JNJ - Johnson & Johnson

[doughishere]

I didn't see a JNJ thread. Starting one. My bad if theres already one. Someone link it if I missed it.

 

Johnson & Johnson knew for decades that asbestos lurked in its Baby Powder.

https://www.reuters.com/investigates/special-report/johnsonandjohnson-cancer/

[peterHK]

They pay out hundreds of millions a year in litigation expenses, so IMO this is an overreaction. Market hates contingent liabilities like this and usually overreacts.

[bobozou]

I personally believe the potential brand-impact of a 'consumer healthcare company' that knowingly sold dangerous goods to consumers (with end user being babies) is extremely negative. 

 

Personally, this news is pretty much up there in terms of 'ickiness':

1) energy companies lie about global warming - I get it, did anyone expect otherwise?

2) agrochemical/pesticide companies lying about potential harmful impacts on human population - ok sure, that makes sense

3) consumer health company pretty much intentionally selling very harmful products, intended for babies - ummm, just wow (maybe I'm being nieve)

 

[Gregmal]

Rumor comes out, blue chip stock loses 10%. Company says rumor is fabricated. Stock still down 10%. Welcome to the current stock market.

[peridotcapital]

Not sure it is really a "rumor" or not. The issue is whether juries will find JNJ liable in court. Normally one would think it would take pretty strong evidence that trace amounts of asbestos in powder can cause cancer in order for consumers to win jury awards. However, the Bayer/Monsanto case shows this is not the case (there is no real evidence that Roundup causes cancer, but it is hard to prove that it doesn't). If juries don't require actual evidence, then these companies could be in trouble. JNJ is big enough to pay out huge awards (just as BP was profitable enough to pay all of those fines from the Deepwater Horizon spill), but the stock would have to look cheap for me to be interested. I looked today and JNJ is trading around 20x free cash flow, in line with recent years' valuation. If I am not getting a material discount, I fail to see why a long position makes sense. At least with Bayer you are getting a cheap stock...

[ander]

Agreed on valuation not being compelling enough.

[rb]

The company has been having quality issues in recent years. I sold a few years ago because it was quality issue after quality issue and JNJ in my opinion seemed content to just bury it's head in the sand. In this business if you have a quality issue you move swiftly and aggressively to fix it and move on.

 

I wouldn't want to pay current valuation when I know that there are bombs waiting to go off. Management meanwhile obfuscates and sings a soothing tune telling everyone that everything's gonna be ok.

[Cigarbutt]

JNJ is the first stock that I eventually became able to really understand (business, accounting and valuation) in the late 90’s. The firm was worth the highest level of admiration and now has become only one of the cleanest of dirty shirts. In 1982, it turned the Tylenol cyanide poisoning costly crisis into an opportunity to build brand value and now all three of its business groups have become entangled in the swamp. Why?

 

A company this large is bound to run into controversies. FWIW, I think some of this is just noise and part of normal business. The vaginal mesh and orthopedic implants issues could be considered “normal risks” of operations even if the modus operandi to deal with the issues has led to some serious questioning. The way they promoted and eventually dealt with the Risperdal issue is particularly concerning.

 

IMO, the baby (talcum) powder is not firm threatening, even if the legal procedures reveal troubling implementation of policies contrary to their Credo, because the scientific evidence presented in courts is relatively weak and can only result in major amounts because of the probability of evidence (50% + 1) required in civil cases and the pre-eminence of subjective evidence submitted in primary courts.

 

But why did JNJ let it slip? Why did they let a breakdown in the culture?

 

Unaudited (Yahoo finance used and numbers may not be exact) market returns (CAGR, excluding dividends)

 

        Last 49 years  last 30 years  last 20 years  last 10 years

JNJ:      6.04%          11.05%          5.86%          8.71%

S&P:      3.84%          7.49%          3.61%          12.15%

 

Messages:

-JNJ fundamentals have provided, historically and up to the recent period, above average returns and this is likely to continue over time

-Timing of investment can be a relevant variable

-The market has had a funny way to reward JNJ and more recently to fail to adequately reprimand it

 

Comment and question:

In the last 20 to 30 years, the shifting priority of JNJ to focus on profits at the expense of ethics has resulted in the market somewhat reinforcing bad behavior. Why is that?

 

Opinion:

JNJ is still a company with great potential, is too expensive now but I will likely invest in it when the governance/greed cycle leaves its cyclical low.

