Johnson & Johnson has issued a press release saying it will present its Medical Devices & Diagnostics (MD&D) business strategy for accelerating growth during its annual Business Review today (22nd January). The news comes on the back of a punchy set of full year financials for 2012, highlights of which included the positive impact of the Synthes acquisition in Q4 and an increased provision to settle the ongoing DePuy ASR metal-on-metal hip disaster.
J&J says the presentation of its strategy will focus on its market leading products, plans for global expansion and meaningful innovations in MD&D (41% of J&J’s total sales in 2012).
So what, in a nutshell, is today’s announcement all about?
Well, there’s no squeezing it into a nutshell, so all-encompassing is the press release, which can be found here by the way.
The core message is that the company is determined to be seen as an innovator, whether through in house R&D or acquisition. The $3.5Bn it claims to have spent on device R&D in the past two years, and the $20Bn acquisition of Synthes testify to that.
Being the giant that it is, one would be surprised to see J&J investing in niches, and again here the message is that it is going for the big stuff, focusing on what it refers to critical clinical and economic needs. Specifically highlighted are diabetes management, surgical powered devices and a new knee system for 2013.
Alongside new ventures comes the possibility of divestment, with the company’s Ortho Clinical Diagnostics (OCD) business a possible candidate.
Finally, the phrase Global Reach with Local focus is coined to describe J&J’s long international arms and methodology. The company makes 56% of its revenues from OUS markets today, in contrast with 40% a decade ago, a trend that is likely to increase with initiatives such as the acquisition of China’s Guangzhou Bioseal Biotech.
“Our MD&D business is the largest medical technology business in the world with sales of $27.4 billion, which grew 8.7% operationally with the inclusion of Synthes,” Alex Gorsky, Chairman and Chief Executive Officer, said. “We’re building on our market leadership positions, having sustained or grown share in the majority of our key platforms, and hold number one or number two positions in over 80% of them today. We’re also expanding our MD&D business in emerging markets, and with Synthes, generated strong double-digit growth there last year.”
Source: Johnson & Johnson