Louise Mehrotra - Vice President of Investor Relations Dominic J. Caruso - Chief Financial Officer, Vice President - Finance

Michael Weinstein - J.P. Morgan Glenn Reicin - Morgan Stanley Tao Levy - Deutsche Bank Bob Hopkins - Lehman Brothers Lawrence Keusch - Goldman Sachs Michael Jungling - Merrill Lynch Matthew Dodds - Citigroup Larry Biegelsen - Wachovia Sara Michelmore - Cowen & Company Bruce Nudell - UBS

Good morning and welcome to the Johnson & Johnson first quarter 2008 earnings conference call. (Operator Instructions) I would now like to turn the conference over to Johnson & Johnson. You may begin.

Good morning and welcome. I’m Louise Mehrotra, Vice President of Investor Relations for Johnson & Johnson and it is my pleasure this morning to review our business results for the first quarter of 2008. With me on the call today is Dominic Caruso, Vice President of Finance and Chief Financial Officer. A few logistics before we get into the details -- this review is being made available to a broader audience via a webcast accessible through the investor relations section of the Johnson & Johnson website. Included with the copy of the press release that was sent to the investment community earlier this morning is the schedule showing sales for major products and/or business franchises to facilitate updating your models. These are also available on the Johnson & Johnson website, as is the press release. I will review highlights of the first quarter 2008 results for the corporation and for our three business segments. Following additional remarks from Dominic, we will open the call to your questions. We expect the total call to last approximately one hour. Before I get into the results, let me remind you that some of the statements made during this call may be considered forward-looking statements. The 10-K for the fiscal year 2007 identifies certain factors that could cause the company’s actual results to differ materially from those projected in any forward-looking statements made this morning. The company does not undertake to update any forward-looking statements as a result of new information or future events or developments. The 10-K is available through the company or online. Last item -- during the call, non-GAAP financial measures may be used to provide information pertinent to ongoing business performance. These measures are reconciled to the GAAP measures and are available on the Johnson & Johnson website. Now I would like to review our results for the first quarter of 2008. If you would refer to your copy of the press release, let’s begin with the schedule titled supplementary sales data by segment of business. Worldwide sales to customers were a record $16.2 billion for the first quarter of 2008, up 7.7% as compared to the first quarter of 2007. Our operational growth was 2.6% and currency contributed 5.1 points. If you turn to the schedule showing sales by geographic area, you will see that we achieved growth of 2.8% in the U.S. In regions outside the U.S., our operational growth was 2.4%, while the effect of currency exchange rates positively impacted our reported results by 11.3 points. Our strongest performing region was the Western Hemisphere excluding the U.S., growing 6.2% on an operational basis. Asia-Pacific/Africa region grew by 3.2% operationally while Europe grew 0.8% operationally. If you will now turn to the consolidated statement of earnings, net earnings on a reported basis were $3.6 billion and earnings per share were $1.26. This compares to $2.6 billion and $0.88 in the same period in 2007. Please direct your attention to the box section of the schedule where we have provided adjusted earnings information. As a reference in the footnote, the 2007 results had been adjusted for the after-tax impact of the in-process research and development charge of $807 million associated with the acquisition of Conor Medsystems. Net earnings on an adjusted basis were up 6.4% and adjusted earnings per share were up 8.6%. I would now like to make some additional comments relative to the components leading to the adjusted earnings before we move on to the segment highlights. Cost of goods sold at 28.5% is down 60 basis points as compared to the same period in 2007, with reductions seen across all three segments. Selling, marketing, and administrative expenses of 31.6% of sales are down 30 basis points as compared to 2007. This leverage is due to reductions primarily in our pharmaceutical business. Our investment in research and development as a percent of sales was 10.6%, 40 basis points less than the first quarter of 2007. Research and development spending is up nearly 4% in the quarter. Interest expense net of interest income of $16 million compares to $33 million of net interest income in the first quarter of 2007. This increase in expense is due to a higher average debt position in the quarter versus the same period last year, as we continue buying back shares as part of our repurchase program. Other income net of other expense was $18 million in the first quarter of 2008 compared to $228 million in the same period last year. The 2007 results included the gain related to the divestitures of certain brands in connection with the acquisition of Pfizer Consumer Healthcare. With regard to taxes, please direct your attention to the effective tax rate excluding special charges shown in the box section of the schedule. In the first quarter of both 2007 and 2008, taxes were 24.2%. Turning now to business highlights, I’ll begin with the consumer segment. Worldwide consumer segment sales of $4.1 billion increased 16.2% as compared to the first quarter of 2007. Operational growth was 9.9% while currency contributed 6.3%. U.S. sales were up 11.7% while international sales grew 8.3% on an operational basis. For the first quarter of 2008, sales for the over-the-counter pharmaceuticals and nutritionals increased 21% on an operational basis compared to the same period in 2007. Sales in the U.S. were up 29% while sales outside the U.S. were up 12% operationally. The successful launch of ZYRTEC in the U.S. in January of this year is the major contributor to this increase. Additionally, both the adult and pediatric analgesics achieved strong growth, driven by an increased uptake in the rapid release gels and the later start to the winter flu season. Our skin care business achieved operational sales growth of 4% in the first quarter of 2008 with sales in the U.S. growing at 7% and sales outside the U.S. up 2% on an operational basis. Strong growth was driven by Clean and Clear, Aveeno, and Nutrogena, due to a combination of new product launches and strength in the core businesses due to innovative technologies, like Helioplex. These gains were partially offset by the discontinuation of a small line of facial refreshers. Baby care products achieved operational growth of 11% when compared to the first quarter of 2007. Sales growth in the U.S. was 6% due to increased babycenter.com sales. Sales outside the U.S. grew 13% on an operational basis, driven by the strong double-digit growth of wipes, hair care, powder, and oil. Women’s health achieved operational growth of 2%. Sales in the U.S. were down 9% due to increased competition, while sales outside the U.S. were up on an operational basis by 9% with strong growth in both the internal and external sanitary protection lines. Operational sales growth in the oral care franchise was 3% with U.S. sales down 2% and sales outside the U.S. up 9%. Strong growth was achieved for the Listerine product line due to whitening strips launched in the third quarter of 2007 and the strong performance of Listerine mouthwash. Sales declines in Reach toothbrushes and Rembrandt products partially offset this growth. That completes our review of the consumer segment and I’ll now review highlights for the pharmaceutical segment. Worldwide net sales for the first quarter of $6.4 billion were up 3.3% versus the same period last year. On an operational basis, sales were down 0.6% with positive currency contributing 3.9 points. Sales in the U.S. increased 0.9% while sales outside the U.S. decreased on an operational basis by 3.1%. Our results continue to be impacted by generic competition on some of our products, namely DURAGESIC, and outside the U.S. RISPERDAL ORAL in many countries. The combined effect of this generic competition has reduced the first quarter worldwide pharmaceutical operational sales growth by approximately 3.5 percentage points with the U.S. impact estimated at approximately 1% and the impact outside the U.S. estimated at nearly 8%. Additionally, we saw a retraction in the U.S. market for ESAs following the ODAC discussions, the label changes, and changes to reimbursement. The resulting decline in PROCRIT sales impacted the worldwide pharmaceutical operational sales growth by approximately 4 points. Excluding both the impact of generics and declining PROCRIT sales, the underlying operational growth for pharmaceutical products was approximately 7%. PROCRIT/EPREX had a combined operational decline of 