 

[dwy000]

Isn't the lawsuit referring to memos and materials from 1971?  that suggests the breakdown in culture was almost 50 years ago as opposed to today. 

 

I also think the 10 year comps that are used today on everything need to be qualified.  Given the absolute market rout exactly 10 years ago, things can look horrible for the 10 year period but not so bad for the 11-12 year period.  That being said, I haven't done the calculations so I could be talking crap on that one.

[CorpRaider]

The brand damage is a bigger issue (at least for the consumer business/the original) than the monetary awards, is my off the cuff take.  People are already switching to other brands, like some of the unilever brands and some of the newer ones. 

[Cigarbutt]

The brand damage is a bigger issue (at least for the consumer business/the original) than the monetary awards, is my off the cuff take.  People are already switching to other brands, like some of the unilever brands and some of the newer ones.

This post is not meant to show disrespect to the potential link between cancer and a product sold by a corporation and is simply about the enduring popularity (and profitability) of certain products that is not closely linked to the notion of toxicity.

 

In the early 2000's, lawsuits against McDonald's were in vogue based on the inadvertent (?!) weight gain associated to attending such places. Buying MCD then would have resulted in an "easy" 10-bagger, breezing through a great derangement. Sin stocks tend to do well and "health" companies will tend to follow suit.

 

This may be an off the cuff conclusion but I would say that eating daily at McDonald's is more toxic and carcinogenic than daily application of baby powder on genitals. And Vaseline Ⓡ may be next in line before we go full circle and a ban is proposed on dihydrogen monoxide.

 

 

 

 

 

[CorpRaider]

The two don't resonate on the same level with me. I think the knowledge and cover-up are going to be the damning portion.  It seems like everyone tacitly knew that fried foods, red meat, and massive calorie loads weren't good for you.  But selling asbestos to use on babies? 

 

Maybe they can move down scale and work around the decimated brand equity like MCD has arguably done.  Possible, however, does not mean likely. 

 

Is it cheap enough for that possibility to make it a passable investment at this juncture?

 

Cigarette companies might be a decent comp, but J&J consumer products aren't addictive narcotics.

 

I'm not able to follow the relevance of the petroleum jelly comment; am not aware of any valid scientific studies or formal medical advice demonstrating conclusive (or even likely) lack of safety, and so; will not comment thereon.   

[peterHK]

Only ~14% of gross profit (I think) comes from consumer goods, the rest is medical devices and pharma that I think are likely to be unaffected by this.

 

Also, I'm pretty sure about 2 years ago headlines came out that JNJ knew about the asbestos stuff, and look where we are now...

[Cigarbutt]

Bought a bit of JNJ today. I also added some FRFHF.

JNJ has accumulated an unusual amount of bad press and litigation issues and perhaps like CorpRaider suggested above, this and specifically the baby powder/asbestos issue (recall just announced versus what they announced before and versus their Credo) is having an effect on the value of the brand, which is potentially concerning.

https://www.interbrand.com/best-brands/best-global-brands/2019/ranking/johnsonjohnson/

However, all in all, this seems like a relatively appealing entry point (on a relative basis within reason) for a triple-A rated recession-resistant behemoth that is facing what I consider to be higher than usual legal expenses and contingencies and which is selling at a reasonable normalized PE ratio given their history and where the Market is right now.

 

Recent Q3 operational results were very decent and pharmaceutical and medical devices continue to mitigate what has happened in their consumer segment.

Also, recently, a report came out in some press outlets that did not stand out but which IMO is very significant concerning the baby powder brand effect. On the surface, it seems like a technical legal win by the company concerning out-of-state plaintiffs' ability to sue where they want. But I think this ruling shows how weak the evidence presented by paintiffs is and how unlikely significant damages will be definitely awarded in less sympathetic courts, suggesting that the baby powder issue may linger for a while but the effect on brand IMO will be limited.

https://www.reuters.com/article/us-johnson-johnson-appeal/missouri-appeals-court-overturns-110-million-johnson-johnson-talc-verdict-idUSKBN1WU2NT

[Spekulatius]

 

JNJ has accumulated an unusual amount of bad press and litigation issues and perhaps like CorpRaider suggested above, this and specifically the baby powder/asbestos issue (recall just announced versus what they announced before and versus their Credo) is having an effect on the value of the brand, which is potentially concerning.

https://www.interbrand.com/best-brands/best-global-brands/2019/ranking/johnsonjohnson/

However, all in all, this seems like a relatively appealing entry point (on a relative basis within reason) for a triple-A rated recession-resistant behemoth that is facing what I consider to be higher than usual legal expenses and contingencies and which is selling at a reasonable normalized PE ratio given their history and where the Market is right now.

