$22.95 Billion ($82.58 Billion)
Prior Fiscal: $25.96 Billion
Percentage Change: -11.6%
No. of Employees: 134,500 (total)
Global Headquarters: New Brunswick, N.J.
Alex Gorsky, Chairman and CEO
Joaquin Duato, Vice Chairman
Paulus Stoffels, Vice Chairman, Chief Scientific Officer
Joseph J. Wolk, Exec. VP and CFO
Ashley McEvoy, Exec. VP, Worldwide Chairman, Medical Devices
Kathryn E. Wengel, Exec. VP, Chief Global Supply Chain Officer
Michael H. Ullmann, Exec. VP, General Counsel
Robert J. Decker Jr., Corporate Controller, Chief Accounting Officer
Matthew Orlando, Corporate Secretary and Worldwide VP, Corporate Governance
That was the message touted last summer by the Pan American Health Organization and Caribbean Development Bank as the two agencies worked to buoy mental wellness and resiliency in the West Indies region.
Inspired by the historic 2017 Atlantic hurricane season (17 named storms, $294.92 billion damage total) and launched two years later, the “Stronger Together” campaign aims to bolster sound mental health and coping strategies during crises. The initiative also attempts to allay the stigma surrounding mental health treatment, and improve publicly available psychosocial support.
Such support was critical last year as COVID-19 lockdowns forced the planet’s populace into months of unbroken solitude, leaving individuals battling loneliness, depression, fear, anxiety, irritability, and post-traumatic stress disorder. Many of these feelings have snowballed among Caribbean island folk whose lives have been upended in recent years by five (consecutive) unusually active hurricane seasons.
“...as we grapple with COVID-19, we are in the middle of our 2020 hurricane season, which is predicted to be above normal,” Diedre Clarendon, division chief for the Caribbean Development Bank’s Social Sector Division, said in campaign kickoff remarks last July. “The impacts for these hurricanes are likely to include heightened stress, fear, depression, and anxiety across populations that are already coping with COVID-19 impacts...we have expanded the scope of our collaboration to include the pandemic. The call to action connecting to feel safe, calm, and hopeful aims to offer information and strategies to assist communities in promoting mental well-being and positive coping strategies, and raise awareness to reduce the stigma about seeking mental health and pyschosocial support while also considering social distancing guidelines. In this way, we will indeed be resilient and we are stronger together.”
Though it targeted a specific audience, Clarendon’s underlying message had worldwide relevance last year in the global battle against SARS-CoV-2. It quickly became the healthcare industry’s mantra as companies temporarily set aside their rivalries and collaborated on coronavirus treatments and pandemic-induced supply shortages.
Johnson & Johnson, for example, partnered with Merck to manufacture its single-shot COVID-19 vaccine, while its Ethicon subsidiary teamed with non-profit firm Prisma Health on the latter’s ventilator expansion device. The product (dubbed VESper Ventilator Expansion Splitter) enables a single ventilator to be used by two patients; Ethicon manufactured and distributed the device at no cost to U.S. healthcare providers.
“Johnson & Johnson has been investing in and applying the best science to take on the most serious public health threats for more than a century—and there was never any question that we would contribute the full breadth and depth of our company’s expertise to global efforts to combat COVID-19,” Chairman and CEO Alex Gorsky told shareholders in the company’s 2020 annual report. “With this ambitious, urgent goal driving us forward, we set out to follow the science and to make our potential vaccine available on a not-for-profit basis for pandemic emergency use. This work was done around the clock, through innovative models of public-private partnerships and new heights of purpose-driven collaboration. At the start of 2020, no one could have imagined just how dramatically our world was about to change...By any measure, it was a year dominated by uncertainty—yet the pandemic helped to clarify our priorities and reinforce our values. And while the familiar yard signs may be faded now, their message is more resonant than ever: We’re all in this together.”
