NEW BRUNSWICK, N.J.,
Nov. 12, 2021 /PRNewswire/ -- Johnson
& Johnson (the "Company") (NYSE: JNJ) today announced its
intent to separate the Company's Consumer Health business, creating
a new publicly traded company. The planned separation would create
two global leaders that are better positioned to deliver improved
health outcomes for patients and consumers through innovation,
pursue more targeted business strategies and accelerate growth.
Following the planned separation, the new Johnson & Johnson
would remain the world's largest and most diverse healthcare
company and continue its commitment to lead in global healthcare
R&D and innovation, with a portfolio that blends its strong
Pharmaceutical and Medical Device capabilities focused on advancing
the standard of care through innovation and technology. As
previously announced, Mr. Alex
Gorsky will serve as Executive Chairman of Johnson &
Johnson and transition the Chief Executive Officer role to Mr.
Joaquin Duato, currently Vice
Chairman of the Company's Executive Committee, effective
January 3, 2022. Mr. Duato would
continue to lead the new Johnson & Johnson following completion
of the planned separation.
The New Consumer Health Company would be a leading global
consumer health company, touching the lives of over one billion
consumers around the world every day through iconic brands such as
Neutrogena, AVEENO®, Tylenol®, Listerine®, JOHNSON's®, and
BAND-AID® and continuing its legacy of innovation. The New Consumer
Health Company's Board of Directors and executive leadership would
be determined and announced in due course as the planned separation
process progresses.
Mr. Gorsky said, "Throughout our storied history, Johnson &
Johnson has demonstrated that we can deliver results that benefit
all our stakeholders, and we must continually be evolving our
business to provide value today, tomorrow and in the decades ahead.
Following a comprehensive review, the Board and management team
believe that the planned separation of the Consumer Health business
is the best way to accelerate our efforts to serve patients,
consumers, and healthcare professionals, create opportunities for
our talented global team, drive profitable growth, and – most
importantly – improve healthcare outcomes for people around the
world."
Mr. Gorsky continued, "For the new Johnson & Johnson, this
planned separation underscores our focus on delivering
industry-leading biopharmaceutical and medical device innovation
and technology with the goal of bringing new solutions to market
for patients and healthcare systems, while creating sustainable
value for shareholders. We believe that the New Consumer Health
Company would be a global leader across attractive and growing
consumer health categories, and a streamlined and targeted
corporate structure would provide it with the agility and
flexibility to grow its iconic portfolio of brands and innovate new
products. We are committed to the success of each organization, as
well as our company's more than 136,000 employees around the globe,
who will remain the backbone of these businesses."
Mr. Duato commented, "This planned transaction would create two
businesses that are each financially strong and leaders in their
respective industries. We believe that the new Johnson &
Johnson and the New Consumer Health Company would each be able to
more effectively allocate resources to deliver for patients and
consumers, drive growth and unlock significant value. Importantly,
the new Johnson & Johnson and the New Consumer Health Company
would remain mission driven companies with exceptional brands,
commitments to innovation, and remarkable talent. Each company
would carry on the Johnson & Johnson legacy of putting the
needs and well-being of the people we serve first."
The planned separation is expected to create value for all
stakeholders by aiming to achieve the following key
goals:
- Increase management focus, resources, agility and speed to
effectively address differing industry trends and to better meet
the needs of the new Johnson & Johnson and the New Consumer
Health Company patients and consumers;
- Further focus capital allocation based on the objectives of
each independent company;
- Provide each company with a compelling financial profile that
more accurately reflects the strengths and opportunities of each
business and, as a result, offers investors a more targeted
investment opportunity; and
- Align corporate and operational structures so each company is
better able to drive growth and value creation.
New Johnson & Johnson: An Innovative Pharmaceuticals and
Medical Devices Leader with Sharpened Focus on Major Unmet Medical
Needs and Advancing Standard of Care for Patients Around the
World
Following the planned separation, the new Johnson & Johnson
would remain the world's largest and most diverse healthcare
company and maintain a portfolio that blends its strong
Pharmaceutical and Medical Device capabilities focused on
materially advancing the standard of care through biopharmaceutical
and medical device innovation and technology. Leveraging its
long-standing strength in core areas of science, technology,
regulatory, supply chain and global commercial reach, the new
Johnson & Johnson would continue to build on its offering of
life-saving treatments, including DARZALEX, ERLEADA, IMBRUVICA,
STELARA and TREMFYA, as well as medical device solutions across
interventional solutions, orthopaedics, surgery and vision.
