The transaction would establish a standalone orthopaedics business, operating as DePuy Synthes.
“This transaction enables Johnson & Johnson to further strengthen its focus and investment toward higher-growth areas where we can meaningfully extend and improve patient lives,” said Joaquin Duato, Chairman and Chief Executive Officer, Johnson & Johnson. “The planned separation reflects our long-standing commitment to portfolio optimization and value creation. We are confident that our Orthopaedics business will be better positioned to improve top-line growth and operating margins as a standalone business.”
Following the completion of the separation, Johnson & Johnson will retain a leadership position in six key growth areas across its Innovative Medicine and MedTech segments – Oncology, Immunology, Neuroscience, Cardiovascular, Surgery and Vision. The Company expects that the separation would increase its top-line growth and operating margins.
“This move would further enhance the market-leading position for DePuy Synthes and strengthen our overall MedTech business with a focus on Cardiovascular, Surgery and Vision,” added Tim Schmid, Executive Vice President, Worldwide Chairman, MedTech. “Through the separation process, we will remain focused on setting our talented teams up for long-term success, while continuing to serve our customers and create healthier futures for patients around the world.”
Following the transaction, DePuy Synthes is expected to benefit from a more focused business model and be better positioned to advance patient care while delivering clinical and economic value to health care systems worldwide. DePuy Synthes would continue to address a $50 billion+ global market opportunity and serve approximately seven million patients annually through its wide range of products and services. For fiscal year 2024, the Orthopaedics business generated approximately $9.2 billion in sales.
The Company also announced that Namal Nawana has been appointed to serve as Worldwide President, DePuy Synthes, effective immediately. Nawana will lead the business through the separation process, reporting directly to Duato, and is expected to continue to lead DePuy Synthes following the completion of the separation.
Nawana most recently served as Executive Chairman and Founder of Sapphiros, a privately-held platform company. Previously, he served as Chief Executive Officer and a member of the Board of Directors of Smith & Nephew Plc, a global medical technology business. Prior to that, he served as President and Chief Executive Officer and a member of the Board of Directors of Alere, Inc., a point-of-care diagnostics company, until its acquisition by Abbott. Before joining Alere, he spent more than 15 years at Johnson & Johnson in progressively senior leadership roles globally, including his final role at the Company, Worldwide President of Johnson & Johnson’s DePuy Synthes Spine business.
Duato added, “Namal brings extensive experience leading global public companies and a demonstrated track record of success in growing medical devices businesses. We are pleased to have an executive of Namal’s caliber step into this role and are confident he is the ideal leader to guide the new DePuy Synthes into the future.”
Nawana commented, “I am honored to take on this role to lead the new DePuy Synthes, a global market leader with a deep heritage of innovation and a strong commercial platform that is well positioned to succeed as a standalone company. I look forward to working together with the broader team to meet our mission and keep people around the globe moving.”
Johnson & Johnson intends to explore multiple paths to effect the planned separation. The Company is targeting completion within 18 to 24 months, subject to the satisfaction of certain conditions including, among others, consultations with works councils and other employee representative bodies, as may be required, final approval of the Johnson & Johnson Board of Directors, and the receipt of other regulatory approvals. There can be no assurance regarding the ultimate timing or structure of the proposed separation or that the transaction will be completed.
As the Company pursues this separation, Johnson & Johnson will continue to operate its Orthopaedics business in alignment with its current strategy, including continued investments in growth, margin improvement and innovation.
Citi and Goldman Sachs & Co. LLC are acting as financial advisors to Johnson & Johnson and Freshfields LLP is acting as legal counsel.
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