07.31.13
1. Johnson & Johnson
$27.4 Billion ($67.2B total)
KEY EXECUTIVES:
Alex Gorsky, CEO & Chairman, Executive Committee
Michel Orsinger, Worldwide Chairman, DePuy Synthes Companies
Dominic J. Caruso, VP, Finance & CFO
Karen A. Licitra, Chairman, Global Medical Solutions Group
Gary J. Pruden, Chairman, Global Surgery Group
Charles E. Austin, VP, Global Supply Chain
NO. OF EMPLOYEES: 127,600 (total)
GLOBAL HEADQUARTERS: New Brunswick, N.J.
Healthcare powerhouse Johnson & Johnson (JNJ) again takes the top spot on Medical Product Outsourcing’s annual list of leading medical device OEMs. The company, with product lines across all areas of the clinical spectrum, has brand recognition on Main Street like no other healthcare firm—most likely because of its widely known consumer products such as Tylenol, Q-Tips and baby shampoo—but it also has Wall Street’s attention with an even broader array of market-leading pharmaceutical and medical device products.
It’s safe to say that for JNJ’s Medical Devices and Diagnostics division, which is responsible for approximately 41 percent of the company’s sales, the big news in fiscal 2012 (ended Dec. 31) was the completion of the long-awaited purchase of Switzerland’s Synthes Inc., a boon for the company’s DePuy orthopedic division. The deal was announced in April 2011 and was closed in June last year.
By the time all the antitrust requirements were settled on both sides of the Atlantic, the final price for the company was $19.7 billion in cash and stock—the largest in JNJ’s history. European Union authorities had worried that the deal would make JNJ untouchable in the already concentrated $5.5 billion trauma device market. To make regulators happy, JNJ sold DePuy’s trauma holdings. In April 2012, Biomet stepped up as the buyer—to the tune of $280 million.
Even after divesting it’s trauma business to Biomet, JNJ’s blockbuster Synthes deal, which created the DePuy Synthes Companies of Johnson & Johnson, will have the majority share of the trauma market. Before the buyout, Synthes already had cornered 50 percent of the market for screws, plates, bone grafts and other products to treat skeletal injuries. Analysts claimed that JNJ’s primary interest in Synthes was the company’s spinal technology. Like many other large companies, Johnson & Johnson has been looking for key acquisitions to bolster sales and expand in new markets. Since the start of 2010, JNJ has had more than 50 drug and devices recalls. The recalls have cost the company around $900 million in annual sales, which resulted in pressure to find new revenue drivers and earnings growth.
“The completion of the Synthes acquisition creates the world’s most innovative and comprehensive orthopedics business and reflects our long-standing strategy of leadership within attractive health care markets,” said Alex Gorsky, JNJ’s CEO, only in his job a few months at the time. “The combination of these two leaders—Synthes and DePuy—will enable us to better serve clinicians and patients worldwide, bring new innovations to the marketplace in orthopedics and neurologics, and strengthen our ability to compete in developing markets.”
Gorsky was named JNJ’s CEO in February 2012—a difficult month for the company. First came the Feb. 13 poor showing in Harris Interactive’s annual consumer poll of corporate images, where the company ranked seventh (falling from one of the top two spots for the first time 13 years). Then there was the Feb. 17 recall of more than 500,000 bottles of infants’ Tylenol due to complaints with the dosing system. And in the midst of all the tumult was the constant barrage of lawsuits over faulty replacement hips and potentially dangerous vaginal mesh products.
With such troubles plaguing the New Brunswick, N.J.-based healthcare conglomerate, few analysts were surprised to learn that the company appointed a new chief executive and reduced William C. Weldon’s role to chairman. Gorsky, a former army captain and endurance athlete, has spent two decades at JNJ, most recently leading the Medical Devices and Diagnostics Group.
“Gorsky is a conservative choice and the strongest internal candidate,” Erik Gordon, a business professor at the University of Michigan in Ann Arbor, told Bloomberg. “That’s a big deal at a company that always taps an insider as its next CEO—even if what they need is someone from outside the team that led the company into so much trouble.”
Weldon had been blamed for much of JNJ’s troubles. He became CEO in 2002 after spending his entire career at the company. Critics accused Weldon of allowing JNJ’s once-staunch attention to quality erode through the years, resulting in the manufacture of drugs with foul odors, adulterated ingredients and/or bad labeling as well as metal hips that wore out and failed long before they should have.
