new product innovations partially offset by competitive pressures and inventory dynamics.
In October 2025, the Company announced its intention to separate its Orthopaedics business and expects the separation to be completed in mid-2027.
Form 10-Q
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Analysis of consolidated earnings before provision for taxes on income
Consolidated earnings before provision for taxes on income for the fiscal nine months of 2026 was $12.8 billion representing 17.1% of sales as compared to $27.6 billion in the fiscal nine months of 2025, representing 39.7% of sales. Consolidated earnings before provision for taxes on income for the fiscal third quarter of 2026 was $34.0 million representing 0.1% of sales as compared to $7.5 billion in the fiscal third quarter of 2025, representing 31.2% of sales. The fiscal third quarter and nine months of 2026 includes a charge of approximately $5.5 billion related to the proposed talc ovarian litigation resolution and $1.0 billion of acquired in-process research and development expense related to the acquisition of Firefly Bio, Inc. The fiscal nine months of 2025 includes approximately $7.0 billion related to the talc reserve reversal.
Cost of products sold
(Dollars in billions. Percentages in chart are as a percent to total sales)
Fiscal nine months Q3 2026 versus Fiscal nine months Q3 2025
Cost of products sold increased slightly as a percent to sales driven by:
•
Unfavorable product mix primarily driven by the decline of STELARA sales in the Innovative Medicine business
•
Increased intangible asset amortization expense in the Innovative Medicine segment for Intra-Cellular (additional CAPLYTA indication)
partially offset by
•
Impact of tariff recoveries of approximately $0.2 billion in the MedTech business
•
Favorable currency in the Innovative Medicine business
The intangible asset amortization expense included in cost of products sold for the fiscal nine months of 2026 and 2025 was $3.7 billion and $3.4 billion, respectively.
Q3 2026 versus Q3 2025
Cost of products sold increased as a percent to sales primarily driven by:
•
Unfavorable product mix primarily driven by the decline of STELARA sales in the Innovative Medicine business
•
Increased intangible asset amortization expense in the Innovative Medicine segment for Intra-Cellular (additional CAPLYTA indication)
partially offset by
•
Impact of tariff recoveries of approximately $0.2 billion in the MedTech business
The intangible asset amortization expense included in cost of products sold for the fiscal third quarters of 2026 and 2025 was $1.2 billion and $1.0 billion, respectively.
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Selling, marketing and administrative expenses
(Dollars in billions. Percentages in chart are as a percent to total sales)
Fiscal nine months Q3 2026 versus Fiscal nine months Q3 2025
Selling, Marketing and Administrative Expenses increased as a percent to sales primarily driven by:
•
Commercial investments in the Innovative Medicine and MedTech businesses
Q3 2026 versus Q3 2025
Selling, Marketing and Administrative Expenses was flat as a percent to sales.
Research and development expense
Research and development expense by segment of business was as follows:
Fiscal Third Quarter Ended
Fiscal Nine Months Ended
2026
2025
2026
2025
(Dollars in Millions)
Amount
% of Sales*
Amount
% of Sales*
Amount
% of Sales*
Amount
% of Sales*
Innovative Medicine
$3,888
23.2
%
$2,944
18.9
%
$9,576
19.7
%
$8,361
18.7
%
MedTech
764
8.8
728
8.6
2,256
8.6
2,052
8.2
Total research and development expense
$4,652
18.3
%
$3,672
15.3
%
$11,832
15.8
%
$10,413
15.0
%
Percent increase over the prior year
26.7
%
13.6
%
*As a percent to segment sales
Fiscal nine months Q3 2026 versus Fiscal nine months Q3 2025 and Q3 2026 versus Q3 2025
Research and Development increased as a percent to sales primarily driven by:
•
Acquired in-process research and development expense of approximately $1.0 billion related to the acquisition of Firefly Bio, Inc. (Firefly)
In-process research and development (IPR&D) impairments
In the fiscal nine months of 2026, the Company recorded a charge of approximately $0.4 billion primarily related to PreCardia, a non-strategic asset acquired as part of the Abiomed acquisition in 2022.
