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November 15, 2021

J&J to divide into consumer health and pharmaceutical businesses

The separation is expected to be completed in 18 to 24 months.

Johnson & Johnson (J&J) has announced plans to spin off its Consumer Health unit from its Pharmaceutical and Medical Device business, creating two independent publicly traded companies.

Subject to approvals and meeting specific conditions, the separation is anticipated to conclude in 18 to 24 months.

Following the separation, the new J&J will continue to be a healthcare company with a sharpened focus on key areas with unmet medical needs and leverage innovation and technology in the biopharmaceutical and medical device sectors to expand the standard of care.

The new J&J will work on expanding its portfolio of life-saving therapies, including Erleada, Darzalex, Imbruvica, Tremfya and Stelara, apart from medical device solutions in interventional solutions, surgery, vision and orthopaedics.

The Pharmaceutical and Medical Devices segments are expected to report around $77bn revenue in full-year 2021.

According to the previously announced plans, Alex Gorsky will act as J&J executive chairman while the company’s present executive committee vice-chairman Joaquin Duato will take over the role of CEO from 3 January next year.

Duato will remain in the position to head the new J&J following completion of the demerger.

The new consumer health company will comprise everyday brands such as Aveeno, Tylenol, Neutrogena, Listerine, and Band-Aid.

As the anticipated separation process advances, the board of directors and executive leadership of the consumer health company will be announced.

According to J&J, the separation will boost management focus, resources, flexibility and pace to meet the different trends of the industry and meet the requirements of patients and clients of the new companies.

Gorsky said: “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.”

The demerger announcement comes days after J&J and its Janssen Pharmaceutical Companies signed a $297m settlement agreement with the US state of Texas to resolve opioid claims.

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