Johnson & Johnson Q3 2017 Earnings Conference Call Transcript (JNJ)

Johnson & Johnson (NYSE: JNJ)

Q3 2017 Earnings Conference CallOctober 17, 2017, 8:30 a.m. ET


  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Good morning, and welcome to Johnson & Johnson's third quarter 2017 earnings conference call. All participants will be in listen-only mode until the question and answer section of the conference. This call is being recorded. If anyone has any objections, you may disconnect at this time. If you experience technical difficulties during the conference, you may press star-zero to reach the operator. I would now like to turn the conference call over to Johnson & Johnson. You may begin.

Joseph Wolk -- VP, IR

Hello, and thank you for joining us to review Johnson & Johnson's business results for the third quarter of 2017. I am Joe Wolk, Vice President of Investor Relations. I would like to provide a few logistics for today's call. This review is being made available during webcast, accessible through the Investor Relations section of the Johnson & Johnson website at There, you can find additional materials, including today's presentation and accompanying schedules. We anticipate today's webcast to last approximately 75 minutes.

Please note that today's presentation includes forward-looking statements. We encourage you to review this cautionary statement regarding such statements included in today's presentation, as well as the company's Form 10-K, which identifies certain factors which may cause the company's actual results to differ materially from those projected.

Our SEC filings, including our 2016 Form 10-K, along with reconciliations of the non-GAAP financial measures utilized for today's discussion to the most comparable GAAP measures are also available at

Several of the products and compounds discussed today are being developed in collaboration with strategic partners or license from other companies. This slide acknowledges those relationships.

I am very pleased to be joined by a few members from our executive committee. Dominic Caruso, Executive Vice President and Chief Financial Officer, will provide some prepared remarks prior to the Q&A portion of the call. You will not only have the opportunity to pose questions to Dominic during that time, but also to each of our segment leaders.

Accompanying Dominic and I on today's call are Joaquin Duato, Executive Vice President, Worldwide Chairman -- Pharmaceuticals; Jorge Mesquita, Executive Vice President, Worldwide Chairman -- Consumer; Sandy Peterson, Executive Vice President, Worldwide Group Chair.

We are very pleased with our strong results. As highlighted in this morning's press release and accompanying materials, the third quarter demonstrated an acceleration of organic sales growth and continued robust adjusted earnings per share. The anticipated acceleration of sales performance was most pronounced in the pharmaceutical segment, where key major brands are penetrating new markets and gaining share. The consumer segment returned to growth in the face of relatively soft global categories, and worldwide medical device growth was relatively stable to second quarter levels. Sales performance in the quarter reflects the contribution from recent acquisitions, as well as the strength of new products across all three segments.

Now, on to the details related to this quarter's results. Worldwide sales were $19.7 billion for the third quarter of 2017, up 10.3% versus the third quarter of 2016. On an operational basis, sales were up 9.5% as currency had a positive impact of 0.8%.

In the US, operational sales growth was 9.7% and regions outside the US achieved operational growth of 9.3%. The effect of currency exchange rates positively impacted reported OUS sales by 1.6 points. Excluding the net impact of acquisitions and divestitures, operational sales growth for the enterprise was 3.8% worldwide.

Net earnings for the quarter were $2.8 billion and diluted earnings per share were $1.37 versus $1.53 a year ago. Excluding after-tax amortization expense and special items for both periods, adjusted net earnings for the quarter were $5.2 billion and adjusted diluted earnings per share were $1.90, representing increases of 11.2% and 13.1% respectively compared to the third quarter of 2016. On an operational basis, adjusted diluted earnings per share grew 10.1%. Dominic will provide additional commentary on earnings in his remarks.

I will now summarize segment sales performance for the quarter with the intent of building upon the slides being presented. Unless otherwise states, percentages quoted represent operational sales change in comparison to the third quarter of 2016 and does exclude the impact of currency translation.

Beginning with the consumer segment, worldwide sales grew 1.6% to $3.4 billion. Excluding the impact of acquisitions and divestitures, operational sales increased 1.1% worldwide. Operational growth in the segment was driven by the beauty and OTC franchises, each growing 4.4%. The results in beauty were driven by strong OUS performance in the Vogue and NEUTROGENA brands. Additionally, the Dr.Ci.Labo brand in Asia Pacific is experiencing good uptake.

Franchise growth, excluding acquisitions was 2.1%. The worldwide beauty market is estimated to have grown approximately 3% in the quarter and was modestly up in the US. In our OTC business, adult and children's TYLENOL continued to gain market share with adult TYLENOL benefiting from strong sales of the rapid release formulation. Concluding the consumer segment, baby care continues to be impacted by the new entrants to the market, however we remain the market leader. As previously communicated, we are actively working on relaunching these brands in 2018.

Regarding our pharmaceutical segment, worldwide sales grew 14.6% to $9.7 billion. Excluding the net impact of acquisitions and divestitures, operational adjusted sales grew 6.7%, a clear acceleration of the growth over the first half of 2017. The strongest therapeutic area of growth was in oncology, growing 24% overall. DARZALEX continued its robust performance with rapid uptake in the one prior line setting. DARZALEX growth drove results outside the US, and the product has now been launched in 25 countries.

IMBRUVICA continues to gain market share globally. Data lags for this product, but based on second-quarter CANVAS data, IMBRUVICA is now above 50% market share in the US and across all approved indications. ZYTIGA growth in the US was driven largely by a growing market, which we estimate at approximately 13%, and a slightly higher share, both versus the prior year and sequentially.

In immunology, the US market is estimated to have grown approximately 7%. STELARA in the US gained 1.8 points of market share in the total immunology market versus the third quarter of 2016, driven mostly by strong adoption for the newer Crohn's disease indication. STELARA market share for Crohn's in the US is now estimated to be approximately 10$0.

REMICADE in the US declined a little more than 1% as it continues to compete in the face of biosimilar entries. REMICADE US export and international combined declined 23%. While we continue to experience erosion from biosimilar competition in Europe, approximately two-thirds of this decline was attributable to the timing of shipments with our partner Merck.

Within the cardiovascular metabolic therapeutic area, XARELTO's growth up 20% was primarily the result of increasing total prescription market share, up almost 2.5 points versus one year ago. WARFARIN continues to decline in favor of branded products.

INVOKANA and INVOKAMET sales in the US declined. As we commented to in recent quarters, the primary driver of this decline is increase in discounts for the brand in managed care contracting and higher utilization in the Medicaid channel. There is also a loss in share of approximately one point.

This is the first full quarter we reporting pulmonary hypertension product results. On a pro forma basis, the therapeutic area grew 9% globally, 16% in the US and 1% outside the US. Worldwide pro forma growth of better than 17% OPSUMIT was driven by further market penetration and share gains.

UPTRAVI, up more than 70% and still largely a US product is experiencing strong launch demand. TRACLEER was down about 14%, which is expected as business converts to OPSUMIT.

