Johnson & Johnson Eyes High-End MedTech Growth as Cardiovascular Takes Center Stage

Key Points

• Johnson & Johnson expects MedTech growth at the high end of its 5%–7% operational market-growth target through 2027, driven by a greater focus on cardiovascular products, including Abiomed, Shockwave and electrophysiology.
• The company is preparing to separate its orthopedics business around mid-2027 and expects to clarify whether it will pursue a sale, spin-off or another structure before year-end.
• J&J is expanding its cardiovascular and robotics pipeline with new pulsed-field ablation catheters and the OTTAVA surgical robot, while maintaining its outlook despite international competition, China procurement risks and geopolitical uncertainty.

Johnson & Johnson NYSE: JNJ MedTech Chairman Tim Schmid said the company remains confident it is delivering growth at the high end of its previously stated 5% to 7% operational market-growth range for the 2022 through 2027 period, citing a portfolio shift toward cardiovascular products, operating-model changes and continued investment in differentiated technologies.

Speaking in a fireside chat hosted by Wells Fargo MedTech Analyst Larry Biegelsen, Schmid said the company has moved from a highly centralized MedTech structure toward a business-unit model intended to improve specialization, speed of decision-making and accountability. Johnson & Johnson’s MedTech organization has roughly 75,000 employees, he said.

Schmid also highlighted the planned separation of the company’s orthopedics business, which is expected around the midpoint of 2027. He said the company is evaluating multiple separation structures and is prioritizing value creation rather than optimizing for a specific format such as a sale or spin-off. Johnson & Johnson expects to have greater clarity on the separation method before the end of the year.

Cardiovascular Becomes a Larger Focus

Cardiovascular, which Schmid described as the largest and fastest-growing MedTech market, is expected to become Johnson & Johnson’s largest and fastest-growing MedTech business by the first quarter of next year. He attributed the expansion to the acquisitions of Abiomed and Shockwave, as well as the company’s electrophysiology, or EP, operations.

However, Schmid acknowledged lingering competitive pressure in EP, particularly outside the United States. He said the transition from radiofrequency ablation to pulsed field ablation, or PFA, has occurred more slowly internationally, including in Asia-Pacific markets. Competition from multinational and local companies, particularly in China, has added to those pressures.

Schmid said Johnson & Johnson expects China’s volume-based procurement program to eventually affect the EP market, potentially later this year and into 2027, though he did not provide a specific timetable.

Despite the competitive environment, he said the company remains committed to its Biosense Webster EP franchise. He cited the installed base of CARTO mapping systems in 6,300 catheterization labs globally and the company’s integrated offering of mapping, navigation and ablation catheters. Schmid said the company has completed more than 100,000 cases with its VARIPULSE catheter and has launched VARIPULSE Pro in Europe, with U.S. approval and launch expected later this year.

Johnson & Johnson plans to add one meaningful PFA catheter to its portfolio annually for the next three to five years, Schmid said. The planned portfolio includes OMNYPULSE, a large-tip focal catheter, and ISOPULSE, a single-shot catheter. He said the clinical study for OMNYPULSE has been completed, but the company has not yet provided timing for regulatory filings.

Abiomed, OTTAVA and Vision Updates

Schmid said Abiomed’s business was affected by discussion surrounding the BCIS3 study, which evaluated patients undergoing complex, high-risk percutaneous coronary intervention. He said the study led to discussions among interventional cardiologists about appropriate patient selection and influenced some treatment decisions in the U.S. and internationally.

Johnson & Johnson is reviewing the broader body of evidence, investing in further data and emphasizing physician education and patient selection, Schmid said. He pointed to the ongoing PROTECT IV study, which is expected to include more than 1,250 patients, compared with 300 patients in BCIS3. He said PROTECT IV incorporates different patient-selection considerations and best practices that were not included in BCIS3.

In surgical robotics, Schmid said feedback on the newly FDA-approved OTTAVA system has been “resoundingly positive.” He said surgeons have responded to its architecture, automation, advanced instruments and digital infrastructure, while hospital systems have shown interest in its smaller footprint and ability to fit into existing operating rooms without requiring major new capital investments.

The company is selecting pilot launch sites for OTTAVA and expects to provide additional details at its Investor Day on Dec. 8. Schmid said OTTAVA, along with the Monarch robotic platform, could become a material contributor to Johnson & Johnson’s performance by the end of the decade.

In vision, Schmid said the company’s contact-lens business has improved, including in Asia-Pacific, after prior supply issues were addressed. He said Johnson & Johnson is again gaining share in contact lenses and expects the business to contribute to vision growth.

Schmid described U.S. vision-surgery performance in the latest quarter as lackluster, though he said uptake of the PureSee premium intraocular lens has accelerated. He said the company expects second-quarter performance in U.S. and global surgical vision to improve significantly.

Outlook and Market Conditions

Schmid said Johnson & Johnson has not seen evidence of a broad slowdown in procedure volumes, including in orthopedics. He said the company’s surgery and cardiovascular businesses have lower exposure to elective procedures than some other MedTech categories.

He noted uncertainty from the conflict in the Middle East, where Johnson & Johnson has a sizable business, citing potential impacts on healthcare provision and investment. Still, Schmid said the company remains confident it can meet the guidance it raised in July and that 2027 will be a stronger year than 2026.

About Johnson & Johnson (NYSE:JNJ)

Johnson & Johnson NYSE: JNJ is a global healthcare company that develops, manufactures and markets pharmaceutical and medical device products. Founded in 1886 and headquartered in New Brunswick, New Jersey, the company serves patients, healthcare professionals and institutions in markets around the world.

Johnson & Johnson operates through two primary business segments: Innovative Medicine and MedTech. Innovative Medicine focuses on prescription treatments in areas including immunology, oncology, neuroscience, cardiovascular and metabolic disease, infectious diseases, and pulmonary hypertension.

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