Johnson & Johnson to Separate Orthopedics Business into New Company
Johnson & Johnson announced today it will spin off its orthopedics division, DePuy Synthes, into an independent company, further streamlining the healthcare giant’s portfolio.
The move, revealed Tuesday, will leave Johnson & Johnson focused on its pharmaceutical and MedTech segments, encompassing prescription drugs, contact lenses, and technologies for cardiovascular care and surgical procedures. DePuy Synthes, which generated over $9 billion in sales last year, will operate as a standalone entity led by Namal Nawana, formerly CEO of Smith & Nephew. This decision follows a similar restructuring in 2021 when J&J separated its consumer health business, now known as Kenvue.
Based in New Brunswick, New Jersey, Johnson & Johnson cited a desire to concentrate on higher-growth areas as the primary driver for the split. The company reported better-than-expected third-quarter earnings yesterday and reaffirmed its full-year adjusted earnings guidance. Investors reacted with a slight dip, with shares falling more than $2 to $188.74 in premarket trading, though the stock has still risen over 30% this year. Such strategic separations are increasingly common in the healthcare industry as companies seek to unlock value and improve focus.
The separation of DePuy Synthes is expected to be completed within the next 18 to 24 months, according to company officials. Further details regarding the new company’s structure and potential public offering will be released as they become available; you can find more information about Johnson & Johnson’s investor relations page.
