Johnson & Johnson – Account Deep Dive Analysis

Johnson & Johnson – Account Deep Dive Analysis October 2018

Source : DRAUP 1 AGENDA

Account Profile ➢ Johnson & Johnson Overview

❑ Highlights on Johnson & Johnson, business overview 01 Business & Financial Overview ❑ Last 5 years revenue analysis

02 Globalization Footprint ❑ Revenue split by geography

❑ Key operating business segment

03 Outsourcing Vendor Analysis ➢ Organization Structure

❑ CXO’s and Executives 04 Rolodex

05 Recommendations

Source : DRAUP 2 On October 2, 2018 Johnson & Johnson completed the divestiture of its LifeScan business to Platinum Equity for approximately $2.1 billion

Headquarter: Year of Establishment: About Johnson & Johnson New Brunswick, New Jersey, 1887 United States Johnson & Johnson, together with its subsidiaries, researches and develops, manufactures, and sells Employees (2017): various products in the health care field worldwide. It ~ 1,34,000 is an American multinational medical devices, pharmaceutical and consumer packaged goods Revenue (2017): R&D Spend (2017): manufacturing company. USD $ 76.45 billion USD $ 10.55 billion

Revenue vs R&D spend (2013-17) Revenue share by Geography (2017) Revenue share by segment (2017)

United States 52% Consumer $74.33 $76.45 18% $71.31 $70.07 $71.89 Revenue CAGR (2013 - 2017): 1.76% Europe 22% Pharmaceutical 47%

Asia-Pacific, Africa 18% $8.18 B $8.49 B $9.04 B $9.09 $10.55 R&D CAGR (2013 - 2017): 6.57% Western 2013 2014 2015 2016 2017 Hemisphere 8% Medical devices 35% Revenue in $ billion R&D spend in $ billion 3

Note – DRAUP data curated from Johnson & Johnson financial reports published annually and updated in October, 2018 Source : DRAUP 3 Johnson & Johnson – Business Segments Overview

Johnson & Johnson

Advanced Sterilization Accelerant Access ACUVUE Adjunctive Hemostasis Products (ASP)

Chemical Process Automotive Experience Biosense Webster Building Efficiency Cordis Equipment's & Engineering

Energy Sealing and DePuy Synthes Diabetes Care Hernia Mesh & Fixation Ligation Dissecting

Mentor Microwave Ablation One Touch Power Solutions Surgical Stapling

Vascular Access and Uterine & Pelvic Wound Closure Infection Control

Note – DRAUP data curated from Johnson & Johnson financial and analysts reports published annually and updated in October, 2018 Source : DRAUP 4 Johnson & Johnson – Executive Leadership

Alex Gorsky

Chairman, Board of Directors & Chief Executive Officer

Joaquin Duato Peter Fasolo Ashley McEvoy Executive Vice President, Chief Human Resources Executive Vice President, Worldwide Chairman, Vice Chairman of the Executive Committee Officer Medical Devices

Jorge Mesquita Michael Sneed Paul Stoffels Executive Vice President, Worldwide Chairman, Executive Vice President, Global Corporate Affairs & Vice Chair of the Executive Committee and Chief Consumer Chief Communication Officer Scientific Officer

Michael Ullmann Jennifer Taubert Kathy Wengel Executive Vice President, Worldwide Chairman, Executive Vice President & Chief Global Supply Chain Executive Vice President, General Counsel Pharmaceuticals Officer

Joseph J. Wolk Executive Vice President, Chief Financial Officer

Note – The above analysis is based on the DRAUP’s Executive Module, updated in October, 2018. Source : DRAUP 5 KEY STRATEGIC PRIORITIES: Core Business Initiatives & Organisational Restructuring

