Johnson & Johnson has announced its intention to separate its consumer health business from its pharmaceutical and medical device business, in doing so creating a new publicly traded company within the next 18 to 24 months.
According to Johnson & Johnson, the planned separation would create two global leaders that are better positioned to deliver improved health outcomes for patients and consumers through innovation; to pursue more targeted business strategies; and accelerate growth.
Following the planned separation, the new Johnson & Johnson would remain the world’s largest and most diverse healthcare company, with a portfolio that blends its strong pharmaceutical and medical device capabilities focused on advancing the standard of care through innovation and technology.
Mr Alex Gorsky will serve as Executive Chairman of Johnson & Johnson and transition the Chief Executive Officer role to Mr Joaquin Duato, currently Vice Chairman of the Company’s Executive Committee, effective 3 January, 2022. Mr Duato will continue to lead the new Johnson & Johnson following completion of the planned separation.
The new consumer health company will be responsible for brands such as Neutrogena, Aveeno, Tylenol, Listerine, Johnson’s and Band Aid, under a Board of Directors and executive leadership to be determined and announced in due course.
The new Johnson & Johnson is expected to be better positioned to (address) diseases in areas such as oncology and eye health that require a combination of surgical, interventional and pharmaceutical treatments
Streamlined and Targeted Structure
Mr Gorsky said, “Throughout our storied history, Johnson & Johnson has demonstrated that we can deliver results that benefit all our stakeholders, and we must continually be evolving our business to provide value today, tomorrow and in the decades ahead. Following a comprehensive review, the Board and management team believe that the planned separation of the consumer health business is the best way to accelerate our efforts to serve patients, consumers, and healthcare professionals, create opportunities for our talented global team, drive profitable growth, and – most importantly – improve healthcare outcomes for people around the world.”
Mr Gorsky continued, “For the new Johnson & Johnson, this planned separation underscores our focus on delivering industry-leading biopharmaceutical and medical device innovation and technology with the goal of bringing new solutions to market for patients and healthcare systems, while creating sustainable value for shareholders. We believe that the new consumer health company would be a global leader across attractive and growing consumer health categories, and a streamlined and targeted corporate structure would provide it with the agility and flexibility to grow its iconic portfolio of brands and innovate new products. We are committed to the success of each organisation, as well as our company’s more than 136,000 employees around the globe, who will remain the backbone of these businesses.”
Mr Duato commented, “This planned transaction would create two businesses that are each financially strong and leaders in their respective industries. We believe that the new Johnson & Johnson and the new consumer health company would each be able to more effectively allocate resources to deliver for patients and consumers, drive growth and unlock significant value. Importantly, the new Johnson & Johnson and the new consumer health company would remain mission driven companies with exceptional brands, commitments to innovation, and remarkable talent. Each company would carry on the Johnson & Johnson legacy of putting the needs and well-being of the people we serve first.”
Set to Drive Novel Solutions
The new Johnson & Johnson is expected to be better positioned to combine skills, expertise and approaches to bring integrated, comprehensive and more impactful care to patients, addressing diseases in areas such as oncology and eye health that require a combination of surgical, interventional and pharmaceutical treatments. The new Johnson & Johnson would continue to play a leading role in advancing the industry forward by creating novel solutions, bringing together treatments spanning therapeutics, robotics, artificial intelligence and more, to change the way diseases are prevented, intercepted and eventually cured.
The pharmaceutical business would continue to generate sustained above market growth by advancing its strong portfolio and pipeline of products, accelerating key therapeutic areas, such as oncology and immunology, while also advancing new therapeutic modalities such as cell and gene therapies. At the same time, the medical devices business would plan to accelerate its momentum across orthopaedics, interventional solutions, surgery and vision, with an increased cadence of meaningful innovation enabled by a strong digital surgery pipeline and focus on execution across all geographies.