And together, the J&J enterprise—through its 260 subsidiary firms and 135,000 employees—survived the world’s worst health crisis in more than a century with just a few metaphorical bumps and bruises. Considering all the coronavirus-bred headwinds it faced last year (lockdowns, supply chain snafus, elective surgery postponements, tanking economies), the healthcare behemoth remarkably turned a profit last year, raising total sales 0.64 percent to $82.6 billion. Gross profit was flat at $54.1 billion ($346 million less than 2019) but net earnings fell 2.7 percent compared with fiscal 2019 to $14.7 billion. Earnings per share—both basic and diluted—also were down, slipping 2.3 percent and 2.1 percent respectively.
J&J’s Consumer Health and Pharmaceutical segments were cash cows last year, with the former increasing sales 1.1 percent to $14 billion, and the latter expanding revenue 8 percent to $45.6 billion. Consumer Health benefited from higher public demand for oral care, wound care, and (outside-U.S.) skin health/beauty products, while Pharmaceutical proceeds grew from gains in nearly all therapeutic areas, save for cardiovascular/metabolism/other.
The Medical Devices segment, conversely, was J&J’s sole spoilsport, surrendering more than a decade of growth to the pandemic’s fiscal thrashing. Total revenue plummeted 11.6 percent in fiscal 2020 to a 13-year low of $22.95 billion as hospital volumes fell precipitously during the second and third quarters, and the medtech market shrunk between 30 percent and 70 percent. U.S. sales slid 11 percent to $11 billion, and international revenue contracted 12.2 percent to $11.92 billion.
Yet there were some bright spots amid the segment’s gloom: The company secured PPE for front-line workers, expanded its hip/knee and intraocular lens platforms, launched new solutions for stroke and arrhythmia treatments, and further developed its surgical robotics capabilities.
“Our Medical Devices business has made strong progress advancing our pipeline despite the pandemic, achieving and even accelerating certain key milestones throughout the year,” Gorsky told analysts during a Q4/2020 full-year earnings conference call in late January (2021). “We are developing an end-to-end digital ecosystem across three robotics platforms, and we achieved a significant milestone this month, receiving FDA clearance for our VELYS robotic-assisted solutions. We believe the industry is just starting to unlock the full potential and benefits of robotic and digital technologies. Johnson & Johnson is well-positioned to bring innovative, differentiated solutions to the surgery suite over the next 10, 20, and 30 years. Overall, we remain very confident in the long-term prospects around the medical device market.”
Those prospects will have to be quite propitious, however, for J&J to recoup its losses from the pandemic. Three of the Medical Devices segment’s four product franchises posted double-digit deficits due to significant hemorrhaging in all eight subdivisions.
Only Interventional Solutions managed to buck the trend—sales climbed 1.6 percent to $3.04 billion on atrial fibrillation procedure growth and new product releases. Among the introductions was Biosense Webster’s CARTO 3 System Version 7 and CARTO PRIME Mapping Module. Unveiled in late August, the CARTO 3 System is the most advanced version of J&J’s 3D heart mapping solution; the accompanying CARTO PRIME module features added tools that further address all major complex arrhythmias and improved mapping capabilities to help reduce ablation times compared to standard mapping systems.
“CARTO PRIME is the most important software release since the introduction of CARTO 3,” Elad Anter, M.D., associate section head, Electrophysiology, Cleveland Clinic, said at the product’s debut. “COHERENT Mapping helps to overcome many of the challenges in electro-anatomical mapping of complex arrhythmias, and with Parallel Mapping, we’re able to map different rhythms simultaneously.”
J&J gained another tool in its cardiac arrhythmia arsenal last year with the U.S. Food and Drug Administration (FDA) approval of the THERMOCOOL SMARTTOUCH SF Ablation Catheter for persistent atrial fibrillation (Afib). Marketed as both a unidirectional and bidirectional device in the United States and Europe, the FDA granted its approval based on positive study results (80.4 percent clinical success rate at 15 months).