To conclude the review of pharmaceuticals, I would like to provide additional context on a few of our late-stage compounds that were mentioned in today's press release. A new drug application for Apalutamide was submitted to the FDA for men with non-metastatic castration resistant prostate cancer. The filing was based on Phase III data from the Spartan trial, which met its primary end point. We plan to present the study results at a major medical meeting in 2018.

Regarding Talacotuzumab, based on a recommendation from the independent data monitoring committee, we have discontinued treatment with Talacotuzumab in AML2002, as the Phase III results did not demonstrate a positive benefit/risk ratio. We continue to assess the data to determine next steps in the clinical development program.

Lastly, we have made the decision to withdraw the applications we had filed globally for Sirukumab in rheumatoid arthritis. We are continuing to study Sirukumab in major depressive disorder, currently in Phase II.

I will now turn to our medical devices segment. Worldwide medical devices sales were $6.6 billion, growing 6.6%. Excluding a net impact of acquisitions and divestitures, adjusted operational sales growth was 1.2% worldwide.

The vision care business continues to exhibit strength. Contact lenses grew 5.3% worldwide, as new products, namely OASYS 1-Day and OASYS 1-Day for Astigmatism continue to be well received in the market. Within the contact lens other line, there is $27 million associated with the recently acquired consumer eye health products.

The visions surgical business on a pro forma basis grew approximately 10%, driven by the cataract business in the US where strong adopt of the IOL TECNIS Symfony lens continues.

We did experience a modest negative impact in our hospital medical device businesses from weather-related events during the quarter. Based on a very preliminary analysis, we estimate that impact to have been a modest 30 basis points to overall total missed growth.

Dominic will discuss this impact in the outlook of our future supply continuity in a few minutes. We routinely reference general selling days. On a worldwide basis, selling day impact this quarter was negligible. Within hospital medical devices, electrophysiology grew approximately 14% worldwide, largely in line with atrial fibrillation procedure growth.

The advanced surgery category grew 3.9%, or 2.2%, excluding the Megadyne acquisition. Energy is facing competitive pressures from reprocessing alternatives. Growth was largely generated by 13% OUS biosurgery performance with strength in the Middle East and Asia Pacific markets. Endocutters grew 6% outside the US, driven by Actelion performance in China.

Within general surgery, worldwide sutures grew approximately 5% behind strong growth in traditional and barbed sutures in China. The decline in specialty surgery was driven by share loss in the esthetics and infection protection businesses.

The decline in the orthopedics business versus the third quarter of 2016 was largely the result of share loss in US spine. We are working to expand our product offerings in faster growing segments. Performance in knees outside the US was negatively impacted by new legislation in India, which is lowering the pricing of implants. That impact was approximately 10 million in the quarter. But, since the legislation is retroactive to the beginning of the year, the third quarter represents three quarters worth of negative impact.

Trauma grew 3.1%, driven by solid growth in the US market and strength in the Asia Pacific and Latin America regions. Hips round out the orthopedic portfolio, and that platform grew 1.5% globally as strength in the US was driven by continued adoption of core-eye. Pure pricing pressure continued across most orthopedic categories, but favorable mix helped offset the erosion.

For the quarter, US price net of mix was -2.[inaudible -- audio cut out] [00:13:45]% in hips. Spine and trauma net of mix were positive 2.1% and 1.2% respectively. Knee price net of mix was flat.

That concludes the segment sales highlights for Johnson & Johnson's third quarter of 2017. For your reference, here is a slide summarizing notable developments that occurred during the quarter.

I am now pleased to turn the call over to Dominic Caruso. Dominic?

Dominic Caruso -- EVP & CFO

Thanks, Joe. Good morning, everyone. We are very pleased with our strong third quarter results. The performance highlights the many areas of strength in our business that have given us the confidence to state throughout the year that we would accelerate sales growth in the second half of 2017. That was exactly what we delivered in the third quarter. We experienced organic growth acceleration, most significantly in the pharmaceutical segment, as oncology and immunology products continued to grow at robust levels.

The consumer segment, which declined modestly in the first half of 2017, grew in the third quarter, while medical devices was relatively stable, but as Joe noted, experienced some minor negative impact to growth due to hurricanes in Texas, Florida, and Puerto Rico.

In addition, we are very pleased with the performance from our recent acquisitions, Actelion and Medical Optics, which will continue to fuel our growth. So, overall, sales beat analyst estimates by approximately 2%, or $350 million, and adjusted earnings beat analyst estimates by $0.10 per share.

I know for many of you there are questions regarding the impact of unprecedented storms that occurred in the quarter. I want to take a moment to acknowledge the courage and resilience of all of those who have been directly impacted by these storms. It's really been incredible. The response of the global business community has also been impressive and I'm especially proud of the role Johnson & Johnson has played. Our desire to improve lives is a foundational element in our credo, and it is times like these when the character of our people, who have been working on the ground side-by-side with relief organizations in a united effort to help their communities, really shines through.

In terms of sales, the limited impact we experienced in the third quarter is not the result of any supply disruption, but rather lost surgery days in those areas affected by the storms. It remains to be seen whether volumes associated with those lost surgeries will be recouped in future quarters. However, in terms of future supply, we are very well positioned.

We have six manufacturing sites on the island of Puerto Rico and, considering the magnitude of the storm, our facilities fared well. All of our sites are open with reliable generator power, operating in various stages of capacity, while the work continues to ramp up to full operations in Puerto Rico. To ensure critical patient needs are met, we are closely monitoring inventories across our global manufacturing network, prioritizing production of essential products, and have already begun shipping newly manufactured goods from the island.

While we cannot rule out the potential for intermittent shortages of certain product formats, many of our products have dual production sites and back-up supply outside of Puerto Rico to help meet demand. Based on what we know today, we do not foresee any material impact to future results.

I will now turn to our consolidated statement of earnings for the third quarter of 2017. As you heard, our operational sales growth this quarter was 9.5%. And, excluding the impact of acquisitions and divestitures, operational growth was 3.8%.

If you will direct your attention to the box section of the schedule, you will see that we have provided our earnings adjusting to exclude intangible amortization expense and special items. As referenced in a table of non-GAAP measures, the 2017 third-quarter net earnings were adjusted to exclude intangible amortization expense and special items of $1.4 billion on an after-tax basis, which consisted primarily of the following: intangible amortization expense of approximately $933 million, primarily from the recent acquisition of Actelion, litigation expenses of approximately $100 million, acquisition-related costs of approximately $280 million and a charge for the continuing restructuring of our hospital medical device business of approximately $140 million.

Our adjusted earnings per share is therefore $1.90, up 13%. And adjusted EPS on a constant currency bases was $1.85, or up 10% over the prior year.

Now, let's take a few moments to talk about the other items on the statement of earnings. Cost of goods sold increased by 430 basis points, primarily due to the inclusion of the amortization expense and charges for inventory step-up from our recent acquisitions. Excluding the impact of these types of expenses in both periods, cost of goods sold was 27.8%, or 120 basis points lower than the prior year, mostly due to favorable product mix.