At the time of his departure, JNJ’s DePuy unit faced more than 4,500 lawsuits over the ASR XL Acetabular System, a hip socket used in traditional replacement surgery, and the ASR Hip Resurfacing System, a partial hip replacement that involves placing a metal cap on the ball of the femur to preserve more bone. Both products were recalled in August 2010. As of early 2012, JNJ had recalled 93,000 hips worldwide, including 37,000 in the United States, warning that more than 12 percent failed within five years.
In the wake of those recalls and others, JNJ initiated a public relations campaign aimed at restoring consumer confidence and revised its quality control mandates to create a single framework for the company’s drug, medical device and consumer healthcare divisions. That response included a comprehensive plan to improve conditions and quality standards at the manufacturing plant that produced many of the adulterated products.
After taking the reins of the venerable firm, Gorsky became only the ninth CEO in JNJ’s 126-year history, according to Bloomberg. He joined the firm’s Janssen Pharmaceuticals unit in 1988 as a sales representative and then worked in various positions in sales, marketing and management during the next 15 years. In 2001, Gorsky became president of Janssen and was promoted two years later to company group chairman of JNJ’s pharmaceuticals business in Europe, the Middle East and Africa. Gorsky left JNJ in 2004 to become head of North American pharmaceuticals for Basel, Switzerland-based Novartis AG. He returned four years later, however, as company group chairman and worldwide franchise chairman for Ethicon in the medical devices business. In 2009, Gorsky was appointed worldwide chairman of the surgical care group and to JNJ’s executive committee.
Some critics feel JNJ should have looked outside for its leadership. Michael A. Kelly, a San Francisco, Calif.-based attorney suing the company, said he was shocked by JNJ’s change in leadership.
“It’s clear that the medical device division was not being well supervised, managed or run, certainly from 2006 through 2010, when the entire ASR debate was going forward,” Kelly, of Walkup, Melodia, Kelly & Shoenberger, noted to Bloomberg reporters. “I would think somebody would say at what cost are we making the profits and what message does it send that we promote the person who was in charge of this division to an even higher job, given the way that the entire ASR issue was handled.”
Gorsky holds a Bachelor of Science degree from the U.S. Military Academy at West Point, N.Y., and spent six years in the U.S. Army. In 1996, he earned a Master of Business Administration from the Wharton School of the University of Pennsylvania. Gorsky was named company chairman in November 2012.
With a company as large as JNJ, there of course were a number of notable new product rollouts throughout 2012 across its medical device business. Some of the key launches included:
Last year also was notable, because JNJ purchased its first Chinese medical device maker, Guangzhou Bioseal Biotech. The deal was finalized in May after it received the appropriate Chinese government approvals, but terms of the deal were not disclosed.
“This transaction reinforces our commitment to China and delivering innovative medical device solutions to the Chinese market,” said Xie Wen Jian, president of JNJ China Medical. “We are very pleased to add the Bioseal brand to our growing portfolio of hemostasis products in China and we look forward to working with our new Bioseal colleagues to bring their innovative products to more physicians and patients.”
JNJ has been doing business in China for more than 25 years, and just last year launched a medical device and diagnostics innovation center there.
Bioseal manufactures a porcine-derived fibrin sealant named Bioseal, currently the only porcine plasma-derived fibrin sealant approved for use in China. Fibrin sealants are used by surgeons alongside hemostasis for use in patients undergoing surgery, when control of bleeding by standard surgical techniques is ineffective or impractical.
JNJ company Ethicon, which produces a line of hemostats, will work closely with Bioseal, company officials said.
“By adding Bioseal to the existing line of Ethicon hemostasis products sold in China, we aspire to shape the broader biosurgery market in Asia by providing physicians and their patients with an even greater variety of innovative and clinical-based solutions to address bleeding, sealing and leaking challenges,” said Michael del Prado, company group chairman of JNJ Medical Asia Pacific.
Johnson & Johnson (China) Investment Ltd., the branch of JNJ that announced and handled the acquisition, is a foreign investment entity established in China by JNJ in 1998.
Ethicon, based in Somerville, N.J., produces surgical care products in the wound closure; general surgery; wound management; biosurgicals; women’s health and urology; aesthetic medicine; and ear, nose and throat sectors.