The THERMOCOOL SMARTTOUCH features a surround flow porous tip and electrodes for delivering thermal energy to specific areas of the heart. Its stable contact force transmits a precise location reference signal through a location sensor and transmitter coil to form lesions, which helps reduce ablation time. The device is integrated with the CARTO 3 system to combine the contact force technology with 3D mapping, and improved navigation tools to measure stable contact force and catheter tip position. Moreover, THERMOCOOL SMARTTOUCH provides uniform cooling at half the flow rate of previous generation irrigated catheters, thereby facilitating fluid management.
“Every patient and every arrhythmia are unique,” Francis Marchlinski, M.D., electrophysiology director at the University of Pennsylvania Health System, said upon the FDA’s blessing. “This approval and the PRECEPT data provide evidence to support a tailored approach using the CARTO 3 System and THERMOCOOL SMARTTOUCH SF Catheter to treat persistent AF patients, who are more at risk for stroke and other complications from their AF.”
Managing those complications—particularly stroke—improved with the introduction of several clot removal devices last fall. In September, CERENOVUS premiered a guide sheath, large-bore catheter, and revascularization device, all of which aim to improve mechanical thrombectomy procedure outcomes.
The CEREBASE DA Guide Sheath has more trackability and support to help physicians better navigate “challenging” anatomy and secure distal access for geometric anchoring. The CERENOVUS Large Bore Catheter, on the other hand, is designed for atraumatic vessel wall interaction for balancing trackability with more durability and compatibility. According to the company, the catheter features excellent distal kink resistance in a thin wall design and it allows quick navigation to the middle cerebral artery based on an anatomically optimized design.
The EMBOTRAP III Revascularization Device, the latest-generation stent retriever, aims to engage various clot types, improve procedural confidence, and provide more tailored options to achieve the First Pass Effect (FPE), the complete or near-complete recanalization after one pass of a mechanical thrombectomy device. FPE is an independent predictor of good functional outcome and has been linked to expedited recovery times.
Finally, the CERENOVUS NIMBUS, launched in Europe last October, is designed to remove tough clots for revascularization in patients with acute ischemic stroke caused by a large vessel occlusion. The product’s design features proximal spiral and distal barrel sections; the spiral section is specifically designed to optimize blood vessel lumen coverage and device-clot interaction for better clot engagement and easier clot dislodgement. CERENOVUS claims the NIMBUS design potentially can improve reperfusion rates and reduce the number of necessary passes in tough clot cases.
“Stroke is a silent killer that can take a life within minutes, and we designed CERENOVUS Stroke Solutions to support physicians in successfully treating their patients efficiently and effectively,” Mark Dickinson, worldwide president of CERENOVUS, said in prepared remarks. “We are committed to developing differentiated solutions based on physicians’ real-world experiences to change the trajectory of stroke care.”
J&J had the same goal in mind with new surgical, orthopedic, and vision care offerings last year, though none of the solutions generated enough revenue to counteract COVID-19’s crippling (fiscal) blow. The Vision franchise was most critically impacted by the pandemic: Virus-driven sales descents in the Contact Lenses/Other and Surgical divisions (the former down 11.7 percent to $2.99 billion, the latter off by 25 percent to $925 million) reduced overall Vision revenue 15.2 percent to $3.91 billion despite an expanded TECNIS intraocular lens portfolio that included the Multifocal Toric II intraocular lens (IOL), the Synergy Toric II IOL, CATALYS System cOS 6.0 software, Synergy, and Eyhance IOL.
The TECNIS Multifocal Toric II IOL debuted in May 2020 in cylinder powers of 1.50, 2.25, 3.00, and 3.75 on the 3.25 D and 2.75 D multifocal add power designs. The lens features a new generation of frosted haptics, offering more surface texture and friction between the lens haptics and capsular bag. The TECNIS Synergy and TECNIS Eyhance IOLs hit the Canadian market last summer following Health Canada approval; Synergy eliminates visual gaps present in trifocal and other multifocal technology, while Eyhance features a power-progressive refractive design that minimizes halo, glare, or starbursts (i.e., bright circles of light surrounding headlights and other illuminary sources).