 

Recent Q3 operational results were very decent and pharmaceutical and medical devices continue to mitigate what has happened in their consumer segment.

 

Yes, I see it the same way. JNJ sells at ~13x forward earnings, which seems like a decent value. I believe the decline to the product recall today was overdone? I have to do more work on this, but based on. Y initial assessment, I felt it worthwhile to start a position. I feel thwt the device sector in particular could have some upside potential. In particular the Auris acquisition points to an effort to become a player in advanced robotics for surgery.

https://www.massdevice.com/jj-to-enter-the-robotic-surgery-market-with-3-4b-auris-health-buy/

[RuleNumberOne]

I have a theory regarding drug companies even if the US negotiates drug prices.

 

1. To avoid a race to the bottom in drug prices, the US would have to pay more than Europe.

 

2. Europe has a lot of drug companies too. If Europe asks US companies for lower prices, the US could ask European companies for lower prices.

 

[Cigarbutt]

I have a theory regarding drug companies even if the US negotiates drug prices.

 

1. To avoid a race to the bottom in drug prices, the US would have to pay more than Europe.

 

2. Europe has a lot of drug companies too. If Europe asks US companies for lower prices, the US could ask European companies for lower prices.

Are you just trolling here?

Just in case not.

 

If really interested in JNJ, you may want to assess their game plan under present circumstances:

https://jnj-janssen.brightspotcdn.com/30/0e/a365aea641e28a57573355358e01/2018-janssen-us-transparency-report.pdf

I find the document to be a masterpiece and page 29 has a section on international price comparisons.

JNJ's argument revolves around the fact that a premium is necessary for the innovation and rapid access to that innovation, which is true, to a certain degree.

If you want to invest in JNJ or one of its oligopolistic sisters, you may want to consider that medications expenditures (however it is measured in the complex, opaque and 'regulated' pharmaceutical world) as a fraction of GDP has grown along (slightly more in fact) the general health expenditures (ie in an unsustainable way) and, on a net basis, has shown decreasing marginal return and even negative return in key areas (US life expectancy)... Restructuring would be best if voluntary and pro-active but failure to do so may eventually imply an extrinsic 'solution' such as Medicare for All...

Disclosure: I live in a Medicare for All type of world and in a regional jurisdiction with a free-rider characteristic and an available to all with no other coverage medications public plan. I wonder if you would not benefit from reading an article that shows what happens outside the Bay Area:

https://features.propublica.org/medical-debt/when-medical-debt-collectors-decide-who-gets-arrested-coffeyville-kansas/#169203

Not so subtle message which may be relevant to JNJ and its Credo: pointing fingers to strangers should not obfuscate the need for internal reform. :)

 

JNJ has accumulated an unusual amount of bad press and litigation issues and perhaps like CorpRaider suggested above...

 

Yes, I see it the same way. JNJ sells at ~13x forward earnings, which seems like a decent value. I believe the decline to the product recall today was overdone? I have to do more work on this, but based on. Y initial assessment, I felt it worthwhile to start a position. I feel thwt the device sector in particular could have some upside potential. In particular the Auris acquisition points to an effort to become a player in advanced robotics for surgery.

https://www.massdevice.com/jj-to-enter-the-robotic-surgery-market-with-3-4b-auris-health-buy/

I have followed closely the robotic sector for a very long time and it's fascinating. I could write pages and pages but will try to simply reply with a short and dense paragraph, a specialty of yours. :)

Intuitive and their da Vinci system has been around for a while but the robotics is still in its infancy, perhaps not unlike what cell phones looked like in the 1990's. ai think twat the future is promising and JNJ well positioned to internally develop options and opportunistically pay up to develop their robotic portgolio.

