07.20.23
Rank: #3 (Last year: #3)
$27.43 Billion
Prior Fiscal: $27.06 Billion
Percentage Change: +1.4%
R&D Expenditure: $14.6B (total)
Best FY22 Quarter: Q1 $7.0B
Latest Quarter: Q1 $7.5B
No. of Employees: 152,700 (total)
Global Headquarters: New Brunswick, N.J.
KEY EXECUTIVES:
Joaquin Duato, Chairman of the Board and CEO
Ashley McEvoy, Exec. VP and Worldwide Chairman, MedTech
Joseph J. Wolk, Exec. VP and CFO
Though not the blockbuster deals of years past, global multi-billion dollar conglomerate Johnson & Johnson began the medtech industry’s largest deal of 2022—a $16.6 billion transaction for heart, lung, and kidney support tech company Abiomed—last November.
Abiomed adds its best-known and breakthrough Impella heart pumps to J&J’s already hearty cardiovascular portfolio. The Impella pumps have exclusive FDA approvals for coronary artery disease patients needing high-risk percutaneous coronary invention, treatment of acute myocardial infarction cardiogenic shock, or right heart failure.
“Abiomed’s skilled workforce and strong relationships with clinicians, along with its innovative cardiovascular portfolio and robust pipeline, complement our MedTech portfolio, global footprint and robust clinical expertise. Together, we have the incredible opportunity to bring lifesaving innovations to more patients around the world,” Ashley McEvoy, J&J’s executive VP and worldwide chairman of MedTech, said in a press release announcing the deal. “We are committed to investing for growth and look forward to welcoming the team and working together to foster our shared patient-first mindset and winning culture of innovation.”
The deal was completed three days before Christmas 2022 and Abiomed became a standalone business within J&J’s MedTech segment, operating within its Interventional Solutions business.
The global conglomerate’s MedTech segment sales (previously referred to as Medical Devices) reached $27.43 billion in its 2022 fiscal year, rising a slight 1.4% over the previous year. U.S sales were strong at $13.4 billion with a 5.4% swell, while International sales fell 2.3% to $14.1 billion.
ANALYST INSIGHTS: With two major portfolio moves under its belt in the past 12 months (spin-off of Kenvue and the acquisition of AbioMed), J&J is a work in process in its main Ethicon and DePuy Synthes business units. While each major group is behind in robotics (Ethicon to Intuitive and MDT; DPS to Stryker), they should see an upswing in procedures due to a post-pandemic rebound of so-called “elective procedures.” For the future, the question is, “Can they catch-up with the market leaders with their Velys digital platforms across all market segments?”
Surgery franchise revenue dropped 1.2% to $9.7 billion. Advanced surgical products captured $4.6 billion of those proceeds (a 1.1% drop) and General surgical products claimed the remaining $5.1 billion (a 1.3% drop). According to J&J’s annual report, endocutter market recovery and new products somewhat tempered competitive U.S. pressures. Strong U.S. demand in 2021 for infection prevention products offset biosurgery market improvement. Energy product sales rose somewhat thanks to market recovery as well, bolstered by competitive supply challenges. General surgical product growth was mainly caused by market recovery and technology penetration.
The company inked a strategic partnership deal with Microsoft to cap off its fiscal year 2022. The two technological powerhouses will work to further enable and expand J&J MedTech’s secure and compliant digital surgery ecosystem, which includes robotics, instrumentation, advanced imaging and visualization, data and analytics, artificial intelligence, machine learning, and digital solutions. Microsoft will become J&J MedTech’s preferred cloud provider for digital surgery solutions and help build out its digital surgery platform and IoT device connectivity with tools including Azure, AI and machine learning, Microsoft 365, and Dynamics 365.
J&J’s Acclarent launched the artificial intelligence (AI)-powered TruDi ENT (ear, nose, throat) navigation system last January to simplify surgical planning and offer real-time feedback during ENT procedures. The software package includes TruSeg automatic segmentation for pre-op CT scans as well as TruPath to calculate and present the shortest valid surgical path that doesn’t cross bone. FDA approval of the TruDi shaver blade, a single-use electromagnetically navigated blade for soft/hard tissue incision and removal in ENT, maxillofacial, head and neck, and ENT skull base surgery, followed for Acclarent in August. The navigable blade features distal tip sensors to display the blade’s position and opening on the TruDi navigation system.
J&J’s Mentor notched FDA approval for the MemoryGel BOOST breast implant in January as well for breast augmentation in women ages 22 and up. The implant, according to J&J data, feels more like a natural breast than another leading brand. It features a highly cohesive gel, innovative implant shell design, and precision fill ratio.