Form 10-Q
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Interest (income) expense
Interest (income) expense in the fiscal nine months of 2026 was net expense of $136 million as compared to net income of $62 million in the fiscal nine months of 2025. The increase in net expense was driven by a lower average cash balance earning a lower rate of interest and a higher average debt balance. Interest (income) expense in the fiscal third quarter of 2026 was net expense of $31 million and was relatively flat as compared to net expense of $18 million in the fiscal third quarter of 2025. The balance of cash, cash equivalents and current marketable securities was $17.2 billion at the end of the fiscal third quarter of 2026 as compared to $18.6 billion at the end of the fiscal third quarter of 2025. The Company’s debt position was $44.6 billion as of September 27, 2026, as compared to $45.8 billion the same period a year ago.
Other (income) expense, net*
Fiscal nine months Q3 2026 versus Fiscal nine months Q3 2025
Other (income) expense, net for the fiscal nine months of 2026 was an expense of $6.4 billion as compared to $7.7 billion of income in the prior year primarily due to the following:
Fiscal Nine Months
(Dollars in Billions)(Income)/Expense
September 27, 2026
September 28, 2025
Change
Litigation related
(1)
$
6.1
(6.9)
13.0
Orthopaedics separation related
0.7
0.0
0.7
Employee benefit related
(0.5)
(0.4)
(0.1)
Changes in the fair value/sale of securities
(0.3)
(0.3)
—
Sail Biomedicines Option Premium
0.3
0.0
0.3
Restructuring related
0.2
0.1
0.1
Acquisition, Integration and Divestiture related
0.1
0.4
(0.3)
Other
(0.2)
(0.6)
0.4
Total Other (Income) Expense, Net
$
6.4
(7.7)
14.1
(1)
The fiscal nine months of 2026 includes a charge of $5.5 billion related to the proposed talc ovarian litigation resolution. The fiscal nine months of 2025 include approximately $7.0 billion related to the talc reserve reversal. For additional details related to talc refer to Note 11 to the Consolidated Financial Statements.
Q3 2026 versus Q3 2025
Other (income) expense, net for the fiscal third quarter of 2026 reflected an expense of $5.8 billion as compared to $0.5 billion of income in the prior year primarily due to the following:
Fiscal Third Quarter
(Dollars in Billions)(Income)/Expense
September 27, 2026
September 28, 2025
Change
Litigation related
(1)
$
5.5
0.0
5.5
Orthopaedics separation related
0.3
0.0
0.3
Sail Biomedicines Option Premium
0.3
0.0
0.3
Employee benefit related
(0.2)
(0.1)
(0.1)
Changes in the fair value/sale of securities
0.0
(0.4)
0.4
Acquisition, Integration and Divestiture related
0.0
0.1
(0.1)
Other
(0.1)
(0.1)
—
Total Other (Income) Expense, Net
$
5.8
(0.5)
6.3
(1)
The fiscal third quarter of 2026 includes a charge related to the proposed talc ovarian litigation resolution. For additional details related to talc refer to Note 11 to the Consolidated Financial Statements.
*Other (income) expense, net is the account where the Company records gains and losses related to the sale and write-down of certain investments in equity securities held by Johnson & Johnson Innovation - JJDC, Inc. (JJDC), changes in the fair value of securities, gains and
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losses on divestitures and on sales of assets, certain transactional currency gains and losses, acquisition and divestiture-related costs, litigation accruals and settlements, investment (income)/loss related to employee benefit plans, as well as royalty income.
Segment income before tax
Income before tax by segment of business for the fiscal nine months were as follows:
Income Before Tax
Segment Sales
Percent of Segment Sales
(Dollars in Millions)
September 27, 2026
September 28, 2025
September 27, 2026
September 28, 2025
September 27, 2026
September 28, 2025
Innovative Medicine
$16,632
$17,208
$48,567
$44,638
34.2
%
38.6
%
MedTech
3,192
3,912
26,204
24,991
12.2
15.7
Segment total
19,824
21,120
74,771
69,629
26.5
30.3
(Income) Expenses not allocated to segments
(1)
7,053
(6,495)
Earnings before provision for taxes on income
$12,771
$27,615
$74,771
$69,629
17.1
%
39.7
%
(1)
Amounts not allocated to segments include interest (income) expense, certain litigation expenses and general corporate (income) expense. The fiscal nine months of 2026 includes a charge of $5.5 billion related to the proposed talc ovarian litigation resolution. The fiscal nine months of 2025 include approximately $7.0 billion related to the talc reserve reversal. For additional details related to talc refer to Note 11 to the Consolidated Financial Statements.