27% with PROCRIT down 37% and EPREX down 9% on an operational basis. New competition and label reviews have contributed to the lower sales results for EPREX. PROCRIT results have been impacted by a decline in the market versus the first quarter of 2007, estimated at approximately 37%, and partially offset by an increase in overall market share. PROCRIT aggregate share across all markets was approximately 45% in the first quarter of 2008, up one point versus the same period last year. Increased share in the hospital and retail markets was partially offset by lower share in the oncology clinics due to our competitors’ anti-competitive contracting strategies. RISPERDAL Oral had an operational decline of 9% when compared to the same period a year ago. Sales in the U.S. grew 4% with market growth of approximately 6% offset by a slight decline in market share. Sales outside the U.S. declined 34% on an operational basis due to generic competition for RISPERDAL Oral in many markets. ACIPHEX, as it’s known in the U.S. market, and PARIET outside the U.S. is a proton pump inhibitor, or PPI, that we co-market with Eisai. On an operational basis, sales were down 23%. U.S. sales were down 27% and sales outside the U.S. were down 19% operationally. In the U.S., market share has been negatively impacted by additional generic launches of competitor PPIs. Similar market dynamics impacted sales outside the U.S., compounded by the impact of market entry in Canada of generic Rabeprazole, the active ingredient in PARIET. Now moving on to our growth drivers -- REMICADE, a biologic approved for the treatment of a number of immune mediated inflammatory diseases, grew by 37% when compared to the first quarter of 2007. Sales growth in the U.S. was 13%. Market growth in the Anti-TNF category continued to be strong and the competitive dynamics intensified with the new competitors in the market and current competitors receiving new indications. Sales to our customers for markets outside the U.S. more than doubled due to a combination of the timing of shipments, strong market demand, and the positive impact of currency. The timing of shipments reflects inventory planning on our customer’s part and was estimated to contribute approximately two-thirds of the increase in sales outside the U.S. versus the same period last year. We expect the resulting build in inventory levels held by our customer will be reduced over the balance of the year. Sales of TOPOMAX, which is approved for the treatment of epilepsy and migraine prophylaxis, increased operationally by 4% with similar results both in and outside the U.S. In the U.S., market share in the migraine category increased versus the same period last year; however, market growth was flat. Outside the U.S., strong growth was achieved in many markets, partially offset by generic entries in certain other markets. Sales of LEVAQUIN, our anti-infective, were up 3% on an operational basis when compared to the same period a year ago. Growth has been tempered by increased competition. RISPERDAL CONSTA, our long-acting injectable formulation, achieved first quarter sales growth of 10% on an operational basis. U.S. sales growth was flat and was impacted by a reduction in the wholesaler inventory levels. Excluding this impact, growth was estimated to be double-digit. Sales outside the U.S. were up 16% operationally due to a positive shift form oral to injectable therapies. CONCERTA, a product for attention deficit hyperactivity disorder, grew 13% operationally in the first quarter as compared to the same period last year. Sales in the U.S. were up 12% with continued strong market growth. Sales outside the U.S. grew 15% on an operational basis with strong growth seen in most regions; however, competitive dynamics continued to intensify. VELCADE, a treatment for relapsed multiple myeloma, is being co-developed with Millennium Pharmaceuticals. We have commercialization rights in Europe and the rest of the world. Operational sales growth was very strong at 49%, with strong momentum due to the predictable safety profile and a favorable benefit risk ratio. With the potential acquisition of Millennium by Takeda, our ex-U.S. rights under the collaboration, distribution, and licensing agreement with Millennium concerning VELCADE will not change. Wrapping up the review of the pharmaceutical segment, last week we submitted to the FDA the manufacturing supplement sNDA for IONSYS and the sNDA for RISPERDAL CONSTA for adjunctive maintenance treatment to delay the occurrence of mood episodes in patients with frequently relapsing bipolar disorder. I will now review the medical devices and diagnostic segment results. Worldwide medical devices and diagnostic segment sales of $5.7 billion grew 1.4% operationally as compared to the same period in 2007. Currency contributed 5.8 points to the sales growth to bring total growth to 7.2%. Sales in the U.S. grew 0.2% while sales outside the U.S. increased on an operational basis by 2.6%. Results have been impacted by lower sales of drug eluting stents. Sales excluding the impact of lower sales of drug eluting stents grew nearly 5% operationally. Now turning to the franchises, starting with Cordis; Cordis sales were down 15% operationally with similar results in and outside the U.S. Cordis results were impacted by lower sales of Cypher, our Sirolimus-eluting stent, partially offset by the results of our Biosense Webster business and our neurovascular business. Cypher sales were approximately $400 million, down 27% on an operational basis versus the prior year. Sales in the U.S. of approximately $170 million were down 28%. A reduction in PCI procedures, a lower penetration rate of drug eluting stents, and lower prices resulted in an estimated market decline in the U.S. of approximately 25% versus the first quarter of 2007. Estimated share in the U.S. of 43% was down three points sequentially and down two points from the first quarter of 2007 due to the market entry of a new competitor during the quarter. Sales outside the U.S. of approximately $230 million declined 27% operationally. The estimated market share in the quarter of 39% was down one point on a sequential basis and down from 52% in the first quarter of 2007. Increased competition has impacted the share outside the U.S. CYPHER estimated worldwide share for the quarter was 41%, down one point sequentially and down 7 points from the first quarter of 2007. Now, turning to growth drivers within the Cordis franchise, the Biosense Webster business, our electro-physiology business, achieved double-digit operational growth in the quarter with the ultrasound products continuing to be strong contributors. The neurovascular business also achieved strong growth in the quarter due to the relaunch of the TRUFILL DCS Orbit Coil system and the enterprise stent in 2007. Our Depuy franchise had operational growth of 4% when compared to the same period in 2007, with the U.S. growing 2% and the business outside the U.S. growing by 6% operationally. Hip growth on a worldwide basis was 9% operational, led by the strong results in the U.S. where we hold the number one market position. On an operational basis, worldwide knee growth was 2% while spine was flat. Mitech, our sports medicine business, grew 11% operationally. Ethicon Endo-Surgery achieved operational growth of 6% in the first quarter of 2008, with U.S. sales growing 3% and sales outside the U.S. growing on an operational basis by 9%. Strong results were achieve in the energy business due to the success with the harmonic scalpel. In addition, the Endocutter, a key product in performing bariatric procedures and advanced sterilization products also contributed to the growth in the quarter. Ethicon worldwide sales grew operationally by 1% with U.S. down 1% and sales outside the U.S. growing operationally by 3%. On an operational basis, sales of sutures and women’s health were flat while meshes and hemostasis achieved solid growth. The diabetes franchise grew operationally by 6% in the first quarter of 2008. The U.S. business grew by 4% while sales outside the U.S. grew 8% on an operational basis. Growth in the U.S. was driven by the strong double-digit growth of the Animas pump business. The success of the one-touch ultra line has been the major driver of growth outside the U.S. Our Vision Care franchise achieved operational sales growth of 12% with sales in the U.S. growing at 16% and sales outside the U.S. growing 9% on an operational basis. Growth for the franchise was driven by the global success of Acuvue Oasis, One-Day Acuvue Moist, and Acuvue Advanced for Astigmatism. Additionally, outside the U.S. One-Day Acuvue Define made a strong contribution to growth in the quarter. Rounding out the review of the medical devices and diagnostic segment, Ortho-Clinical Diagnostics achieved operational growth of 4% in the first quarter. Sales outside the U.S. were up 5% on an operational basis due to increased sales in clinical chemistry. Sales growth in the U.S. was 2% with donor screening and immunohematology products achieving