J&J Ethicon’s Auris Health gained 510(k) clearance for the Monarch flexible robotic solution to perform endourological procedures in May. Monarch now supports both ureteroscopic and percutaneous nephrolithotomy procedures. The platform aims to help urologists reach and visualize areas in the kidney with precision and control.
Launch of Ethicon’s Echelon 3000 stapler came in June. The next-gen stapler features 39% greater jaw aperture and 27% greater articulation span, as well as software for real-time haptic and audible device feedback. It’s used for thoracic, colorectal, and bariatric/gastric laparoscopic procedures where device access and control can make a critical difference: VATS segmentectomy, low anterior resection, and sleeve gastrectomy.
J&J’s Biosense Webster franchise rolled out the OctaRay mapping catheter with TrueRef in September. The catheter maps cardiac arrhythmias, including AFib, in any heart chamber to capture precise info for catheter ablation. OctaRay has 48 TrueRef mapping reference electrodes on eight splines to minimize the impact of farfield signals and accurately identify lesion set gaps. The size of the electrodes are smaller than previous generation technologies, with tight electrode spacing.
Biosense Webster released the Heliostar balloon ablation catheter in Europe a month later. Used for catheter-based cardiac electophysiological mapping (stimulating and recording) of the atria and cardiac ablation, Heliostar can conform to varied pulmonary vein anatomy and can achieve single-shot pulmonary vein isolation in 12 seconds. It features 10 gold-plated, irrigated electrodes and their power can be customized based on anatomical location and known tissue thickness.
Orthopaedics posted flat revenue of $8.59 billion in 2022. J&J’s annual report attributed operational growth in hips—which grew sales 2.3% to $1.51 billion—to continued portfolio strength including the Actis stem and enabling tech Kincise and Velys hip navigation. Impacts of volume-based procurement in China and timing of tenders outside the U.S. tempered this growth. Knees proceeds also grew 2.6% to $1.36 billion due to oricedure recovery, Attune portfolio strength, and pull-through related to Velys. Trauma product sales fell 0.5% to $2.87 billion, and Spine, Sports & Other sales fell further, dropping 1.9% to $2.84 billion.
DePuy Synthes announced the Attune cementless, fixed-bearing knee with Affixium 3D printing tech and the Attune medial stabilized knee last March. The first in the Attune portfolio to use Affixium 3D printing, the cementless knee was engineered to meet the demands of an active lifestyle and features a 3D lattice structure to create a porosity similar to natural bone. The Attune medial knee touts asymmetric anatomic inserts with a raised medial lip and TruARC lateral path for natural knee function. It addresses a range of posterior cruciate ligament (PCL) management and surgical philosophies. The knee is compatible with the VELYS robotic-assisted solution.
October saw FDA 510(k) clearance for the Teligen platform to enable minimally invasive surgical transforaminal lumbar interbody fusion (MS-TLIF) using digital visualization and access tools. The system is comprised of a camera control system, VueLIF-T procedure with disposable HD camera, Teligen clear discectomy device, and patient-based disposable ports. The Teligen Vue camera is at the distal end of the patient-specific port to remove the need for a microscope for unobstructed surgical site view, and Teligen’s heads-up display lets surgeons maintain ergonomic posture during the surgery. It integrates with DePuy spine’s Unleash bundle of implant solutions.
Vision franchise revenue overall grew 3.4% to $4.85 billion. Contact Lenses/Other’s 3% swell to $3.54 billion was attributed to market recovery, price actions, commercial execution, and new products. The remaining $1.31 billion of Surgical vision sales—a 4.6% rise over the previous year—grew due to market recovery and new products as well, J&J’s annual report claimed.
FDA approval for the AcuVue Theravision drug-eluting contact lenses came last March. Each daily, disposable lens has 19 micrograms of the well-established antihistamine ketotifen to help lens wearers suffering from allergic conjunctivitis. Clinical studies showed meaningful eye allergy reduction as quickly as three minutes after the lens was inserted, lasting up to 12 hours.
September saw launch of the AcuVue Oasys Max 1-day contact lenses and AcuVue Oasys Max 1-day multifocal contact lenses for presbyopia. Both lenses have TearStable tech for tear-film stability and moisture lock-in, as well as OptiBlue 60% blue-violet light filter. Both lenses also block UVA and UVB rays and tailor 100% of parameters to pupil size variations.
Later in September, J&J Vision introduced the Tecnis Symfony OptiBlue presbyopia-correcting intraocular lens (IOL). The hybrid lens features InteliLight combination of violet-light filter, echelette design, and achromatic technology.
