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Johnson & Johnson’s 2Q17 Estimates: Medical Devices

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Medical Devices

Johnson & Johnson’s (JNJ) Medical Devices segment deals with the vision care, cardiovascular care, specialty surgery, orthopedics, surgical care, and diabetes care franchises.

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Medical Devices brands

The Medical Devices segment includes the following brands:

  • Animas – diabetes products portfolio
  • Biosense Webster – advanced cardiac diagnostic, therapeutic, and mapping tools
  • DePuy Synthes – orthopedic and neurological products
  • Ethicon – surgical technologies and solutions including sutures, staplers, trocars, and hemostats
  • Janssen Diagnostics – diagnostic and health IT (information technology) solutions
  • JNJ Vision Care – disposable contact lenses and other eye care products
  • LifeScan – blood glucose monitoring system under OneTouch brand
  • Mentor business – global esthetics products including breast implants and facial esthetics.

Cardiovascular care

The cardiovascular care franchise’s revenue is expected to rise in 2Q17 compared to 2Q16. This growth will likely include growth driven by electrophysiology products such as the Thermocool SmartTouch contact force sensing catheter.

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Vision care

The vision care franchise’s 2Q17 revenue is expected to rise following the strong performance of new products in all major markets worldwide in the quarter.

Diabetes care

The diabetes care franchise’s revenue is expected to fall in 2Q17 due to pricing pressures and competition for its self-monitoring blood glucose (or SMBG) devices. This fall is expected to be partially offset by the strong performance of the Animas Vibe and other SMBG devices during 2Q17.

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Orthopedics

The orthopedics franchise is expected to report a fall in revenue in 2Q17 due to the lower sales of its spine products, which could be partially offset by the strong performance of the Attune Knee System and the TFN-Advanced Nailing System, along with other products such as Orthovisc and Monovisc, in the United States.

Surgery

The surgery franchise’s 2Q17 revenue is expected to rise due to higher demand for endocutters, energy products, and biosurgical products in advanced surgery and sutures and topical adhesives in general surgery in the quarter. This growth is expected to be substantially offset by lower sales of the franchise’s hernia and mechanical products as well as lower mentor sales in 2Q17.

To divest risk, investors can consider ETFs such as the Fidelity MSCI Healthcare ETF (FHLC), which holds 8.8% of its total assets in Johnson & Johnson. FHLC also holds 6.7% in Pfizer (PFE), 3.6% in Amgen (AMGN), and 2.9% in Biogen (BIIB).

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