Core Business Initiatives

• On September 12, 2018 Johnson & Johnson Medical Devices through its subsidiary Johnson & Johnson Medical GmbH acquired Emerging Implant Technologies GmbH (EIT), a privately held manufacturer of 3D-printed titanium interbody implants for spinal fusion surgery that allowed DePuy Synthes to enhance its comprehensive interbody implant portfolio that includes expandable interbody devices, titanium integrated PEEK technology and now 3D-printed cellular titanium, for both minimally invasive and open spinal surgery. • On July 30, 2018 Johnson & Johnson Consumer Inc. acquired Zarbee’s, Inc., a privately held company that is a leader in naturally-based healthcare products to bring a more comprehensive set of products to consumers within their core need states. • On June 12,2018 Johnson & Johnson announced that it has accepted the binding offer from Platinum Equity, to acquire its LifeScan, Inc., a world leader in blood glucose monitoring and maker of the OneTouch® brand of products to serve those impacted by diabetes through innovative products, services and solutions from its Medical Device, Pharmaceuticals and Consumer businesses • On June 6, 2018 Johnson & Johnson announced that it has received a binding offer from Fortive Corporation to acquire its Advanced Sterilization Products (ASP) business, a division of Ethicon, Inc to deliver the greatest value to customers, healthcare providers and shareholders. • On May 2,2018 Janssen Biotech, Inc., one of the Janssen Pharmaceutical Companies of Johnson & Johnson, acquired BeneVir Biopharm, Inc., a privately-held, biopharmaceutical company specializing in the development of oncolytic immunotherapies which focused to bring forward an array of novel immunotherapies and combinations that might improve treatment outcomes for patients. • On February 20, 2018 Johnson & Johnson Medical Devices Companies acquired Orthotaxy, a privately-held developer of software-enabled surgery technologies to build a next-generation robotic-assisted orthopaedic surgery solution that is cost-effective, time-efficient, and user-friendly in a variety of care settings

Organisational Restructuring

• On August 8, 2018 Johnson & Johnson announced the appointment of Chris DelOrefice as Vice President of Investor Relations to provide strategic financial leadership and counsel. • On June 22, 2018 Johnson & Johnson announced the appointment of Joaquin Duato, Executive Vice President, Worldwide Chairman, Pharmaceuticals and Dr. Paul Stoffels, Executive Vice President, Chief Scientific Officer to the position of Vice Chairman of the Executive Committee

Note – Analysis is based on the news articles, journals and other similar sources updated in October, 2018 Source : DRAUP 6 KEY STRATEGIC PRIORITIES: Focus on Emerging Technologies & Ecosystem Partnerships

Focus on Emerging Technologies Ecosystem Partnerships

• On September 26, 2018 Johnson & Johnson announced that DePuy Synthes introduced • On September 23, 2018 Johnson & Johnson collaborated with Janssen Vaccines & SENTIO MMG, a first-of-its-kind digital mechanomyography platform designed to assess Prevention B.V., part of the Janssen Pharmaceutical Companies to develop and nerve status and identify and avoid peripheral nerves during spine surgery. manufacture a vaccine against Middle East Respiratory Syndrome Coronavirus (MERS- • On June 7, 2018 DePuy Synthes, part of the Johnson & Johnson Medical Devices CoV). Companies announced the launch of its Femoral Recon Nail System, a nailing system that • On August 7, 2018 Johnson & Johnson Services Inc. partnered with the Government of provides new options for the surgical treatment of a wide variety of long thigh bone fractures. Rwanda to significantly strengthen and expand access to quality mental health care in the • On April 26,2018 DePuy Synthes, part of the Johnson & Johnson Medical Devices country Companies announced the US launch of the PROTI 360° Integrated Titanium Family of • On April 16, 2018 The Janssen Pharmaceutical Companies of Johnson & Johnson interbody devices to advance care for patients who have degenerative disc disease in the collaborated with Bristol-Myers Squibb Company on a program to develop and neck and back. commercialize Factor XIa (FXIa) inhibitors, including BMS-986177 for the prevention and • On April 11, 2018 Johnson & Johnson Vision announced ACUVUE OASYS® with treatment of major thrombotic conditions. Transitions® Light Intelligent Technology™ first of its kind contact lens that provides • On February 7, 2018 The Janssen Pharmaceutical Companies of Johnson & wearers with vision correction and a dynamic photochromic filter that helps to continuously Johnson collaborated with an affiliate of Theravance Biopharma, Inc. to develop TD-1473, a balance the amount of light entering the eye first-in-class oral, gastrointestinal (GI) restricted pan-Janus kinase (JAK) inhibitor for the • On April 5, 2018 Johnson & Johnson Institute added a Innovative Analytics-Based treatment of inflammatory bowel disease (IBD), which includes Crohn’s disease and Learning Platform , a new digital learning capability to help surgeons improve technical ulcerative colitis (UC). skills and clinical outcomes Across a Range of Specialties • On December 21, 2017 Janssen Biotech, Inc. collaborated with Legend Biotech USA Inc. and Legend Biotech Ireland Limited, subsidiaries of Genscript Biotech Corporation, to develop, manufacture and commercialize a chimeric antigen receptor (CAR) T-cell drug candidate, LCAR-B38M, which specifically targets the B-cell maturation antigen (BCMA). 7