Concluding September’s trilogy was FDA approval for an expanded range of AcuVue Abiliti overnight therapeutic lenses for myopia management, up to six diopters. The orthokeratology (ortho-k) lenses are worn overnight to temporarily reduce refractive error. In conjunction with a myopia management plan, they can remove the need for glasses or contacts during the day after removing the lenses.
Interventional Solutions gathered $4.3 billion in sales in 2022, an increase of 8.3% over 2021. The growth was attributed to market recovery, success of new products and commercial strategies, and sales from the Abiomed acquisition.
In April 2022, a California appeals court upheld a lower court ruling that Johnson & Johnson must pay penalties to the state for “deceptively marketing mesh implants for women,” according to The Guardian. The global conglomerate appealed in 2020 after superior court judge Eddie Sturgeon looked at the $344 million in penalties against J&J subsidiary, Ethicon.
He found after a non-jury trial that Ethicon made “misleading and potentially harmful statements” in hundreds of thousands of advertisements and instructional brochures over almost 20 years. A $42 million penalty for sales pitches to doctors was unjustified, because there wasn’t evidence of what the sales reps actually said. The court reduced the amount to $302 million as a result.
J&J spokesperson Ryan Carbain told the San Francisco Chronicle that the company would appeal the ruling to the state supreme court. “Ethicon responsibly communicated the risks and benefits of its trans-vaginal mesh products to doctors and patients and in full compliance with U.S. Food and Drug Administration (FDA) laws,” he told the Chronicle.
Many women have sued the New Brunswick, N.J.-based company, alleging the mesh caused severe pain, bleeding, infections, discomfort during intercourse, and the need for surgical removal. According to The Guardian, the condition affects about 3% to 17% of women, and sometimes turns severe after age 70. Pelvic mesh is used to treat conditions like stress-related urinary incontinence, bladder leakage, and organ prolapse, which can cause pain and pressure during urinary movements and during sexual intercourse.
Finally, J&J established its commitment to life sciences in September 2022 by announcing that its Consumer Health Company spinoff would be called Kenvue. Inspired by “ken”—an English word mainly used in Scotland meaning “knowledge,” and “vue” referencing sight—Kenvue’s IPO was valued at $22 per share ($3.8 billion total) according to CNBC. Shares of “KVUE” began trading on May 4, 2023, marking the largest restructuring deal in J&J’s 135-year history.
$27.43 Billion
Prior Fiscal: $27.06 Billion
Percentage Change: +1.4%
R&D Expenditure: $14.6B (total)
Best FY22 Quarter: Q1 $7.0B
Latest Quarter: Q1 $7.5B
No. of Employees: 152,700 (total)
Global Headquarters: New Brunswick, N.J.
KEY EXECUTIVES:
Joaquin Duato, Chairman of the Board and CEO
Ashley McEvoy, Exec. VP and Worldwide Chairman, MedTech
Joseph J. Wolk, Exec. VP and CFO
Though not the blockbuster deals of years past, global multi-billion dollar conglomerate Johnson & Johnson began the medtech industry’s largest deal of 2022—a $16.6 billion transaction for heart, lung, and kidney support tech company Abiomed—last November.
Abiomed adds its best-known and breakthrough Impella heart pumps to J&J’s already hearty cardiovascular portfolio. The Impella pumps have exclusive FDA approvals for coronary artery disease patients needing high-risk percutaneous coronary invention, treatment of acute myocardial infarction cardiogenic shock, or right heart failure.
“Abiomed’s skilled workforce and strong relationships with clinicians, along with its innovative cardiovascular portfolio and robust pipeline, complement our MedTech portfolio, global footprint and robust clinical expertise. Together, we have the incredible opportunity to bring lifesaving innovations to more patients around the world,” Ashley McEvoy, J&J’s executive VP and worldwide chairman of MedTech, said in a press release announcing the deal. “We are committed to investing for growth and look forward to welcoming the team and working together to foster our shared patient-first mindset and winning culture of innovation.”
The deal was completed three days before Christmas 2022 and Abiomed became a standalone business within J&J’s MedTech segment, operating within its Interventional Solutions business.
The global conglomerate’s MedTech segment sales (previously referred to as Medical Devices) reached $27.43 billion in its 2022 fiscal year, rising a slight 1.4% over the previous year. U.S sales were strong at $13.4 billion with a 5.4% swell, while International sales fell 2.3% to $14.1 billion.
ANALYST INSIGHTS: With two major portfolio moves under its belt in the past 12 months (spin-off of Kenvue and the acquisition of AbioMed), J&J is a work in process in its main Ethicon and DePuy Synthes business units. While each major group is behind in robotics (Ethicon to Intuitive and MDT; DPS to Stryker), they should see an upswing in procedures due to a post-pandemic rebound of so-called “elective procedures.” For the future, the question is, “Can they catch-up with the market leaders with their Velys digital platforms across all market segments?”
