J&J follows GSK in announcing plans to separate its consumer health unit from fast-growing pharma business.
On Friday, global pharma heavyweight J&J announced plans to split its consumer products business from its pharmaceutical and medical device operations, which would see it create two publicly traded companies. The planned split will see the 135-year-old conglomerate separate the unit that sells products such as Listerine and Neutrogena, from the riskier, but faster-growing pharmaceuticals and medical devices division. “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,” outgoing CEO Alex Gorsky said in a statement.
The news come as Johnson & Johnson is also going through a change at its top ranks, with long-serving CEO Gorsky handing over the reins to Joaquin Duato. The U.S. giant announced it hopes to complete the transaction within 18 to 24 months. Once completed, the pharmaceutical and medical device division would retain the name Johnson & Johnson and have Duato at its helm. The company is yet to announce the name for the consumer unit. “Our goal is really to create two global leaders – a pharmaceutical and medical device business that has great potential today ... and of course, the consumer business that’s got iconic brands,” said Gorsky in televised interview on CNBC. With British giant GSK undergoing its own split, this makes J&J the second big pharma to go this route.