Note – Analysis is based on the news articles, journals and other similar sources updated in October, 2018 Source : DRAUP 7 AGENDA

Account Profile

01 Business & Financial Overview ➢ Details on Global Technology Footprint

02 Globalization Footprint ❑ Key buying locations

❑ Region wise insights for global Technology centres – Headcount,

03 Outsourcing Vendor Analysis Activities and key products developed

04 Rolodex

05 Recommendations

Source : DRAUP 8 Summary: Johnson & Johnson – Technology Globalization Footprint

➢ Key buying center is based out of Greater New York Area, United States

Key Buying Locations ➢ Greater New York Area, United States with ~16% of engineering talent, is responsible for the development, maintenance and execution of test scripts/ test cases for System integration test across test phases based on business requirements, functional requirement specification and User stories

➢ The Key activities are definition, implementation and maintainenance of program management strategies, procedures, processes, and methodologies. ➢ Establishment and maintainenance of a Global Pharma Application/Service Asset & Configuration Management (SACM) Governance process. Key Engagements ➢ Development of a of Tolerance Analysis System using TADM (Tolerance Analysis and Dimensional Management) System and Enventive® ➢ Development and implementation of multi-region projects that drive strategic plan objectives for high growth of Clean & Clear®, Beauty Devices, and the broader Johnson & Johnson® Face Care portfolio of brands.

Daniel Zelem Margaret Yu Kendra Hileman Dan Baker Vice President, Oncology Clinical Vice President Immunology Key Stakeholders Chief Technology Officer VP, Head of Clinical R&D Development R&D

Note – Analysis is based on the news articles, journals and other similar sources updated in October, 2018 Source : DRAUP 9 Johnson & Johnson : Greater New York Area, United States is the only Key Buying Center that owns 100% of total Outsourced deals

Global Technology Footprint of Johnson & Johnson 22 No. of Centers : 1 Head Count : 20 – 30 Total Number of Technology Hotspots

No. of Centers : 1 No. of Centers : 2 Head Count : 30 – 60 Head Count : 200 – 300 No. of Centers : 1 Head Count : 50 – 100 No. of Centers : 1 Head Count : 200 – 250 UK Ireland Netherlands Germany

United Switzerland States of 3,000 – 4,000 America China No. of Centers : 1 Israel Total Number of Technology workforce Head Count : 200 – 300 No. of Centers : 1 Head Count : 50 – 100 Installed No. of Centers : 14 Head Count : 2K – 3K

1 Number of Buying Centers

Note: The represented data illustrates the number of centers by Geography and the bubble size is proportional to overall HC Installed in the area. 10

Note – The represented data has been collected from Draup Proprietary Global Footprint Database updated as of October, 2018. Source : DRAUP 10 Johnson & Johnson : Greater New York City Area, United States is one of the major Engineering hubs that owns ~16% of total Technology Workforce

Leeds Area Providence, Rhode Island Area Inverness Area Greater Philadelphia Area Hamburg Area

Greater New York City

San Francisco Bay Area Ireland Groningen Area Switzerland Greater Boston Area Suzhou, China Greater Los Angeles Cincinnati Area Albuquerque, New Mexico Area Israel Madison, Wisconsin Area San Angelo, Texas Area Orange Country Miami/Fort Lauderdale Fort Wayne, Indiana Area

Jacksonville, Florida

Hub Satellite Outpost 11

Note – The represented data has been collected from Draup Proprietary Global Footprint Database updated as of October, 2018. Source : DRAUP 11 Greater New York City Area, United States – Technology Centre Deep Dive: Centre Overview

• Creation of Python-Flask REST API’s health-check endpoints to fetch data from HashiCorp Consul for granular level monitoring Web, DB, Node.js app services to showcase real time statistics on Grafana Dashboard.

