After reshaping itself as a two-sector company with the spinout of its consumer health division this year, Johnson & Johnson posted ongoing gains across its medtech segments—and said it has a “pretty voracious” appetite for device M&A going forward, while it expects rebounds in surgery volume to continue funneling cash into the coffers for the rest of the year.
Though the COVID-19 pandemic had forced many patients to put off procedures, while labor shortages in hospitals delayed still more, device sales finally began to return last year. For the latter half of 2023, J&J said it predicts those levels to remain on track with normal seasonal trends.
The company’s medtech businesses produced $7.79 billion in global revenue over this year’s second quarter, totaling 14.7% growth compared to the $6.90 billion brought in during the same three-month period in 2022, excluding international currency impacts.
The miniature heart pump maker Abiomed—which J&J picked up last year for $16.6 billion, making it one of the largest medtech deals of 2022—accounted for 4.8 of those percentage points, or nearly a third of the gains, with $331 million in worldwide revenue for the quarter. The company has added $655 million to J&J MedTech’s bottom line since the acquisition was closed last December.
“Everything is moving well and according to plan in Abiomed’s integration, and we are increasingly convinced that this is going to be a key component in our medtech strategy of becoming a leader in heart recovery,” J&J CEO Joaquin Duato said on the company’s Thursday earnings call with investors.
“When it comes to M&A, we continue to look for opportunities,” he added. “And when it comes to medtech … we look forward to growing in areas that are close to where we are today: vision, cardiovascular, surgery, and also high-growth segments in orthopedics.”
Elsewhere in J&J’s medtech pantheon of companies, growth was driven largely by a 25.9% year-over-year boost in electrophysiology sales—with that segment crossing the billion-dollar mark, supported by new product launches including Biosense Webster’s QDOT catheter for atrial fibrillation. The company also saw increases in trauma orthopedics, wound closure kits and biosurgery products, as well as in contact lenses.
This past May, J&J said goodbye to its consumer health division—steward of brands such as Neutrogena, Tylenol, Motrin, Nicorette and Sudafed—under the new name Kenvue following a $41 billion IPO. J&J said it plans to “split off” from its Kenvue shares through an exchange offer later this year.
In pharmaceuticals, the company detailed $13.73 billion in sales, up 3.8% compared to last year—adding up to a conglomerate-wide total of $25.53 billion in revenue for the second quarter.