The Bottom Line
JNJ’s worldwide medical device and diagnostics sales were $27.4 billion for 2012—an increase of 6.4 percent compared with 2011, factoring an operational increase of 8.7 percent and a decrease from currency of 2.3 percent. Domestic sales increased 8.7 percent; international sales increased 4.5 percent, which reflected an operational increase of 8.6 percent and a negative currency effect of 4.1 percent. Sales, of course, included the impact of the recently completed acquisition of Synthes, which contributed 7.9 percent to worldwide operational sales growth, including the divestiture of the DePuy trauma business. The orthopedics franchise achieved sales of $7.8 billion in 2012, a 34.3 percent increase from 2011. Growth primarily was due to sales of newly acquired products from Synthes, and sales of joint reconstruction and Mitek sports medicine products. Sales were impacted by the divestitures of the surgical instruments business of Codman & Shurtleff Inc. in the fiscal fourth quarter of 2011, and the divestiture of the trauma business. The positive impact on the orthopedics franchise total sales growth and operational growth due to newly acquired products from Synthes, including the trauma business sale, was 34.7 percent. Surgical care franchise sales were $6.5 billion in 2012, a decrease of 2.3 percent from the prior year. Lower sales of mechanical, breast care and pelvic floor products were partially offset by increased sales of sutures and endoscopy products with the success of the Echelon Flex-powered Endopath stapler. The company’s vision care franchise achieved sales of $3 billion, a 2.7 percent increase, driven by Acuvue TruEye, 1-Day Acuvue Moist for Astigmatism and 1-Day Acuvue Moist. Sales from the diabetes care franchise decreased 1.4 percent to $2.6 billion. Sales growth in Asia and Latin America was offset by the negative impact of currency. The specialty surgery devices drove sales of $2.5 billion in 2012, a 4.9 percent increase. Sales of biosurgery products and international sales of energy products were the major contributors to the growth, company officials noted. The cardiovascular care franchise sales were $2 billion, a decline of 13.2 percent. Sales were impacted by the company’s decision to exit the drug-eluting stent market in the second quarter of 2011, and lower sales of endovascular products, impacted by competitive launches and a disruption in supply that was resolved late in the third quarter. The decline in sales was partially offset by strong growth in Biosense Webster’s electrophysiology business primarily due to the success of the ThermoCool catheter launches. The infection prevention business achieved sales of $1 billion, a 5.1 percent increase primarily due to growth in the advanced sterilization business.
Diagnostics franchise sales were $2.1 billion, a decline of 4.4 percent, primarily due to lower sales in donor screening due to competitive pressures. In January 2013, the company announced it is exploring strategic alternatives for the Ortho-Clinical Diagnostics business, including a possible sale.
Pre-tax profits for the medical device businesses were roughly $7.2 billion, an increase of 37 percent—once again, the Synthes deal helped to substantially grow that number.
For the company overall, sales were $67.2 billion, up from $65 billion in 2011. Net earnings were $10.5 billion, up from $9.7 billion the year before. U.S. and international sales increased.
$27.4 Billion ($67.2B total)
KEY EXECUTIVES:
Alex Gorsky, CEO & Chairman, Executive Committee
Michel Orsinger, Worldwide Chairman, DePuy Synthes Companies
Dominic J. Caruso, VP, Finance & CFO
Karen A. Licitra, Chairman, Global Medical Solutions Group
Gary J. Pruden, Chairman, Global Surgery Group
Charles E. Austin, VP, Global Supply Chain
NO. OF EMPLOYEES: 127,600 (total)
GLOBAL HEADQUARTERS: New Brunswick, N.J.
Healthcare powerhouse Johnson & Johnson (JNJ) again takes the top spot on Medical Product Outsourcing’s annual list of leading medical device OEMs. The company, with product lines across all areas of the clinical spectrum, has brand recognition on Main Street like no other healthcare firm—most likely because of its widely known consumer products such as Tylenol, Q-Tips and baby shampoo—but it also has Wall Street’s attention with an even broader array of market-leading pharmaceutical and medical device products.
It’s safe to say that for JNJ’s Medical Devices and Diagnostics division, which is responsible for approximately 41 percent of the company’s sales, the big news in fiscal 2012 (ended Dec. 31) was the completion of the long-awaited purchase of Switzerland’s Synthes Inc., a boon for the company’s DePuy orthopedic division. The deal was announced in April 2011 and was closed in June last year.
By the time all the antitrust requirements were settled on both sides of the Atlantic, the final price for the company was $19.7 billion in cash and stock—the largest in JNJ’s history. European Union authorities had worried that the deal would make JNJ untouchable in the already concentrated $5.5 billion trauma device market. To make regulators happy, JNJ sold DePuy’s trauma holdings. In April 2012, Biomet stepped up as the buyer—to the tune of $280 million.