Innovative Medicine segment
The Innovative Medicine segment income before tax as a percent of sales in the fiscal nine months of 2026 was 34.2% versus 38.6% for the same period a year ago. The decrease in the income before tax as a percent of sales for the fiscal nine months of 2026 as compared to the prior year was primarily driven by the following:
•
Acquired in-process research and development expense of approximately $1.0 billion related to the acquisition of Firefly in 2026
•
Expense of $0.3 billion primarily related to the option premium associated with Sail Biomedicines (Sail) in 2026
•
Restructuring related costs of $0.3 billion in 2026
•
Higher intangible asset amortization expense of $0.3 billion in 2026 related to Intra-Cellular (additional CAPLYTA indication)
•
Unfavorable product mix in Cost of products sold, primarily driven by the decline of STELARA sales
partially offset by
•
Favorable currency in Cost of products sold
MedTech segment
The MedTech segment income before tax as a percent of sales in the fiscal nine months of 2026 was 12.2% versus 15.7% for the same period a year ago. The decrease in the income before tax as a percent of sales for the fiscal nine months of 2026 was primarily driven by the following:
•
Orthopaedics separation related costs of $0.7 billion in 2026
•
Unfavorable changes in the fair value of securities of $0.2 billion versus 2025
•
In-process research and development impairment charges of $0.4 billion in 2026, primarily related to PreCardia, a non-strategic asset acquired as part of the Abiomed acquisition in 2022
partially offset by
•
Impact of tariff recoveries of approximately $0.2 billion included in Cost of products sold
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Income before tax by segment of business for the fiscal third quarters were as follows:
Income Before Tax
Segment Sales
Percent of Segment Sales
(Dollars in Millions)
September 27, 2026
September 28, 2025
September 27, 2026
September 28, 2025
September 27, 2026
September 28, 2025
Innovative Medicine
$5,066
$6,446
$16,757
$15,563
30.2
%
41.4
%
MedTech
776
1,287
8,642
8,430
9.0
15.3
Segment total
5,842
7,733
25,399
23,993
23.0
32.2
(Income)/ Expenses not allocated to segments
(1)
5,808
240
Earnings before provision for taxes on income
$34
$7,493
$25,399
$23,993
0.1
%
31.2
%
(1)
Amounts not allocated to segments include interest (income) expense, certain litigation expenses and general corporate (income) expense. The fiscal third quarter of 2026 includes a charge of $5.5 billion related to the proposed talc ovarian litigation resolution. For additional details related to talc refer to Note 11 to the Consolidated Financial Statements.
Innovative Medicine segment
The Innovative Medicine segment income before tax as a percent of sales in the fiscal third quarter of 2026 was 30.2% versus 41.4% for the same period a year ago. The decrease in the income before tax as a percent of sales for the fiscal third quarter of 2026 as compared to the prior year was primarily driven by the following:
•
Acquired in-process research and development expense of approximately $1.0 billion related to the acquisition of Firefly in 2026
•
Expense of $0.3 billion primarily related to the option premium associated with Sail Biomedicines (Sail) in 2026
•
Higher intangible asset amortization expense of $0.2 billion in 2026 related to Intra-Cellular (additional CAPLYTA indication)
•
Favorable changes of $0.2 billion in the fair value of securities in 2025 as compared to 2026
•
Restructuring related costs of $0.1 billion in 2026
•
Unfavorable product mix in Cost of products sold, primarily driven by the decline of STELARA sales
partially offset by
•
Favorable currency in Cost of products sold
MedTech segment
The MedTech segment income before tax as a percent of sales in the fiscal third quarter of 2026 was 9.0% versus 15.3% for the same period a year ago. The decrease in the income before tax as a percent of sales for the fiscal third quarter of 2026 as compared to the prior year was primarily driven by the following:
•
Orthopaedics separation related costs of $0.4 billion in 2026
•
Unfavorable changes in the fair value of securities of $0.2 billion versus 2025
•
In-process research and development impairment charge of $0.3 billion in 2026, related to PreCardia, a non-strategic asset acquired as part of the Abiomed acquisition in 2022
partially offset by
•
Impact of tariff recoveries of approximately $0.2 billion included in Cost of products sold
Restructuring
In the fiscal second quarter of 2026, the Company initiated a supply chain restructuring program primarily in the Innovative Medicine segment to exit certain manufacturing locations as part of its optimization efforts to streamline operations. The program is expected to be substantially complete by the end of 2029 with estimated costs between $0.7 billion and $0.8 billion, and include site and supplier exit costs, decommissioning and asset impairments costs. The pre-tax restructuring expense was $74 million in the fiscal third quarter of 2026, of which $103 million was recorded in Restructuring, a reversal of $18 million of expense in Cost of products sold and a reversal of $11 million of expense in Other income and expense on the Consolidated Statement of Earnings primarily related to exit costs. The pre-tax restructuring expense was $274 million in the fiscal nine months of 2026, of which $103 million was recorded in Restructuring and $171 million in Other income and expense on the Consolidated Statement of Earnings primarily related to asset impairments and exit costs. Total project costs of approximately $0.3 billion have been recorded since the restructuring was announced.