Selling marketing and administrative expenses were up 70 basis points, as compared to the second quarter of 2017, largely due to the investment of new products in our consumer segment. Our investment in research and development as a percent of sales was 13.1%, up 90 basis points compared to the prior year, as we continue to advance our robust pipeline of pharmaceutical products.

In interest expense, net of interest income was a net expense of $155 million, slightly higher than last year. Other income and expense was a net gain of $236 million the quarter compared to a net gain of $54 million in the same period last year. Excluding the special items that are recorded in this line, other income and expense was a net gain of $517 million compared to a net gain of $220 million in the prior year period, reflecting completion of certain asset sales, which were included in our annual guidance. I'll provide an update on this activity during my guidance comments.

Excluding special items, the effective tax rate was 20.8%, compared to 19.7 in the same period last year. This rate is consistent with our expectations as a component of the full year effective tax rate. I'll also provide an update on tax during my guidance comments.

Turning to the next slide, I will now review adjusted income before tax by segment. In the third quarter of 2017, our adjusted income before tax for the enterprise improved 80 basis points versus the third quarter of 2016, driven by favorability in the other income and expense line, partially offset by the additional investments I mentioned earlier.

Looking at the adjusted pre-tax income by segment, medical devices at 30.1% is lower than the prior year, primarily due to higher investment spend to support new product launches. Pharmaceutical margins improved 110 basis points to 41%, driven by favorable product mix. Consumer margins improved to 28%, primarily due to the divestiture gains partially offset by increased advertising and promotional spending.

Now, I will provide some guidance for you to consider as you refine your models for 2017. At the end of the quarter, we had $19 billion of net debt, which consisted of approximately $16 billion of cash and marketable securities and approximately $35 billion of total debt. Therefore, for purposes of your models, and assuming no other significant uses of cash, I suggest you consider modeling net interest expense of between $600-700 million, which is consistent with our previous guidance.

Regarding other income and expense, as a reminder, this is the account where we record royalty income as well as gains and losses arising from such items as litigation, investments buyer development corporation, divestitures, asset sales, and write-offs. One of our business priorities is to actively manage our portfolio to maximize value creation with the intention of redeploying most of those gains back into the business to enhance our long-term growth prospects.

Consistent with our previous guidance, we are still comfortable with your models for 2017, reflecting net other income and expense, excluding special items, as a net gain ranging from approximately $1.6-1.8 dollars. This includes the gain associated with the sale of the Codman neurosurgery business, which we closed subsequent to the third quarter.

Regarding pre-tax operating margin, we expect that investment levels will increase, and therefore we maintain our guidance that we will be flat to slightly decreased from 2016 levels. This is, of course, offset by the divestiture gains I just mentioned.

Now, a word on taxes. As the Chief Financial Officer of one of the largest US based multinational companies, I'm often asked these days about my perspective on tax reform. In fact, it is a topic I've been actively engaged in for more than ten years with legislators as well as my peers across many industries. While our guidance today does not include any assumptions about potential tax reform measures, there are some points I'd like to share as I do believe we now have momentum to attain meaningful and impactful business tax reform in the very near future.

First, we commend our leaders in Washington for taking steps to address business tax reform, and we see the united framework as a thoughtful approach to jump-starting the US economy, fueling US jobs and US investment, one that will improve the ability of US multinational companies to compete more effectively. The current tax system has not kept pace with modern innovation-driven global economy, which results in an increasingly difficult business environment for US based companies that do compete globally.

To level the playing field with other industrialized countries, tax reform should include three fundamental elements. A lower corporate income tax rate in line with other industrialized countries. The adoption of a modern, globally competitive, international tax system, allowing US companies to manage their cash without tax penalty. And, greater incentives for innovation in the US. The framework addresses each of these elements. While clarity and additional detail is still needed on some elements, it is important that Washington and the business community unite now behind the tax reform bill that will have a positive impact on domestic jobs and economic growth.

Having said all of that, and still remaining optimistic that something on this front can get done, we are not assuming reform in our 2017 guidance. Excluding special items, our guidance is 19-19.5% as an effective tax rate, and this is a slight tightening of the reigns from our previous guidance.

Now, turning to sales and earnings. Our sales guidance for 2017 does not anticipate any impact from generic competition this year for ZYTIGA, RISPERDAL, CONSTANTIN, PROCRIT, PREZISTA, or INVEGA SUSTENNA. As we've done for several years, our guidance will be based first on a constant currency basis, reflecting our results from operations. This is the way we manage our business and provides a good understanding of the underlying performance of our business.

We will, of course, also provide an estimate of our sales and EPS results for 2017 with the impact that current exchange rates could have on the translation of those results. As I mentioned earlier, we expect to maintain the acceleration of our underlying sales growth for the balance of t year and our major acquisitions of Actelion and Medical Optics completed earlier this year remain on track.

As this is in line with our previous expectations, we are maintaining our operational sales guidance for the year in the range of 5.5-6%. This translates to sales for 2017 of approximately $75.9-76.2 billion on a constant currency basis.

We are not predicting the impact of currency movements, but to give you an idea of the impact on sales, if currency exchange rates were to remain where they were as of last week, with the Euro, for example, at $1.18 for the balance of the year, our sales growth rate would increase by 60 basis points versus our previous guidance.

Thus, under this scenario, we expect reported sales growth in the range of 6-6.5% for a total expected level of reported sales of approximately $76.2-76.5 billion, which is higher than our previous guidance.

And now, turning earnings. As I noted earlier, we plan to continue to invest in our growth opportunities and those plans are already in place. In the fourth quarter, as we did in the third, we will see an elevated level of R&D investment, as well as additional investment in marketing programs behind the launches of several new products. Therefore, we continue to expect our pre-tax operating margins will decline somewhat from the prior year, consistent with our previous guidance.

We expect adjusted EPS to be in the range of between $7.22-7.27 per share on a constant currency basis, reflecting an operational constant currency growth rate of between 7-8%. This is a tightening of the range and an increase of about $0.02 over the July adjusted EPS guidance. If currency exchange rates for all of 2017 were to remain where they were as of last week, then our reported adjusted EPS would be favorably impacted by $0.03 due to currency movements. This is an improvement from the negative impact of $0.05 in our previous guidance.

Therefore, we would be comfortable with our reported adjusted EPS ranging from $7.25-7.30 per share, an increase of $0.10 from our prior guidance, and a growth rate of between 7.7-8.4%.

In closing, we are extremely pleased with the sales and earnings performance in the third quarter and our higher EPS guidance for 2017. In summary, we're maintaining our operational sales growth of 5.5-6% for the year, consistent with our goal of growing earnings faster than sales. Our guidance for operational adjusted EPS growth remains strong in the range of 7-8% and our businesses continue to invest for the long-term while also delivering on near-term priorities.

Now, I'd like to turn things back to Joe to begin the Q&A portion of the call, where I'm delighted to be joined by Joaquin, Jorge, and Sandy to address your questions. Joe?