Even after divesting it’s trauma business to Biomet, JNJ’s blockbuster Synthes deal, which created the DePuy Synthes Companies of Johnson & Johnson, will have the majority share of the trauma market. Before the buyout, Synthes already had cornered 50 percent of the market for screws, plates, bone grafts and other products to treat skeletal injuries. Analysts claimed that JNJ’s primary interest in Synthes was the company’s spinal technology. Like many other large companies, Johnson & Johnson has been looking for key acquisitions to bolster sales and expand in new markets. Since the start of 2010, JNJ has had more than 50 drug and devices recalls. The recalls have cost the company around $900 million in annual sales, which resulted in pressure to find new revenue drivers and earnings growth.
“The completion of the Synthes acquisition creates the world’s most innovative and comprehensive orthopedics business and reflects our long-standing strategy of leadership within attractive health care markets,” said Alex Gorsky, JNJ’s CEO, only in his job a few months at the time. “The combination of these two leaders—Synthes and DePuy—will enable us to better serve clinicians and patients worldwide, bring new innovations to the marketplace in orthopedics and neurologics, and strengthen our ability to compete in developing markets.”
Gorsky was named JNJ’s CEO in February 2012—a difficult month for the company. First came the Feb. 13 poor showing in Harris Interactive’s annual consumer poll of corporate images, where the company ranked seventh (falling from one of the top two spots for the first time 13 years). Then there was the Feb. 17 recall of more than 500,000 bottles of infants’ Tylenol due to complaints with the dosing system. And in the midst of all the tumult was the constant barrage of lawsuits over faulty replacement hips and potentially dangerous vaginal mesh products.
With such troubles plaguing the New Brunswick, N.J.-based healthcare conglomerate, few analysts were surprised to learn that the company appointed a new chief executive and reduced William C. Weldon’s role to chairman. Gorsky, a former army captain and endurance athlete, has spent two decades at JNJ, most recently leading the Medical Devices and Diagnostics Group.
“Gorsky is a conservative choice and the strongest internal candidate,” Erik Gordon, a business professor at the University of Michigan in Ann Arbor, told Bloomberg. “That’s a big deal at a company that always taps an insider as its next CEO—even if what they need is someone from outside the team that led the company into so much trouble.”
Weldon had been blamed for much of JNJ’s troubles. He became CEO in 2002 after spending his entire career at the company. Critics accused Weldon of allowing JNJ’s once-staunch attention to quality erode through the years, resulting in the manufacture of drugs with foul odors, adulterated ingredients and/or bad labeling as well as metal hips that wore out and failed long before they should have.
At the time of his departure, JNJ’s DePuy unit faced more than 4,500 lawsuits over the ASR XL Acetabular System, a hip socket used in traditional replacement surgery, and the ASR Hip Resurfacing System, a partial hip replacement that involves placing a metal cap on the ball of the femur to preserve more bone. Both products were recalled in August 2010. As of early 2012, JNJ had recalled 93,000 hips worldwide, including 37,000 in the United States, warning that more than 12 percent failed within five years.
In the wake of those recalls and others, JNJ initiated a public relations campaign aimed at restoring consumer confidence and revised its quality control mandates to create a single framework for the company’s drug, medical device and consumer healthcare divisions. That response included a comprehensive plan to improve conditions and quality standards at the manufacturing plant that produced many of the adulterated products.
After taking the reins of the venerable firm, Gorsky became only the ninth CEO in JNJ’s 126-year history, according to Bloomberg. He joined the firm’s Janssen Pharmaceuticals unit in 1988 as a sales representative and then worked in various positions in sales, marketing and management during the next 15 years. In 2001, Gorsky became president of Janssen and was promoted two years later to company group chairman of JNJ’s pharmaceuticals business in Europe, the Middle East and Africa. Gorsky left JNJ in 2004 to become head of North American pharmaceuticals for Basel, Switzerland-based Novartis AG. He returned four years later, however, as company group chairman and worldwide franchise chairman for Ethicon in the medical devices business. In 2009, Gorsky was appointed worldwide chairman of the surgical care group and to JNJ’s executive committee.
Some critics feel JNJ should have looked outside for its leadership. Michael A. Kelly, a San Francisco, Calif.-based attorney suing the company, said he was shocked by JNJ’s change in leadership.