—Dave Sheppard, Co-Founder and Managing Director, MedWorld Advisors
Surgery franchise revenue dropped 1.2% to $9.7 billion. Advanced surgical products captured $4.6 billion of those proceeds (a 1.1% drop) and General surgical products claimed the remaining $5.1 billion (a 1.3% drop). According to J&J’s annual report, endocutter market recovery and new products somewhat tempered competitive U.S. pressures. Strong U.S. demand in 2021 for infection prevention products offset biosurgery market improvement. Energy product sales rose somewhat thanks to market recovery as well, bolstered by competitive supply challenges. General surgical product growth was mainly caused by market recovery and technology penetration.
The company inked a strategic partnership deal with Microsoft to cap off its fiscal year 2022. The two technological powerhouses will work to further enable and expand J&J MedTech’s secure and compliant digital surgery ecosystem, which includes robotics, instrumentation, advanced imaging and visualization, data and analytics, artificial intelligence, machine learning, and digital solutions. Microsoft will become J&J MedTech’s preferred cloud provider for digital surgery solutions and help build out its digital surgery platform and IoT device connectivity with tools including Azure, AI and machine learning, Microsoft 365, and Dynamics 365.
J&J’s Acclarent launched the artificial intelligence (AI)-powered TruDi ENT (ear, nose, throat) navigation system last January to simplify surgical planning and offer real-time feedback during ENT procedures. The software package includes TruSeg automatic segmentation for pre-op CT scans as well as TruPath to calculate and present the shortest valid surgical path that doesn’t cross bone. FDA approval of the TruDi shaver blade, a single-use electromagnetically navigated blade for soft/hard tissue incision and removal in ENT, maxillofacial, head and neck, and ENT skull base surgery, followed for Acclarent in August. The navigable blade features distal tip sensors to display the blade’s position and opening on the TruDi navigation system.
J&J’s Mentor notched FDA approval for the MemoryGel BOOST breast implant in January as well for breast augmentation in women ages 22 and up. The implant, according to J&J data, feels more like a natural breast than another leading brand. It features a highly cohesive gel, innovative implant shell design, and precision fill ratio.
J&J Ethicon’s Auris Health gained 510(k) clearance for the Monarch flexible robotic solution to perform endourological procedures in May. Monarch now supports both ureteroscopic and percutaneous nephrolithotomy procedures. The platform aims to help urologists reach and visualize areas in the kidney with precision and control.
Launch of Ethicon’s Echelon 3000 stapler came in June. The next-gen stapler features 39% greater jaw aperture and 27% greater articulation span, as well as software for real-time haptic and audible device feedback. It’s used for thoracic, colorectal, and bariatric/gastric laparoscopic procedures where device access and control can make a critical difference: VATS segmentectomy, low anterior resection, and sleeve gastrectomy.
J&J’s Biosense Webster franchise rolled out the OctaRay mapping catheter with TrueRef in September. The catheter maps cardiac arrhythmias, including AFib, in any heart chamber to capture precise info for catheter ablation. OctaRay has 48 TrueRef mapping reference electrodes on eight splines to minimize the impact of farfield signals and accurately identify lesion set gaps. The size of the electrodes are smaller than previous generation technologies, with tight electrode spacing.
Biosense Webster released the Heliostar balloon ablation catheter in Europe a month later. Used for catheter-based cardiac electophysiological mapping (stimulating and recording) of the atria and cardiac ablation, Heliostar can conform to varied pulmonary vein anatomy and can achieve single-shot pulmonary vein isolation in 12 seconds. It features 10 gold-plated, irrigated electrodes and their power can be customized based on anatomical location and known tissue thickness.
Orthopaedics posted flat revenue of $8.59 billion in 2022. J&J’s annual report attributed operational growth in hips—which grew sales 2.3% to $1.51 billion—to continued portfolio strength including the Actis stem and enabling tech Kincise and Velys hip navigation. Impacts of volume-based procurement in China and timing of tenders outside the U.S. tempered this growth. Knees proceeds also grew 2.6% to $1.36 billion due to oricedure recovery, Attune portfolio strength, and pull-through related to Velys. Trauma product sales fell 0.5% to $2.87 billion, and Spine, Sports & Other sales fell further, dropping 1.9% to $2.84 billion.
