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On October 17, 2023, Johnson & Johnson (NYSE: JNJ), one of the world's largest medical device manufacturers, announced its financial results for the third quarter of 2023.Third-Quarter Sales Increase by 6.8% to Reach $21.4 Billion. In addition, Johnson & Johnson executives stated during the quarterly earnings call with investors,Restructuring its DePuy Synthes orthopedics business。#Investing $800 million, Johnson & JohnsonReconstructionOrthopedicsJohnson & Johnson Executive Vice President and Chief Financial Officer Joe Wolk said on the conference call that Johnson & Johnson had taken steps this quarter to improve the future profit outlook of its Medical Technology (MedTech) sector, implementing a restructuring plan aimed at simplifying and centralizing the operations of its orthopedics business.The reorganization is expected to be completed by the end of 2025 at a cost of $700 million to $800 million, which will enhance the division's ability to meet product demand.In the next two years, department revenue will be affected to a certain extent (estimated revenue impact is approximately US$250 million), but the company believes these measures will not only accelerate future growth but also improve profitability.Johnson & Johnson CFO Joe Wolk said that the two-year restructuring plan will remove the company's orthopedics division from the label of "lower-margin markets and product lines" to improve the division’s profitability.，In this third quarterIn the report, orthopedicsSales increased by 2.6%。DePuy Synthes was formed by the merger of DePuy, acquired by Johnson & Johnson from Roche in 1998, and Synthes, acquired in 2011. The company offers the most comprehensive range of products in the orthopedic and neuroscience fields, covering joint reconstruction, trauma, spine, sports medicine, craniomaxillofacial, power tools, and biomaterials.DePuy Synthes has approximately 18,000 employees in 60 countries/regions.Orthopedics is the second largest business under Johnson & Johnson Medical Technology., with a total revenue of $8.587 billion in the 2022 fiscal year, accounting for 31%. Among the four major business lines in orthopedics, trauma and spine have the largest share. DePuy Synthes supports nearly one million orthopedic surgeries globally each year.# The Future Development of Johnson & Johnson OrthopaedicsJohnson & Johnson CEO Joaquin Duato expressed optimism about DePuy Synthes, firmly believing the company will achieve significant growth in the coming years. Despite not having reached this goal yet, the company will continue to make progress by investing and expanding in the fastest-growing areas.Joaquin DuatoAlso mentioned improvements in the product portfolio, particularly inOrthopedic Knee Joint FieldThe orthopedic department has a "more complete product portfolio" in revision products and non-cemented products.The company is launching the Velys orthopedic robot in Europe for total knee replacement surgeries. The surgical robot has been used in up to 30,000 procedures.▲Image SourceOfficial CompanyNetwork (hereinafter the same)
In March 2023, Johnson & Johnson announced for the first time a restructuring plan involving its orthopedics business, aiming to achieve "cost reduction and efficiency enhancement" in the orthopedics department.Rajit Kamal, the outgoing global president of sports medicine and shoulder reconstruction, said that the restructuring plan at the time included merging the company's Mitek sports medicine business into another business.Last week, Johnson & Johnson just announced that its TriALTIS™ Spinal System and navigation instruments, as well as the TriLeap Plate System for foot and ankle surgeries, received FDA 510(k) clearance.ButThe DePuy Synthes business is not as busy as some of Johnson & Johnson's other operations.For example, Biosense Webster, the cardiac division of Johnson & Johnson, placed a strong emphasis on innovation last year.
Joe Wolk said on the earnings call that the company routinely discusses new growth opportunities almost every week, which may complement the existing portfolio or future product lines in the fields of medical technology and innovative pharmaceuticals.# Johnson & Johnson 2023 Q3 PerformanceOn the same day that Johnson & Johnson announced the orthopedics restructuring, the company also released its financial results for the third quarter of 2023.
Third-Quarter Sales Increase by 6.8% to Reach $21.4 Billion, operational growth of 6.4%, adjusted operational growth of 4.9%. Operational growth excluding COVID-19 vaccines was 9.0%;
Earnings per share (EPS) were $1.69, an increase of 4.3%, and adjusted earnings per share were $2.66, an increase of 19.3%;
The company is raising the midpoint of its full-year 2023 guidance and adjusted earnings per share.
Chairman and CEO Joaquin Duato stated that with a strong focus on innovative pharmaceuticals and medical technology solutions, Johnson & Johnson is driving innovation in the healthcare sector and is well-positioned to achieve future breakthroughs in medical technology.Medical Technology
MedTherapy Technologies' global adjusted operating sales increased by 6.0%, primarily driven by electrophysiology products in interventional solutions, wound closure products in general surgery, contact lenses in vision care, and biosurgery products in advanced surgery.Global operational sales growth in MedTech was 10.4%, with the acquisition of Abiomed contributing 4.6%.
Innovative Pharmaceuticals
Innovative pharmaceuticals global adjusted operating sales increased by 4.4%.Excluding COVID-19 vaccines, operational sales increased by 8.2%.DARZALEX (daratumumab), ERLEADA (apalutamide) in the oncology field, STELARA (ustekinumab), TREMFYA (guselumab), and SIMPONI/SIMPONI ARIA (golimumab) in the immunology field, SPRAVATO (esketamine) in the neuroscience field, and UPTRAVI in the pulmonary arterial hypertension field have driven growth.
The growth was partially offset by the COVID-19 vaccine (Ad26.COV2.S) in the infectious disease area, ZYTIGA (abiraterone acetate) and IMBRUVICA (ibrutinib) in the oncology field, and REMICADE (infliximab) in the immunology sector.
# About Johnson & Johnson
Johnson & Johnson, founded in 1886, is one of the most comprehensive healthcare enterprises with a wide range of business operations globally, covering three major fields: medical devices, pharmaceuticals, and consumer goods. Headquartered in New Brunswick, New Jersey, USA, it has over 260 operating companies in more than 60 countries and regions worldwide, with a global workforce exceeding 130,000 employees.
From sterile dressings to today's medical giant, Johnson & Johnson has gone through more than 130 years. Over the past 130 years, Johnson & Johnson has made outstanding contributions to advancing human health and medical technology. Johnson & Johnson started with surgical dressings, being the inventor of Band-Aid, and gradually transformed into a professional medical product company. Johnson & Johnson can be seen among the top 10 enterprises in various fields such as global medical devices and pharmaceuticals.In November 2021, Johnson & Johnson announced that it would spin off its consumer health business and list it independently, while retaining the name Johnson & Johnson for its pharmaceutical and medical device businesses. This split marks the largest restructuring in the company's 135-year history.
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