In case you're interest in superficial references:

https://www.roboglobal.com/insights/intuitive-surgical-gold-standard-robotic-surgery/

https://www.forbes.com/sites/michelatindera/2019/02/14/intuitive-surgical-stock-robot-surgery-da-vinci-alphabet-jnj-ceo-gary-guthart/#738ae52aa37b

[Spekulatius]

Hopefully we don’t get side tracked in a Medicare for all discussion. The risk of intervention in drug pricing has been around forever and is just something that an investor in drug stocks has to live with.

 

Cigarbutt, thanks for the link about JNJ’s robotic research. I knew that JNJ plans an entry in this field, but didn’t now about the collaboration with GOOG, a large holding of mine.

 

It clear that drug pricing is out of line in the US with the rest of the world. If prices were to come down, I believe reducing expenses and in particular marketing would be a necessity. I also think that clinical trial costs could be reduced since the FDA has become overzealous in their requirements for trials, especially biological and biological generics. Besides that, JNJ is a diversified health care company and better diversified than virtually any other company in this business.

[RuleNumberOne]

Cigarbutt,

 

I don't know how to troll. Even if I tried, I couldn't.

 

What is special about JNJ compared to other drug companies? The market cap is $337 billion. Half the revenue but all the growth comes from pharma. The non-pharma revenue grows around 1% per year.

 

Revenue and everything else was flat during 2008-2013 at JNJ (IIRC Buffett sold in the middle of that dull period). Tells me the drug pipeline is the main item in JNJ's growth.

 

Medical debt happens because the healthcare sector is where all the job growth of the last 20 years (or maybe longer) has happened. I trust you will Google for the exact numbers, but it is quite shocking. From the left-wing NYT, half the cost of US healthcare is labor.

 

I have a theory regarding drug companies even if the US negotiates drug prices.

 

1. To avoid a race to the bottom in drug prices, the US would have to pay more than Europe.

 

2. Europe has a lot of drug companies too. If Europe asks US companies for lower prices, the US could ask European companies for lower prices.

Are you just trolling here?

Just in case not.

 

If really interested in JNJ, you may want to assess their game plan under present circumstances:

https://jnj-janssen.brightspotcdn.com/30/0e/a365aea641e28a57573355358e01/2018-janssen-us-transparency-report.pdf

I find the document to be a masterpiece and page 29 has a section on international price comparisons.

JNJ's argument revolves around the fact that a premium is necessary for the innovation and rapid access to that innovation, which is true, to a certain degree.

If you want to invest in JNJ or one of its oligopolistic sisters, you may want to consider that medications expenditures (however it is measured in the complex, opaque and 'regulated' pharmaceutical world) as a fraction of GDP has grown along (slightly more in fact) the general health expenditures (ie in an unsustainable way) and, on a net basis, has shown decreasing marginal return and even negative return in key areas (US life expectancy)... Restructuring would be best if voluntary and pro-active but failure to do so may eventually imply an extrinsic 'solution' such as Medicare for All...

Disclosure: I live in a Medicare for All type of world and in a regional jurisdiction with a free-rider characteristic and an available to all with no other coverage medications public plan. I wonder if you would not benefit from reading an article that shows what happens outside the Bay Area:

https://features.propublica.org/medical-debt/when-medical-debt-collectors-decide-who-gets-arrested-coffeyville-kansas/#169203

Not so subtle message which may be relevant to JNJ and its Credo: pointing fingers to strangers should not obfuscate the need for internal reform. :)

 

JNJ has accumulated an unusual amount of bad press and litigation issues and perhaps like CorpRaider suggested above...

 

Yes, I see it the same way. JNJ sells at ~13x forward earnings, which seems like a decent value. I believe the decline to the product recall today was overdone? I have to do more work on this, but based on. Y initial assessment, I felt it worthwhile to start a position. I feel thwt the device sector in particular could have some upside potential. In particular the Auris acquisition points to an effort to become a player in advanced robotics for surgery.

https://www.massdevice.com/jj-to-enter-the-robotic-surgery-market-with-3-4b-auris-health-buy/

I have followed closely the robotic sector for a very long time and it's fascinating. I could write pages and pages but will try to simply reply with a short and dense paragraph, a specialty of yours. :)

Intuitive and their da Vinci system has been around for a while but the robotics is still in its infancy, perhaps not unlike what cell phones looked like in the 1990's. ai think twat the future is promising and JNJ well positioned to internally develop options and opportunistically pay up to develop their robotic portgolio.

