|J&J CFO Dominic Caruso|
After cutting deep into its medical device business early this year with a major restructuring, Johnson & Johnson ($JNJ) recently offered a cheerier vision. At the Barclays Global Healthcare Conference on March 17, it highlighted a consumer medical device focus, particularly in emerging markets, alongside 6 device areas of innovation that are expected to undergird growth in the segment for the conglomerate going forward.
J&J officially divides its business into three overarching categories: Consumer, Pharmaceutical and Medical Device units. But it's started talking a lot about its "consumer medical devices" such as vision care and diabetes, which sit at the intersection of the Consumer and Medical Device businesses but are reported as part of the latter.
Ashley McEvoy, J&J Group Chairman for Diabetes and Vision Care, detailed the health conglomerate's expectations for consumer medical devices. "So we view these as growth opportunities for Johnson & Johnson. We like to say that they actually think that they're going with the grain of healthcare and why is that? They're medical devices sold as prescriptions in many places around the world that consumers buy."
"So, the power of brand really matters because of healthcare professionals actively engaged in their care. Given the chronic nature of their need states, consumers are also actively engaged and really exceeds to the value some iconic equities to create value. I think J&J is uniquely suited to best meet the needs of healthcare professionals and consumers in these spaces," she concluded.
Vision care, driven by contact lenses, is a top device growth segment--it grew 8% globally in the second half with whopping 17% growth in the U.S. In diabetes, McEvoy noted that J&J's OneTouch Vario blood glucose meter is the fastest growing blood glucose meter globally and that the company's Animus pumps that incorporate DexCom's ($DXCM) sensor grew 30% in 2015. Emerging markets are a focus for the J&J diabetes business--diabetics in poorer nations typically are not using at-home blood glucose monitors, they may only get tested routinely via physicians, if at all.
Beyond the consumer business, J&J CFO Dominic Caruso identified 6 innovative device areas that the company "will disproportionately invest in, both commercially and with innovation." He expects these groups will drive most of the growth within medical devices.
These include: "Endocutters, and there we've seen very good growth; our energy instrumentation, also good growth; our investment in robotic surgery with our partnership with Google; also knee technologies, in particular the Attune knee has done very well. We think there's additional innovation in knees. Trauma, there continues to be good innovation and areas of growth in trauma. And then finally, our electrophysiology business has been fantastic for us and will continue to be that way," Caruso concluded.
Google Life Sciences, with which J&J made the robotic surgery deal, has since been renamed Verily and sits under parent company Alphabet ($GOOG).
- here is the March 17 transcript