The newly-designed Synergy Toric II IOL (and its Simplicity Delivery System) launched in Europe last fall. Its nearly flat defocus curve and squared, frosted haptic design resists rotation common in astigmatism, and provides continuity without the visual gaps present in trifocal technology, covering 33 cm to distance. J&J also released new software with the lens (CATALYS System cOS 6.0, in collaboration with Cassini Technologies B.V.) to simplify astigmatism management workflow and increase operational efficiency. The software reduces calculation time by including computations of accurate incision parameters using built-in nomogram and the automatic input of accurate incision parameters into the treatment planning screen.
“The TECNIS Synergy Toric II IOL means we can now give cataract patients with astigmatism our most advanced IOL solution yet, whilst the CATALYST System cOS 6.0 is a software package that allows for better accuracy, speed, and ease of use for the surgeon for a whole range of astigmatism procedures,” Erin McEachren, regional vice president of Europe, Middle East, and Africa, for Johnson & Johnson Surgical Vision, said upon the lens’s market release. “This is the best of both worlds for people with cataracts and astigmatism—our best Toric II IOL in a preloaded delivery system with the most advanced software tool for ease, speed, and accuracy in aligning the lens. These latest additions build on our proud history of raising the standard of care for patients with cataracts, and ensure we stay true to our legacy of innovation.”
J&J tried maintaining that legacy within the Medical Devices segment, but COVID-19 considerably hindered the pace of innovation in 2020. New product introductions were relatively scarce in the Surgery and Orthopedics franchises as hospitals worldwide periodically suspended millions of elective procedures throughout the year (mostly within the second and third quarters).
Ethicon Inc., for instance, launched only one product—the ECHELON ENDOPATH Staple Line Reinforcement, a buttressing device for strengthening staple lines and reducing potential complications during bariatric, thoracic and general surgeries. It reportedly is the company’s first buttress solution specifically designed for use with ECHELON Flex Powered Staplers with GST reloads.
The ENDOPATH Staple Line’s mid-September unveiling occurred about six weeks after Ethicon received FDA breakthrough device designation for its transbronchial microwave ablation technology using robotic-assisted bronchoscopy. The designation pairs the NeuWave microwave ablation system with Auris Health’s Monarch platform, a robotic-assisted bronchoscopy solution that provides improved peripheral reach in the lungs with continuous real-time vision, precision, and control.
“We remain incredibly excited about the great potential of the end-to-end digital surgery ecosystem and are simultaneously developing three differentiated robotic programs and recently achieved a significant milestone with the FDA clearance for our VELYS Robotic-Assisted Solution designed for use with the ATTUNE Total Knee System,” Gorsky said in J&J’s 2020 annual report. “Our industry is just starting to unlock the full potential and benefits of these robotic and digital technologies—and it seems only fitting that the same company that helped pioneer sterile surgery 135 years ago is now poised to lead the way in bringing differentiated, cutting-edge, new solutions to the 21st-century operating room.”
Those cutting-edge solutions are critical now to J&J’s long-term growth prospects, given the financial damage the company sustained amid the pandemic. Surgery franchise sales were down 13.4 percent last year to $8.2 billion, with neither product division turning a profit. Advanced surgery revenue fell 6.2 percent to $3.83 billion, though the decline was partially offset by new product sales outside the United States and the resolution of an isolated supply disruption for Ethicon’s SURGIFLO Hemostatic Matrix in 2019.
General surgery proceeds sank 18.8 percent in 2020 to $4.39 billion, due mainly to COVID-19 and the aftereffects of a 3-year-old divestiture (advanced sterilization products, $2.8 billion).
