Johnson & Johnson to Separate Orthopedics Division, Sharpen Focus on High-Growth MedTech Sectors
New brunswick, NJ – Johnson & Johnson (J&J) announced plans today to spin off its orthopedics business, a move signaling a strategic realignment toward faster-growing segments within the medical device industry. The decision reflects J&J’s ambition to streamline its portfolio and concentrate resources on areas poised for notable expansion, including cardiovascular devices and robotic surgery.
The orthopedics division, responsible for hip, knee, and shoulder implants alongside related surgical tools, generated $9.2 billion in sales last year – representing over 10% of J&J’s $88.8 billion total revenue. Despite this substantial contribution, the unit experienced modest growth of 2.4% compared to the previous year, prompting the company to seek a separation that will unlock greater potential for both the spun-off entity and the remaining J&J medical device group. This restructuring impacts investors, employees within the orthopedics division, and competitors in the orthopedic implant market. The spin-off is expected to be completed in the coming months, pending standard regulatory approvals.
According to Tim Schmid, EVP and global chairman of J&J’s medical device business, the orthopedics division is “a great business, but it is in a lower growth market.” He anticipates that the separation will accelerate sales growth and improve margins across the remaining medical device portfolio, enabling increased investment in areas like cardiovascular solutions, surgical innovations, and ophthalmology.J&J believes this strategic shift will position it to capitalize on unmet clinical needs and emerging technologies within these high-demand sectors.