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In fiscal 2025, the Company initiated a restructuring program of its Surgery franchise within the MedTech segment to simplify and focus operations by exiting certain non-strategic product lines and optimize select sites across the network. The pre-tax restructuring expense was $80 million in the fiscal third quarter of 2026, of which $44 million was recorded in Restructuring, $6 million in Cost of products sold and $30 million in Other income and expense on the Consolidated Statement of Earnings primarily related to product exits. The pre-tax restructuring expense was $194 million in the fiscal nine months of 2026, of which $105 million was recorded in Restructuring, $30 million in Cost of products sold and $59 million in Other income and expense on the Consolidated Statement of Earnings primarily related to product exits. The pre-tax restructuring expense was $128 million in the fiscal third quarter of 2025, of which $35 million was recorded in Restructuring and $93 million in Other income and expense on the Consolidated Statement of Earnings. The pre-tax restructuring expense was $157 million in the fiscal nine months of 2025, of which $64 million was recorded in Restructuring and $93 million in Other income and expense on the Consolidated Statement of Earnings. Total project costs of approximately $0.4 billion have been recorded since the restructuring was announced. This program will be completed as of the fiscal fourth quarter of 2026 at a total project cost of approximately $0.6 billion.
In fiscal 2023, the Company initiated a restructuring program of its Orthopaedics franchise within its MedTech segment to streamline operations by exiting certain markets, product lines and distribution network arrangements. The pre-tax restructuring expense was $41 million in the fiscal third quarter of 2026, of which $34 million was recorded in Restructuring and $7 million in Cost of products sold on the Consolidated Statement of Earnings primarily for costs related to market and product exits. The pre-tax restructuring expense was $65 million in the fiscal nine months of 2026, of which $39 million was recorded in Restructuring, $1 million in Other (Income)/Expense and $25 million in Cost of products sold on the Consolidated Statement of Earnings primarily for costs related to market and product exits. The pre-tax restructuring expense was $40 million in the fiscal third quarter of 2025, of which $28 million was recorded in Restructuring and $12 million in Cost of products sold on the Consolidated Statement of Earnings primarily for costs related to market and product exits. The pre-tax restructuring expense was $145 million in the fiscal nine months of 2025, of which $80 million was recorded in Restructuring, $35 million in Cost of products sold and $30 million in Other (Income)/Expense on the Consolidated Statement of Earnings primarily for costs related to asset impairments as well as market and product exits. Total project costs of approximately $0.9 billion have been recorded since the restructuring was announced. This program will be completed as of the fiscal fourth quarter of 2026 at a total project cost of approximately $1.0 billion.
For further details related to the restructuring refer to Note 12 to the Consolidated Financial Statements.
Provision for taxes on income
The worldwide effective income tax rate for the fiscal nine months was 14.0% in 2026 and 21.5% in 2025.
For further details related to the fiscal 2026 provision for taxes refer to Note 5 to the Consolidated Financial Statements.
Form 10-Q
49
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Liquidity and capital resources
Dividends to shareholders
*Includes business combinations and asset acquisitions
Cash flows
Cash and cash equivalents were $16.9 billion at the end of the fiscal third quarter of 2026 as compared with $19.7 billion at the end of fiscal year 2025. The primary sources and uses of cash that contributed to the $2.8 billion decrease were:
(Dollars In Billions)
19.7
Q4 2025 Cash and cash equivalents balance
18.9
net cash generated from operating activities
(4.9)
net cash used for investing activities
(16.8)
net cash used for financing activities
$
16.9
Q3 2026 Cash and cash equivalents
In addition, the Company had $0.3 billion in marketable securities at the end of the fiscal third quarter of 2026 and $0.4 billion at the end of fiscal year 2025.
