Johnson & Johnson stock falls after company lays out plan to spin off orthopaedics business

Johnson & Johnson (J&J) is changing its focus again. This is almost four years after it separated its consumer health business. The company said on Tuesday it will spin off its orthopedics business into a new, standalone company called DePuy Synthes, as stated in the report by Associated Press.

After the split, J&J will concentrate on its pharmaceutical and MedTech segments, which make prescription drugs, contact lenses, and technology for heart disease and surgeries. Namal Nawana will lead the new orthopedics company. He is a former CEO of Smith & Nephew, a medical tech company focused on orthopedics, sports medicine, and wound management.

J&J orthopedics spin-off details

J&J’s orthopedics business made over $9 billion in sales last year. The company said separating orthopedics will let it focus on higher-growth areas. J&J expects to complete the spin-off within 18 to 24 months.

Past business changes and stock reaction

This is not the first time J&J split its business. Kenvue was created in 2021, as per Associated Press, after J&J created a separate brand for its consumer health vertical. Kenvue would oversee manufacturing of Band-Aids, Listerine, and Tylenol.


The move has largely worked, with J&J outperforming its expected earnings for the third quarter, as per its yearly earnings forecast. After this news, J&J shares fell a little to $188.74, but they have still gone up more than 30% this year.

FAQs

Q1. Why is Johnson & Johnson spinning off its orthopedics business?

J&J is separating its orthopedics business, DePuy Synthes, to focus more on its pharmaceutical and MedTech segments and higher-growth areas.

Q2. When will the J&J orthopedics spin-off be completed?

The company expects the spin-off to finish in the next 18 to 24 months.