In case you're interest in superficial references:

https://www.roboglobal.com/insights/intuitive-surgical-gold-standard-robotic-surgery/

https://www.forbes.com/sites/michelatindera/2019/02/14/intuitive-surgical-stock-robot-surgery-da-vinci-alphabet-jnj-ceo-gary-guthart/#738ae52aa37b

[RuleNumberOne]

Market caps of other drug companies (in billions)

 

ABBV  113

AMGN 121

REGN  32

BMY    87

CELG    73

BIIB    41

GILD    82

 

That adds up to 549. You could buy up all the drug companies for less than the market cap of AAPL or MSFT.

 

 

[Read the Footnotes]

 

JNJ has accumulated an unusual amount of bad press and litigation issues and perhaps like CorpRaider suggested above...

 

Yes, I see it the same way. JNJ sells at ~13x forward earnings, which seems like a decent value. I believe the decline to the product recall today was overdone? I have to do more work on this, but based on. Y initial assessment, I felt it worthwhile to start a position. I feel thwt the device sector in particular could have some upside potential. In particular the Auris acquisition points to an effort to become a player in advanced robotics for surgery.

https://www.massdevice.com/jj-to-enter-the-robotic-surgery-market-with-3-4b-auris-health-buy/

I have followed closely the robotic sector for a very long time and it's fascinating. I could write pages and pages but will try to simply reply with a short and dense paragraph, a specialty of yours. :)

Intuitive and their da Vinci system has been around for a while but the robotics is still in its infancy, perhaps not unlike what cell phones looked like in the 1990's. ai think twat the future is promising and JNJ well positioned to internally develop options and opportunistically pay up to develop their robotic portgolio.

In case you're interest in superficial references:

https://www.roboglobal.com/insights/intuitive-surgical-gold-standard-robotic-surgery/

https://www.forbes.com/sites/michelatindera/2019/02/14/intuitive-surgical-stock-robot-surgery-da-vinci-alphabet-jnj-ceo-gary-guthart/#738ae52aa37b

A quick word of caution regarding the robotics area. Maybe this time is different, but there have been previous waves of excitement regarding robotics and for the most part it has been a pattern of a spurt in technological application, new products, and revenues, followed by a quick leveling off. This time may finally be different, but like the iPhone, it didn't work out that great the first several times that Steve Jobs tried to create a mobile device, so to continue that analogy, how do you know that this is finally the age of the iPhone?

 

With the previous quick plateaus was that the products didn't really live up to the hype and the sales especially in the real world. Once the novelty wore off, there were no new adoptions after a point.

 

One issue in the past was that almost all benefits in patient outcomes have been derived from the minimally invasive procedure and NOT the robotic aspect. In other words a minimally invasive procedure of any type might have better outcomes, but in most fields of surgery the robot did not add much. As a result, the robots had high rates of adoption in only a couple of fields.

 

Plus a lot of surgeons eventually felt that the benefits like speed weren't there. If you can get the same quality of outcome and do it faster with less hassle without the robot, why have a robot? Plus getting surgeons to adopt new techniques is notoriously hard and does not follow a path that you might assume if you were to just imagine how that should go.

 

Business factors etc come in to play eventually even if the initial decisions are irrational. Cigarbutt says he's followed the field for a long time, so maybe he's expert in the field. If you're an expert in the field, feel free to ignore these comments and maybe you understand well why this time is different, but I'd recommend some skepticism if you're not really confident in your thesis. Healthcare is complicated, and what actually happens is frequently not what a rational person would expect until you dig deeper and start to understand all the quirks and irrational aspects.

[John Hjorth]

Market caps of other drug companies (in billions)

 

ABBV  113

AMGN 121

REGN  32

BMY    87

CELG    73

BIIB    41

GILD    82

 

That adds up to 549. You could buy up all the drug companies for less than the market cap of AAPL or MSFT.

 

Off topic :

 

+LLY  105 [<- Just sayin' [ ; - ) ]]

 

-Back to topic.

[Gregmal]

Market caps of other drug companies (in billions)

 

ABBV  113

AMGN 121

REGN  32

BMY    87

CELG    73

BIIB    41

GILD    82

 

That adds up to 549. You could buy up all the drug companies for less than the market cap of AAPL or MSFT.

 

Off topic :

 

+LLY  105 [<- Just sayin' [ ; - ) ]]

 

-Back to topic.

 

Back office topic!

