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Johnson & Johnson plans to spin off consumer health arm

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US pharmaceutical giant Johnson & Johnson on Friday (November 12) announced plans to break up into two listed companies, separating its consumer health arm that sells Band-Aids and Tylenol from its pharmaceutical division.

Johnson & Johnson said in a statement it will create “two global leaders that are better positioned to deliver improved health outcomes for patients and consumers through innovation.”

It plans to complete the separation in 18-24 months, creating two publicly traded companies. CEO Alex Gorsky said the decision was made following a “comprehensive review.”

The board and management believe the split 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,” he said.

He added that the separation “underscores our focus on delivering industry-leading bio-pharmaceutical 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.”

The consumer health branch, which produces Neutrogena skin care products and baby powder, generated $3.7 billion in the third quarter of 2021, nearly 16 percent of the group’s total revenue.

The company’s single-dose Covid-19 vaccine generated nearly $20 billion in revenue in the period.

The company said its more than 136,000 employees around the world “will remain the backbone of these businesses.”

J&J is following a pharmaceutical industry trend to slim down, including GSK and Pfizer, who formed a joint venture from their consumer health units which will be spun off in the middle of next year.

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