Joseph Wolk -- VP, IR

Thank you, Dominic. Let's move into the Q&A session.


Rob, can you please provide instructions for those on the line willing to ask a question?

Questions and Answers:


Thank you. [Operator Instructions] Your first question comes from the line of Mike Weinstein with JP Morgan.

Mike Weinstein -- JPMorgan

Good morning. Thanks. Dominic, I'd like to clarify for people because there appears to be a fair amount of confusion out there -- the margin that you reported this morning, the headliner on adjusted margins this morning -- that doesn't back out the amortization costs, so those numbers the people are looking at are not apples to apples to the ones you gave on your comments? Correct?

Dominic Caruso -- EVP & CFO

That's correct. When I'm commenting on our results, I'm doing so by excluding the special items -- the most impactful impact of amortization expense -- just so we can have an apples to apples comparison because of the significant acquisitions we did this year. That's right, Mike.

Mike Weinstein -- JPMorgan

Perfect. A couple of items I wanted you to touch on. Can you give us an update on ZYTIGA and what's happening, from what you can see with the IPR decision and the trial? And then, could you spend a minute on STELARA? If we look at the pharma outperformance this quarter -- and, in part, the overall acceleration of pharma from first half to second half. One of the big stories is STELARA's acceleration over the last several months, driven by the Crohn's launch. Can you talk a little bit about how that launch is going and maybe the outlook for STELARA going forward?

Dominic Caruso -- EVP & CFO

Mike, let me turn that question over to Joaquin who is here and runs our pharmaceutical business. Joaquin?

Joaquin Duato -- EVP, Worldwide Chairman, Pharmaceuticals

Hi, Mike. Good morning to all of you. Before I go to STELARA, let me give you a couple of thoughts and reflections on how the quarter went. When we met in May 2017, on the occasional of the pharmaceutical R&D review date, we anticipated that the performance of the pharmaceutical group was going to accelerate during the second half of the year. That's precisely what you're seeing today. You're seeing the pharmaceutical group moving from low single-digit growth in the first half of the year to 6.7% in the third quarter.

So, clear acceleration of the sales of the pharmaceutical group. That's driven by a number of factors. One is the momentum that our key brands are gaining, mainly driven by market share gains. One example of that that I will talk about is STELARA. As you mentioned, that posted very impressive 43% gain in the US in the quarter.

The second is positive news on our pipeline. During this period, we have launched TREMFYA, which has been very well accepted by physicians. We already have 900 physicians prescribing TREMFYA -- about 3,000 patients. As we speak. TREMFYA is already leading in new to brand share when compared to the new therapies -- when compared to the Anti-IL-17.

The third one is that we completed the acquisition of Actelion and we are now in our first 100 days post-integration. You've seen the results of Actelion. They are very much in line with the expectations, positive growth, and shared gains both in UPTRAVI and OPSUMIT.

So, the combination of these three factors is driving the 6.7% adjusted growth and the 14.6% of total pharmaceutical growth. This is very aligned on what we discussed in our pharmaceutical review.

When it comes to STELARA, the growth is driven by two factors. First, share gains in the psoriasis market, where STELARA is the leading brand in new to brand share in psoriasis, and second, very impressive gains also in the current diluted market where we continue to gain share. The combination of our continuous growth and sustained growth is psoriasis plus the launching curve is driving this growth in STELARA that you are seeing today.

Dominic Caruso -- EVP & CFO

Mike, with respect to the ZYTIGA patent -- as you're well aware, there are two avenues that are being pursued there. The first is with respect to the court. The New Jersey court had set a preliminary trial date for October of this year. However, during a status conference as recently as a few weeks ago in September. There's a schedule of pretrial activity, so we don't anticipate that a new trial date will be set until early next year.

With respect to the second avenue in the US patent and trademark office, we have not yet received a decision. We understand it's the US PTO's right and permission to extend deadlines on that, so we await word just like everyone else.


Your next question comes from the line of Matt Miksic with UBS.

Matt Miksic -- UBS

Good morning. I have one question on pharma and just one follow-up on devices. First, for Joaquin, obviously very impressive results across core franchises, excluding Actelion. I'd love to get your thoughts on -- Mike mentioned STELARA -- how some of the other pieces fit together over the next 12 months, specifically new indications and line extension for key drugs like XARELTO and DARA, and some of the other recent filings like Apalutamide and how they fit together against the potential increase of biosimilar pressure.

The reason I mention the next 12 months is, I think investors are interested in seeing how you'll maintain and extend the Actelion franchise and fit these other pieces together to sustain your growth going forward.

Joaquin Duato -- EVP, Worldwide Chairman, Pharmaceuticals

Thank you. Let me start with the drivers of the growth that we are having and seeing in the third quarter and in the second half of the year, that you will continue to see over the next year. Let me start with XARELTO, that posted very impressive growth in this quarter of 20% -- mainly driven by share gains that we believe will be sustained into next year. You remember that we already share the data of our composite study and we are planning to file these new indications by the end of the year. That, together with the existing share gains that we have in our market, will drive the growth of XARELTO in 2018.

XARELTO had the highest share gain in the quarter in the last four years, mainly driven because we are starting to put a bigger dent on WARFARIN. That's an important driver for us moving forward. If we continue with oncology, both IMBRUVICA and DARZALEX continue to have impressive share gains. IMBRUVICA, as Joe commented, has already 50% share across lines of therapies and DARZALEX is getting share, both in second multiple myeloma with around 20% and 40% respectively.

We plan to file our first line study by the end of the year, so that's going to be another positive driver moving into next year, as we continue to gain share in different lines of therapy. As you recall, this past quarter we had the approval of the combination with POMALYST in second-line multiple [inaudible -- audio cuts out] [00:37:42]. So, both IMBRUVICA and DARZALEX will remain important drivers of our growth into 2018.

The other driver that sometimes goes unrecognized, but is having an impact, that in the quarter posted 15% growth and we see that continue to gain share in the antipsychotic market -- that's long-acting therapies, remain relatively underutilized as compared to the potential of it. Those are going to be some of the most important drivers moving into 2018.

Then, another two important updates on our pipeline. It's the filing of Apalutamide. We just completed and it's going to enable us to have a medicine that is going to have an indication in patients that have prostate cancer without metastasis. It would be a very important new indication for Apalutamide and a great option for prostate cancers.

We will continue to progress with TREMFYA in psoriasis. Also, in 2018, we are planning the filling of Esketamine, which we believe would be a very important option for the treatment of depression. Those are the drivers that will continue to enable our market growth in 2018.

Matt Miksic -- UBS

That's great. Thank you. Just a couple of things I think investors are curious about in devices. On the US knee market, worldwide down obviously, there was some international pricing you mentioned. Any color on what you're seeing here in Q3. And then in spine -- the pressure. You talked about portfolio GAAPs. Anything, being your position in the market as one of the leaders -- any comments you had on the color of that market would be helpful. Thanks.

