Johnson & Johnson hit $93.8 billion revenue in 2021, with its medical devices and diagnostics segment earning about $9.8 billion, and the company aims to split into two companies in the next year.
The spinoff comes after a couple of other large medical device companies announced or completed similar transactions in the last year — Zimmer Biomet spun off its spine and dental units to form ZimVie and Colfax split its medical device business, DJO, and its industrial business, ESAB, into separate entities. Analysts have also suggested that Medtronic's spine business could be in line for a spinoff along with its enabling technologies portfolio.
Johnson & Johnson has spent about $10 billion in mergers and acquisitions in the last five years, company executives said during the 2022 Wells Fargo Healthcare Conference. The imminent spinoff transaction will have one company focusing on medical devices and drugs, and the other focusing on consumer health products, including bandages, lotions and Tylenol.
Former CEO Alex Gorsky said the "planned separation underscores our focus on delivering industry-leading biopharmaceutical and medical device innovation and technology with the goal of bringing new solutions to market for patients and healthcare systems, while creating sustainable value for shareholders."