J&J Growth Plan Includes Over 20 New Hospital And Consumer Medical Devices By 2018
Johnson & Johnson’s (J&J) medical device business is poised for significant growth across multiple healthcare markets and in several key regions worldwide, according to senior leadership. By 2018, the company plans to launch over 20 new products in both the clinical and consumer product segments with total sales potential of $8 billion, which will drive overall growth between 4 and 6 percent per year by 2020.
Over the last five months, J&J has been implementing a massive restructuring strategy that trimmed down its medical device business and freed over $1 billion in capital to be invested in innovation and long-term growth opportunities. During last month’s Q1 2016 earnings call, J&J CEO Alex Gorsky commented that a strategy to prioritize and accelerate in high-growth segments is paying off, and the medical devices business is gaining momentum.
“The way we are approaching innovation goes beyond products and services,” said Gorsky in a recent press release. “We are innovating how we go to market, how we reach new consumers, and how we use technology to drive better outcomes and deliver long-term value to patients, consumers and customers around the world.”
J&J Worldwide Chairman of Medical Devices Gary Pruden explained during a business overview that J&J has established footholds in key categories, including electrophysiology and joint reconstruction, which drive double-digit growth. According to Pruden, J&J plans to further prioritize and accelerate innovation in other high-growth areas, including robotics, Endocutters, and businesses that address unmet needs in “priority disease states,” such as structural cardiovascular disease and obesity.
J&J’s hospital device segment is slated to file regulatory applications for 20 new products between now and 2018 that are worth an estimated $6 billion. The consumer device business pipeline, which includes vision care and diabetes management products, is worth an estimated $2 billion. The partnership between J&J’s subsidiary Ethicon and Verily’s Verb Surgical is expected to yield a working prototype by the end of this year, according to Pruden.
Moving forward, J&J will also be investing more of its resources in digital technology and the development of connected health products that are both flexible and secure, said Sandra Peterson, Group Worldwide Chairman, during a presentation. By incorporating smart technology into its core businesses, J&J plans to deliver devices that can analyze data and adapt based on insights gained from consumers and patients.
“We have the right internal capabilities and are developing strategic partnerships in healthcare technology to reshape the way healthcare is delivered, managed and experienced,” said Gorsky in a press release.
In an interview with CNBC, Gorsky commented that the company is focused on growth across multiple markets, including surgical products and orthopedic offerings, with plans to augment its emerging cardiovascular portfolio.
“We’ve been taking a hard look at our portfolio because while we’re very excited about the investments that we’ve been making in the future in certain areas, we realize that in other areas, frankly we needed to be more effective, more efficient,” said Gorsky.
J&J’s full presentation is available online through the company’s website.