Medical Design Briefs - January 2023 - 17

Inside
the OEM:
Johnson & Johnson
F
or more than 130 years, Johnson
& Johnson has been synonymous
with healthcare. Today,
as one of world's largest healthcare
companies, it manufactures
many pharmaceutical, medtech,
and consumer products.
But just over a year ago, the conglomerate
made a major shift, creating a new
publicly traded company - Kenvue -
as the new corporate brand for its consumer
products. This move serves to not
only strengthen the consumer arm, but
to allow the company to focus on growing
its biopharmaceutical and medical
device businesses. In early 2022, J&J had
also named Joaquin Duato as its new
CEO to replace Alex Gorsky, who had
served in that role since 2012. Larry
Merlo, former president and CEO of
CVS Health, has been appointed nonexecutive
chair of the new consumer
health company. Kenvue's purpose, to
" Realize the Extraordinary Power of Everyday
Care, " will guide the company's
actions and long-term aspirations, from
strategy to talent philosophy.
" This planned transaction would create
two businesses that are each financially
strong and leaders in their respective industries.
We believe that the new Johnson
& Johnson and the New Consumer Health
Company would each be able to more efMedical
Design Briefs, January 2023
fectively allocate resources to deliver for
patients and consumers, drive growth,
and unlock significant value, " Duato said.
" Importantly, the new Johnson & Johnson
and the new consumer health company
would remain mission-driven companies
with exceptional brands, commitments to
innovation, and remarkable talent. Each
company would carry on the Johnson &
Johnson legacy of putting the needs and
well-being of the people we serve first. "
The reconfigured Johnson & Johnson
is poised to continue to play a leading
role in advancing these industries.
" Since becoming CEO, I have tried to
reconnect in my new role with our employees
globally and with important stakeholders, "
said Duato, who spoke at the
Morgan Stanley 20th Annual Global
Healthcare Conference in September
2022. " My impression when I talked to
employees, investors, and government officials
is that they have a strong expectation
of what Johnson & Johnson can do
and what our contribution can be to advanced
healthcare - and they have a
high bar for us. "
J&J's Global Goals for 2023
A key deliverable for J&J in 2023 is the
separation of the consumer company
and the creation of what Duato calls " a
global consumer champion. "
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" This is a historical moment for Johnson
& Johnson and a historical opportunity
to make the new Johnson & Johnson
focus on pharma and medtech more
competitive, nimbler, and faster, " he said.
The planned separation is expected to
create value for all stakeholders by aiming
to achieve the following key goals:
* Increase management focus, resources,
agility, and speed to effectively address
differing industry trends and to
better meet the needs of the new
Johnson & Johnson and the new consumer
health company patients and
consumers.
* Further focus capital allocation based
on the objectives of each independent
company.
* Provide each company with a compelling
financial profile that more accurately
reflects the strengths and opportunities
of each business and, as a
result, offers investors a more targeted
investment opportunity.
* Align corporate and operational structures
so each company is better able to
drive growth and value creation.
With that realignment under way, Duato's
second priority is to make sure that
medtech is a best-in-class franchise for
Johnson & Johnson. " We are already the
second largest medtech company globally,
and we are on a journey of improve17
Joaquin
Duato has served as
Johnson & Johnson's CEO
and a member of the board
of directors since January
2022. He will assume the
additional position of chairman,
effective in January
2023. (Credit: Johnson &
Johnson)
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Medical Design Briefs - January 2023

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