Johnson & Johnson (J&J) has made the latest slimming down move across its company in recent years, saying it plans to separate its orthopaedics business into a new stand-alone company.
While few details were shared on the spinoff, J&J said the new business will be named DePuy Synthes.
The decision comes despite modest growth for its business, which already includes DePuy Synthes as one of its components. The unit, which includes artificial hip and knee devices, grew 2.4% this quarter.
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J&J acquired Switzerland-based Synthes for $21bn in 2012, combining it with its own DePuy business.
According to J&J’s Chair and CEO, Joaquin Duato, this will primarily occur in a bid to “prioritise” its portfolio, while moving its core business strategies into “high-growth markets”.
The split will leave J&J focused on its pharmaceutical and remaining MedTech segments.
The company expects that the separation of its orthopaedics business will enhance topline growth and margins, while facilitating the key focus on cardiovascular surgery, vision and robotics.
J&J anticipates the separation process will likely take 18 to 24 months to complete. Once the split is complete, Namal Nawana, previous chair and founder of Sapphiros will take the company’s helm, which will become the “largest and most comprehensive” orthopaedics company worldwide, according to J&J.
This split follows the pharma’s restructuring of its orthopaedics unit in FY 2023, which saw the company retreat from less profitable markets and product lines at a cost of between $700 and $800m. J&J also split off its consumer-health division – which makes well known products such as Tylenol and Band-Aid – in 2023.
Meanwhile, Duato noted that he had high hopes for the company’s MedTech business, which he hopes will become “the best-in-class MedTech group in the industry”.