Dominic Caruso -- EVP & CFO

Sure. A little bit of commentary on knees. It was a little bit softer than what we'd experienced in recent quarters, but I would say it's not the 4% that was reported as down. You have some pricing issues, specifically in India, with some legislation, where we actually booked the charges for three quarters and not just the one quarter, since it was retroactive back to the beginning of the year.

You also had some weather-related impact, albeit modest. So, you're getting closer to a negative one to flat, versus the minus four that we reported. Maybe for some qualitative commentary with respect to knees and spine, I'll turn it over to Sandy.

Sandra E. Peterson -- EVP, Group Worldwide Chairman

Hi, Matt. Just a couple of general comments and then I'll specifically answer your questions about knees and spine in particular. As you know, in the last few months, I've taken over responsibility for medical devices. I think, in the quarter, you will see that we have some clear areas where we're doing very well -- EP, wound closure, biosurgery, and some parts of our orthopedics portfolio -- but there are some places in the portfolio where the full impact of some of our new product launches and acquisitions have not fully taken hold yet.

As I've said to others before, we've also spent a lot of time over the last quarter talking about how do we ensure commercial execution on the ground in a much more robust way in some of these markets. I think we're beginning to see the positive impact of that with a lot of businesses, and some account wins that will start having some positive impact for us as we continue through the fourth quarter.

Joe's comments about knees are absolutely spot on. There is a little bit of the impact about elective surgeries in parts of the US, where we know a large percentage of the volume happens in that southeast part of the US that clearly had some minor impact on the business also in the quarter. Also, in Europe -- which impacted our business, spine and knee -- we had a very unusual one-time impact on our ordering and distribution system that impacted about a week's worth of sales, particularly in orthopedics. So, we're catching up from that. It clearly had an impact in both spine and knees in Europe and the US.

The last thing I'll say is our tibial tray and cement list programs, and we have just completed our first ATTUNE revision case in the US. We are still in the soft rollout of that, but that clearly is going to have a very positive impact on our knee business, in particular in the US. But, as it goes global outside of the US, we'll start seeing the positive impact of that on our knee business as we move forward.

I guess I would characterize the quarter as a few one-off things that had an impact on the business, but generally speaking, the platform is doing very well. We'll start gaining more momentum as we move forward.

As it relates to our spine business, if you break it apart and look at the performance overall, we're not satisfied with the performance of that business. We have had portfolio GAAPs in that business for a while. We're starting to get through those and starting to launch some new things in the business. But, if you look at the business from a regional standpoint, the Asian and Latin America businesses had a good quarter. We have work to do in the US and North America.

But, you should start seeing some more positive momentum in our spine business as we go into next year. In general, I think spine procedures have been down in the industry overall over the last couple of quarters, and clearly, there's a macroeconomic impact on spine. Thank you, Matt.


Your next question comes Larry Biegelsen with Wells Fargo.

Larry Biegelsen -- Wells Fargo

Good morning. I have a question for Jorge and for Dominic. On consumer, everyone has seen the news that Pfizer's exploring a strategic alternative for its consumer health business. What's the implication, if any, for your consumer franchise? J&J has been reshaping its consumer portfolio in recent years. Are you interested in a large deal in consumer or do you prefer it continue to do smaller deals in your current categories?

Jorge S. Mesquita -- EVP, Worldwide Chairman -- Consumer

Good morning. As you know, we have a very disciplined and systemic approach to evaluation potential acquisitions. Our focus primarily is always on value creation. That's the overriding criteria we use to establish whether or not we have an interest in a particular asset. As assets become available, we systemically evaluate them. But, our focus is always, can we create value for Johnson & Johnson, regardless of the scale of the asset.

Larry Biegelsen -- Wells Fargo

Dominic, I want to ask about the puts and takes for 2018. I know you're not giving guidance until the Q4 call, but anything on the top line that you would call out versus 2017. But, I'm more curious about EPS and how we should be thinking about the incremental Actelion accretion in 2018. It's probably about an incremental $0.30 or so. Should we expect to see that on top of your normal 6-8% operational EPS growth, or you'll reinvest some of it?

Dominic Caruso -- EVP & CFO

I think we've previously described the first full year of accretion for Actelion to be $0.35-0.40 a share. We said that this year's accretion is going to be about $0.07. So, you're right. You get to a place that's just under $0.30 of potential additional EPS accretion from that acquisition.

As we always do, we're evaluating all of our plans right now and determining where is the best place to invest, what the businesses have in terms of launches of new products, and what they have in terms of their own momentum. We want to continue to invest behind new product launches. So, it's too early to give you an expectation of how much of the accretion from Actelion will fall through versus how much will be invested.

But, suffice it to say, we generally grow our sales. We aim to grow our sales faster than the categories we compete in, and we aim to grow our earnings at a rate faster than sales. So, we'll continue to do that and we'll give you a clear picture of that as we set our plans for 2018 when we talked in January.


Your next question comes from Jeff Holford with Jefferies.

Jeffrey Holford -- Jefferies

Hi. I was wondering if you could just give us a little bit more color on DARZALEX in the US, where you'll have better information, hopefully. Just your market share in the lines of therapy that you're in and what kind of duration of therapy you think you're going to get to in those lines. Thanks very much.

Joaquin Duato -- EVP, Worldwide Chairman, Pharmaceuticals

As far as DARZALEX, as I commented, our market share in Ceelin Plus is north of 40% in the US already and in second line, depending on the sort, is generally north of 30% and it continues to grow. The trend that we are seeing in the market are very positive, particularly after the approval in one prior line and the data we presented in one prior line. As I commented earlier, we'll finish the study in first line in combination with VMP and we are planning to file before the end of the year. So, all is positive on that side.

Importantly, we are also working, as you guys know, in developing our ASAP-Q formulation and we are going to start our Phase III study with the ASAP-1 formulation this year. Increasingly, we see DARZALEX becoming a backbone therapy in the treatment of multiple myeloma. That's the feedback that we are getting from customers.

Jeffrey Holford -- Jefferies

On Actelion, Dominic has talked a couple of times about how accretion from this deal can be delivered pretty quickly. I'm just wondering, for 2018, do you think you'll give us some kind of update on the level of accretion that really will drop through from this in 2018 and whether there's any potential upside to the $0.35-$0.40 that you previously talked to?

Dominic Caruso -- EVP & CFO

When we talk in January, we'll point out the impact of Actelion and all of our acquisitions on growth. So, we'll give you an estimate of organic growth and therefore you'll be able to see the impact of acquisitions. And on the bottom line, we'll talk about the impact it has to our overall earnings picture and also any major investments we plan to make.


Your next question comes from David Lewis with Morgan Stanley.

David Lewis -- Morgan Stanley

Good morning. Jorge, starting with you, strategically since you got to the company, you saw some very impressive improvements in the consumer franchise earlier last year and that has slowed in the near term. There are a lot of strategic questions about the impact of Amazon on the broader consumer business, the impact of millennials on brands. Other than just making some of the investments you've talked about, is there any change in the strategic focus for this business for you based on some of these macro pressures, or is it just continuing to do the prior plans? Strategically, how well do you think you're positioned now versus when you first joined J&J?

