OUR FIVE-YEAR JOURNEY
Several years ago, we set out to build on our strong foundation and sustain our track record of growth, even as we prepared to address a daunting challenge: the patent expirations for two of our major drugs, RISPERDAL® (risperidone) and TOPAMAX® (topiramate). Together, these products had combined peak-year sales of more than $6 billion. We also prepared ourselves for other market issues to which we had a good line of sight.
Additional developments could not be as easily foreseen: the severe economic decline; the tightening of consumer spending and health care budgets; over-the-counter (OTC) product quality issues at McNeil Consumer Healthcare and the recall of the DePuy ASR™ Hip System.
Our company was severely tested.
In managing through this stretch, we relied heavily on the resolve of our people and on our time-tested business model: our broad base in health care, our decentralized management structure, managing for the long term and the values set forth in Our Credo.
We made necessary restructurings to our business to manage our cost structure, simplify our operations, and ensure the most efficient use of our capital for the long-term benefit of patients and shareholders.
Our management team and employees took critical actions to preserve the core values and strengths of our business. We remained committed to retaining the trust of our patients and customers, taking responsibility and instituting new measures to ensure that our products live up to the high quality standards that our customers expect and deserve.
As 2011 came to a close, we moved through a turning point. The headwinds from patent expirations, tough portfolio choices, litigation matters and OTC product quality issues had been, or were being, addressed.
At the same time, our continued investments in research and development (R&D), equaling nearly $37 billion over the past five years, yielded nine major approvals for new pharmaceutical products in the United States—including STELARA® (ustekinumab) and SIMPONI® (golimumab) in immunology; PREZISTA® (darunavir) and INTELENCE® (etravirine) in HIV; ZYTIGA® (abiraterone acetate) in oncology; and XARELTO® (rivaroxaban) in cardiovascular disease.
The emphasis we place on R&D has also led to exciting innovations in our Medical Devices and Diagnostics (MD&D) and Consumer platforms, such as contact lenses, electrophysiology, advanced energy, biosurgicals, oral care and skin care.
We have replenished or advanced our pipelines with new technologies, like the Fibrin Pad for hemostasis, as well as compounds like canagliflozin for diabetes and bapineuzumab for Alzheimer's disease.
With our focus on financial discipline, capital has been returned to shareholders in the form of dividends and share repurchases. Capital has also been used for important long-term investments in strategic alliances and acquisitions like Pfizer Consumer Healthcare and Beijing Dabao Cosmetics Company, Ltd. in the Consumer business; Crucell N.V. and Elan Corporation plc in our Pharmaceuticals business; and the pending acquisition of Synthes, Inc. in the MD&D business.
When I look back at how we faced this period of industry and global change, and how we have managed, I am proud of the people of Johnson & Johnson. They have shown the ingenuity, resiliency, tenacity, integrity and compassion that you would expect of a global leader in human health care.