Johnson & Johnson
Medical Device R&D and Manufacturer
2025Year10In the month, Johnson & Johnson announced a major business adjustment:Planned for the future18To24To spin off its orthopedics business into an independent company within the month“DePuy Synthes”。
This is a follow-up to the move two years ago that valued150The consumer health business, worth billions of dollars, was split intoKenvueLater, Johnson & Johnson passed again“Slimming”Optimize the business structure, and the core logic of this adjustment, as stated by the head of its medical technology departmentTim SchmidAs mentioned, it is“Achieving Faster Growth by Doing Less”。
From the perspective of business fundamentals, Johnson & Johnson's orthopedics business is not“Hold Back”The existence.2024In that year, the business achieved92billion dollars in sales, accounting for Johnson & Johnson's total revenue10%The above, in its medical technology sector (MedTech) The proportion of sales is as high as29%Its product portfolio covers hip, knee, and shoulder joint replacement implants, as well as accompanying surgical instruments, making it an important participant in the global orthopedic field.
Looking back at history, the foundation of this business stems from two key acquisitions:1998Year35Billion-dollar acquisitionDePuy，2011Yearly Again with210Hundreds of millions of dollars to acquireSynthes, which remains the largest acquisition in Johnson & Johnson's history. Now, this“Legacy Business”Splitting independently is, in essence, Johnson & Johnson's proactive adaptation to trends in the medical technology industry.
Johnson & Johnson's split decision primarily points to a strategic focus on its medical technology sector. In recent years, Johnson & Johnson has clearly been directing resources towards“Unmet needs, higher growth potential”Tilting in the field,Cardiovascular and robotic surgery are the core directions.This can be clearly seen from its recent acquisition activities:2023Year166Billion-dollar acquisition of cardiovascular device manufacturerAbiomed，2024Year Again with131Acquired for $ billionShockwave Medical, both transactions are aimed at the high-growth cardiovascular sector.
In contrast, although the orthopedic field has a market size of500billion USD, but the overall growth rate is relatively slow, and the competitive landscape tends to stabilize. In the current market,Stryker2024Annual Total Revenue226Billion USD, including orthopedic business90Billion USD; Focused on OrthopedicsZimmer Biomet2024Annual revenue also reached77Billion US dollars,DePuy SynthesEven after becoming the industry leader post-independence, it still needs to face fierce competition in the existing market.
For the splitDePuy SynthesFor instance, independent operation may bring greater flexibility for development. Johnson & Johnson has appointedNamal NawanaServe as the head of the new company,NawanaPreviously founded a diagnostic enterpriseSapphirosAnd Medical Device Investment CompanyNeoenta Design, with rich experience in innovation and management in the field of medical technology. According to Johnson & JohnsonCEO Joaquin DuatoPlanning, after independenceDePuy SynthesWill be able to“Concentrate resources to strengthen market leadership, enhance commercialization capabilities, and seize profitable growth opportunities.”, especially in the innovation and market penetration of surgical robots, independent operation can avoid the diversion of resources by other businesses within the group, which is expected to accelerate technology implementation.
From an industry perspective, the split of Johnson & Johnson is not an isolated case, but a trend in the global biopharmaceutical and medical technology industry.“Focus on the Core”A continuation of the trend. In recent years, giants such as Novartis, Sanofi, GlaxoSmithKline, Merck, and Pfizer have all focused on developing innovative drugs and high-growth medical technology businesses by spinning off non-core operations and divesting segments like consumer health and traditional devices.“Leader in the Professional Field”Rather than“Full-category Giant”。The core logic of this strategic shift is that the capital market places more emphasis on“Top Performance in Niche Fields”Rather than“Scale”。
However, the market's reaction to this decision remains cautious. On the day the news was announced (10Month14On the day, Johnson & Johnson's stock price fell during the early trading session.2%, reflecting investors' concerns about the weakening of short-term synergies and the uncertainty of the new company's operations after the business split. However, in the long term, most analysts are optimistic.
Edward JonesAnalystJohn BoylanIt was pointed out that after splitting off the low-growth orthopedics business, Johnson & Johnson can focus more on the cardiovascular business with better growth prospects.DePuy SynthesAs an independent company, it can also focus more on innovation in the orthopedic field, especially the research and development and promotion of surgical robots, which is expected to be ultimately achieved.“Win-win for Parent Company and New Company”。
For Johnson & Johnson, the spin-off of its orthopedics business is both a restructuring of its own business structure.“Precision Slimming”, and also a glimpse into the future trends of the medical technology industry.“Advance Layout”. In the global healthcare industry, accelerating towards“High Innovation, High Growth, High Specialization”Against the backdrop of transformation,“Do some things, refrain from others.”Perhaps it will become a strategic choice for more giants. After all, in the highly competitive medical technology track,“Run Faster”Compared to“Larger Scale”More important.
