Recently, the CEO of Johnson & Johnson Medical TechnologyTim Schmid SharingBusiness Split, Surgical Robotics, M&A Strategy, and How to Accelerate the Growth of the World's Second-Largest Medical Device Business.

In the future, Johnson & Johnson Medical Technology will streamline its focus from four key businesses to three major segments: Cardiovascular, Surgery, and Vision. This means that outside of the Johnson & Johnson system, our innovative investments in these three areas will become more concentrated.

[01] Expansion of the Cardiovascular Field

Three years ago, Johnson & Johnson significantly boosted its performance by acquiring Abiomed, a publicly traded company that provides the Impella micro heart pump for patients hospitalized with heart failure, for $16 billion. However, the company realized the need for product lines with higher growth rates. In 2018, only 18% of its products were sold in markets growing over 5% annually, resulting in an overall growth rate of just 1.5% that year.

Thanks to the acquisitions of Abiomed and Shockwave Medical, nearly half of Johnson & Johnson Medical Technologies' products have entered high-growth areas. In the third quarter of 2025, the division generated $8.4 billion in revenue, a year-over-year increase of 5.6%. These two major acquisitions, along with several smaller deals, have expanded Johnson & Johnson's cardiovascular business from electrophysiology to heart failure and peripheral vascular disease. New products, together with the electrophysiology business, drove full-year revenue to $7.7 billion, a 21.4% increase from 2023 (in 2020, this business generated only $3.05 billion in revenue).

"We have made a unique decision... to play a more important role in the cardiovascular field. This is where we can make the greatest impact on patients and also create the best opportunities for returns to our shareholders."

【02】Surgical Robot Competition

Despite the widespread acclaim for Abiomed and Shockwave Medical's acquisitions, the growth of Johnson & Johnson's traditional surgical business remains harder to predict. The annual report of its surgical division shows a 1.9% decline in revenue, attributed to factors such as the contraction of its business in China and competitive pressures on energy devices and staplers.

The future growth of this business hinges on a star project: Ottava. The promotional video showcases its streamlined design —The robotic arm extends from beneath the operating table. While design is important, the more critical aspect is enabling Johnson & Johnson's sales team to compete against the long-time leader, Intuitive.New entrantsMedtronic's Offensive (Hugo Just Received FDA Approval).

Although I did not lead this business in the past two years, I have always been involved. It has indeed been very challenging. But today, Johnson & Johnson is a leader in both open surgery and laparoscopic surgery, and we absolutely aim to be a significant player in the robotic surgery field. We know the current market competition is fierce, but all surgeons and hospital management look forward to competition—it drives everyone forward. With our leadership in the first two areas, the opportunity to compete is immense.

Tim Schmid believed that unique design is considered the primary advantage, followed by Johnson & Johnson's position in the field of surgical instruments: "While surgeons worldwide benefit from the convenience of robotic surgery, they still desire to use Johnson & Johnson's top-tier staplers, energy devices, and other instruments, which have not yet been integrated into robotic systems." He also mentioned that Johnson & Johnson's introduction of the Polyphonic digital ecosystem and operating room data analysis tools are additional highlights attracting customers.

Johnson & Johnson expects to complete the pivotal clinical trial of Ottava this year and submit it to the FDA for approval in 2026.

【03】Ophthalmology Business Vision

Ophthalmology is Johnson & Johnson's third-largest high-growth business, serving 40 million people annually through vision correction, implants, and surgical tools. Over the past five years, sales in this segment have grown by 31%, second only to the cardiovascular division, but in 2024, revenue increased by just 1.5% year-over-year to $5.1 billion — ophthalmology sales are more reliant on consumer preferences compared to other medical device businesses.

Johnson & Johnson's Acuvue Oasys Max Multifocal for Astigmatism is the world's first and only daily disposable contact lens that simultaneously corrects presbyopia and astigmatism, offering a new option to many patients who previously thought they could not use contact lenses. Meanwhile, sales of the Tecnis intraocular lenses, which can permanently correct vision and address issues such as cataracts, have grown by nearly 15%. "We are incredibly proud of the impact we are making in this field."

[04] The Road Ahead

Our China business is currently presenting some headwinds. This region once contributed significantly to growth, but now we are redirecting resources to other markets, such as the United States, to ensure we offset the impact.

Johnson & Johnson invested $3.7 billion in R&D in 2024 (a year-on-year increase of 19%), and throughJJDCContinuously invest in core business areas. For example, participate in the $67 million Series D financing of Shanghai-based surgical robotics company Realize Medical, which provides us an opportunity to learn and introduce ideal technologies in a highly competitive market, accelerating our presence at the forefront of China's medical device sector.

Despite Spending $30 Billion on Two Acquisitions, Johnson & Johnson Continues to Pursue Aggressive M&A Strategy. Acquired Companies Benefit from Johnson & Johnson's Market Scale and Back-Office Support in Human Resources, Finance, etc., but Johnson & Johnson Chooses to Let Them Operate Independently.

"One important lesson we’ve learned is that the decision-making power to drive (individual) business innovation must remain within the business itself. After acquiring Abiomed and Shockwave, we’ve allowed them to operate completely autonomously."

--- Tim Schmid

Starting from January 2026, Johnson & Johnson Medical Technologies will be reorganized into a more decentralized business unit-led model to "reduce bureaucracy, enhance accountability, and accelerate decision-making." The next step is the divestiture of DePuy Synthes, which operates in medium- and low-growth areas – whether sold to a private equity fund or public market investors, it will become the world's 14th largest medical device company.

Upon completion of the transaction, we will immediately achieve higher revenue growth and profit margins. Equally important, due to the extensive scope of our business portfolio, we have had to deprioritize the orthopedic business because of its slower growth rate and lower profit margins. As an independent company, it will directly compete with focused orthopedic rivals. This is a difficult decision for all stakeholders, but we firmly believe it will lead both Johnson & Johnson and DePuy Synthes to even greater success.