“It’s clear that the medical device division was not being well supervised, managed or run, certainly from 2006 through 2010, when the entire ASR debate was going forward,” Kelly, of Walkup, Melodia, Kelly & Shoenberger, noted to Bloomberg reporters. “I would think somebody would say at what cost are we making the profits and what message does it send that we promote the person who was in charge of this division to an even higher job, given the way that the entire ASR issue was handled.”
Gorsky holds a Bachelor of Science degree from the U.S. Military Academy at West Point, N.Y., and spent six years in the U.S. Army. In 1996, he earned a Master of Business Administration from the Wharton School of the University of Pennsylvania. Gorsky was named company chairman in November 2012.
With a company as large as JNJ, there of course were a number of notable new product rollouts throughout 2012 across its medical device business. Some of the key launches included:
- U.S. Food and Drug Administration (FDA) approval of Ethicon Biosurgery’s Evarrest fibrin sealant patch that, according to the company, “rapidly and reliably” helps to stop problematic bleeding during surgery. Unexpected and uncontrollable bleeding during surgery poses a significant challenge to surgeons, and in some surgical procedures can raise a patient’s mortality rate to 20 percent. FDA approved the technology for use with manual compression as an adjunct to hemostasis for soft tissue bleeding during open retroperitoneal, intra-abdominal, pelvic and non-cardiac thoracic surgery, when control of bleeding by standard surgical methods of hemostasis (e.g., suture, ligature, cautery) is ineffective or impractical.
- In November, JNJ’s Cordis cardiovascular division received FDA approval for the SMART Control vascular stent systems for use in the superficial femoral artery (SFA) and/or the proximal popliteal artery. The SMART stent, which has been approved for peripheral indication in international markets since 1999, was the first stent in the United States with both Iliac and SFA indications, according to the company. One of the most common vascular diseases, Peripheral Arterial Disease (PAD), occurs when leg arteries become narrowed or blocked by plaque. The blockages can result in severe pain, limited physical mobility and non-healing leg ulcers. According to the American Heart Association, approximately 10 million people in the United States suffer from PAD.
- Ethicon Endo-Surgery division received FDA 510(k) clearance for the Harmonic Ace + Shears with Adaptive Tissue Technology, adding to the Harmonic portfolio of ultrasonic surgical devices that can handle multiple surgical jobs, including dissection, sealing, transection, and ostomy creation. The system’s Adaptive Tissue Technology responds to varying tissue conditions by regulating energy delivery and providing surgeons with enhanced audible feedback. It is designed for use in numerous specialties and procedures, including general surgery, bariatric, colorectal, gynecology and urology. The Harmonic line was launched in 1992.
- In May, JNJ’s Biosense Webster division, a maker of devices for the diagnosis and treatment of cardiac arrhythmias, had the U.S. launch of its ThermoCool SF NAV irrigated ablation catheter with Curve Visualization. The device combines Biosense Webster’s porous tip technology with the visualization of the Carto3 3-D mapping and ablation system. It is designed to reduce fluoroscopy exposure to physicians, lab staff and patients, enhance visualization of the ablation catheter’s orientation and improve procedural efficiency. The ThemoCool SF catheter system was introduced in January 2012. The ThermoCool SF NAV catheter is approved in the United States for treatment of drug refractory recurrent symptomatic paroxysmal atrial fibrillation when used with Carto Systems and Type 1 atrial flutter for patients 18 years and older. Atrial fibrillation (AF) is the most prevalent arrhythmia and a leading cause of stroke among people 65 years and older. Worldwide, it is estimated that 20 million people have AF, yet only approximately 130,000 are treated with ablation every year. Many patients with AF take anti-arrhythmic drugs, though about half of them do not respond to the drugs.
- DePuy Orthopaedics Inc., prior to the Synthes merger, received FDA premarket approval its TruMatch Personalized Solutions with DePuy’s Sigma RP knee system. TruMatch for use with DePuy’s Sigma Fixed Bearing knee previously was cleared in August 2011. TruMatch is a surgical instrumentation and computer software system that is designed to aid knee implant positioning and procedure efficiency. It uses computed tomography (CT) scans and computer software to guide the development and production of femoral and tibial cutting blocks that are individually prepared to match the actual bone surfaces of each patient. CT scans, rather than MRIs, are used for improved bone imaging, less scanning time and lower costs.
Last year also was notable, because JNJ purchased its first Chinese medical device maker, Guangzhou Bioseal Biotech. The deal was finalized in May after it received the appropriate Chinese government approvals, but terms of the deal were not disclosed.