double-digit results. Partially offsetting this growth was lower sales in clinical chemistry due to shipment timing. With the launch of the Chagas assay in 2007, 85% of the U.S. blood supply is now screened for this disease. That completes highlights for the medical devices and diagnostic segment and concludes the segment highlights for Johnson & Johnson's first quarter of 2008. Before we open the call to your questions, I’ll turn the discussion over to Dominic Caruso for some additional comments. Dominic. Dominic J. Caruso: Thank you, Louise. We are very pleased today to report solid financial results for the first quarter of 2008, which Louise has already highlighted for you. As we expected, our first quarter results reflected the continued impact of generic competition, the softening of the market for ESAs, some additional competition in drug eluting stents, and the implementation of our cost restructuring program announced last year. Our sales results for the quarter were above the mean of the analyst estimates as published by First Call. In the first quarter of this year, we have benefited from the successful launch of ZYRTEC, which included some initial inventory build in the trade, as well as the timing of shipments of REMICADE to our partner for distribution outside the U.S., reflecting inventory planning on their part. Additionally, in some of our MD&D businesses in the U.S., we saw slower ordering patterns from our distributors, which is due partly to timing of shipments and which may also be an early sign that procedure volumes may have slowed somewhat, at least in the first quarter. We delivered another solid earnings performance for the quarter as well, which reflects our ability to continue managing our cost and improving our margins. We have largely implemented the cost restructuring program that we announced last year and we remain on track to achieve annual cost savings of approximately $1.3 billion to $1.6 billion for 2008. As you can see, our operating margins have improved across each major category of the earnings statement. Our solid earnings performance exceeded the mean of analyst estimates as published by First Call. Now a brief update on the progress of our $10 billion share repurchase program. As you’ll recall, we began purchasing shares in August of 2007 and to date, we have purchased approximately $5.1 billion of our stock, or approximately 80 million shares. This share repurchase program, along with our dividends, continues to demonstrate our commitment to returning value to our shareowners while maintaining a strong financial position that provides the flexibility to invest in business building activities for future growth. This quarter we continued to show progress on new product introductions and pipeline developments that will fuel our growth going forward. In consumer, as I mentioned, our allergy treatment ZYRTEC became available without a prescription in stores across the U.S. for the first time. As the number one prescribed allergy treatment in the U.S., ZYRTEC’s availability over the counter has been highly anticipated and its launch has gone very well. Based on the data so far, we’ve reached 90% of U.S. stores in our first three months and we are very encouraged by the response. Our launch plans are on schedule, the marketing campaign is going well and we continue to view ZYRTEC’s switch as an important growth contributor for our consumer business. Meanwhile, the integration of the Pfizer Consumer Healthcare business and brands continues to be on track to meet or exceed our target of $500 million to $600 million in cost synergies by 2009, and we still expect this transaction to be break-even or modestly accretive by 2009, one year ahead of the original schedule. We’ve also seen significant progress in our medical device pipeline this quarter. Our Cordis and Conor Medsystems businesses have begun a randomized clinical trial comparing the [Nevo] Sirolimus-eluting coronary stent to Taxus Liberte Paclitaxel-eluting coronary stent. [Nevo] is the brand name for our new Conor Sirolimus product. We look forward to the results of this trial and remain excited by the prospect of combining a Sirolimus drug, which is used in Cordis’ CYPHER drug eluting stent, with Conner Medsystems unique reservoir technology for drug delivery. At our analyst meeting last October, we also discussed the development of the first computerized personalized sedation system, or CAPS. Ethicon Endo-Surgery has recently submitted a pre-market approval application to the FDA for this system. Turning to our pharmaceutical pipeline, we received good news on the virology front. The FDA in January granted accelerated approval to Tibotec pharmaceutical’s HIV medicine, INTELENCE, which was previously known as TMC125. This is the first new drug in its class to be approved in 10 years and its accelerated approval is a tribute to the breakthrough research and development that our virology teams have been doing. Meanwhile, in the area of pain management, we submitted a new drug application to the FDA for tapentadol, an investigational oral analgesic for the relief of moderate to severe acute pain. In addition, Centocor submitted a Marketing Authorization Application in Europe this quarter for the approval of golimumab, or CNTO148. Golimumab is a monthly subcutaneous treatment for adults with rheumatoid arthritis, psoriatic arthritis and ankylosing spondylitis. As a reminder, we have several new compounds currently under review with health authorities. These include Ustekinumab in the U.S. and the E.U.; paliperidone palmitate in the U.S.; [hipoxitene] in select countries in Europe; and ceftobiprole in the U.S. and the E.U. I would now like to provide some comments for you to consider as you refine your models for 2008. Let’s start with a discussion of cash and interest income and expense. During the first quarter of 2008, the company continued to generate strong cash flows. At the end of the first quarter, we had approximately $400 million of net debt. This consists of approximately $11 billion of cash and investments and $11.4 billion of debt. This is a slight increase in our overall net debt position from year-end 2007 as we have used approximately $1.5 billion in the first quarter of this year to continue buying our stock under our share repurchase program. For purposes of your models, assuming no major acquisitions, and considering the continuation but not full completion of the share repurchase program during 2008, I would suggest you consider modeling net interest income of between zero and a minor level of interest income consistent with our guidance in January. Turning to other income and expense, as a reminder this account is where we record royalty income as well as one-time gains and losses arising from such items as litigation, gains or losses from investments by our development corporation, or asset sales. This account is difficult to forecast but assuming no major one-time gains or losses, I would recommend that you consider modeling other income and expense for 2008 as a net gain ranging from approximately $100 million to $150 million, or a somewhat lower level of other non-operating net gains as compared to our earlier guidance. And now a word on taxes; for the first quarter of 2008, the company’s effective tax rate was 24.2%. We would suggest that you model our effective tax rate for 2008 in the range of 24% to 24.5%, which would not include any special items and is consistent with our earlier guidance. Additionally, this guidance does not assume the reenactment of the R&D tax credit for 2008. As always, we will continue to pursue opportunities in this area to improve upon this rate throughout the year. Turning to sales, we would be comfortable with your models reflecting operational sales growth for the full year 2008 of between 1% and 2%, consistent with our earlier guidance. As you know, currency impacts are difficult to predict and while we cannot predict the impact of currency movements, to give you an idea of the potential impact if currency rates were to stay where they are today through the end of this year, our sales growth would be favorably impacted by approximately 4.5%, resulting in total reported sales growth for the year of between 5.5% and 6.5%. Now for earnings -- when I last checked, the First Call mean estimate for our EPS for full year 2008 was $4.44 per share. Considering the strength of our first quarter earnings performance, the impact of the launch of ZYRTEC, and the timing of shipments for REMICADE as I mentioned earlier, but not losing sight of the loss of U.S. market exclusivity for RISPERDAL in the second half of the year, we suggest that you model our EPS for 2008 excluding any special items between $4.40 and $4.45 per share, slightly higher than our guidance in January. That concludes my comments on our operating performance this quarter and our guidance with respect to your models. I look forward to updating you throughout the year on our quarterly earnings calls. Thank you and now back to you, Louise.

