J&J lays out plan to splinter orthopedics business into separate company

Key Points

• Johnson & Johnson plans to separate its orthopedics business into a standalone company called DePuy Synthes, allowing J&J to concentrate on its pharmaceutical and MedTech segments.
• The move is driven by the goal to focus on higher-growth areas, despite the orthopedics business generating over $9 billion in sales last year.
• Leadership of the new entity will be taken by Namal Nawana, a former CEO of Smith & Nephew, with the separation expected to be completed in the next 18 to 24 months.
• J&J also reported better-than-expected third-quarter earnings and reaffirmed its adjusted earnings guidance, although shares fell more than $2 in premarket trading.

Johnson & Johnson is narrowing its focus again, nearly four years after peeling off its consumer health business.

The health care giant said Tuesday that it will separate its orthopedics business into a standalone company known as DePuy Synthes. The move leaves J&J focused on its pharmaceutical and MedTech segments, which make prescription drugs, contact lenses and technology to treat cardiovascular disease and help with surgeries.

The orthopedics business will be led by Namal Nawana, a former CEO of the medical technology business Smith & Nephew, which makes products for sports medicine and wound management and also focuses on orthopedics.

J&J’s orthopedics business pulled in more than $9 billion in sales last year. But the company said the split will help it focus on higher-growth areas.

The company expects to complete the move over the next 18 to 24 months.

J&J announced in November, 2021, that it would turn its consumer health business, which makes Band-Aids, Listerine and Tylenol into a separate company that later became known as Kenvue.

New Brunswick, New Jersey-based Johnson & Johnson also reported on Tuesday better-than-expected third-quarter earnings and reaffirmed its adjusted earnings guidance for the year.

Company shares slipped more than $2 to $188.74 in premarket trading. The shares have already climbed more than 30% so far this year.