The new Johnson & Johnson would remain committed to changing
the trajectory of human health. The Pharmaceutical and Medical
Devices segments, which are expected to generate revenue of
approximately $77 billion in
Full-Year 20211, are united by their shared and
complementary focus on scientific research and development to serve
similar end users – patients and healthcare providers – and operate
in similar regulatory and competitive environments. The new Johnson
& Johnson is expected to be better positioned to combine
skills, expertise and approaches to bring integrated, comprehensive
and more impactful care to patients, addressing diseases in areas
such as oncology and eye health that require a combination of
surgical, interventional and pharmaceutical treatments. The new
Johnson & Johnson would continue to play a leading role in
advancing the industry forward by creating novel solutions,
bringing together treatments spanning therapeutics, robotics,
artificial intelligence and more, to change the way diseases are
prevented, intercepted and eventually cured.
The Pharmaceutical business would continue to generate sustained
above market growth by advancing its strong portfolio and pipeline
of products, accelerating key therapeutic areas, such as oncology
and immunology, while also advancing new therapeutic modalities
such as cell and gene therapies. At the same time, the Medical
Devices business would plan to accelerate its momentum across
orthopaedics, interventional solutions, surgery and vision, with an
increased cadence of meaningful innovation enabled by a strong
digital surgery pipeline and focus on execution across all
geographies.
The new Johnson & Johnson would remain committed to
maintaining a strong balance sheet and to its stated capital
allocation priorities of R&D investment, competitive dividends
and value-creating acquisitions.
New Consumer Health Company Post-Separation: A Leading Global
Consumer Health Company with Iconic Brands and Commitment to
Continued Innovation
The New Consumer Health Company would be a global leader with a
powerful portfolio of iconic brands — comprising four $1 billion megabrands and 20 brands over
$150 million — and leading positions
in Self Care (OTC), Skin Health and Essential Health, which
includes baby care, feminine care, wound care and oral health. The
Consumer Health segment is expected to generate revenue of
approximately $15 billion in
Full-Year 20212 and, following the planned separation,
the New Consumer Health Company would generate sales in over 100
countries, driven by world-class innovation capabilities and
demonstrated business momentum.
In recent years, Johnson & Johnson has focused the Consumer
Health business and advanced its innovation, enabling it to reach
more consumers with products that truly make a difference in
peoples' lives, while simultaneously expanding margins and
delivering healthy financial results. These actions have bolstered
positions in Self Care, Skin Health and Essential Health.
The New Consumer Health Company would be expected to benefit
from a strong investment grade profile and balance sheet that would
allow it to build on its long history of innovation and maintain
and extend its leadership position across important and growing
categories.
The planned organizational design for the New Consumer Health
Company is expected to be completed by the end of 2022 and will be
subject to legal requirements including consultation with works
councils and employee representatives, as required. Planned New
Consumer Health Company employees are expected to continue
participating in their current Johnson & Johnson pay, benefits
and retirement programs through the end of 2022.
Transaction Details
The Board of Directors' intent is to effect the planned
separation through the capital markets, creating two independent,
market-leading companies. The transaction is intended to qualify as
a tax-free separation for U.S. federal income tax purposes.
In addition, it is expected that the overall shareholder
dividend will remain at least at the same level following the
completion of the transaction.
The Company is targeting completion of the planned separation in
18 to 24 months, subject to the satisfaction of certain conditions
including, among others, consultations with works councils and
other employee representative bodies, as required, final approval
of Johnson & Johnson's Board of Directors, receipt of a
favorable opinion and Internal Revenue Service ruling with respect
to the tax-free nature of the transaction, and the receipt of other
regulatory approvals. There can be no assurance regarding the
ultimate timing of the proposed transaction or that the transaction
will be completed.
Advisors
Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC are
acting as financial advisors to Johnson & Johnson, and Cravath,
Swaine & Moore LLP and Baker & McKenzie LLP are acting as
legal counsel.
