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Johnson & Johnson splits into two companies

Johnson & Johnson has separated the consumer health business that helped it become the world’s largest manufacturer of healthcare products. The company has a segment selling over-the-counter drugs such as Band-Aid, Listerine, and Tylenol on Friday in the pharmaceutical and medical device business. Corporate leaders told analysts that splitting into two publicly traded companies would increase the agility of each business to adapt to its market. It also allows for a more accurate allocation of capital. CEO Alex Gorsky said the company’s broad focus has worked in the past, but the split corresponds to a segment that has “evolved as a radically different business.” Gorsky made some mention of the accelerated shift to online shopping during the COVID-19 pandemic, noting on these markets, especially on the consumer side. The segment that sells prescription drugs and medical devices (J & J’s two major businesses) is the name of Johnson & Johnson. Its products include Dazalex for cancer treatment, COVID-19 vaccine, orthopedic and surgical medical devices. The new consumer health company has not yet been named. It houses brands such as Neutrogena, Aveno and the iconic Band-Aid. Was created by a company employee over 100 years ago. Pharmaceuticals and medical devices generated total revenue of $ 19.6 billion in the third quarter of the recently completed company. The result was better than the analysts expected. Consumer health has brought $ 3.7 billion. Related video: General Electric splits into three companies Gorsky said the consumer health business has more than 20 brands, each with annual sales of over $ 150 million. He added that the portfolio includes well-known names such as Tylenol, which has the highest market share ever, and Tylenol for children. As a way to help offset or balance the recession in a particular segment. “I think we have consistently believed that our diversified portfolio is rooted in our strategy,” says Gorsky. “But it’s not fixed in strategy.” Johnson & Johnson, founded in 1886, said the split would occur in the next two years if approved by the company’s board of directors. Leadership transition. The company announced that Gorsky would resign in August and be replaced by long-time executive Joaquin Duato in January. There will also be a split to address criticisms from some Democrats in Congress of another move by J & J. J & J faces thousands of proceedings alleging that talc-based baby powder, which has been discontinued in the United States and Canada, caused ovarian cancer. Senator Dick Durbin of Illinois and Elizabeth Warren of Massachusetts have recently asked for more information about the newly established subsidiary that filed for Chapter 11 bankruptcy protection. In a letter on November 10, Senator called the move a “corporate shell game” and said it would protect the company from liability in that case. J & J’s announcement will come a few days after General Electric announces plans to split into three separate companies. We will also follow a similar move by Pfizer, a rival of a major pharmaceutical company. New Jersey-based Johnson & Johnson’s New Brunswick Merck & Co. Shares, which spun off its consumer health products business in 2019, rose less than 2% to $ 165.28. Trading in the morning when the Dow Jones Industrial Average rose slightly. J & J stocks have risen about 4% so far this year and the Dow has risen about 17%. J & J has been a component of the Dow Jones Industrial Average since 1997.

Johnson & Johnson is separating the consumer health business that helped it become the world’s largest manufacturer of healthcare products.

The company announced on Friday that it will separate its over-the-counter drug sales segment, including Band-Aid, Listerine and Tylenol, from its pharmaceutical and medical device businesses.

Corporate leaders told analysts that splitting into two publicly traded companies would increase the agility of each business to adapt to its market. It also allows for more accurate allocation of capital.

CEO Alex Gorsky said the company’s broad focus had worked in the past, but the split corresponds to a segment that “evolved as a radically different business.”

“We have seen significant evolution in these markets, especially on the consumer side,” said Gorsky, who noted some of the accelerated transition to online shopping during the COVID-19 pandemic.

J & J’s two major businesses, the segment selling prescription drugs and medical devices, retain the Johnson & Johnson name. Its products include Darzalex for cancer treatment, COVID-19 vaccine, orthopedic and surgical medical devices.

The new consumer health company has not yet been named. It houses brands such as Neutrogena, Aveno, and the iconic Band-Aid created by company employees over 100 years ago.

Pharmaceuticals and medical devices generated total revenue of $ 19.6 billion in the company’s recently completed third quarter. This is better than analysts expected. Consumer health has brought $ 3.7 billion.

Related Video: General Electric splits into three companies

Gorsky says there are more than 20 brands in the consumer health business, each with annual sales of over $ 150 million. He added that the portfolio includes well-known names such as Tylenol for children and Tylenol for children, which have reached record highs in market share.

Analysts asked company leaders on Friday why they are making changes now when they advertised J & J’s diversity in the past as a way to offset or balance the recession in a particular segment.

“I think we consistently had the belief that a diversified portfolio was rooted in strategy,” Gorsky said. “But it’s not fixed in strategy.”

Founded in 1886, Johnson & Johnson said the split would occur over the next two years if approved by the company’s board of directors.

J & J is also in the process of transitioning leadership and is starting to split. The company announced in August that Gorsky would resign and be replaced by long-time executive Joaquin Duato in January.

The split also occurs when J & J addresses criticism from some Democrats in Congress about the move of another company. J & J faces thousands of proceedings alleging that talc-based baby powder, which has been discontinued in the United States and Canada, caused ovarian cancer.

Senator Dick Durbin of Illinois and Senator Elizabeth Warren of Massachusetts recently sent a letter to the company asking for more information about the newly established subsidiary that filed for Chapter 11 Bankruptcy Protection.

In a letter on November 10, Senator called the move a “corporate shell game” and protected the company from liability in such cases.

A company official said the split announced on Friday was “separate and different” from the baby powder situation.

J & J will be announced in a few days General Electric said it plans to split To three separate companies.

It also follows similar moves by rivals Pfizer and Merck, which spun off the consumer health products business in 2019.

New Brunswick, NJ-based Johnson & Johnson shares rose less than 2% to $ 165.28 in midnight trading, while the Dow Jones Industrial Average rose slightly.

The Dow has surged about 17%, while J & J shares have already risen about 4% so far this year.

J & J has been a component of the Dow Jones Industrial Average since 1997.

Johnson & Johnson splits into two companies

Source link Johnson & Johnson splits into two companies

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