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.
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The decision comes despite modest growth for the 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.
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.
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By GlobalDataThe 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”.
Positive Q3 backdrop
The orthopaedic split was shared on the same day as the drugmaker announced Q3 results. J&J distanced itself from the big pharma earnings slump earlier this year, with the company’s sales jumping 6.8% to $24bn in Q3 2025.
This upward trend was primarily driven by sales across its innovative medicine portfolio, which constituted 64% of the reported sales this quarter. This value was up 6.8% from the same time in 2024.
Shares in J&J opened 1% higher at $192.92 at market open on 14 October compared to a pre-announcement market close. The drugmaker has a market cap of $452bn.
This includes oncology stalwarts like blockbuster multiple myeloma drug Darzalex (daratumumab) and prostate cancer med Erleada (apalutamide), which pulled in $3.6bn and $936m, respectively, for the US pharma company.
Meanwhile, immunology asset Stelara (ustenkinumab) was still a high earner for the company, making $1.5bn, despite the drug surpassing its patent cliff at the start of the year.
However, Stelara’s successor, Tremfya (guselkumab) took centre stage in the company’s 14 October investor call, with the company’s executive VP of innovative medicines, Jennifer Taubert noting that J&J was “bullish” about the IL-23 inhibitor’s future potential after sales grew by 40% to $1.4bn in Q3.
Taubert added that the drug already held half of the IL-23 market share before the subcutaneous (SC) approval of Tremfya, which – in her eyes – signalled “a lot of growth opportunity” for the autoimmune therapy moving forward.
While J&J estimates peak sales of $10bn for Tremfya, analysts at GlobalData have a slightly more conservative forecast, predicting that the therapy will make $9.1bn in 2031. GlobalData is the parent company of Pharmaceutical Technology.