• Implementation of TDD/BDD approach for developing the Python applications, unit-tested by mocking for external resources like AWS S3 Bucket, DynamoDB, VMware vRealize Orchestrator's API's slashing resource.

• Development of innovative plastic surgery implants, reconstruction & augmentation silicone based implants Location Greater New York City Area, United States • Validation of data on front end as well as Back end (Writing Sql Query).

• Development of biochemical and physical assays to characterize formulations of novel medical devices. R&D Headcount 500 – 600 FTEs • Mechanical device design and development for Wound Closure and Repair, Hernia, and Bio surgery businesses

Center Level Hub, HQ Top leaders Major Engineering Talent Profiles

Daniel Zelem MaryJo Zaborowski Software Senior Data Average Salary Cost / FTE Chief Technology Officer Vice President, R&D IT Engineer analyst USD 115K / Annum 12

Note – The above analysis is based on the DRAUP’s Executive Module, updated in October, 2018 Source : DRAUP 12 San Francisco Bay Area, United States – Technology Centre Deep Dive: Technology Leadership (1/3)

Technology Leadership 42 Key Executives (Including, Top Leaders, VPs and Directors)

Josh Ghaim Daniel Zelem Chief Technology Officer at Top Leaders Chief Technology Officer Johnson & Johnson

Norm Rosenthal Katia Boven Bernhard Brouwer MaryJo Zaborowski VP, Clinical Development, VP, Clinical Development and VP IT - Consumer NA + global Vice President, R&D IT Cardiovascular & Metabolism Global Medical Affairs R&D

Vaibhav Narayan Walter Joppy Sen Zhuang MD Lynn Reed Vice president’s VP Research and Therapeutic VP Global IT Quality & Vice President, Oncology VP, Information Technology, Area IT Compliance Clinical Research Application Services

Gunaretnam Rajagopal Samantha Tucker- Jonathan Miller Jennifer Zhu VP - Global Head, Samaras VP Global Oral Care & Wound Vice President, Global Beauty Computational Sciences, Care R&D R&D Discovery Sciences VP, Strategic Science R&D 13

Note – The above analysis is based on the DRAUP’s Executive Module, updated in October, 2018 Source : DRAUP 13 San Francisco Bay Area, United States – Technology Centre Deep Dive: Technology Leadership (2/3)

Technology Leadership 42 Key Executives (Including, Top Leaders, VPs and Directors)

Federico Feldstein, JD Keith Demarest David Gruber Leona Brenner- Gati Vice President’s Vice President, Head of R&D Vice President, Global Head of VP, Corporate Development & Vice President, Science and Quality & Compliance Research New Ventures Technology

Nicholas Di Prospero Mehul Desai Christoph Heuck Muneet Burke Senior Director, Clinical Senior Director Clinical Senior Director Clinical Director - Medical Safety Officer Development Development Research

Om Sharma, MS Rafal HRYMOC Carolyn Mordas Eunice Ofori Artis Director, Clinical Research and Director - Global R&D Beauty Senior Director R&D Director, Clinical Research Drug Development Packaging & Innovation Director’s Jacqueline Bussolari Phil Rudio, PE Theresa Scheuble Filomena Macedo Senior Director, Development Global Director, Engineering and Director, R&D Senior Director R&D Skin Care Team (Oncology) Design

Michael Smith Chris Karcher Charles J. Buckle Rochelle Kleinberg Senior Director, Compound Director, Enabling Technology Director of Engineering Director, Healthcare Solutions Development Team 14

Note – The above analysis is based on the DRAUP’s Executive Module, updated in October, 2018 Source : DRAUP 14 San Francisco Bay Area, United States – Technology Centre Deep Dive: Technology Leadership (3/3)

Technology Leadership 42 Key Executives (Including, Top Leaders, VPs and Directors)

Ying Wan George Quirk Cokey N. Mayra Goncalves Director, Oncology Clinical Senior Director, Engineering Senior Director, Oncology R&D Senior Director R&D Biostatistics Network Director’s John Murtha Pat Calaiaro Steven Gabel Carol Boyne Director Material Science & Director, R&D Operations Director, Engineering Senior Director R&D Technology

Note – The above analysis is based on the DRAUP’s Executive Module, updated in October, 2018 Source : DRAUP 15 Globalization Technology Footprint (1/4)

