J and J Overhauls Orthopedic Division: In an intelligent move, Johnson & Johnson (JNJ.N) has announced a two-year plan to turn around its orthopedics business. This comes after the medical devices industry had a disappointing third quarter, falling short of what Wall Street had hoped for. Since the company split off its consumer health business, its focused strategy can now be seen through this restructuring drive.
As important parts of this transformational plan, the roadmap says that J&J needs to leave some markets and stop selling some orthopedic goods. J&J’s big pharmaceutical company is under more pressure than ever now that its consumer health portfolio is gone and its orthopedics section is being restructured. The company’s big goal is to sell $57 billion of medicines by 2025, which fits with this greater zeal. Notably, the fact that the company’s popular psoriasis drug, Stelara, could be met with new competition in that important year adds another layer of trouble.
Even though more competition is a worry, J&J can get past these problems, showing that they are very smart with money. Because of good results in its pharmaceutical division, the company raised its profit estimate for the coming year. Because of this, the stock price of this American healthcare giant dropped by a tiny 1%. The weakness of the medical devices unit is likely to blame for this price movement, says Vamil Divan, an analyst at Guggenheim Partners. He says the best thing about J&J’s quarter was their medicine sales.
Because it doesn’t have a consumer health business, J&J has raised its goal for adjusted profits in 2023 from $10 to $10.10 per share to $10.07 to $10.13 per share. It’s important to remember that the $21 billion profit was made in the third quarter after the consumer health separation. Stelara led the pharmaceutical business, which did better than expected by contributing more than 20% ($2.86 billion). Through agreements, Stelara’s expected biosimilar competition in 2025 has been skillfully pushed back, which has helped the drug keep its top spot in overall sales.
Also Read: J And J Talc Cancer Case: Court Throws Out $223.8 Million Verdict
J&J Chief Financial Officer Joseph Wolk said that a major patent will end mid-next year. Stelara may sell well in Europe. Wall Street had predicted $7.58 billion in sales for the medical product unit, but only $7.46 billion was made. The orthopedics industry, which made up about 29% of third-quarter medical equipment sales, is having trouble.
One big thing affecting sales of medical devices is the decrease in procedures, especially stomach surgeries, due to fewer people wanting treatments like bariatric surgery. Traditional treatments that use J&J products are getting less attention than they used to because of the success of new weight-loss drugs like Novo Nordisk’s Wegovy and Ozempic.
Chief Financial Officer Joseph Wolk thinks that the rising use of weight-loss drugs could change the types of patients who come in. He posits that people who can’t have particular heart or joint surgeries right now because they are too fat might be able to get them in the future.
It’s not easy, but J&J still has a 9.5% share of the well-known consumer health sector, even though it just finished the biggest reorganization in its 137-year history with the August split. LSEG says that J&J did better than expected financially, with a reported profit of $2.66 per share, 14 cents more than experts had predicted.
Our Reader’s Queries
What are the three divisions of Johnson and Johnson?
Johnson & Johnson, a healthcare behemoth established in 1886, dominates the industry with its multi-billion market cap. The company operates in three major segments, namely pharmaceuticals, medical devices, and consumer products.
Is DePuy Synthes part of johnson and johnson?
With a commitment to excellence, DePuy Synthes, a division of Johnson & Johnson Medical Devices Companies, offers an extensive range of orthopaedic solutions that are unparalleled in the industry. Their portfolio is among the most comprehensive in the world, providing patients with the highest quality care and innovative treatments.
What are the Johnson and Johnson medical device franchises?
Johnson & Johnson’s medical device division comprises of three worldwide franchises, namely Ethicon (focusing on surgical procedures), Biosense Webster (specializing in cardiovascular and other specialty solutions), and DePuy Synthes (dealing with orthopedics).
What are the best selling drugs of Johnson and Johnson?
The pharmaceutical industry raked in a whopping $45.6 billion in sales, with top-performing drugs such as Stelara, Darzalex, Imbruvica, Tremfya, Erleada, Uptravi, Invega, Symtuza, and Opsumit leading the pack. These drugs have proven to be highly effective and have contributed significantly to the industry’s revenue.