Johnson & Johnson

Johnson & Johnson ($JNJ)
CEO: Alex Gorsky
Based: New Brunswick, NJ
2014 sales: $27.5 billion
2013 sales: $28.5 billion
Change: -3%

In its enormous breadth, Johnson & Johnson holds a wealth of contradictions including a tension between innovation and inertia. Its venture investment is easily the most wide-ranging of any of the big medical device players. And it expects to use its tremendous bulk to negotiate to its advantage in this age of cost-efficiency measurement and value-based healthcare. But one player almost surely will eclipse J&J when it comes to med tech in 2015; the combined Medtronic ($MDT)/Covidien 2014 revenues exceed those of the J&J Medical Devices business.

Unlike J&J, the new Medtronic has revenue growth momentum. On its combined $28.2 billion in 2014 revenue Medtronic/Covidien gained 4% over the year prior--while J&J's $27.5 billion for the year in medical device sales represented a 3% decline.

In the long term, J&J is aiming for at least a 3% to 5% growth rate in its medical devices business. It sees innovation as undergirding med tech growth, which it has successfully employed to spark its therapeutics side to about 15% sales growth in 2014 to hit $32.3 billion.

"Growth was driven by orthopedics and cardiovascular care products, partially offset by lower sales in vision care," J&J VP of Investor Relations Louise Mehrotra said on a January conference call. The company further detailed that its "primary contributors to operational growth were its broad portfolio of orthopedic products; Biosense Webster's electrophysiology products in the Cardiovascular Care business; and biosurgicals and international sales of energy products in the Specialty Surgery business."

CEO Alex Gorsky noted that J&J has 10 different medical device platforms with $1 billion or more in annual sales and that 85% of the company's sales are from platforms where it has a number one or two position in the market.

J&J has launched more than 50 major new medical device products since 2012 and it had more than 30 pending filings at year end.

It also plans to submit 30 major filings between 2014 and 2016 "including the Echelon Flex Powered Vascular Stapler and our TFN-Advanced Proximal Femoral Nailing System in trauma which we'll launch this year," Gorsky said. "We're also innovating medical devices for consumers like the new Calibra 3-Day wearable insulin patch, as well as with our new brand of Acuvue for use in the beauty and astigmatism and presbyopic segments."

-- Stacy Lawrence (email | Twitter)

For more:
J&J, Philips partner to develop hand-held blood test for neuropsychiatric disorders
Electrophysiology cardiac catheter from J&J's Biosense Webster in ongoing recall
J&J readies to rid itself of Cordis--for as much as $2B to Cardinal Health
Medical devices weigh on J&J; focuses on innovation, hospital bundling to improve
J&J looks to sell off Cordis for as much as $2B

Johnson & Johnson