Johnson & Johnson, which was born in the late 19th century, will split in two.
One of the companies that will emerge from the division will focus on consumer healthcare products that customers can buy over-the-counter, including Benadryl, Band-Aid and Tylenol. The other will sell prescription drugs and medical devices, such as the Covid-19 vaccine. Both will be publicly traded.
After the announcement, Johnson & Johnson shares soared more than 4% in the opening of the market on the American stock exchange. The Wall Street Journal was responsible for disseminating the information.
The separation aims to create “two global leaders who are best positioned to provide better healthcare options for patients and consumers through innovation,” the company said in a statement.
The pharmaceutical business unit, which manufactures the Covid-19 vaccine, will retain the Johnson & Johnson name and will remain one of the world’s largest manufacturers of medicines and healthcare products.
In addition to medications, including some aimed at treatments for cancer and infectious diseases, Johnson & Johnson will continue to manufacture medical equipment.
The board and name of the new division that will supply drugs for routine use have yet to be announced. This arm of the business has revenues of US$ 15 billion in annual sales and manufactures drugs such as Motrin, Zyrtec, Nicorette and Sudafed.
Johnson & Johnson CEO Alex Gorsky said the changes are the “best way to accelerate our efforts to serve patients, consumers and healthcare professionals,” says the executive.
Gorsky, who announced his intention to step down as CEO in August, says the division is looking to provide opportunities to “drive earnings growth and – most importantly – improve health outcomes for people around the world.”
The current CEO of the company, who is also the chairman of the group, will be replaced by Joaquin Duato at the beginning of next year. Gorsky, accumulates the positions since 2012 and, from January 3, will only have the position of chairman, a kind of honorary president.
Talc was not the reason for the separation
Gorsky told the Wall Street Journal that the lawsuits over baby powder did not play a role in the breakup.
Last year, the company announced that it stopped making baby powder in the United States and Canada. The product was the subject of tens of thousands of lawsuits filed by women who developed ovarian cancer after regular use of talc that cost the company billions of dollars.
Johnson & Johnson has its roots in a healthcare products company formed by Robert Wood Johnson and his brothers.
The company joins Toshiba and General Electric, which also announced that they are separating their companies to focus on more profitable business units.
(Translated text. Read the original here.)
Reference: CNN Brasil