Thank you, Dominic. Elizabeth, can you please give the instructions for the questions?

(Operator Instructions) Your first question comes from the line of Mike Weinstein with J.P. Morgan. Michael Weinstein - J.P. Morgan: Good morning. First question, Dominic, you had a strong quarter here particularly with regard to consensus expectations. I think the consensus for the quarter was $1.20. You reported $1.26 adjusted, so you had a $0.06 beat but relative to your prior guidance, you only raised expectations for the year it looks like by $0.01. So maybe you can just comment on that. Thanks. Dominic J. Caruso: Sure, Mike. The -- as I commented on throughout the discussion and Louise did in her discussion as well, we mentioned that we benefited in the first quarter from a number of items, particularly the successful launch of ZYRTEC, which included some inventory stocking in the trade. Of course, that will then bleed off a bit in the remaining quarters of the year. Our launch plans are consistent with our annual guidance but we did see some significant build in the first quarter and that impacted our first quarter number. I don’t think that the -- when I looked at the various estimates throughout the analyst community, it didn’t seem like those were built in to those estimates. And secondly, we mentioned that the O-U.S. shipments for REMICADE to our partner were significant in the first quarter, reflecting also inventory build on their part. As you may remember, we shipped bulk to our partner outside the U.S. and they finish the product for distribution outside the U.S. and through their inventory planning process, they ordered much more earlier in the year than perhaps we would have anticipated. So we think that will obviously bleed off as well. So taking that into consideration, those two items into consideration, and also looking at the fact that we expect a little bit lower non-operating gains, as I mentioned, and other income and expense, we thought it would be prudent to review our annual results again with you and slightly increase our expectations for the year. Michael Weinstein - J.P. Morgan: Okay. You made a couple of other interesting comments that look at the performance of the business, as the consumer business was very strong, obviously helped by ZYRTEC but was still strong across the board. And then you made a comment about the really your U.S. MD&D business. You had a number of businesses that decelerated this quarter versus what we had seen last quarter and you made a comment about procedure volumes. Ethicon was surprisingly light this quarter. Ethicon Endo was I think 3% and Life Scan was slower and it was a little bit slower. So the commentary there about the distributor ordering patterns and procedure volumes, can you just flesh that out a little bit in terms of what you think you are seeing across the MD&D business? Dominic J. Caruso: Sure. What we’ve seen early on in the year is that as I mentioned, distributors softened their ordering a little bit in the early part of the year. Our field checks tell us that’s a little bit of an inventory burn on their part, which is okay as you might expect that to happen. But also there may be early -- these are very early signs that at least in the first quarter, we did see some lower procedure volumes across the surgical suites in the U.S. We don’t -- we’re not sure whether that is going to be an impact for the full year or not but we definitely think it had some impact in our first quarter. Michael Weinstein - J.P. Morgan: Okay, great. Last question and then I’ll let someone else jump in here -- ceftobiprole which became approvable later on during the quarter, what is your expectation there for timing? Dominic J. Caruso: Well, the timing is obviously we have to work through with the FDA their completion of the review. You may remember that the reason -- in the approvable letter, the FDA cited completion of site inspections on their part and review of some additional information that we have provided. There’s been no indication of any safety or any other manufacturing issues of any sort, so I don’t want to predict how long it will take the FDA to complete their review and we would just like to wait and make sure that they are thoroughly complete with their review and then get back to us on their findings. Michael Weinstein - J.P. Morgan: Great. Thank you, Dominic.

