|Ethicon's Echelon Flex--Courtesy of Johnson & Johnson|
After disclosing a major restructuring of its medical device business last week, Johnson & Johnson ($JNJ) tried to refocus on the future of that group on its annual earnings call. It emphasized doing more deals to acquire platforms for growth, as well as funneling more resources to high revenue growth device groups.
The healthcare and consumer conglomerate has already been working on making good on that commitment. Earlier this year, J&J disclosed 22 new partnerships, with at least 5 of these in devices.
These included collaborations with HistoSonics to use its noninvasive soft tissue ablation technology to treat solid tumors that aren't good candidates for surgical resection such as liver and pancreatic cancer; Carbon 3D to develop custom surgical devices using its technology to pool resin instead of printing it; and Northwestern University on an approach to atrial fibrillation that uses computational phase mapping and catheter ablation to target an underlying molecular mechanism. That last one is via J&J business Biosense Webster and is expected improve outcomes for catheter ablation to treat persistent AF.
They also detailed two deals through DePuy Synthes, a J&J company focused on surgery and orthopedics: a partnership with Brainlab to create a next-gen knee surgical navigation system and with Medos International research subsidiary Rainbow Medical to develop a solution to decreasing back pain and modulating disc degeneration.
J&J has an appetite for more major, innovative device deals--highlighting its acquisition of atrial fibrillation startup Coherex Medical and robotic surgery deal with Google Life Sciences (now known as Verily) as examples.
|J&J CEO Alex Gorsky|
"Our recent acquisition of Coherex Medical in the area of atrial fibrillation and the surgical deal with formerly Google Life Sciences are examples of the type of focused and strategic investments that you will see us make more of in the future," said J&J chairman and CEO Alex Gorsky on a Jan. 26 conference call.
"Our goal is to reach more patients, outperform the markets in which we compete and consistently identify bill and acquire new platforms for growth. Moving forward into 2016, we will continue to take bold, but appropriate, steps to put our medical device business in the best position for our shareholders."
Gorsky also noted that J&J will "double down" on its top performing medical device segments including endocutters and electrophysiology. He said the surgical stapling endocutters are J&J's "fastest growing platform in or medical devices segment." J&J also noted its biosurgical, orthopedics reconstruction and insulin pump businesses as the primary device contributors to operational growth.
But overall for 2015, J&J's global medical device sales were down 8.7% from the prior year to $25.1 billion.
Moving forward, summed up Gorsky, "Our priority in medical devices is accelerating growth to the strategic investments in innovation and by transforming our go-to-market models."