Scientific and Medical Innovation

making a difference for patients.

The foundation of a global business.

Dr. Paul STOFFELS

Worldwide Chairman , Janssen Pharmaceutical Chief

Scientific Officer, Johnson & Johnson

Important choices in life…

What to study ?

Music or Science

Medicine – direct impact on people.

Where to study ?

3

Important Choices : where to live and work…

4

Life

expectancy

at birth

(years)

Source: United Nations Population Division (2004). World Population Prospects: The 2004 Revision, database.

Botswana

South Africa

Swaziland

Zambia

Zimbabwe

1970–1975

1975–1980

1980–1985

1985–1990

1990–1995

1995–2000

2000–2005

2005–2010

70

65

60

55

50

45

40

35

30

25

20

4.1

Life changing events…

Play Stills

(Passion for Patients)

(1 minute)

Critical people in my life

Potent and selective inhibition of HIV-1 replication in vitro by a novel series of TIBO derivatives Rudi Pauwels*, Koen Andries†, Jan Desmyter*, Dominique Schols*, Michael J. Kukla‡, Henry J. Breslin‡, Alfons Raeymaeckers†, Jozef Van Gelder†,

Robert Woestenborghs†, Jozef Heykants†, Karel Schellekens†, Marcel A. C. Janssen†, Erik De Clercq* & Paul A. J. Janssen† *Rega Institute for Medical Research, Katholieke Universiteit Leuven, Minderbroedersstraat 10, B-3000 Leuven, Belgium †Janssen Research Foundation, Turnhoutseweg 30, B-2340 Beerse, Belgium ‡Janssen Research Foundation, Bethlehem Pike, Spring House, Pennsylvania 19477, USA

IN the search for compounds active against human immunodeficiency virus (HIV), we have found that members of a novel series of

tetrahydro-imidazo[4,5,1-jk][l,4]-benzodiazepin-2(1H)-one and -thione (TIBO) derivatives inhibit the replication of HIV-1, the main

aetiological agent of AIDS, but not of HIV-2, or of any other DNA or RNA viruses. In five cell systems, HIV-1 is inhibited by TIBO

derivatives in nanomolar amounts, which are 104−105 times lower than the cytotoxic concentration. The unprecedented specificity of these

compounds may be due to an interaction with a reverse transcriptase-associated process. By contrast, AZT (3'-azido-2',3'-

dideoxythymidine), which is used for the treatment of AIDS, and DDC (2',3'-dideoxycytidine) and DDI (2',3'-dideoxyinosine), whose

clinical application is being assessed, inhibit both HIV-1 and HIV-2 at concentrations that, depending on the cell systems, are 2 to 4 orders

of magnitude below their cytotoxic concentration. TIBO-derivatives are new chemicals unrelated to any other antiviral agents. We believe

that they are the most specific and potent inhibitors of HIV-1 replication studied so far.

Nature, 1990: the first NNRTI : a new drug for HIV ?

Tibotec, the big jump…

First P3 Lab

Inside P3 Laboratory

HIV protease gene diversity matrix

1 10 20 30 40 50 60 70 80 90

Amino-acid position

Viral isolates

0.05

0.1

0.51

510

50

0.05

0.1

0.51

510

50

%

Asp25

sc

COOH

Asp29

mc

NH

Asp30

mc

NH

Asp30

mc

NH

Gly27

mc

O

NH-H2O

mc

Ile50

Phase II results: activity in multi-drug resistant patients (POWER 1&2, week 48)

Improving on drug formulation during development: etravirine

Phase IIa – 900mg

18 capsules bid

Phase IIb – 800mg

4 large tablets bid

Phase III – 200mg

2 tablets bid

Solution: spraydrying

25

Janssen Pharmaceutica in Belgium

Beerse I

Beerse IIOlen

Geel

Merksem

Creating Value Through Innovation End-to-End Strategy Focused on Five Therapeutic Areas

NEUROSCIENCE

• Alzheimer’s Disease

• Mood disorders

• Schizophrenia

• Chronic pain

CARDIOVASCULAR & METABOLISM

• Cardiovascular disease

• Diabetes

IMMUNOLOGY

• Inflammatory

bowel disease

• Rheumatoid

arthritis

• Psoriasis

• Pulmonary

ONCOLOGY

• Prostate

• Lung

• B-cell malignancies

INFECTIOUS DISEASES & VACCINES

• HIV

• HCV

• Respiratory

• Vaccines

27

* Companies with 5 New Drugs: Amgen, Bayer, Genzyme. ** Companies with 4 New Drugs: AstraZeneca, Boehringer Ingelheim, CSL Behring, Eisai, Forest Labs, Genentech, Eli Lilly, Shire, Takeda. *** Companies with 3 New Drugs: Astellas, Baxter.

Innothink

Janssen Pharmaceutica The Most Productive Company in the Past 10 Years

FDA NME Approvals

28

# of New Drugs

9 Companies**

2 Companies***

3 Companies*

Fastest Growing Top 10 Pharmaceutical Company1

WW Pharmaceuticals: Operational Sales Change vs. Prior Year Respective Quarter*

Q1’09 Q3’09 Q1’10

Q3’10 Q1’11 Q3’11 Q1’12 Q3’12

11.4%

Q1’13

Source: 1. IMS MIDAS as of 1Q 2013 vs. prior year respective quarter (based on available data May 20, 2013). * Q4 2009 and Q4 2010 operational sales change adjusted for the dynamics of the 53rd week in Q4 2009.

29

30

Years of life saved

Years of quality of life generated

= the basis for our business.

