Johnson & Johnson (JNJ) is considering ways to continue its strong opportunities in its medical devices business, a historically slow-growth area for the company.
Medical devices have been a stagnant area for the company over the past decade. It lags behind pharmaceuticals every quarter.
The company reported revenue of more than $21 billion on Tuesday, of which medical devices (surgical equipment and monitoring equipment) accounted for more than $21 billion. 7.8 billion dollars.
Earlier this month, J&J announced an investment of more than $13 billion this year to acquire cardiac equipment maker Shockwave, and in 2022 it will invest more than $16 billion in Abiomed, a standalone company in J&J's medical technology division. Acquired.
Joe Walke, the company's chief financial officer, joined Yahoo Finance to discuss the company's performance and growth areas. “If you look at where our opportunities are, I think you have to say, [it’s] In medical technology. This was a somewhat unreliable and unpredictable field many years ago, and growth was certainly slow. Our growth rate in 2017 was 1.5%, but last year we had a growth of 7.8%. ” he said.
Medtech used to be the company's stronger portfolio and drove the company's performance for years, Wolk said, until around 2010, when the focus shifted to pharmaceuticals. That's what it means.
Currently, J&J's results are primarily driven by pharmaceuticals, which accounted for $13.6 billion of the $21.4 billion reported in the first quarter. The company spent about $3 billion on 50 small deals in this space last year. The company's blockbuster drugs include Stelara, which brought in $2.4 billion and will face biosimilar competition next year.
“We're trying to balance that, but not out of a mathematical necessity…just because we think there's an opportunity there. Vascular disease, No. 1 is cardiovascular disease, which is a bigger killer than cancer,” he said.
With the acquisitions of Abiomed and Shockwave, the company is investing in businesses that are already driving profits, Wolk noted.
There has been an increased focus on the medtech space since J&J spun off its consumer health division last year, now operating independently as Kenvue (KVUE), to reshape its pipeline and boost future revenue. We are aiming to expand.
Impact of GLP-1
Last October, J&J suggested that demand for bariatric surgery devices, including staples, was slowing due to the buzz surrounding GLP-1, a diabetes and weight loss drug that has gained popularity due to its record-breaking weight loss successes.
That trend continued in the first quarter of this year, Wolk said.
“Bariatric surgery is a little soft this quarter as some people are waiting to see if GLP-1 will work for them. However, in the long term, GLP-1 will actually improve the medical technology field. We see the potential to do so,” Wolk said.
For example, people who were not previously candidates for bariatric surgery or knee or hip surgery may qualify if GLP-1 proves effective in reducing weight. Novo Nordisk (NVO) and Eli Lilly (LLY), the two major players in the GLP-1 space, are struggling to meet demand and are increasing the market share of these drugs as many competitors race to catch up. Demand and usage will continue to increase.
“I think we need a little more time to see how this plays out. I think this is very exciting,” Wolk said.
Anjali Khemrani She is a senior health reporter for Yahoo Finance, covering all areas of pharmaceuticals, insurance, care services, digital health, PBMs, and health policy and politics.Follow Anjali on all social media platforms @AjKhem.
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