Medical Design Briefs - November 2024 - 12

Inside the OEM
A big focus, he said, will be how such a
complex organization can simplify how
it works. " Over the last six months, [J&J]
has actually moved 40,000 people across
our business into our business units. And
we're moving away from a centralized
operating model to a decentralized one
that gives our business units direct endto-end
accountability for their business. "
Schmid subscribes to the philosophy
that accountability is everything. " The
buck needs to stop with one business
unit. And as you know, across medtech,
specialization really matters. And I do
think this shift that we're driving within
Johnson & Johnson is going to increase
our speed and our ability to adapt to local
market conditions, " he said. " By centralizing,
we're going to deliver better
outcomes and be able to leverage our
scale and its areas that makes sense. For
example, we still maintained a central
approach to procurement where we can
leverage our buying power. "
M&A Strategy: Big Bets
The M&A strategy for J&J MedTech is
one that centers on three areas: scientific,
strategic, and financial. Meeting these
three criteria drives the company's
investment decision-making, providing
strength to the balance sheet and high
growth in high-margin business areas.
For J&J, Schmid said that size really
isn't a major factor
as the company
makes M&A decisions. " We really focus
on three key factors: Scientific. Is there a
really significant unmet need and a technology
that creates differentiation for
our customers? Strategic. Does it fit with
our strategy, and does it align to the capabilities
we currently have? And then,
of course, financial. Does it deliver the
returns we need to ensure we meet our
commitments to all of our stakeholders?
That's the way we look at it. "
J&J has made some big acquisitions,
most notably in Abiomed and Shockwave.
But, Schmid said, the company has
also made some nice " tuck-ins " in both
Laminar, which gets J&J into left atrial
appendage, and then more recently,
V-Wave. " When you look back over the
last 20 years, not just for our medtech
business, but also for our innovative
medicine businesses, over 90 percent of
our deals tend to be south of $1 billion.
We like those. But as you've seen, we're
certainly willing to make bigger bets.
This is where the strength of our balance
12
sheet at Johnson & Johnson is very beneficial
to all of our businesses. And for the
right reasons, we'll continue to make big
bets, " he said.
" What helps me in the job that I have is
that I have a CEO who has declared that
we will continue to build a best-in-class
medtech company, " Schmid said. " And
certainly, when you look at the investments
we've made across the corporation,
we've been the beneficiaries of some
tremendous investments in medtech. "
He also explained why cardiovascular
is an amazing focus for J&J. " In most industries,
the largest category tends to be
the slow growth categories. It's exactly
the opposite in medtech. And if you look
at the size of the cardiovascular category,
it's upwards of $60 billion. It's growing 8
percent. That's an extra $5 billion that
part of the business is adding to the industry.
And so, it's very attractive. "
J&J already had very strong established
leadership position with its electrophysiology
business, but the company hadn't
participated in interventional cardiology
where many of its competitors did. The
move into Abiomed, he said, was a deliberate
move to start shifting into that
area. Shockwave, he said, was a fast follower
to give J&J a foothold into coronary
artery disease and peripheral. " Our
expectation is we will continue to invest
both organically and inorganically where
it makes sense, " he said, noting that J&J's
positions in cardiovascular are all highgrowth
and higher-margin businesses.
" As long as it meets those sort of criteria,
we'll continue to grow in that area. "
Portfolio Performance
Schmid pointed to some of the headwinds
that drove the less-than-expected
performance. He said that these are being
addressed, but also noted that some
of them are out of the company's control,
primarily stocking dynamics in the
United States. " We had some supply
challenges last year on the back of
COVID. We saw a reduction in distributor
inventory, which bled both first and
second quarter, " he said. " We are seeing
a sequential improvement in the second
half. And thankfully, that has continued.
And so, our contact lens business, I feel
very confident will continue to improve. "
The other surprise, he said, was doCARTO™
3 System Version 8 advances the CARTO™
mapping capabilities by bringing advanced tools for physicians
across a range of procedures. (Credit: Johnson
& Johnson MedTech)
ing business in China because it will be
a headwind, not just for this year, but
for next year.
" But when I look at the momentum
we have in the other businesses, that's
what gives me confidence. It's the cardiovascular
portfolio we have. Even with
the competition that we're seeing in
electrophysiology, that is upwards of $5
billion business that will once again grow
double digit this year. And then, of
course, all of the new assets we have in
the Cardiovascular space. And so, all
those together, we feel very confident
that we'll continue to meet that commitment
that we made to grow in that 5-7
percent range. "
Schmid said that J&J remains very
bullish. " We've been fortunate to receive
The MONARCH Platform, used with the MONARCH
Bronchoscope, is intended to provide bronchoscopic
visualization of and access to adult patient airways for
diagnostic and therapeutic procedures. (Credit: Johnson
& Johnson MedTech)
www.medicaldesignbriefs.com
the investment we have in our segment. "
He said all investments, including
Abiomed and Shockwave are all performing
on par with expectations.
Medical Design Briefs, November 2024
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Medical Design Briefs - November 2024