Next question, please.

Your next question comes from the line of Glenn Reicin with Morgan Stanley. Glenn Reicin - Morgan Stanley: A couple of housekeeping questions -- you brought up the REMICADE stocking issue. You said it’s two-thirds of growth so that comes out to about $125 million. Is that about right?

Your math is good. Glenn Reicin - Morgan Stanley: Okay, and then on ZYRTEC, can you at all quantify what you think the initial stocking was? And then you said it’s going to be a great growth driver for the year. Can you quantify what your expectations are for ZYRTEC for the year? Dominic J. Caruso: We won’t -- Glenn, as you know we won’t give individual estimates for a product growth. ZYRTEC is included in our overall sales growth estimates for the year. As far as the first quarter is concerned, that OTC category which grew in excess of 25%, if we were to exclude ZYRTEC from that category of sales, we would see low to mid-single-digit growth in that category. Glenn Reicin - Morgan Stanley: Okay then, how much of that growth do you think was stocking versus underlying usage? Dominic J. Caruso: Well, probably a good two-thirds of the initial sales in the first quarter were attributed -- we believe are attributed to stocking. Glenn Reicin - Morgan Stanley: That’s very helpful. Okay, and then also just two other quick questions -- INVEGA, is that included in the RISPERDAL number or is that separate now? Dominic J. Caruso: That’s separate now in Other. Glenn Reicin - Morgan Stanley: Okay, and you are not going to tell us what that number is?

No, not right now. Glenn Reicin - Morgan Stanley: Okay, so all the other numbers you’ve given us in the past are going to be restated for that change?

The numbers that you have in the schedule have your comparables for prior year. Glenn Reicin - Morgan Stanley: In prior quarters did INVEGA, was that included under the anti-psychotic number?

Yes, it was. And the numbers -- Glenn Reicin - Morgan Stanley: Okay, so we’re going to get restated schedules for all of the quarters going back or no?

What we have given you here is 2007 restated to take INVEGA out. We certainly could give you -- break out the RISPERDAL Oral and we could put that up. Glenn Reicin - Morgan Stanley: Okay, we’ll do that later. And then R&D was only up around 4%. What do you expect growth in R&D to be up this year and why only 4%? Dominic J. Caruso: Well, again Glenn, we won’t comment on individual line items like that because we manage the business throughout the 250 operating companies around the world and let them decide the proper level of spending in each of their categories, but generally speaking R&D growth will not be as pronounced as it has been in prior years. It will most likely be closer to the sales growth as opposed to the increased level of R&D spending you saw in prior years, as we now have built the pipeline as you saw and the products are now beginning to move through the regulatory process and off into the market. Glenn Reicin - Morgan Stanley: So you’re actually saying that pharma spending moderates during the next couple of years on an R&D -- Dominic J. Caruso: That’s probably -- that’s a good -- it will definitely moderate a bit from our prior several years growth in R&D, that’s right. Glenn Reicin - Morgan Stanley: Okay. Thank you very much.

Thank you. Next question, please.

Your next question comes from the line of Tao Levy with Deutsche Bank. Tao Levy - Deutsche Bank: Good morning. You did comment briefly on the procedures that you were seeing sort of at hospitals being maybe a tad lighter in Q1. I was just wondering if you could provide any commentary around sort of more capital equipment spending that you might detect. I know you guys don’t do too much of that but I would love to get any thoughts there. Dominic J. Caruso: Actually, Tao, we -- as you know, our business is not capital intensive at all and so it would be not appropriate for me to comment on that part of the business, which we really don’t participate much in. Tao Levy - Deutsche Bank: Okay. And you also mentioned on drug eluting stents lower prices affecting you here in the U.S. I was just wondering if you could quantify that change. Dominic J. Caruso: Sure and maybe Louise has it more readily available. If you look at price in drug eluting stents in this quarter versus last quarter of last year, it’s a decline on average of about 6%. Tao Levy - Deutsche Bank: Great, thanks. And then just lastly, any general thoughts on the recent district court decision in favor of Teva on generic RISPERDAL and whether -- how that impacts how you are thinking about RISPERDAL going generic in the back half of the year. Dominic J. Caruso: Right. Well, we are obviously aware of the court decision that is favorable to Teva to grant them a 180-day exclusivity period. We would prefer to wait for the FDA to actually act because the FDA has not yet granted Teva that exclusivity period so I would prefer to wait and see how the FDA acts and then we’ll plan accordingly. Tao Levy - Deutsche Bank: But is it fair to -- I mean, if the FDA agrees with the courts, then that’s sort of a net positive for you guys versus your prior thinking? Dominic J. Caruso: Sure, well, it’s always positive when you have less competitors in the market. Tao Levy - Deutsche Bank: Okay, great. Thanks.

