J&J splits off consumer – but not medtech

Johnson & Johnson has plumped to follow Glaxo’s model, rather than the path pioneered by Abbvie. J&J plans to spin off its consumer arm, the largest of its kind among pharma companies, according to Evaluate Pharma, in 2023, probably via a stock market listing. Glaxo, thanks to a controlling stake in a joint venture with Pfizer and products it acquired from Novartis, currently has the second-largest consumer business, though not, of course, for long. The as-yet unnamed group that will be spun out of J&J will become the home of brands such as Neutrogena and Listerine, but perhaps more importantly of J&J’s talcum powder products, the subject of thousands of lawsuits claiming that they cause cancer. Another intriguing facet of the split-up is that J&J has opted to keep its pharma products and medical devices together, saying these serve similar patients and healthcare providers and operate in similar regulatory and competitive environments. But splitting them apart has worked well for Abbvie and Abbott Laboratories, and General Electric announced just this week that it would spin its medtech operations into a separate company within the next two years. Perhaps J&J might have yet more streamlining to do.

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