CareCredit Women's Health May 2024 Banner

Johnson & Johnson Amplifies MedTech Profile in Q1 Earnings

Johnson & Johnson (J&J) has emphasized the pivotal role of medical technology (MedTech) in advancing healthcare.

During a Tuesday (April 16) call with analysts to discuss the first quarter (Q1) and full-year 2023 financial results, the pharmaceutical giant underscored its commitment to bolstering its reputation as an “innovation powerhouse.” 

A significant move in this direction is the acquisition of Shockwave Medical, with an enterprise value of approximately $13.1 billion. According to the company, the purchase strengthens J&J’s position in cardiovascular intervention, one of the fastest-growing global MedTech markets.

“The acquisition of Shockwave […] will provide us with a unique opportunity to impact coronary artery and peripheral artery disease to the highest growth innovation-oriented segments within cardiovascular intervention. This addition is not only adjacent to our other cardiovascular businesses, but also consistent with our strategy of becoming a best-in-class MedTech company,” Joaquin Duato, chairman and CEO, said on the call.

Expected to be finalized by mid-year, the Shockwave deal follows a series of other notable acquisitions in the MedTech sector, including the purchase of Abiomed, a cardiovascular MedTech firm, in December 2022, and the $400 million purchase of Laminar, a privately-held medical device company, announced in November.

According to Duato, these moves are integral to J&J’s mergers and acquisitions (M&A) strategy, which prioritizes long-term value creation over short-term gains: “When we think about M&A, we think in decades. We don’t think opportunistically.”

Overall, J&J reported a 4.5% increase in worldwide MedTech sales in Q4, reaching $7.8 billion. Key drivers of this growth include advancements in wound closure, knee and hip technologies, and biosurgery solutions. Additionally, the company witnessed an 8.4% growth in worldwide innovative medicine sales, totaling $13.6 billion in Q4. While the U.S. market experienced an 8.4% growth, international sales, excluding the impact of the COVID-19 vaccine, saw a 4% decline.

Also, in alignment with its innovation-driven efforts, the healthcare firm is leveraging digital technologies such as robotics, data analytics and machine learning to transform healthcare delivery. These efforts aim to enable early cancer detection, streamline medical procedures, and personalize treatment approaches, ultimately enhancing patient outcomes and experiences.

Against this backdrop, J&J is progressing with the development of the OTTAVA robotic surgical system, slated for an investigational device exemption (IDE) application to the U.S. Food & Drug Administration (FDA) in the second half of 2024. 

“We believe the future of surgery is personal,” Hani Abouhalka, company group chairman, robotics and digital, Johnson & Johnson MedTech, said when the initiative was first announced last November. “Starting with the human impact — the connection between the patient, surgeon and OR [operating room] staff — we are unlocking what science and technology can do to improve the surgical experience and health outcomes for everyone involved. OTTAVA is designed to consistently deliver this experience in any OR globally.”

Furthermore, the company said its robotic-assisted solution aimed at optimizing surgical workflows and predicting joint stability for knee replacement surgeries continues to gain momentum.

However, amidst its MedTech advancements, J&J has encountered challenges in its medical device sales, particularly in the abdominal surgeries space. The decline in sales of devices used in such procedures can be attributed to a shift in patient preferences towards non-surgical weight-loss interventions.

Consequently, J&J has initiated a two-year restructuring initiative for its orthopedics division to adapt to evolving market dynamics, PYMNTS reported last year.