Investor Conference Call
The Company plans to hold an investor webcast to discuss this
announcement and provide opportunity for Q&A today at
8:30 a.m. ET. The call will be hosted
by Mr. Joseph Wolk, Chief Financial
Officer, Mr. Alex Gorsky, Chairman
and CEO, and Mr. Joaquin Duato, Vice
Chairman of the Executive Committee. The webcast is accessible at
www.investor.jnj.com and telephone, for both "listen-only"
participants and financial analysts who wish to take part in the
question and answer portion of the call. Please dial (877) 869-3847
in the U.S. and (201) 689-8261 outside of the U.S.
About Johnson & Johnson
At Johnson & Johnson, we believe good health is the
foundation of vibrant lives, thriving communities and forward
progress. That's why for more than 130 years, we have aimed to keep
people well at every age and every stage of life. Today, as the
world's largest and most broadly-based healthcare company, we are
committed to using our reach and size for good. We strive to
improve access and affordability, create healthier communities, and
put a healthy mind, body and environment within reach of everyone,
everywhere. We are blending our heart, science and ingenuity to
profoundly change the trajectory of health for humanity. Learn more
at www.jnj.com. Follow us at @JNJNews.
Cautions Concerning Forward-Looking Statements
This presentation contains "forward-looking statements" as
defined in the Private Securities Litigation Reform Act of 1995
regarding, among other things: the anticipated separation of
Johnson & Johnson's Consumer Health business; future operating
and financial performance, product development, market position and
business strategy. The viewer is cautioned not to rely on these
forward-looking statements. These statements are based on current
expectations of future events. If underlying assumptions prove
inaccurate or known or unknown risks or uncertainties materialize,
actual results could vary materially from the expectations and
projections of Johnson & Johnson. Risks and uncertainties
include, but are not limited to: Johnson & Johnson's ability to
satisfy the necessary conditions to consummate the separation of
Johnson & Johnson's Consumer Health business on a timely basis
or at all, Johnson & Johnson's ability to successfully separate
Johnson & Johnson's Consumer Health business and realize the
anticipated benefits from the separation, the New Consumer Health
Company's ability to succeed as a standalone publicly traded
company, economic factors, such as interest rate and currency
exchange rate fluctuations; competition, including technological
advances, new products and patents attained by competitors;
challenges inherent in new product research and development,
including unexpected clinical trial results, additional analysis of
existing clinical data, uncertainty of clinical success and
obtaining regulatory approvals; uncertainty of commercial success
for new and existing products; the impact of business combinations
and divestitures; challenges to patents; the impact of patent
expirations; the ability of Johnson & Johnson to successfully
execute strategic plans, including restructuring plans;
manufacturing difficulties or delays, internally or within the
supply chain; product efficacy or safety concerns resulting in
product recalls or regulatory action; significant adverse
litigation or government action, including related to product
liability claims; changes to applicable laws and regulations,
including tax laws, global health care reforms and import/export
and trade laws; trends toward health care cost containment; changes
in behavior and spending patterns of purchasers of health care
products and services; financial instability of international
economies and legal systems and sovereign risk; increased scrutiny
of the health care industry by government agencies. A further list
and descriptions of these risks, uncertainties and other factors
can be found in Johnson & Johnson's Annual Report on Form 10-K
for the fiscal year ended January 3,
2021, including in the sections captioned "Cautionary Note
Regarding Forward-Looking Statements" and "Item 1A. Risk Factors,"
in Johnson & Johnson's most recently filed Quarterly Report on
Form 10-Q and in Johnson & Johnson's subsequent filings with
the Securities and Exchange Commission. Copies of these filings are
available online at www.sec.gov, www.jnj.com or on request from
Johnson & Johnson. Any forward-looking statement made in this
presentation speaks only as of the date of this presentation.
Johnson & Johnson does not undertake to update any
forward-looking statement as a result of new information or future
events or developments.
1 Figures represent Total Reported Sales from the
2021 Midpoint of October Sales Dollar Guidance excluding Vaccine.
Sales dollars are allocated to segments based on September 2021 YTD Actuals sales mix.
2 Figures represent Total Reported Sales from the
2021 Midpoint of October Sales Dollar Guidance excluding Vaccine.
Sales dollars are allocated to segments based on September 2021 YTD Actuals sales mix.
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