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Developments in J&J’s Medical Device Business Could Drive Growth

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Jan. 31 2018, Updated 12:00 p.m. ET

Key acquisitions and divestitures in 4Q17

In October 2017, Johnson & Johnson (JNJ) exited its insulin pump business, which was experiencing a decline in sales due to the intense competition in the insulin pump market, which is largely dominated by Medtronic (MDT). For details, read JNJ Exits Insulin Pump Business amid Stiff Competition. The company also sold its Codman Neurosurgery business to Integra Lifesciences (IART). Investors can check out the details of the deal in J&J Completed the Divestiture of Its Neurosurgery Business. Also, recently Depuy Synthes, a subsidiary of J&J, sold its Prodisc assets, which were part of its spine business, to Centinal Spine. J&J’s Prodisc assets include Prodisc-L, Prodisc-C, Prodisc-C Vivo, Prodisc-C Nova, Prodisc-O, and Discover cervical and lumbar artificial disc systems.

Such events might trigger a stock price movement for the Vanguard Value ETF (VTV), which holds ~2.9% of its total portfolio in JNJ stock.

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Key product launches in 4Q17

The company continued to restructure its medical devices businesses and executed four divestitures in fiscal 2017. However, the company also made a number of key innovative medical device launches in this period. Recently, in December 2017, J&J launched its Concorde Clear MIS (minimally invasive surgery) discectomy device in EMEA (Europe, the Middle East, and Africa). In October 2017, the company launched its Viper Prime System and the Concorde Clear MIS device in the United States.

Johnson & Johnson is focused on strengthening its stroke portfolio. The company launched its new neurovascular business Cerenovus in September 2017. The new unit consists of J&J’s Pulsar Vascular and Neuravi acquisitions and the Codman Neuro neurological portfolio that remained after the divestiture. The company recently announced the launch of its smallest and softest embolic finishing coil Galaxy G3 mini coil, which is part of its Cerenovus portfolio, for use in the endovascular treatment of cerebral aneurysms and hemorrhagic stroke. Medtronic and Abbott Laboratories (ABT) are J&J’s major competitors in the stroke business.

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