DePuy Synthes announced the Attune cementless, fixed-bearing knee with Affixium 3D printing tech and the Attune medial stabilized knee last March. The first in the Attune portfolio to use Affixium 3D printing, the cementless knee was engineered to meet the demands of an active lifestyle and features a 3D lattice structure to create a porosity similar to natural bone. The Attune medial knee touts asymmetric anatomic inserts with a raised medial lip and TruARC lateral path for natural knee function. It addresses a range of posterior cruciate ligament (PCL) management and surgical philosophies. The knee is compatible with the VELYS robotic-assisted solution.
October saw FDA 510(k) clearance for the Teligen platform to enable minimally invasive surgical transforaminal lumbar interbody fusion (MS-TLIF) using digital visualization and access tools. The system is comprised of a camera control system, VueLIF-T procedure with disposable HD camera, Teligen clear discectomy device, and patient-based disposable ports. The Teligen Vue camera is at the distal end of the patient-specific port to remove the need for a microscope for unobstructed surgical site view, and Teligen’s heads-up display lets surgeons maintain ergonomic posture during the surgery. It integrates with DePuy spine’s Unleash bundle of implant solutions.
Vision franchise revenue overall grew 3.4% to $4.85 billion. Contact Lenses/Other’s 3% swell to $3.54 billion was attributed to market recovery, price actions, commercial execution, and new products. The remaining $1.31 billion of Surgical vision sales—a 4.6% rise over the previous year—grew due to market recovery and new products as well, J&J’s annual report claimed.
FDA approval for the AcuVue Theravision drug-eluting contact lenses came last March. Each daily, disposable lens has 19 micrograms of the well-established antihistamine ketotifen to help lens wearers suffering from allergic conjunctivitis. Clinical studies showed meaningful eye allergy reduction as quickly as three minutes after the lens was inserted, lasting up to 12 hours.
September saw launch of the AcuVue Oasys Max 1-day contact lenses and AcuVue Oasys Max 1-day multifocal contact lenses for presbyopia. Both lenses have TearStable tech for tear-film stability and moisture lock-in, as well as OptiBlue 60% blue-violet light filter. Both lenses also block UVA and UVB rays and tailor 100% of parameters to pupil size variations.
Later in September, J&J Vision introduced the Tecnis Symfony OptiBlue presbyopia-correcting intraocular lens (IOL). The hybrid lens features InteliLight combination of violet-light filter, echelette design, and achromatic technology.
Concluding September’s trilogy was FDA approval for an expanded range of AcuVue Abiliti overnight therapeutic lenses for myopia management, up to six diopters. The orthokeratology (ortho-k) lenses are worn overnight to temporarily reduce refractive error. In conjunction with a myopia management plan, they can remove the need for glasses or contacts during the day after removing the lenses.
Interventional Solutions gathered $4.3 billion in sales in 2022, an increase of 8.3% over 2021. The growth was attributed to market recovery, success of new products and commercial strategies, and sales from the Abiomed acquisition.
In April 2022, a California appeals court upheld a lower court ruling that Johnson & Johnson must pay penalties to the state for “deceptively marketing mesh implants for women,” according to The Guardian. The global conglomerate appealed in 2020 after superior court judge Eddie Sturgeon looked at the $344 million in penalties against J&J subsidiary, Ethicon.
He found after a non-jury trial that Ethicon made “misleading and potentially harmful statements” in hundreds of thousands of advertisements and instructional brochures over almost 20 years. A $42 million penalty for sales pitches to doctors was unjustified, because there wasn’t evidence of what the sales reps actually said. The court reduced the amount to $302 million as a result.
J&J spokesperson Ryan Carbain told the San Francisco Chronicle that the company would appeal the ruling to the state supreme court. “Ethicon responsibly communicated the risks and benefits of its trans-vaginal mesh products to doctors and patients and in full compliance with U.S. Food and Drug Administration (FDA) laws,” he told the Chronicle.
Many women have sued the New Brunswick, N.J.-based company, alleging the mesh caused severe pain, bleeding, infections, discomfort during intercourse, and the need for surgical removal. According to The Guardian, the condition affects about 3% to 17% of women, and sometimes turns severe after age 70. Pelvic mesh is used to treat conditions like stress-related urinary incontinence, bladder leakage, and organ prolapse, which can cause pain and pressure during urinary movements and during sexual intercourse.
Finally, J&J established its commitment to life sciences in September 2022 by announcing that its Consumer Health Company spinoff would be called Kenvue. Inspired by “ken”—an English word mainly used in Scotland meaning “knowledge,” and “vue” referencing sight—Kenvue’s IPO was valued at $22 per share ($3.8 billion total) according to CNBC. Shares of “KVUE” began trading on May 4, 2023, marking the largest restructuring deal in J&J’s 135-year history.