Jorge S. Mesquita -- EVP, Worldwide Chairman -- Consumer

That's a good question. There's no doubt that the broader CPG industry is seeing a change in the competitive landscape. There is a fundamental shift enabled by digital technologies. We see the rise of a lot of small companies that are now competing with the large established companies in this field.

But, in the face of it, I'm very confident that our strategies are absolutely the right ones for us to continue with what we've had for a number of years, which is a strong sustained run of market share growth. We have to make some adjustments in terms of the operational focus of those strategies. In particular, we have to drive accelerated growth on the online channel, and we're doing just that.

We are growing, we estimate, at this point at twice the rate of the broader online channel with our e-commerce capabilities. We are investing very heavily in leadership, systems, capabilities in general, and sales fundamentals online so that we drive our share of e-commerce to match our offline share.

There are some adjustments we're making, but overall the broad strategic focus that we've had and has driven our results for the last few years remains very much in place and we feel we're very well positioned.

David Lewis -- Morgan Stanley

Okay. Joaquin, two questions about pharma. First, ZYTIGA strength this quarter? How much does that have to do with the patient assistance programs disconnect from the other part of the year resolving? How should we think about that franchise growth going forward? Second, in talking to them, you talked about the potential multibillion-dollar opportunity. Can you give us a little bit more detail? Was this a safety issue, an efficacy issue? What's the future path going forward for Talacotuzumab? Thanks so much.

Joaquin Duato -- EVP, Worldwide Chairman, Pharmaceuticals

ZYTIGA strength has been mainly driven in the US by the combination of market growth and share gain. That's the reason we've had this ZYTIGA strength in the US.

Dominic Caruso -- EVP & CFO

Joaquin, if I could just interject. The patient assistance foundation still hasn't anniversaried yet. We expect that in the fourth quarter. So, that was actually about a four- to five-point headwind to growth this quarter. These are independent organizations, so it's hard to predict what may happen, but we didn't see the incremental lift from the sequential quarter from Q2. But, it is still a significant comparator when you compare it to last year's Q3.

Joaquin Duato -- EVP, Worldwide Chairman, Pharmaceuticals

So, that's the source of the strength of ZYTIGA. The market is growing and also we continue to gain share and price of it all, including the effect of the third-party foundations continues to be a negative to ZYTIGA.

What has been new recently is the presentation of the latitude data, which was very well received by the customers and by patients, with very significant results in increasing overall survival and rapid progression of survival in patients that were metastatic but did hormone life. This is the first time that medicine is tested in this indication and we are filing in this indication in the US and in Europe and in some other parts of Europe. We've received a positive opinion for the CHMP recently.

So, that is the major driver of ZYTIGA growth. Higher market penetration, combined with CR gains across the board.

Regarding Talacotuzumab, as Joe commented, we discontinued it based on the recommendation of the IDMC and AML, based on the safety risk-benefit ratio. We are now evaluating the data and using those to see which other indications we may pursue in the future. So, it is still premature to comment on what else we would do with Talacotuzumab.


Your next question comes from Bob Hopkins of Bank of America Merrill Lynch.

Bob Hopkins -- Bank of America Merrill Lynch

Hi. First, just to clarify, on the impact of the hurricanes and the medical device growth, you said it was 30 basis points. Was that global or US? And, was it more pronounced in certain areas of hospital med tech versus others?

Dominic Caruso -- EVP & CFO

Yeah, I would say, Bob, the best way to classify that is a very preliminary analysis. We looked at some zip codes to see what particular metropolitan areas might've been hit that were in direct line of the storm. But, it's mostly a US phenomenon because it was related to surgery days and not anything to do with supply disruption.

Bob Hopkins -- Bank of America Merrill Lynch

But the 30 basis was the impact on worldwide hospital med-tech growth not US?

Dominic Caruso -- EVP & CFO


Bob Hopkins -- Bank of America Merrill Lynch

Okay. The bigger picture question for Sandy. On the outlook for pricing in hospital med tech. We've been noticing whether it's China, Australia, or India, it just feels like governments in these countries are taking a harder line around med tech pricing and it could be something that impacts growth going forward. I was just curious to get your views on how big of a concern this is for you as you look at the hospital med tech business growth outlook outside the United States.

Sandra E. Peterson -- EVP, Group Worldwide Chairman

Our sense of it is that in some of these markets it's an episodic thing that happens and it's not that unusual over time. But, I think we're also finding -- I guess the punchline is we're concerned about it but we're not terribly concerned about it because we have been able to go and work with many of these governments and hospital systems to find ways to provide incremental value to them beyond the physical product alone. That's a way for us to actually be able to deal with some of these questions about pricing.

Obviously, the situation in India -- this one-time price impact on knees -- clearly has an impact on the marketplace in that regard. I think that's a much more extreme example of what we've seen in other marketplaces, which are a lot more moderated. We have the opportunity, in some cases, to have broader considerations with them. It's part of why we have changed our business strategy to show up as an integrated business talking to them about a number of different things beyond purely the physical product on going forward. So, that's how we believe we're going to address this question when it arises in OUS markets.

Dominic Caruso -- EVP & CFO

Maybe just to pick up on that point for the benefit of those on the call, if you look at our price contribution to the enterprise result, it was actually about -0.2%. It was a slight positive price impact in consumer, slightly negative in medical devices. Where we actually saw some price decline or erosion was about 3% in the pharmaceutical sector. That translates to about 2% down for the entire enterprise. It speaks to the strength of pharma that it really came from volume and market share related types of improvements.


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

Glenn Novarro -- RBC Capital Markets

Hi. Good morning. Another question for Sandy. J&J has been reshaping it's device portfolio for several years now, selling diagnostic and cardio. I know you're strategically looking at diabetes. I was hoping you would give us an update beyond what you said on Animas most recently. Then, as you look at the portfolio, are there other areas that may be divested? Are there areas that you see that may be helped through [inaudible -- audio cuts out] [00:58:44]?

Sandra E. Peterson -- EVP, Group Worldwide Chairman

I'll start -- you have seen the actions we've taken regarding our portfolio. But, the most important thing is all of the actions we've taken to invest in the platforms we believe have significant growth. We've been doing this both in terms of acquisitions, strategic partnerships, and investing in R&D. As you know, we've made a significant bet in our neurovascular business, where stroke is a huge unmet need and it's only growing. We now have a business, due to some things we did internally as well as a couple of acquisitions in the last 12 months. You should see us, over time, build that business the way we have built the EP business.

It's an important growth driver for us as a company. In our core orthopedics businesses, we have been making small talk and acquisitions plus investing in technology as well as innovation. You'll see us continue to drive that.

The most obvious significant one in the last year is all of the investments we've been making in vision to broaden our portfolio in vision care. We did three acquisitions this year to broaden the depth and breadth of our vision portfolio. I think you should think about this as a combination of where do we see growth in the business, whether it's in core surgery, orthopedics, vision, or what we call now interventional. You should expect to see us continuing to make those investments. Over time, if we make choices about other parts of our portfolio, we'll let you know when we make those choices.