R&D LOCATION DETAILS Buying Centres HEADCOUNT

• Development of Jenkins CICD pipelines, automating deployments for (AWS & Bare metal VM’s), integration with GIT to Greater New York City 500 – 600 automate code-checkout and release processes. Area, United States • Involved in Research and Development of Sutures including Antibacterial Sutures

• Product development of digital solutions for the Johnson & Johnson Diabetes Care companies, including LifeScan Inc., Greater Philadelphia 400 – 450 Animas Corporation, and Calibra Medical, Inc Area, United States • Design and develop implants and instrumentation for orthopaedic applications

Cincinnati Area, • Supports the Ethicon Portfolio of Products in J&J Medical Devices. Kentucky, United 300 – 400 • Design and development of Harmonic products in the Energy business States • Development of bipolar and ultrasonic algorithms for optimum tissue sealing effects

• Design and management of biomarker discovery for ophthalmic indications and contact lens derived adverse events. Jacksonville, Florida • Leads and manages the Global R&D Lab Systems Production Line. 300 – 400 Area, United States • Product development in spherical daily disposable and reusable lenses, lenses for astigmatism, lenses for presbyopia, and lenses for natural beauty enhancement

• Validation of Equipment Process/Aseptic Process Simulation in Life Cycle Management of Parenterals Production. Switzerland 200 – 250 • Development of products for cervical spine treatment & Cervical R&D

• Development, testing and installation of control system software changes with supporting documentation for validating Ireland 200 – 250 the manufacturing systems. • Development and execution of test plans (SAT, FAT). 16

Note – Global Footprint data curated by DRAUP and updated in October, 2018. R&D Headcount includes research and product engineering talent Source : DRAUP 16 Globalization Technology Footprint (2/4)

R&D LOCATION DETAILS HEADCOUNT

• Development of new and novel Spinal systems including MIS Pedicle Screws, Power, Navigation, Expandable Cages, 3D Greater Boston Area, 100 – 200 Printed cages and Lateral Systems. United States • Involved in Process Development for Health Care Products

• Development of the Clean & Clear® brand by ensuring global consistency in Generation Z equity understanding, Greater Los Angeles 100 – 200 positioning, new product idea generation to drive the business growth. Area, United States • Identify and capitalize on key macro trends for leading key global strategic Face Care initiatives

Orange County, • Validation of Enterprise systems with preparation and execution of validation deliverables. Supports Product Quality California Area, United 100 – 200 NPI/LCM projects. States • Development of test methods, creates protocols and analyses data.

• Validation and Verification of high-tech automated manufacturing line of networked machines. Inverness, United 100 – 150 • Creation and execution of validation documents, specifically factory acceptance testing protocols. Kingdom • Deployment of strategic NPI’s & Supply Chain projects into the organisations product portfolio.

San Francisco Bay • Involved in end-of-life mitigation, service escalations and cost improvement projects for on-market products. 100 – 150 Area, United States • Involved in PCBA design changes for product yield improvement

• Planning, implementation & sustainability of process improvements in relation to material and productivity losses of a Hamburg Area, 50 – 100 surgical sutures production area. Germany • Supports QMS related projects such as integrating the EES GmbH Quality System into the Ethicon Quality System. 17

Note – Global Footprint data curated by DRAUP and updated in October, 2018. R&D Headcount includes research and product engineering talent Source : DRAUP 17 Globalization Technology Footprint (3/4)

R&D LOCATION DETAILS HEADCOUNT

• Development of appropriate orthopaedic medical devices specifically for the ASPAC region. Leeds, United Kingdom 50 – 100 • Management of the project from the front end, charter, development, verification and validation through to eventual commercialisation

• Development of firmware for a generator device used for Cardiac ablation procedure. Israel 50 – 100 • Design, development & implementation of Software & Architecture for Advanced Networking and Wireless Devices in embedded platforms

• Development of New technology and involved in next generation biological fixation. Fort Wayne, Indiana 40 – 80 • Design/optimize stainless steel surgical instruments for 3D Printing. Area, United States • Planning and designing of Post processing of parts for machining, heat treatment and use of finishing technologies.

• Design and maintainenance of ETL processes and data warehouse. Miami/Fort Lauderdale 40 – 80 • Development and implementation of processes, procedures, audits and corrective actions. Area, United States • Design and implementation of machine safeguards.