Thank you. Next question, please.

Your next question comes from the line of Bob Hopkins with Lehman Brothers. Bob Hopkins - Lehman Brothers: Thanks and good morning. A couple of quick questions; first, Dominic, to go back to your comments about procedure growth during the quarter, was that spread evenly across Ethicon and Depuy or was that, your comments more focused on one versus the other, especially your comments on distributor inventory issues versus just overall slowdown? I was wondering if there was any further level of granularity you could provide there. Dominic J. Caruso: Yeah, I think we saw lower procedure growth in general but I think probably in our Ethicon business more so than in the other businesses. Bob Hopkins - Lehman Brothers: Okay, so the inventory issue you are talking about is related more to Depuy than Ethicon than? Dominic J. Caruso: Well, it’s been across the board, Bob, so we have to do some additional field checks but I think in terms of the overall growth or slower growth in procedures probably more in the general surgery are that we saw in our Ethicon business. Bob Hopkins - Lehman Brothers: Okay, thank you. That’s very helpful. And then on VELCADE and Millennium in light of the deal, I just want to be clear here -- should we expect the structure of your relationship with Millennium to change in any way as a result of this deal? Dominic J. Caruso: Well, let’s break down the structure of the deal for you, that we -- hopefully this will be helpful. Outside the U.S., we have a broad arrangement with Millennium and as you know, we were the sole exclusive marketing partner outside the U.S. With respect to the current deal with Takeda that may take place, that deal will not be impacted in any way. In the U.S., we actually co-promote VELCADE along with Millennium. That particular co-promote arrangement has various expiration dates. They are generally annual and then they can be renewed by either party on an annual basis, so we will have to wait and see what -- if the transaction goes through what the new thinking is on the part of our partner. We would be happy to continue co-promoting the product with Millennium or the new entity, as the case may be. Bob Hopkins - Lehman Brothers: Okay. Thank you. That’s helpful and then one final question -- given the launch of INTELENCE, I was wondering if you could provide any qualitative or quantitative thoughts on how we should think about that launch throughout the course of the rest of ’08 and into 2009. Dominic J. Caruso: It’s probably too early, Bob, to give you any indication. We just launched it just a few months ago so I’d prefer to wait and see as we get more experience under our belt. I would say that the initial reaction by the medical community has been very positive, so we look forward to updating you more throughout the year. Bob Hopkins - Lehman Brothers: Thank you, Dominic. Appreciate it.

Next question, please.

Your next question comes from the line of Larry Keusch with Goldman Sachs. Lawrence Keusch - Goldman Sachs: Good morning. Dominic, I’m wondering if you could just review for us now where things stand with IONSYS, both in the U.S. and Europe. You obviously made some indications on the filing but I just want to kind of get an understanding where we stand. Dominic J. Caruso: Sure. Well, IONSYS in Europe, we filed a manufacturing adjustment already, as you know, and it’s already been launched in Europe in seven countries, so it’s in the market in Europe. In the U.S., we just recently filed a manufacturing adjustment application with the FDA and we’ll have to wait for the FDA to take a look at that and we expect to hear back from them later this year. Lawrence Keusch - Goldman Sachs: Okay, so it is possible that it could launch in the U.S. this year? Dominic J. Caruso: Yeah, let’s just wait and see what the -- we work very closely with the FDA on it. Let’s just wait and see what the FDA has to say about our application. Lawrence Keusch - Goldman Sachs: Okay, and then two other quick ones -- you certainly made some comments in the past, I think you’ve done some analysis around this where your consumer portfolio tends to do well during periods of economic challenges. But I just want to see how that was tracking in the first quarter and maybe you could take into account some of the comments about the decline in sales of Rembrandt as well as In-Reach toothbrushes. That’s question one. And then question two, I know you are going to get a lot of questions about the procedure volume that you mentioned but just anecdotally as you speak to the business managers, any sense of why you might be seeing any change in procedure volumes this early in the year and again, early in the economic cycle? Dominic J. Caruso: Okay, well first with respect to our consumer business, you are right. As we looked over the years at various economic cycles, our consumer business did not -- really did not correlate at all with any economic cycles, either up or down. So the business does not seem to be impacted by major trends in the economy. You had asked about Rembrandt and Reach. We did have some slower growth in Rembrandt and Reach toothbrushes, which offset the very strong growth that we had in Listerine. Listerine is really the driver in our oral care business right now. It’s doing remarkably well for us, as we expected, bringing in a product of that heritage into our portfolio is very, very promising, so we are pleased with the outlook and the progress that we are making with Listerine. With respect to procedure volumes, it is a little early to comment on it, Larry. I think there’s a number of factors going on here. The holiday schedule, for example, in the first quarter of this year was different than the first quarter of last year, so scheduling procedures may be a little different than it was year over year. There isn’t anything that stands out to us in terms of one particular category or one particular factor impacting procedure growth. We just saw a little bit slower procedure growth this quarter than we had seen in the first quarter of prior years. So a little too early to tell. We’ll have to wait and see what others report and we’ll get a better sense for the overall market after we see that. Lawrence Keusch - Goldman Sachs: Okay, great. Thanks for the comments, guys.

Thank you. Next question, please.