Glenn Novarro -- RBC Capital Markets

No update on diabetes other than the announcement on Animas -- is that correct?

Sandra E. Peterson -- EVP, Group Worldwide Chairman


Glenn Novarro -- RBC Capital Markets

If I look at your US surgery business, I look US orthopedic business. It did come in wider than we expected. It looks like, in the third quarter, there was a step down to slightly negative growth versus positive growth in the first half. Can you provide any commentary on what you're seeing in the US with respect to utilization? Is there any impact from fewer sign-ups with ACA? Is there impact occurring because of high deductible plans being purchased? Any color as to why we saw some weakness in either your business or utilization in the third quarter?

Joseph Wolk -- VP, IR

This is very preliminary for the third quarter, but pretty much on par with hospital admissions being down maybe 50 basis points to 100 basis points. Surgical procedures, from our lens, looks to be down about 2.5%. In lab procedures are remaining flat sequentially up about 2%. Thanks for the questions.


Your next question comes from Geoff Meacham with Barclays.

Geoff Meacham -- Barclays

I just have a few quick questions for pharma. On INVOKANA, it looks like the quarter performance was a little weak. I want to get your perspective from the field now that it's been a few months since the presentation to the ADA. How much of the sequential drop would you attribute to pricing and what's that look like going forward? And then, on Apalutamide, I just want to get the J&J perspective on the cost-benefit the profile have stacks against ZYTIGA. Down the road, you'll be competing against the generic, so that's a different sales cycle on that.

Maybe a bigger picture on prostate. You guys have had good data on premetastatic, as has -- I just wanted to get your perspective on the tipping point for broader urologist adoption. Thanks.

Joaquin Duato -- EVP, Worldwide Chairman, Pharmaceuticals

Let me start with INVOKANA. It continues to be the leader in prescriptions in the SGLT2 category. It's still the leader in the SGLT2 category. When it comes to this quarter, we saw a decline. A decline was mainly driven by price. Also, we saw impact since we included the black box warning on our labels. It's a combination of mainly price and some share declines due to the black box warning.

As we move forward, we see opportunities with INVOKANA. The first one is we just file our MACE indication based on the CANVAS data, and that's going to be important for us moving into 2018. The second one, we continued to progress with our credence study in patients with diabetic nephropathy in order to evaluate how their kidney function progresses. So, those are two elements that make us content with the future of INVOKANA moving into 2018.

Regarding Apalutamide, we're super excited at being able to continue our leadership in prostate cancer with Apalutamide. It's been great that we have been able to file recently for this indication. It's going to be the first time that these agents are indicated in patients that have no metastases.

To your question of ZYTIGA, I think you are aware that in metastatic prostate cancer, we're analyzing a combination of Apalutamide and ZYTIGA compared to ZYTIGA. So, that would be a transformation if we are able to demonstrate that superiority. That is how we see the market moving forward. As you are also aware, we have alliances with [inaudible -- accent] [01:04:52] in the area of prostate cancer that we are starting now that we plan to file in this indication in 2018. Eventually, we will combine with our antiandrogen agent.

So, we have a full line of products in the area of prostate cancer, from the non-metastatic to the metastatic indications combining Apalutamide, ZYTIGA, and eventually [inaudible -- accent]. We're feeling very confident about the options that we are bringing to those patients. Also, we feel very confident about how competitive our offering is, which has been demonstrated by the share gains that you have seen in this quarter and about our speed in being able to complete the Apalutamide trials and fight for that.


Your next question comes from Jami Rubin with Goldman Sachs.

Jami Rubin -- Goldman Sachs

Joaquin, maybe you could just follow up on the question related to INVOKANA. What are you seeing with the SGLT2 class? Are you losing share to JARDIANCE because of the amputation warning? You talked about prices. How should we think about this franchise going forward? INVOKANA was one of those drugs that had such a spectacular [inaudible -- audio cuts out] and now it's a negative territory and down 20% this quarter. Would you anticipate price continues to be a thorn or is this more of a step down and rebalancing? Would you expect to see the SGLT2 class start to face some share?

Joaquin Duato -- EVP, Worldwide Chairman, Pharmaceuticals

To your first question. Yes, we are losing share to the other SGLT2 agents since we introduced the box warning in our label. We remain the leader of the category, but we are losing share, particularly in new patients. Certainly, the price has been even a bigger driver in the step decline that you have seen this quarter. Our belief in INVOKANA moving forward is based on the very positive data that we have submitted in MACE and the order release reduction that we see in utilizing INVOKANA.

Also, in the study that we're conducting -- the CREEDENCE one in patients with diabetic nephropathy, evaluating their renal function. So, all in all, we see the SGLT2 category and INVOKANA bringing important benefits and we continue to see INVOKANA as an important brand for us moving into 2018.

Jami Rubin -- Goldman Sachs

Dominic, a couple of P&L questions. I think you had said that currency has now swung from minus five to plus three. That's an eight percentage point benefit. Should we assume that most of the top line and bottom line guidance increases -- not all, but most -- the majority -- is related to effects?

Secondly, on the other income line, that's the line that I know you're going to give us guidance in 2018. It's very hard for us to analyze because it fluctuates so much depending on asset sales. Going back in my model, this was a line item that was more in the $500-600 million dollar range and now it's $1.7-1.8 billion. There was a year when it was $2 billion. Can you just give us a big picture view in terms of how we should think about this line going forward? Obviously, it's become a driver to earnings. Thanks.

Dominic Caruso -- EVP & CFO

First of all, on the effects question, you're correct that the increase in our guidance is partly due to different outlook on effects on both top and bottom line. That's an accurate assessment. With respect to other income, here's a good way to think about it. We have consistently talked about the fact that we intend to actively manage our portfolios. We've been doing that over the last several years. In doing that, we will make a determination whether the asset's better in our hands or better in someone else's hands.

Once those decisions are made -- we do include in our overall guidance for the year, our expectation on this other income line, which is difficult for anyone to forecast. That's why we give you our expectation. You can see that we're pretty much in line with the expectation that we gave you from the beginning of the year with respect to the asset sales we think would occur this year and therefore be part of our overall expectation from the very beginning. We're executed on those.

The way to think about this is, we don't expect that our work in evaluating the portfolio is going to diminish. We're going to continue to do that. We're going to make sure that assets are better, either in our hands or in someone else's hands. And when you look at the other income line in your model and see it increase, please take also a look at pre-tax operating margin, which is after COGS and SG&A and R&D. You can see that that margin, at the same time, decreases, which goes to the point that I made earlier. When we do this, it's a portfolio decision, so we're increasing our investment in R&D, SG&A, etc. at the same time we're recognizing these gains.