Cash flow from operations of $18.9 billion was the result of:
(Dollars In Billions)
$
11.0
Net earnings
6.8
non-cash expenses and other adjustments primarily for depreciation and amortization, stock-based compensation and asset write-downs partially offset by deferred tax provision and net gain on sale of assets/businesses
(2.9)
an increase in accounts receivable and inventories
1.4
an increase in accounts payable and accrued liabilities
1.4
a decrease in other current and non-current assets
1.1
an increase in other current and non-current liabilities
0.1
rounding
$
18.9
Net cash flows from operations
50
Table of Contents
Cash flow used for investing activities of $4.9 billion was primarily from:
(Dollars In Billions)
$
(3.7)
additions to property, plant and equipment
0.1
proceeds from the disposal of assets/businesses, net
(0.4)
acquisitions, net of cash acquired
(1.0)
acquired in-process research and development assets/related milestones
(0.5)
net purchases of investments
0.9
credit support agreements activity, net
(0.3)
Other and rounding
$
(4.9)
Net cash used for investing activities
Cash flow used for financing activities of $16.8 billion was primarily from:
(Dollars In Billions)
$
(9.6)
dividends to shareholders
(6.0)
repurchase of common stock
(2.9)
net repayment of short and long term debt
2.3
proceeds from stock options exercised/employee withholding tax on stock awards, net
(0.6)
Other, primarily Auris shareholder payment (described in Note 11), Credit support agreements and rounding
$
(16.8)
Net cash used for financing activities
The Company has access to substantial sources of funds at numerous banks worldwide and has the ability to issue up to $20 billion in Commercial Paper. Furthermore, in June 2026, the Company secured a new 364-day Credit Facility of $12.5 billion (expiration on June 23, 2027) which may be used for general corporate purposes including to support commercial paper borrowings. Interest charged on borrowings under the credit line agreement is based on either Secured Overnight Financing Rate (SOFR) Reference Rate or other applicable market rate as allowed plus applicable margins. Commitment fees under the agreement are not material.
As of September 27, 2026, the Company had cash, cash equivalents and marketable securities of approximately $17.2 billion and had approximately $44.6 billion of notes payable and long-term debt for a net debt position of $27.4 billion as compared to the prior year fiscal third quarter net debt position of $27.2 billion. The Company anticipates that operating cash flows, the ability to raise funds from external sources, borrowing capacity from existing committed credit facilities and access to the commercial paper markets will continue to provide sufficient resources to fund operating needs, including the Company’s remaining balance of approximately $9.0 billion related to talc matters, $3.2 billion related to the current portion of Corporate bonds due and approximately $2.6 billion for the option to acquire Sail (refer to Note 10 to the Consolidated Financial Statements for further details) and the remaining approximately $0.9 billion related to opioid settlements. In addition, the Company monitors the global capital markets on an ongoing basis and from time to time may raise capital when market conditions are favorable.
Dividends
On July 15, 2026, the Board of Directors declared a regular cash dividend of $1.34 per share, payable on September 8, 2026, to shareholders of record as of August 25, 2026.
On October 13, 2026, the Board of Directors declared a regular cash dividend of $1.34 per share, payable on December 8, 2026, to shareholders of record as of November 24, 2026. The Company expects to continue the practice of paying regular quarterly cash dividends.
Other information
New accounting pronouncements
Refer to Note 1 to the Consolidated Financial Statements for new accounting pronouncements.
Form 10-Q
51
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Economic and market factors
The Company operates in certain countries where the economic conditions continue to present significant challenges. The Company continues to monitor these situations and take appropriate actions. Inflation rates and currency exchange rates continue to have an effect on worldwide economies and, consequently, on the way the Company operates. The Company has accounted for operations in Venezuela, Argentina, Turkey and Egypt as highly inflationary, as the prior three-year cumulative inflation rate surpassed 100%. In the face of increasing costs, the Company strives to maintain its profit margins through cost reduction programs, productivity improvements and periodic price increases.
The long-term implications of regional conflicts on the Company are difficult to predict. The financial impact of known existing conflicts, particularly in the Middle East, negatively impacted growth in the MedTech Surgery business in the fiscal third quarter of 2026.