 

What position would you rather be in as a company? Having a product with a TAM of everyone, where they all love your product and many buy new ones at 35%+ margins every two years and then fluff your bottom line with add on purchases.... or...... having a product with a TAM of everyone but people hate your products, only need them when in dire straights or facing potentially deadly circumstances, and buy them largely through subsidizations and price reducing programs...all of which are currently, and likely to continue to be, squeezed. Interesting question. Not sure of the answer, but I'd rather be Apple than all the others combined.

[Cigarbutt]

...

A quick word of caution regarding the robotics area. Maybe this time is different, but there have been previous waves of excitement regarding robotics and for the most part it has been a pattern of a spurt in technological application, new products, and revenues, followed by a quick leveling off. This time may finally be different, but like the iPhone, it didn't work out that great the first several times that Steve Jobs tried to create a mobile device, so to continue that analogy, how do you know that this is finally the age of the iPhone?

 

With the previous quick plateaus was that the products didn't really live up to the hype and the sales especially in the real world. Once the novelty wore off, there were no new adoptions after a point.

 

One issue in the past was that almost all benefits in patient outcomes have been derived from the minimally invasive procedure and NOT the robotic aspect. In other words a minimally invasive procedure of any type might have better outcomes, but in most fields of surgery the robot did not add much. As a result, the robots had high rates of adoption in only a couple of fields.

 

Plus a lot of surgeons eventually felt that the benefits like speed weren't there. If you can get the same quality of outcome and do it faster with less hassle without the robot, why have a robot? Plus getting surgeons to adopt new techniques is notoriously hard and does not follow a path that you might assume if you were to just imagine how that should go.

 

Business factors etc come in to play eventually even if the initial decisions are irrational. Cigarbutt says he's followed the field for a long time, so maybe he's expert in the field. If you're an expert in the field, feel free to ignore these comments and maybe you understand well why this time is different, but I'd recommend some skepticism if you're not really confident in your thesis. Healthcare is complicated, and what actually happens is frequently not what a rational person would expect until you dig deeper and start to understand all the quirks and irrational aspects.

I agree with your assessment and it's hard to evaluate when real market penetration for robotics will occur but it will likely occur. The principle of transferring actual acts from control to autonomy (spectrum) has occurred (autopilots in planes etc) and is evolving in the car driving space. JNJ, based on its history and capital strength, is simply well positioned to occupy the space when the time comes.

If you evaluate JNJ along Mr. Philip Fisher's 15 points, the reported numbers, valuation and history do not make it a great investment at this point mostly because of the perceived brand quality (legal stuff) and margin threats but they are leaders in a growing market, are likely to maintain relatively high margins and are likely (IMO) to continue to transform R+D dollars into profitable investments either through internal developments, market expansion or entering related markets, including the robotic segment when the time comes.

The first time I got exposed to potential applications of robotic surgery (1987) JNJ share price was less than 5$. Since then, share price appreciation has been irregular (but quite satisfactory overall) and has not really benefitted from robotic surgery equipment sales but I'd be ready to bet that robotics will eventually reach the bottom line in the next 32 years.

[Read the Footnotes]

 

I agree with your assessment and it's hard to evaluate when real market penetration for robotics will occur but it will likely occur. The principle of transferring actual acts from control to autonomy (spectrum) has occurred (autopilots in planes etc) and is evolving in the car driving space. JNJ, based on its history and capital strength, is simply well positioned to occupy the space when the time comes.

 

 

I agree completely that progress will be made and that the question is just a matter of how much and when. Miniaturization will likely be a large and under-appreciated component too. One place an investor could easily make mistakes is over-estimating how much low hanging fruit will be available at some point in time.

 

I do think that comparisons to other industries can be a little tricky and you want to be careful when making extrapolations from one industry to another. With any industry, you need to think about what is the low hanging fruit. For automation, a controlled environment makes a huge difference and that concept probably transfers easily across industries, but what is the low hanging fruit in a surgical setting may not be intuitive except to specialists.

 

I probably could have made my point in my previous post by saying that robotic surgery has gained and KEPT a foothold in the areas that turned out to be the low hanging fruit. The problem is that investors were frequently sold that there was other fruit higher on the tree that was reachable, and that often times turned out to be sales and puffery.

 

I hope I was clear that my comments were not based on JNJ's history but based on their competitors in the space. From your comments I don't think there was any confusion, but I could have been clearer on that point.