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On January 23, Johnson & Johnson's official website released its financial report for the fourth quarter of 2023 and the full year. According to the data, its performance exceeded Wall Street expectations. Johnson & Johnson's total sales for 2023 increased by 6.5% year-on-year to reach 85.2 billion US dollars, with a net profit of 35.2 billion US dollars. Among this, revenue from innovative drugs was 54.8 billion US dollars, and revenue from medical devices was 30.4 billion US dollars, increasing by 10.8% year-on-year.In 2023, the revenue for the fourth quarter was $21.4 billion, surpassing the expected $21.01 billion and marking a 7.2% year-over-year increase compared to 2022. In terms of the medical devices business, it has steadily recovered from the decline caused by the COVID-19 pandemic. Sales of medical devices in the fourth quarter grew by 13.3% year-over-year from 2022, reaching $7.67 billion.
Source of the image:Johnson & Johnson Official Information2023 Medical Device Sales Surge Driven by Surgical Volume and AcquisitionsJoseph Wolk, Chief Financial Officer of Johnson & Johnson (Joseph Wolk) attributed the growth of its medical device business to a further increase in the number of surgeries in December 2023, as well as the company's acquisition of heart pump company for $16.6 billion at the end of 2022.Abiomed。Volker said on a call with investors that Abiomed's performance so far has exceeded the company's internal model and surpassed the expectations set by Wall Street analysts before the deal was completed in late December 2022.2023 Marks the First Year After Johnson & Johnson Medical Technology’s $16.6 Billion Acquisition of Abiomed, a Miniature Heart Pump Manufacturer, Which Has Already Started to Pay Off Beyond Many People's Expectations.Excluding international currency fluctuations, Johnson & Johnson's medical device segment global operational sales grew by 12.4% in 2023, with total revenue reaching $30.4 billion. The company reported in its latest earnings that Abiomed alone contributed 4.7%, while sales of electrophysiology hardware, contact lenses, and surgical wound closure products also performed strongly.Highly interested in medical technology mergers and acquisitionsJoseph Wolk, Executive Vice President and Chief Financial Officer of Johnson & Johnson, was asked about the company's "interest" in mergers and acquisitions during the earnings call.Volcker said, "We are currently in a favorable position and may continue to engage in various types of transactions in the future." "But we need to look for partners that align with our strategy, while hoping to deliver fair returns to our shareholders."Volker stated that the acquisition of Abiomed has surpassed the internal transaction model and performed better than Wall Street's expectations. He also commended Johnson & Johnson's cash spending on smaller partnerships and deals, highlighting the diversity of Johnson & Johnson's mergers, acquisitions, and portfolio.J&J CEO Duato emphasized: "We don't prejudge sectors or size. Our investment approach focuses on what's within our internal capabilities, with high regard for expertise, and dedication to researching innovative products that can significantly elevate current medical standards and stay up-to-date."The company said that over the past 13 months, Abiomed's catheter-based Impella pump has seen widespread commercial adoption. The pump is designed to be inserted into the ventricle to help reduce the workload on damaged or weakened heart muscles.This helped Johnson & Johnson's interventional solutions products increase performance by 49.8%. The product portfolio's sales in 2023 were $6.35 billion, which also includes cardiac mapping and ablation catheters for treating atrial fibrillation, as well as cardiac implants acquired through the $400 million purchase of Laminar at the end of last year, which may help reduce strokes. Hoping to become a strong competitor in the cardiac field.Left Atrial AppendageA top-tier product in the occluder device market. Through two acquisitions, it is not difficult to see that Johnson & Johnson Medical is ramping up its cardiovascular business layout. With both new and existing businesses advancing side by side, this may push Johnson & Johnson to a new market ranking in the cardiovascular field.Abiomed Pumps Frequently RecalledIn 2023, Abiomed's heart pumps were subject to multiple Class I recall alerts issued by the FDA, with four patient deaths linked to other cardiovascular implants (such as prior aortic valve replacements). Investigations revealed that stent-like struts along the edge of TAVR implants inadvertently entered the side of the Impella pump, severing its rotating impeller blades and causing parts of the device to break. Although there is no need to return the devices to the manufacturer, the FDA strongly recommends that surgeons pay attention to the updated instructions and ensure prevention of rotation when repositioning the pump inside the heart.Last year, another Class I recall of the Impella 5.5 involved the potential leakage of sodium bicarbonate cleaning solution, which might cause the heart pump to stop due to low pressure. In October last year, the FDA also sent a warning letter to J&J and Abiomed, stating that the two companies were...Impella ConnectThe software's monitoring and alarm system needs to obtain approval from the regulatory authorities.Orthopedics Business to Be Restructured, May Exit Some MarketsAmong other medical technology companies under Johnson & Johnson, surgical sales exceeded $10.3 billion. The annual growth rate of 5.5% in this field was partly due to the approximately 12% increase in sales of biosurgical hemostatic products, including Surgicel powder and Vistaseal fibrin glue and sealant.Orthopedic sales reached $8.94 billion, increasing by 4.6% over the previous year, with growth in hip, knee, and trauma businesses. In October last year, Johnson & Johnson announced it would begin exiting "lower-profit" segments of the orthopedic market through a two-year restructuring plan. The company stated at the time that these measures are expected to cost between $700 million and $800 million by the end of 2025 due to streamlining operations.At the same time, vision-related sales grew 6.6% annually to reach $5.07 billion, driven by the Acuvue Oasys daily disposable contact lens series and Johnson & Johnson's Tecnis surgical intraocular lenses.Multiple new products may become new growth pointsLooking ahead to 2024, Johnson & Johnson CEO Joaquin Duato (Joaquin Duato) said that electrophysiology may become a major highlight, and this year will welcome "a series of new breakthroughs."Johnson & Johnson’s Biosense Webster unit recently announced that its Varipulse pulsed field ablation system received approval in Japan and gained FDA Breakthrough Device Designation last year, allowing the use of an atrial fibrillation catheter without real-time X-ray fluoroscopy. This makes Johnson & Johnson the world's first and currently only company with an approved product for atrial fibrillation ablation that does not require fluoroscopic guidance.Joaquin Duato highlighted several key achievements in the quarterly report, such as the positive upgrade of the Ottava surgical robotics platform and the successful entry into the left atrial appendage space through the acquisition of Laminar. He anticipates that a series of new products will inject momentum into the future development of Johnson & Johnson’s medical technology business.Johnson & Johnson also raised its previous financial forecast for 2024, aiming for growth of 5% to 6%, which would bring the company's operational sales to a range of $88.2 billion to $89.0 billion.
Source: Medical Device Innovation Network
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