Governments around the world consider various proposals to make changes to tax laws, which may include increasing or decreasing existing statutory tax rates. In connection with various government initiatives, companies are required to disclose more information to tax authorities on operations around the world, which may lead to greater audit scrutiny of profits earned in other countries. A change in statutory tax rate in any country would result in the revaluation of the Company’s deferred tax assets and liabilities related to that particular jurisdiction in the period in which the new tax law is enacted. This change would result in an expense or benefit recorded to the Company’s Consolidated Statement of Earnings. The Company closely monitors these proposals as they arise in the countries where it operates. Changes to the statutory tax rate may occur at any time, and any related expense or benefit recorded may be material to the fiscal quarter and year in which the law change is enacted.
The Company may be further impacted by the imposition of tariffs, trade protection measures or other policies adopted by any jurisdiction that favor domestic companies and technologies over foreign competitors.
The Company faces various worldwide health care changes that may continue to result in pricing pressures that include health care cost containment and government legislation relating to sales, promotions and reimbursement of health care products including recent actions in the U.S. and foreign countries such as Germany. Recent U.S. policy initiatives have focused on prescription drug affordability, including the use of, international reference pricing methodologies, intended to reduce costs for American patients and the U.S. Government. The Company has entered into voluntary agreements with the U.S. government that include patient affordability initiatives, participation in certain pricing programs, and continued investment in U.S.-based research, development, and manufacturing capabilities. The Company continues to implement and evaluate the potential effects of these agreements and related policy initiatives.
Changes in the behavior and spending patterns of purchasers of healthcare products and services, including delaying medical procedures, rationing prescription medications, reducing the frequency of physician visits and foregoing healthcare insurance coverage, may continue to impact the Company’s businesses.
The Company faces regular intellectual property challenges from third parties, including generic and biosimilar manufacturers, seeking to manufacture and market generic and biosimilar versions of key pharmaceutical products prior to the expiration of the applicable patents. These challengers file Abbreviated New Drug Applications or abbreviated Biologics License Applications with the FDA or otherwise challenged the coverage and/or validity of the Company’s patents. In the event the Company is not successful in defending the patent claims challenged in the resulting lawsuits, generic or biosimilar versions of the products at issue may be introduced to the market, resulting in the potential for substantial market share and revenue losses for those products, and which may result in a non-cash impairment charge in any associated intangible asset. There is also risk that one or more competitors could launch a generic or biosimilar version of the product at issue following regulatory approval even though one or more valid patents are in place.
Item 3 — Quantitative and qualitative disclosures about market risk
There has been no material change in the Company’s assessment of its sensitivity to market risk since its presentation set forth in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in its Annual Report on Form 10-K for the fiscal year ended December 28, 2025.
52
Table of Contents
Item 4 — Controls and procedures
Disclosure controls and procedures. At the end of the period covered by this report, the Company evaluated the effectiveness of the design and operation of its disclosure controls and procedures. The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Joaquin Duato, Chief Executive Officer; Chairman, Executive Committee and Joseph J. Wolk, Executive Vice President, Chief Financial Officer, reviewed and participated in this evaluation. Based on this evaluation, Messrs. Duato and Wolk concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective.
Internal control. During the period covered by this report, there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. The Company continues to monitor and assess the effectiveness of the design and operation of its disclosure controls and procedures.
The Company is implementing a multi-year, enterprise-wide initiative to integrate, simplify and standardize processes and systems for the human resources, information technology, procurement, supply chain and finance functions. These are enhancements to support the growth of the Company’s financial shared service capabilities and standardize financial systems. This initiative is not in response to any identified deficiency or weakness in the Company’s internal control over financial reporting. In response to this initiative, the Company has and will continue to align and streamline the design and operation of its financial control environment.
Form 10-Q
53
Table of Contents
Part II — Other information
Item 1 — Legal proceedings
The information called for by this item is incorporated herein by reference to Note 11 included in Part I, Item 1, Financial Statements (unaudited) — Notes to Consolidated Financial Statements.
Item 2 — Unregistered sales of equity securities and use of proceeds
(c) Purchases of Equity Securities by the Issuer and Affiliated Purchasers.
The following table provides information with respect to Common Stock purchases by the Company during the fiscal third quarter of 2026. Common stock purchases on the open market are made as part of a systematic plan to meet the needs of the Company's compensation programs. The repurchases below also include the stock-for-stock option exercises that settled in the fiscal third quarter.
