2014 med tech R&D budget: $1.652 billion
Change from 2013 budget ($1.783 billion): -7.3%
Percent of 2014 segment sales ($27.5 billion): 6%
Johnson & Johnson ($JNJ) saw a steep spike in its therapeutics sales last year, but medical devices haven't fared nearly as well. Although J&J remains committed to med tech and invested substantially in segment R&D, in calendar 2015 J&J will likely no longer be the biggest device R&D spender.
The newly combined Medtronic ($MDT)/Covidien is likely to take that title in 2015, though. It's committed to spend 7% to 7.5% of combined company revenue on R&D, and with $27.4 billion in 2014 revenues that puts the total R&D spend at $1.92 billion even at the low end of the range based on last year's revenue.
As for J&J, its commitment to medical device R&D is hardly proportional to that for overall sales. While 10.9% of total J&J sales goes to R&D, only 6% of medical device sales goes to R&D. Across the company as a whole, J&J spent $8.5 billion on R&D and executed more than 100 strategic partnerships, licenses and acquisitions in 2014.
Still, J&J expects to launch 30 new medical device products by 2016.
J&J Chairman and CEO Alex Gorsky highlighted an integrated med tech and biopharma project as an example of J&J's enterprise-wide initiatives to further company goals across a number of businesses. In January, he highlighted a China Lung Cancer Center as an example.
"We're in the process of establishing a China Lung Cancer Center which will adopt an integrated medical approach to transforming the disease we help ultimately into a preventable and curable one, by taking a unique local approach where we have R&D, medical device, pharmaceutical and consumer experts all working together to bring forward new and very comprehensive solutions," said Gorsky.
"This is also a good illustration of the versatility of the types of enterprise-wide solutions we can uniquely offer as Johnson & Johnson, and we're already in talks with governments and other nations to develop similar models to help them attack diseases that are rapidly spreading through their nations," he added. -- Stacy Lawrence (email | Twitter)
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