“Our goal is to grow at or faster than the markets where we compete,” Gorsky told analysts during an earnings conference call earlier this year. “We believe the markets where we compete overall in surgery and orthopedics and vision care and others, cardiovascular, are in the 4 percent to 5 percent range. And that’s the goal for our businesses. Of course, with...2020 and the effect of COVID-19, that had a very significant impact.”
Its significance, however, was somewhat blunted in the Orthopedics franchise, which stemmed its losses better than its franchise brethren. The lower deficit total is quite surprising, really, considering the global orthopedics industry virtually went dormant while elective surgeries were suspended last spring and summer.
Total Orthopedics revenue fell 12.2 percent to $7.76 billion, driven by steep declines in all four product divisions. The 11 percent slide in Hips sales ($1.28 billion) was partially offset by strong demand for the Anterior approach (front of the hip), the ACTIS stem, and enabling technologies—KINCISE and VELYS Hip Navigation. The KINCISE Surgical Automated System is designed to replace the handheld mallet traditionally used in total hip arthroplasty, while VELYS aims to improve surgical accuracy.
Knees proceeds nosedived 21 percent last year to $1.17 billion, and Trauma sales slipped 3.9 percent to $2.61 billion. Spine, Sports & Other revenue declined 15.7 percent to $2.7 billion, but new product sales helped the division avert further losses.
Some of those new products included the FIBULINK Syndesmosis Repair System and Radial Head Replacement System, both of which launched last October in the United States.
The FIBULINK system treats traumatic syndesmosis injuries and restores the ankle’s physiologic motion. Developed by Durham, N.C.-based Akros Medical Inc. (acquired last year by DePuy Synthes), FIBULINK features a short high-strength suture bridge, which eliminates potential complications associated with broken syndesmotic screws. DePuy claims the product is the only flexible syndesmotic repair system that can fine-tune and readjust tension intraoperatively, allowing surgeons to tighten and reverse suture tension as necessary to optimize the final gap between the tibia and fibula.
FIBULINK implants are manufactured in stainless steel or titanium, and they are compatible with all DePuy Synthes distal fibula plates and any plate hole that accepts a 4 mm non-locking cortex screw. The system delivers biomechanical superiority over the Arthrex Syndesmosis TightRope XP Implant, with FIBULINK providing three times the fixation strength and 71 percent less elongation in a model simulating poor bone quality, according to DePuy Synthes Fatigue Loading and Static Failure data.
The FIBULINK Repair system eliminates the need for medial incisions or hardware in syndesmotic fixations, thus avoiding such complications as neurovascular structure damage or soft tissue entrapment that may occur with suture button constructs. The implant also helps improve procedural efficiency by delivering fixation through a single lateral incision.
“This launch allows us to bring a differentiated solution that combines the benefits of stability and flexibility in the treatment of these common injuries,” I.V. Hall, worldwide president of Trauma, Extremities, CMF, and Animal Health at DePuy Synthes, said upon the FIBULINK’s release. “The acquisition of Akros and subsequent launch of this key technology demonstrate a clear focus on accelerating meaningful innovation and strengthening DePuy Synthes’ Extremities portfolio—providing diverse solutions that enable customers to provide greater benefit to their patients.”
Another beneficial patient solution to debut last year was the Radial Head Replacement System, designed for patients with destabilized radial head fractures. The system includes side loading spacers and single-use instrument kits to save time in the operating room, improve efficiency, and reduce costs. It reportedly is the first system to use radiolucent trials that allow for better visualization of the elbow joint during trialing and more accurate implant sizing during surgery. The Radial Head Replacement System also offers smooth stemmed implants, which are designed to allow for unrestricted motion, allowing the stem to self-center inside the radial canal.
“We are pleased to integrate this technology into our portfolio alongside our current offerings and provide comprehensive solutions for the treatment of fractures and conditions in extremities,” Hall noted in a news release. “This launch allows us to bring a differentiated solution to surgeons treating the common injury of radial head fractures, while also providing greater efficiency and reducing costs.”