Fiscal Month Period
Total Number
of Shares
Purchased
(1)
Avg. Price
Per Share
Total Number of
Shares
Purchased as
Part of Publicly
Announced Plans
or Programs
Maximum Number of
Shares that May Yet
Be Purchased Under
the Plans or Programs
June 29, 2026 through July 26, 2026
3,265,000
251.70
—
—
July 27, 2026 through August 23, 2026
1,177,561
270.67
—
—
August 24, 2026 through September 27, 2026
2,100,509
270.53
—
—
Total
6,543,070
261.16
—
—
(1)
During the fiscal third quarter of 2026, the Company repurchased an aggregate of 6,543,070 shares of Johnson & Johnson Common Stock in open-market transactions, all of which were purchased as part of a systematic plan to meet the needs of the Company’s compensation programs.
54
Table of Contents
Item 5 — Other information
Securities trading plans of Directors and Executive Officers
. During the fiscal third quarter of 2026, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) informed us of the
adoption
or
termination
of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” each as defined in Item 408 of Regulation S-K.
Item 6 — Exhibits
Exhibit 31.1
Certification of Chief Executive Officer under Rule 13a-14(a) of the Securities Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 — Filed with this document.
Exhibit 31.2
Certification of Chief Financial Officer under Rule 13a-14(a) of the Securities Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 — Filed with this document.
Exhibit 32.1
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 — Furnished with this document.
Exhibit 32.2
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 — Furnished with this document.
Exhibit 101:
EX-101.INS
Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
EX-101.SCH
Inline XBRL Taxonomy Extension Schema
EX-101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase
EX-101.LAB
Inline XBRL Taxonomy Extension Label Linkbase
EX-101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase
EX-101.DEF
Inline XBRL Taxonomy Extension Definition Document
Exhibit 104:
Cover Page Interactive Data File––the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
Form 10-Q
55
Table of Contents
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: October 21, 2026
Date: October 21, 2026
JOHNSON & JOHNSON
(Registrant)
By
/s/
J. J. Wolk
J. J. Wolk
, Executive Vice President, Chief Financial Officer (Principal Financial Officer)
By
/s/
R. J. Decker Jr.
R. J. Decker Jr.
,
Controller (Principal Accounting Officer)
56

----- a20263qex311ceocertificati.htm -----
EX-31.1
2
a20263qex311ceocertificati.htm
EX-31.1 CEO
Document
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT
I, Joaquin Duato, certify that:
1.   I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended September 27, 2026 (the “report”) of Johnson & Johnson (the "Company");
2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
4.  The Company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the Company and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter (the Company's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and
5.  The Company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.
/s/
Joaquin Duato
Joaquin Duato
Chief Executive Officer
Date: October 21, 2026

----- a20263qex312cfocertificati.htm -----
EX-31.2
3
a20263qex312cfocertificati.htm
EX-31.2 CFO
Document
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT
I, Joseph J. Wolk, certify that:
1.   I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended September 27, 2026 (the “report”) of Johnson & Johnson (the "Company");
2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
4.  The Company's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the Company and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the Company's most recent fiscal quarter (the Company's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and
5.  The Company's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.
/s/
Joseph J. Wolk
Joseph J. Wolk
Chief Financial Officer
Date: October 21, 2026

----- a20263qex321ceocertificati.htm -----
EX-32.1
4
a20263qex321ceocertificati.htm
EX-32.1 CEO
Document
Exhibit 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT
The undersigned, Joaquin Duato, the Chief Executive Officer of Johnson & Johnson, a New Jersey corporation (the “Company”), pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, hereby certifies that, to the best of my knowledge:
(1)    the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 27, 2026 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
(2)    the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/
Joaquin Duato
Joaquin Duato
Chief Executive Officer
Dated: October 21, 2026
This certification is being furnished to the SEC with this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that sec
tion.

----- a20263qex322cfocertificati.htm -----
EX-32.2
5
a20263qex322cfocertificati.htm
EX-32.2
Document
Exhibit 32.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT
The undersigned, Joseph J. Wolk, the Chief Financial Officer of Johnson & Johnson, a New Jersey corporation (the “Company”), pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, hereby certifies that, to the best of my knowledge:
(1)    the Company's Quarterly Report on Form 10-Q for the quarterly period ended September 27, 2026 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
(2)    the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/
Joseph J. Wolk
Joseph J. Wolk
Chief Financial Officer
Dated: October 21, 2026
This certification is being furnished to the SEC with this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section.