Your next question comes from the line of Michael Jungling with Merrill Lynch. Michael Jungling - Merrill Lynch: Good morning, everyone. I have three questions. Firstly, can you give us the division EBIT for consumer, pharma, medical devices? Secondly, were you invited to make an offer for Alcon? And then thirdly, a question; if you did make another large acquisition, what is the upper limit that you are willing to go on a net debt to EBITDA? That would be great. Thank you. Dominic J. Caruso: Michael, as you know we don’t really discuss the individual operating performance of the businesses. Rather, we give you an overall perspective on the enterprise and as you saw, we had very strong EBIT or pretax operating margins for the enterprise in the first quarter and we are pleased to see that the restructuring program we put in place last year has now been largely implemented and we see that in the operating margins for the entire business. No comment on the -- on whether or not we were invited in any particular situation. And lastly, with respect to acquisitions, the way we think about it, Michael, is in evaluating any limits, we don’t use the -- our Triple A credit rating, for example, as a limitation to our ability to make an appropriate offer for any acquisition that we would find attractive. Our primary criteria is whether or not the acquisition will generate significant shareholder value and in evaluating that, we take a look at whether or not the acquisition, proposed acquisition would generate a return sufficiently in excess of our cost of capital to compensate our shareholders for the risk. That’s our entire focus is on creating shareholder value and not necessarily on maintaining a particular level of debt or debt to equity ratio. Michael Jungling - Merrill Lynch: And then just one final follow-up; if you look at the slow down in procedure growth that you’ve seen in the first quarter, how much of that could be the results of perhaps having less selling days in the first quarter? Dominic J. Caruso: Well, that’s a great question, Michael and I was just commenting to Larry in the prior question that that did have some impact, that there were several days less shipping days in the quarter just because of the holiday schedule so that obviously had some impact. I can’t quantify it for you, however. Michael Jungling - Merrill Lynch: Okay. Thank you.

Next question, please.

Your next question comes from the line of Matthew Dodds with Citigroup. Matthew Dodds - Citigroup: Thanks. Good morning. A couple of questions. First, on the gross margin, you were up pretty good year over year and Dominic, I just wanted to see if you could comment at all how much of that might have been related to foreign exchange and how much was related to the restructuring program. And then the second question is on ACIPHEX/PARIET, that had a pretty big drop from what we even saw last year in the fourth quarter. So I guess my question there is was there any reversal in stocking in that kind of decline and is that the kind of run-rate we should expect, or is this a one-time drop of that magnitude? Dominic J. Caruso: Okay, well with the gross margin, as you saw we did have a very favorable up-tick in gross margin this quarter versus the first quarter of last year. It’s really two items that impact that. One is that you may remember last year we brought in the Pfizer consumer healthcare business and in recording the acquisition price, there’s obviously some inventory step-up to fair market values. That was -- that negatively impacted first quarter gross margins, so the cost of those products were higher then. Obviously they have all now been sold through and so that accounting treatment has been fully taken into account by now, as we enter the first quarter of ’08. And then secondly, the other part of the benefit is the cost restructuring program that we announced last year across most of our businesses. We’ve taken a hard look at some of the cost structure, as you know, and we’ve seen a benefit across all our businesses. Matthew Dodds - Citigroup: And then how about ACIPHEX? Dominic J. Caruso: ACIPHEX -- Louise, can you comment on ACIPHEX and the entry of generics into the marketplace?

So the ACIPHEX in the U.S. is down about 27% and was your question regarding the inventory -- inventory differences is about half of that decline. Matthew Dodds - Citigroup: Well, yeah because last -- I mean, even last year in the fourth quarter, you grew both in the U.S. and O-U.S. and then you had a huge drop down, so I guess globally is this the kind of -- is this a new level of decline we should expect or was there some reversals in inventory?

Well, about half of the decline, as I said, is due to reversals in the inventory or changes in the inventory level but there is new competition in the PPI market in the U.S. in terms of a generic and we are seeing that same dynamic outside the U.S. Also in Canada, the PARIET, there is a generic of PARIET on the market now. Matthew Dodds - Citigroup: Thanks, Louise. Thanks, Dominic.

Next question, please.

Your next question comes from the line of Larry Biegelsen with Wachovia. Larry Biegelsen - Wachovia: Thanks for taking my questions. Louise, drug eluting stent pricing in Europe on a constant currency basis, I think you gave the U.S. earlier.

On an operational basis, O-U.S. is about 7% down. Larry Biegelsen - Wachovia: Thanks, and could you tell us what you think your share of the gastric banding market was in the quarter in the U.S. and how broadly you’ve rolled out the Realize brand? And then I have one question after that. Dominic J. Caruso: Larry, as you know we are in the early stages of that launch so I -- we are probably not going to comment right now on market share there. In terms of how broadly it’s been rolled out, we have been undergoing physician training with respect to this launch. We’ve included in the launch plans a significant amount of physician training and education to ensure that the product is used appropriately, so we are just about through that now and then obviously we will continue to see further penetration of the product. It’s early though to give you any indication of share. Larry Biegelsen - Wachovia: And the U.S. filing for Rivaroxaban and Golimumab, could you just remind us of the dates on those two please? Thanks. Dominic J. Caruso: Louise, why don’t you comment on those?

Okay, so for Golimumab, it will be in the second quarter in the U.S. and for Rivaroxaban in the third quarter in the U.S. Larry Biegelsen - Wachovia: Thank you.

Next question, please.