Table of Contents for the Digital Edition of Medical Design Briefs - November 2024

Medical Design Briefs - November 2024 - Intro
Medical Design Briefs - November 2024 - Sponsor
Medical Design Briefs - November 2024 - COV1a
Medical Design Briefs - November 2024 - COV1b
Medical Design Briefs - November 2024 - COV1
Medical Design Briefs - November 2024 - COV2
Medical Design Briefs - November 2024 - 1
Medical Design Briefs - November 2024 - 2
Medical Design Briefs - November 2024 - 3
Medical Design Briefs - November 2024 - 4
Medical Design Briefs - November 2024 - 5
Medical Design Briefs - November 2024 - 6
Medical Design Briefs - November 2024 - 7
Medical Design Briefs - November 2024 - 8
Medical Design Briefs - November 2024 - 9
Medical Design Briefs - November 2024 - 10
Medical Design Briefs - November 2024 - 11
Medical Design Briefs - November 2024 - 12
Medical Design Briefs - November 2024 - 13
Medical Design Briefs - November 2024 - 14
Medical Design Briefs - November 2024 - 15
Medical Design Briefs - November 2024 - 16
Medical Design Briefs - November 2024 - 17
Medical Design Briefs - November 2024 - 18
Medical Design Briefs - November 2024 - 19
Medical Design Briefs - November 2024 - 20
Medical Design Briefs - November 2024 - 21
Medical Design Briefs - November 2024 - 22
Medical Design Briefs - November 2024 - 23
Medical Design Briefs - November 2024 - 24
Medical Design Briefs - November 2024 - 25
Medical Design Briefs - November 2024 - 26
Medical Design Briefs - November 2024 - 27
Medical Design Briefs - November 2024 - 28
Medical Design Briefs - November 2024 - 29
Medical Design Briefs - November 2024 - 30
Medical Design Briefs - November 2024 - 31
Medical Design Briefs - November 2024 - 32
Medical Design Briefs - November 2024 - 33
Medical Design Briefs - November 2024 - 34
Medical Design Briefs - November 2024 - 35
Medical Design Briefs - November 2024 - 36
Medical Design Briefs - November 2024 - 37
Medical Design Briefs - November 2024 - 38
Medical Design Briefs - November 2024 - 39
Medical Design Briefs - November 2024 - 40
Medical Design Briefs - November 2024 - 41
Medical Design Briefs - November 2024 - 42
Medical Design Briefs - November 2024 - 43
Medical Design Briefs - November 2024 - 44
Medical Design Briefs - November 2024 - 45
Medical Design Briefs - November 2024 - 46
Medical Design Briefs - November 2024 - 47
Medical Design Briefs - November 2024 - 48
Medical Design Briefs - November 2024 - 49
Medical Design Briefs - November 2024 - 50
Medical Design Briefs - November 2024 - COV3
Medical Design Briefs - November 2024 - COV4
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https://www.nxtbook.com/smg/techbriefs/23MDB06
https://www.nxtbook.com/smg/techbriefs/23MDB05
https://www.nxtbook.com/smg/techbriefs/23MDB04
https://www.nxtbook.com/smg/techbriefs/23MDB03
https://www.nxtbook.com/smg/techbriefs/23MDB02
https://www.nxtbook.com/smg/techbriefs/23MDB01
https://www.nxtbook.com/smg/techbriefs/techleaders22
https://www.nxtbook.com/smg/techbriefs/22MDB12
https://www.nxtbook.com/smg/techbriefs/22MDB11
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https://www.nxtbook.com/smg/techbriefs/techleaders21
https://www.nxtbook.com/smg/techbriefs/22MDB03
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https://www.nxtbook.com/smg/techbriefs/21MDB12
https://www.nxtbook.com/smg/techbriefs/21MDB11
https://www.nxtbook.com/smg/techbriefs/21MDB10
https://www.nxtbook.com/smg/techbriefs/21MDB09
https://www.nxtbook.com/smg/techbriefs/21MDB08
https://www.nxtbook.com/smg/techbriefs/21MDB07
https://www.nxtbook.com/smg/techbriefs/21MDB06
https://www.nxtbook.com/smg/techbriefs/21MDB05
https://www.nxtbook.com/smg/techbriefs/21MDB04
https://www.nxtbook.com/smg/techbriefs/21MDB02
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