Johnson & Johnson is breaking up Band-Aids and pharmaceuticals

The corporate, which traces its roots again to 1886, will break into two: One firm will deal with shopper well being merchandise prospects can purchase over-the-counter, together with Benadryl, Band-Aids and Tylenol. The opposite enterprise will promote pharmaceuticals and medical gadgets. Each might be publicly traded firms.

The separation is geared toward creating “two international leaders which might be higher positioned to ship improved well being outcomes for sufferers and shoppers via innovation,” the corporate mentioned in a press release. Management and the brand new identify of the consumer-focused division have not but been introduced.

Johnson & Johnson (JNJ) shares spiked greater than 4% in premarket buying and selling. The Wall Avenue Journal first reported the news.

Johnson & Johnson CEO Alex Gorsky mentioned the modifications is the “greatest option to speed up our efforts to serve sufferers, shoppers, and healthcare professionals, create alternatives for our gifted international staff, drive worthwhile progress, and — most significantly — enhance healthcare outcomes for individuals world wide.”

Gorsky introduced in August that he might be changed as CEO with Joaquin Duato early subsequent yr. Gorsky, who has served as CEO and chairman since 2012, will turn out to be govt chairman on January 3, 2022.

The pharmaceutical enterprise unit, which makes a Covid-19 vaccine and can maintain the Johnson & Johnson identify, will stay one of many world’s largest makers of medicine and well being merchandise. It makes varied medical gadgets and medicines, together with remedies for cancers and infectious illnesses.

The extra well-known consumer-facing firm, which rakes in $15 billion in yearly gross sales, additionally manufactures Motrin, Zyrtec, Nicorette and Sudafed.

Gorsky additionally instructed the Journal that lawsuits surrounding its child powder did not play a task into the breakup. Final yr, the company announced it stopped making talc-based child powder in the USA and Canada. The product was the topic of tens of hundreds of lawsuits filed by ladies who’ve developed ovarian most cancers after common talcum powder use costing the corporate billions of {dollars}.
Johnson & Johnson traces its roots to a well being merchandise firm fashioned by Robert Wooden Johnson and his brothers. The corporate joins Toshiba and General Electric, which additionally introduced they’re breaking apart their firms to deal with extra worthwhile enterprise items.

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