Health Care Makes a Significant Difference in Society

• Increase in life expectancy

from new medicines

• Significant progress in quality of life

• Broadening access to medicine

in emerging markets

Source: World Health Organization

Today’s Dynamic Global Landscape Poses Challenges

• Complex medical challenges

• Innovation threshold

• Challenging economic environment

• Regulatory and payer demands

Our Solution: Transformational Innovation

stock-photo-19245120-senior-woman.jpg

Science and Technology Offer Tremendous Opportunities to Innovate

• Next generation biotechnology – Novel scaffolds

– Stem cells

– Vaccines

• New frontiers in personalized medicine – Genomics

– Biomarkers

– Companion diagnostics

• Advances in imaging

• Powerful bioinformatics

Total Focus on Innovation

• Medical need and differentiation

• Therapeutic areas and disease areas

• Attracting best talent

• Increased probability of success

• Outcome and value

#1

Level of Innovation Needed for Success

has Dramatically Increased

35

Le

ve

l o

f in

no

va

tio

n

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

Time/year

The innovation threshold Differentiated

product

Value

Me too

Market expectations

HIGHLY CONFIDENTIAL – NOT FOR DISTRIBUTION

Our Approach to Sourcing Innovation

• Astellas – JAK Inhibitor

• Corimmun – Targeting Beta 1-Adrenergic Receptor Auto-Antibodies

• Genmab – Daratumumab

• Pharmacyclics – Ibrutinib

• Shionogi – BACE Inhibitor

• Index Ventures

• Polaris Ventures

• MPM Capital

• Boston

• California

• London

• Shanghai

Discovery/ Concept

Early Development

Late Development

Regulatory Review

Early Exploration

Post- Launch

Ap

pro

va

l

#

2

Internal Discovery and Early Research Biomarkers, Research Capabilities Global Development

Early Stage Innovation via Innovation Centers Leveraging Venture Capital Licensing and Acquisitions

HIV

Cancer RA

Diabetes Alzheimer’s

Biotech Pharma Academia

The Value Creation Chain

Marketplace

Reward

Government funding

Research

Grants

VC Funding

Public Capital

Markets

Public Capital

Markets Payors

Governments

Sourcing External Innovation through Johnson & Johnson Innovation Centers

California London

Boston Shanghai

San Diego

Minneapolis

Israel

Innovation

Center Satellite

#

2

Tokyo

Sydney

Collaborations

Licensing

Incubators

Ventures

Partnerships

Johnson & Johnson Scientific Expertise | Local Transactional Capabilities | Business

Expertise

Access Innovation Wherever Best Science Happens

Johnson & Johnson Innovation Centers

#

2

Johnson & Johnson

Pharmaceuticals | Medical Devices & Diagnostics | Consumer

Excellence in Execution

• World-class development capabilities

• Accelerating pipelines in Japan and China

• Optimizing output, time, and cost with

the highest degree of quality

• With flexibility in deploying resources

• Speed to market

• Making us a partner of choice

• Industry leading success rates*

* Third Party Proprietary Research

#3

Accelerating Cycle Time

Industry Median 5.7 months

XARELTO® (Atrial Fibrillation)

ZYTIGA® (Prostate Cancer)

INCIVO® (Hepatitis C)

EDURANT® (HIV)

INVOKANA™ (Diabetes)

Industry Median 5.7 Months

Janssen Average 3.8 Months

~2 Months Better Than Industry Median

Today: Average Cycle Time from Database Lock to Submission

#4

* Third Party Proprietary Research

IMMUNOLOGY NEUROSCIENCE INFECTIOUS DISEASES & VACCINES

CARDIOVASCULAR & METABOLISM

ONCOLOGY

SIMPONI®

STELARA®

INVEGA®

INVEGA®

SUSTENNA®

NUCYNTA®

NUCYNTA®

ER

PREZISTA®

INTELENCE®

EDURANT®

INCIVO®

SIRTURO®

XARELTO®

INVOKANA®

VELCADE®

ZYTEGA®

DACOGEN®

15 New Differentiated Medicines in 10 Years

Eleven New Products Since 2009 Four New Products from 2004 – 2008

Transforming Our Portfolio

Janssen Heritage in Schizophrenia

1958: Janssen lab notebook, first synthesis of R1625,

haloperidol

1958: first clinical publication

Janssen Heritage in Schizophrenia

Haloperidol

Haloperidol Decanoas

Risperidone

Risperidone Consta

HERITAGE FUTURE

Point-of-Care Compliance Diagnostic

Paliperidone 3 Month Paliperidone

Paliperidone Palmitate

(1 month)

PRESENT

44

HCV: Major Public Health Challenge

150 Million Infected Worldwide

45

World Health Organization. Hepatitis C. Weekly Epidemiological Record, 1997; 72:65-69. Gastroenterology 2010; 138(2): 513-521.

1 Million Cases of Liver Cirrhosis in US by 2020

Anti-HCV Seroprevalence by GBD Region, 2005

1. If HCC risk in HCV-infected individuals with fibrosis does not change. Gastroenterology. 2010;138(2):513-521.

Peak Incidence: >145,000 Cases/Year in ~2020

Peak Incidence: >14,000 Cases/Year in 20191

Cases, n

Hepatocellular Carcinoma (HCC)

WHO 2012 Global TB Report

Building a business with a purpose

• Passionate people

• The best science

• Solving global medical problems

Our Medicines Serving Global Health

• Leveraging our science to address neglected diseases

• SIRTURO®

– New drug for MDR-TB

• Product development partnerships – TB Alliance, IPM, Gates Foundation

• Innovative access models – PREZISTA

® IP

– Partnerships with generic companies

– #2 in ATMI

• Significant contributions to UN Millennium Development Goals

• Vaccines (Polio and HIV in development)

The critical role of education

The critical role of academic basic research

Creating the environment for innovation

Creating an environment for entrepreneurs & risk taking

Play Stills

(Passion for Patients)

(1 minute)