Your next question comes from the line of Sara Michelmore with Cowen. Sara Michelmore - Cowen & Company: Good morning. Can you talk about the environment for price increases in your pharmaceutical business? I know recently you did take a price increase on REMICADE in the U.S. Can you just talk about the environment in general and if there are any other product lines where you’ve been able to pass through price increases recently? Dominic J. Caruso: Right. Well Sara, as you know this environment in general is a difficult environment to take price increases in. And really the area that you can take prices in is when you obviously show significant benefit or differentiation from other products in the market. So we believe to the extent that we have such differentiation and we believe many of our products do demonstrate value to the healthcare system, we’ll continue to look for price increases where appropriate. But I would say the environment is not really conducive to price increases at all. Sara Michelmore - Cowen & Company: Okay, and any other major product lines besides REMICADE in which you’ve been able to raise price recently? Dominic J. Caruso: I don’t have the data in front of me, Sara, but we probably won’t comment on individual products. Sara Michelmore - Cowen & Company: Okay. And in terms of CYPHER, I just wanted to clarify the U.S. market commentary there in particular, in terms of DDS utilization and PTCA volume declines. Could you just on a sequential basis give us a sense of what the trend there -- I know it was down significantly year over year but I’m just wondering if from your standpoint if that environment has stabilized or improved or deteriorated quarter to quarter. Dominic J. Caruso: Right, so let me give you some insight into our estimate of the penetration rate in the U.S. for the first quarter is about 64%, and although that is significantly lower than the first quarter of ’07, we think it’s about a point higher than the fourth quarter of ’07. So that’s a good sign. It looks like the penetration rate sequentially now has stabilized. And in terms of the overall procedure volume, I don’t have that information handy right now.

Rough estimate is between the 10% and 15% range down in the quarter. Sara Michelmore - Cowen & Company: Okay, okay and I guess we heading into the May medical meeting season. Any big data dissemination we should be paying attention to coming up at ASCO, DDW, APA -- any other meetings? I know specifically if you could comment on paliperidone palmitate and if we are going to see that Phase III data in the next couple of months.

At APA, you will see a poster on Phase III data at APA. We’ve also got REMICADE -- sorry, Golimumab Phase III data RA at ULAR, and that’s in June in Paris. And that’s -- we’ve got some Tapentadol data also coming out later on in the quarter as well at APS in Tampa. Dominic J. Caruso: I think a little further out, Sara, I think in September we’ll see Ustekinumab at a Durham meeting in comparison to [Embro] I think, right?

Correct. Sara Michelmore - Cowen & Company: Great. Thank you.

Okay, and last question.

Your last question comes from the line of Bruce Nudell with UBS. Bruce Nudell - UBS: Good morning. Ex-ZYRTEC stocking, what would you estimate the operational growth of consumer might have been? Dominic J. Caruso: For the entire consumer sector, I just don’t have it handy but as we mentioned earlier in the OTC arena, that growth of 25 or some percent was obviously -- obviously benefited from the ZYRTEC launch and that growth would have been in the low to mid single digits. Bruce Nudell - UBS: Okay, thank you. And with regard to the procedure slow down in surgery, general surgery I think you said, in prior periods of economic slow down have you seen that sort of effect before? Dominic J. Caruso: Actually no. On a big picture perspective, all of our businesses actually have had very little correlation to economic trends. I would say we are in a little bit of a unique environment though today, so it’s hard to predict based on past practices but we are a little bit in a unique environment with this particular economic slowdown, so to predict what impact that would have now would be a little premature. It’s just early in the quarter and we just saw some early signs. Bruce Nudell - UBS: I guess just to follow-up on that, why -- in what manner is this particularly unique? Dominic J. Caruso: Well, you mean the overall economic slow down? Bruce Nudell - UBS: Yes, from -- Dominic J. Caruso: Well, I think from my perspective, Bruce, what I see is the uncertainty in the credit markets being somewhat of an area of -- well, quite frankly uncertainty and then economic growth is a question mark as a result of that. We’ve seen this before in other economic cycles but I think you’d agree this one is a little bit more pronounced than we’ve seen in at least more recent economic cycles. Bruce Nudell - UBS: But it wouldn’t necessarily tie to general surgical procedures or -- Dominic J. Caruso: Well, no, that’s what I -- that’s right and that’s what I mentioned. It’s not necessarily something that we have seen in the past and I’m not sure whether it’s something we are seeing now but it’s just early in the year and we’re giving you some insight into some early indicators that we saw in the first part of this year. Bruce Nudell - UBS: I guess my final question is you know, you guys clearly have enormous financial resources and capacity to buy back shares, tighten the belt. But looking forward 1.5% to 2.5% operational growth is going to be problematic for stock progression. From your point of view, what are the organic growth drivers for the top line that you folks are most excited about? Thank you. Dominic J. Caruso: Sure, Bruce and of course, the 1% to 2% you mentioned going forward, the 1% to 2% of course is this year’s operational growth rate. We’re not going to comment on what it would be going forward but we are excited about the overall robustness of the pipeline. And as we mentioned earlier in the call today, we’ve made very, very good progress on all fronts -- the medical device business is filing for new products, exciting products like the CAP system. We’ve begun the Sirolimus on the Conor stent clinical trial, which I think is an exciting new growth platform for us going forward. And as you know the pharma pipeline is not only robust, it’s progressing according to schedule and we are making the filings and dialoging with the health authority. And so we have a number of potential growth drivers already moving forward, consistent with our plans. And having said all that, during a time of some slow growth in the short-term period, we obviously feel like we took the appropriate disciplined actions for the business overall to account for that. Bruce Nudell - UBS: Thanks so much. Dominic J. Caruso: Okay. Great, well, thank you, everyone and thank you, Louise. Before we end this call, I would like to share some final thoughts on this quarter’s results. We are continuing to execute against the key priorities and pipeline opportunities we have recently outlined for you. Our progress on new products and new filings is moving along, thanks to the hard work and dedication of the extraordinary people across the Johnson & Johnson family of companies. We continue to invest in growth opportunities that are critical to our future while continuing to manage our costs and improve our operating margins. I look forward to speaking with you again at our meeting on June 5th where we will focus on our medical devices and diagnostics businesses and also provide an update on the consumer business. Thank you for your continued support of Johnson & Johnson and have a great day.

Thank you. This concludes today’s Johnson & Johnson first quarter 2008 earnings conference call. You may now disconnect.