Johnson & Johnson (J&J) has announced plans to separate its orthopaedics division, DePuy Synthes, from the main company within the next 18 to 24 months. The significant organizational move follows third quarter results that exceeded Wall Street expectations, underscoring the firm's evolving strategy to concentrate on higher-growth, higher-margin businesses.
The orthopaedics division—DePuy Synthes—specializes in products such as hip and knee replacements and spinal equipment, generating approximately $9.2 billion in sales in 2024. J&J’s Chief Financial Officer, Joseph Wolk, noted that while DePuy Synthes remains a strong business, it does not match the growth pace or profitability of J&J’s other core operations. By spinning off the unit, J&J aims to empower DePuy Synthes to operate as a standalone entity, a move expected to make it the largest independent orthopaedics company in the world.
The company is currently evaluating separation options, with a full spinoff cited as the most complex and resource-intensive approach. To guide this transition, J&J has immediately appointed Namal Nawana, a seasoned medical technology leader formerly associated with Alere Inc. and Smith & Nephew Plc, as head of the orthopaedics unit.
The announcement coincided with J&J’s robust Q3 financial results. The New Jersey-based company reported $24 billion in revenue for the quarter, surpassing analyst estimates of $23.7 billion. It also raised its 2025 reported sales forecast by $300 million to $93.7 billion. Despite higher taxes, J&J maintained its adjusted earnings guidance for the year.
J&J's recent investments include a $55 billion commitment to US manufacturing and R&D over four years and a $2 billion pledge for a new North Carolina manufacturing site, expected to add around 120 new jobs.