So, they're not really drivers of earnings. They're really drivers of investment in the portfolio. So, take a look at that. As I said earlier, we expect to complete this group of asset sales this year in our guidance. But, I said earlier, when we talked last quarter, that I would not expect that this line item would drop off significantly in 2018 and therefore, that allows us to keep our investment levels up high going into 2018 as well.


Your next question comes from Josh Jennings with Cowen and Company.

Josh Jennings -- Cowen and Company

Good morning. I have two quick questions for Joaquin. First, on the biosimilar readiness plan you installed. It's been effective and highly successful in contracting in 2018. I wanted to get your input, that if anything changes in the REMICADE defense strategy, the [inaudible -- audio cuts out] [01:11:26] in terms of continuing to secure wins with your innovative contracting model.

Joaquin Duato -- EVP, Worldwide Chairman, Pharmaceuticals

The important thing here is to understand the dynamics on the REMICADE and immunology biologics market overall. The key factor for REMICADE being successful is the fact that physicians and patients have a high confidence in trusting REMICADE based on more than two million patients treated and 16 indications. There is no other medicine as studied as experienced as REMICADE is.

The second factor is that these medicines are not interchangeable. Sometimes this element is lost in the debate. These medicines are not designated as interchangeable by the FDA. In other words, they are not like the others and they are not the same. They are biosimilars, but not the same.

Having said that, what we're seeing in the marketplace that physicians are very reluctant to switch stable patients from REMICADE into other medicines. That is normal. In many of the indications that REMICADE is used, particularly in the most frequent one of gastroenterology, these biosimilars do not have any data to show for. So, the most important factor in the success of REMICADE is the physician and patient experience and the body of data that supports using REMICADE and the lack of interchangeability.

Now, we continue to compete vigorously in price and we continue to drive reductions of cost for the overall system based on that. As a matter of fact, they price of REMICADE has decreased year over year when you look at the net price. When we move into 2018, we're going to continue to work along the same lines of making sure that physicians have the option to continue to use REMICADE and making sure they are aware of the body of data and the experience that they have had during the last years in which they have been able to have this rapid deduction.

That's really the base of our 2018 plan. Making sure physicians have the option to prescribe REMICADE and making sure that patients are stable and can benefit and remain in REMICADE.

Josh Jennings -- Cowen and Company

Thanks for that. A quick one on XARELTO. It accomplished trials. It's still early days post data, but any preliminary thoughts on how to maximize capitalization on the coronary and periphery disease opportunities?

Joaquin Duato -- EVP, Worldwide Chairman, Pharmaceuticals

As I said, XARELTO has had terrific share gains during this quarter. The highest share gain in the last four years. While we are very pleased with the results, it has nothing to do with the CANVAS results. As you know, CANVAS population -- either the coronary and peripheral arterial vascular disease is a different one. XARELTO will be used in a different dose. So, all that you are seeing in XARELTO today is driven by our existing indications, particularly atrial fibrillation and VTE treatment and prophylaxis.

Moving into 2018, we are filing this year for the CANVAS data as I commented. So, we see significant opportunities in CANVAS. It's 6-7 million patients that can be treated -- is the total population. We believe that the profile of XARELTO based on the data of the CANVAS trial is going to be extremely competitive. That's going to be one of the drivers.

This is only one of the studies that are included in our explorer program that contains multiple indications seeking studies in congestive heart failure, [inaudible -- accent] [01:15:37] syndrome, medical patients that would continue to drive the growth of XARELTO in '18 and after '18.


Your next question comes from the line of Tony Butler with Guggenheim Partners.

Tony Butler -- Guggenheim Partners

The immunology section for J&J has been a tremendous grower, even since you date back to the acquisition of XenaCor in the 1990s. But, one of the things that you've recently done is backed out Sirukumab in RA. Outside of the products you have on the market today, is there anything to backfill into RA that you have in the portfolio.

Within immunology, can you comment on how Guselkumab has been received with payers? If I may, a third, for GVHD, Joaquin, would you say that's a large market opportunity for you? If so, how large? Thanks very much.

Joaquin Duato -- EVP, Worldwide Chairman, Pharmaceuticals

It's important for me to remind that when it comes to the discussion of Sirukumab and Talacotuzumab, those were setbacks. But, our outlook of continuing to drive our market growth through 2021 remains more surely than before, based on the growth of our existing brands. The problems we have had with several key elements of our pipeline -- that's an important thing to remind. When it comes to immunology, we are the company with more assets in this category. We have four approved assets -- REMICADE, Symfony, STELARA, and TREMFYA.

Are we disappointed with Sirukumab? We are because we stand behind Sirukumab and the value it has. The additional data request that we were having from the complete response later would have delayed the introduction of Sirukumab significantly based on the competition that exists there, we thought the best thing for us is to focus on other priorities.

TREMFYA has been very well received by physicians and by patients. As a matter of fact, we already have 900 physicians prescribing TREMFYA and 3,000 patients. As we speak, it's the leading in psoriasis when you consider new therapies Anti-IL-17.

What about the players? Look, this is a very competitive market in this category. We feel confident that we have appropriate access moving into 2018. We've been negotiating that access in this part of the year, and when 2018 comes, we feel good that patients that want to use TREMFYA, physicians that want to use TREMFYA, will be able to use it and will be able to prescribe it. Overall, as we discussed, we see that -- even in immunology -- even considering the erosion that we're going to have with REMICADE, we're going to continue to post positive growth in immunology based on the strength of STELARA and the strength of TREMFYA moving forward.

Joseph Wolk -- VP, IR

Great. That concludes the Q&A portion of today's call. Thanks to everyone for the questions and continued interest in Johnson & Johnson, and apologies for those questions we weren't able to address today. I'll now turn the call back to Dominic for some brief closing remarks.

Dominic Caruso -- EVP & CFO

Well, thanks, Joe. As I noted earlier, we're very, very pleased with our strong third quarter performance. I'm also glad you had the opportunity hear directly from our business leaders -- Sandy, Jorge, and Joaquin -- who are doing a terrific job in leading our strong businesses and delivering very, very strong results.

We owe our strong performance, and therefore our thanks, to the very talented colleagues we have around the world, who continue to bring innovative solutions to patients and consumers. Thank you for your time today. I look forward to updating you on our full year results in January. Have a great day.


Duration: 80 minutes

Call participants:

Joseph Wolk -- VP, IR

Dominic Caruso -- EVP & CFO

Joaquin Duato -- EVP, Worldwide Chairman, Pharmaceuticals

Jorge S. Mesquita -- EVP, Worldwide Chairman -- Consumer

Sandra E. Peterson -- EVP, Group Worldwide Chairman

Glenn Novarro -- RBC Capital Markets

Mike Weinstein -- JPMorgan

Jami Rubin -- Goldman Sachs

Matt Miksic -- UBS

Larry Biegelsen -- Wells Fargo

David Lewis -- Morgan Stanley

Tony Butler -- Guggenheim Partners

Bob Hopkins -- Bank of America Merrill Lynch

Josh Jennings -- Cowen and Company

Jeffrey Holford -- Jefferies

Geoff Meacham -- Barclays

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