J&J Is Set to Undergo a Massive Change
The New Brunswick, NJ-based company is splitting off its consumer products business from the medical device and pharma units.
The unit is tentatively being referred to as the New Consumer Health Company. It would be comprised of four $1 billion megabrands and 20 brands over $150 million. The brands focus on Self Care (OTC), Skin Health, and Essential Health, which includes baby care, feminine care, wound care, and oral health. The Consumer Health segment is expected to generate revenue of about $15 billion in full-year 2021.
The Pharmaceutical and Medical Devices segments, which are expected to generate revenue of approximately $77 billion in Full-Year 2021. The device unit saw somewhat of a rebound this past quarter bringing in $6.6 billion – an 8% rise when compared to this time last year. The company’s device unit suffered in 2020 when elective surgeries were either canceled or rescheduled because of the pandemic.
Nathan Ray, a partner in the healthcare & life sciences practice at West Monroe commented on the split in an email to MD+DI.
“Many big pharma companies have spun out their OTC assets and restructured to reinvent their abilities to innovate and grow, specifically through acquisitions,” Ray wrote in an email to MD+DI. “J&J separating these businesses opens capital and enables better focused strategic investment on these two sides of their business that will have very different objectives to pursue in the market. Separation allows both sides of the business to realign strategically around the talent and market opportunities most likely to yield value. For the consumer side, that could be further roll-up consolidation, efficiency efforts or synergistic ventures with competitors. For biopharma, this can look to bring new talent, strategic acquisitions, and potentially more capital to their R&D efforts.”
Original Article: (https://www.mddionline.com/news/jj-set-undergo-massive-change)