“This transaction reinforces our commitment to China and delivering innovative medical device solutions to the Chinese market,” said Xie Wen Jian, president of JNJ China Medical. “We are very pleased to add the Bioseal brand to our growing portfolio of hemostasis products in China and we look forward to working with our new Bioseal colleagues to bring their innovative products to more physicians and patients.”
JNJ has been doing business in China for more than 25 years, and just last year launched a medical device and diagnostics innovation center there.
Bioseal manufactures a porcine-derived fibrin sealant named Bioseal, currently the only porcine plasma-derived fibrin sealant approved for use in China. Fibrin sealants are used by surgeons alongside hemostasis for use in patients undergoing surgery, when control of bleeding by standard surgical techniques is ineffective or impractical.
JNJ company Ethicon, which produces a line of hemostats, will work closely with Bioseal, company officials said.
“By adding Bioseal to the existing line of Ethicon hemostasis products sold in China, we aspire to shape the broader biosurgery market in Asia by providing physicians and their patients with an even greater variety of innovative and clinical-based solutions to address bleeding, sealing and leaking challenges,” said Michael del Prado, company group chairman of JNJ Medical Asia Pacific.
Johnson & Johnson (China) Investment Ltd., the branch of JNJ that announced and handled the acquisition, is a foreign investment entity established in China by JNJ in 1998.
Ethicon, based in Somerville, N.J., produces surgical care products in the wound closure; general surgery; wound management; biosurgicals; women’s health and urology; aesthetic medicine; and ear, nose and throat sectors.
The Bottom Line
JNJ’s worldwide medical device and diagnostics sales were $27.4 billion for 2012—an increase of 6.4 percent compared with 2011, factoring an operational increase of 8.7 percent and a decrease from currency of 2.3 percent. Domestic sales increased 8.7 percent; international sales increased 4.5 percent, which reflected an operational increase of 8.6 percent and a negative currency effect of 4.1 percent. Sales, of course, included the impact of the recently completed acquisition of Synthes, which contributed 7.9 percent to worldwide operational sales growth, including the divestiture of the DePuy trauma business. The orthopedics franchise achieved sales of $7.8 billion in 2012, a 34.3 percent increase from 2011. Growth primarily was due to sales of newly acquired products from Synthes, and sales of joint reconstruction and Mitek sports medicine products. Sales were impacted by the divestitures of the surgical instruments business of Codman & Shurtleff Inc. in the fiscal fourth quarter of 2011, and the divestiture of the trauma business. The positive impact on the orthopedics franchise total sales growth and operational growth due to newly acquired products from Synthes, including the trauma business sale, was 34.7 percent. Surgical care franchise sales were $6.5 billion in 2012, a decrease of 2.3 percent from the prior year. Lower sales of mechanical, breast care and pelvic floor products were partially offset by increased sales of sutures and endoscopy products with the success of the Echelon Flex-powered Endopath stapler. The company’s vision care franchise achieved sales of $3 billion, a 2.7 percent increase, driven by Acuvue TruEye, 1-Day Acuvue Moist for Astigmatism and 1-Day Acuvue Moist. Sales from the diabetes care franchise decreased 1.4 percent to $2.6 billion. Sales growth in Asia and Latin America was offset by the negative impact of currency. The specialty surgery devices drove sales of $2.5 billion in 2012, a 4.9 percent increase. Sales of biosurgery products and international sales of energy products were the major contributors to the growth, company officials noted. The cardiovascular care franchise sales were $2 billion, a decline of 13.2 percent. Sales were impacted by the company’s decision to exit the drug-eluting stent market in the second quarter of 2011, and lower sales of endovascular products, impacted by competitive launches and a disruption in supply that was resolved late in the third quarter. The decline in sales was partially offset by strong growth in Biosense Webster’s electrophysiology business primarily due to the success of the ThermoCool catheter launches. The infection prevention business achieved sales of $1 billion, a 5.1 percent increase primarily due to growth in the advanced sterilization business.
Diagnostics franchise sales were $2.1 billion, a decline of 4.4 percent, primarily due to lower sales in donor screening due to competitive pressures. In January 2013, the company announced it is exploring strategic alternatives for the Ortho-Clinical Diagnostics business, including a possible sale.
Pre-tax profits for the medical device businesses were roughly $7.2 billion, an increase of 37 percent—once again, the Synthes deal helped to substantially grow that number.
For the company overall, sales were $67.2 billion, up from $65 billion in 2011. Net earnings were $10.5 billion, up from $9.7 billion the year before. U.S. and international sales increased.