• Creating 3D models, drawings, DFMEA and DHF. Suzhou, China 30 – 60 • Designing of global joint to meet the need and requirement of Chinese market and performs unique product development process to create domestic product codes with high standard drawings

Albuquerque, New • Involved in several different product lines and all New Product Development launches. Mexico Area, United 10 – 30 • Development of diagnostic technologies for refractive & cataract surgery and contact lenses. States 18

Note – Global Footprint data curated by DRAUP and updated in October, 2018. R&D Headcount includes research and product engineering talent Source : DRAUP 18 Globalization Technology Footprint (4/4)

R&D LOCATION DETAILS HEADCOUNT

Groningen Area, • Development of Intraocular lenses for cataract surgery. 10 – 30 Netherlands • Performs overall QA activities in a medical devices company with slight focus on Quality Management System.

San Angelo, Texas • Testing and inspection of the quality of chemical compounds, reagents and culture media. 10 – 30 Area, United States • Development and implementation of the Reliability and Maintenance Engineering Department.

Madison, Wisconsin • Testing and running of protocols that help characterize performance of NeuWave technology. 10 – 20 Area, United States • Involved in new product launch to accelerate the business growth.

Providence, Rhode • Development and delivery of multiple Android platforms including Care4Today Connect, the J&J Official 7 Minute Island Area, United 10 – 20 Workout, and applications developed for the Care Module platform. States • Automation of regression tests for numerous company projects using JBehave /Java, and similar tools.

Note – Global Footprint data curated by DRAUP and updated in October, 2018. R&D Headcount includes research and product engineering talent Source : DRAUP 19 AGENDA

Account Profile

01 Business & Financial Overview ➢ Outsourcing Vendor’s deals analysis

❑ Total headcount outsourced to service providers 02 Globalization Footprint ❑ Key vendors working with Johnson & Johnson

03 Outsourcing Vendor Analysis ❑ Key Opportunity areas to target

04 Rolodex

05 Recommendations

Source : DRAUP 20 Summary: Technology Services Outsourcing

➢ HCL is the major strategic partner for Johnson & Johnson working majorly across the area of PES, ADM and IMS. HCL contributing to ~40% of total outsourcing size Key partners ➢ TCS is other key outsourcing partner contributing to nearly ~30% of the current outsourced deals

➢ Product Engineering Services is the key engagement areas for Johnson & Johnson contributing to 55% of total outsourced deals

Key Activities ➢ Major workloads across Product Engineering Services is development & Testing of some mobile application like Nicorrete, mentor App etc.,

➢ Involved in Adhoc Testing, Sanity Testing, Functional Testing and Regression testing.

➢ Vendors should target on Product Engineering Services related engagements Key Opportunity Areas ➢ Vendors can also target on Artificial Intelligence (AI) for the discovery of Drugs

Note: Analysis is based on the news articles, journals etc updated in October, 2018 Source : DRAUP 21 Vendor Analysis – HCL is the major strategic partner for Johnson & Johnson contributing to 40% of total outsourced HC

7 Active Outsourcing Partners

Workforce split across 400 - 450 Outsourcing Partners

Technology Outsourcing Split by Service Providers Split by Sub Service Segment (In HC %) TCS 30%

Cognizant 12%

HCL 40%

Capgemini, 9%

Sonata Software, 5%

Wipro, 2% IBM, 2% 22

Note - Above analysis is based on the DRAUP’s proprietary Outsourcing module, updated in October, 2018. Source : DRAUP 22 ADM and IMS Sub-segments has the highest number of deals with multiple vendors

Cognizant, 46% HCL, 18% Sonata Software, 9% TCS, 18% Wipro, 9%

ADM Cognizant HCL Sonata Software TCS Wipro

Capgemini, 17% HCL, 17% IBM, 17% Sonata Software, 17% TCS, 32%

IMS Capgemini HCL IBM Sonata Software TCS

Capgemini, 13% HCL, 60% TCS, 27%

PES Capgemini HCL TCS

TCS, 100%

CSI TCS 23

Note - Above analysis represents the HC split of Service Providers in each Sub-segment for Johnson & Johnson updated in October, 2018 Source : DRAUP 23 Key Vendor Engagements Snapshot (1/3)