08.17.21
Rank: #2 (Last year: #2)
$7.76 Billion ($82.58B total)
Prior Fiscal: $8.83 Billion
Percentage Change: -12.2%
No. of Employees: 18,000
Global Headquarters: West Chester, PA; Raynham, Mass.; and Warsaw, Ind.
KEY EXECUTIVES:
Alex Gorsky, Chairman and CEO
Joaquin Duato, Vice Chairman
Paulus Stoffels, Vice Chairman, Chief Scientific Officer
Joseph J. Wolk, Executive VP and CFO
Ashley McEvoy, Executive VP, Worldwide Chairman, Medical Devices
Kathryn E. Wengel, Executive VP, Chief Global Supply Chain Officer
Michael H. Ullmann, Executive VP, General Counsel
Robert J. Decker Jr., Corporate Controller, Chief Accounting Officer
Matthew Orlando, Corporate Secretary and Worldwide VP, Corporate Governance
Stronger together.
That was the message touted last summer by the Pan American Health Organization and Caribbean Development Bank as the two agencies worked to buoy mental wellness and resiliency in the West Indies region.
Inspired by the historic 2017 Atlantic hurricane season (17 named storms, $294.92 billion damage total) and launched two years later, the “Stronger Together” campaign aims to bolster sound mental health and coping strategies during crises. The initiative also attempts to allay the stigma surrounding mental health treatment, and improve publicly available pyscho-social support.
Such support was critical last year as COVID-19 lockdowns forced the planet’s populace into months of unbroken solitude, leaving individuals battling loneliness, depression, fear, anxiety, irritability, and post-traumatic stress disorder. Many of these feelings have snowballed among Caribbean island folk whose lives have been upended in recent years by five (consecutive) unusually active hurricane seasons.
“...as we grapple with COVID-19, we are in the middle of our 2020 hurricane season, which is predicted to be above normal,” Diedre Clarendon, division chief for the Caribbean Development Bank’s Social Sector Division, said in campaign kickoff remarks last July. “The impacts for these hurricanes are likely to include heightened stress, fear, depression, and anxiety across populations that are already coping with COVID-19 impacts...we have expanded the scope of our collaboration to include the pandemic. The call to action connecting to feel safe, calm, and hopeful aims to offer information and strategies to assist communities in promoting mental well-being and positive coping strategies, and raise awareness to reduce the stigma about seeking mental health and pyscho-social support while also considering social distancing guidelines. In this way, we will indeed be resilient and we are stronger together.”
Stronger indeed.
Though it targeted a specific audience, Clarendon’s underlying message had worldwide relevance last year in the global battle against SARS-CoV-2. It quickly became the healthcare industry’s mantra as companies temporarily set aside their rivalries and collaborated on coronavirus treatments and pandemic-induced supply shortages.
Johnson & Johnson, for example, partnered with Merck to manufacture its single-shot COVID-19 vaccine, while its Ethicon subsidiary teamed with non-profit firm Prisma Health on the latter’s ventilator expansion device. The product (dubbed VESper Ventilator Expansion Splitter) enables a single ventilator to be used by two patients; Ethicon manufactured and distributed the device at no cost to U.S. healthcare providers.
“Johnson & Johnson has been investing in and applying the best science to take on the most serious public health threats for more than a century—and there was never any question that we would contribute the full breadth and depth of our company’s expertise to global efforts to combat COVID-19,” Chairman and CEO Alex Gorsky told shareholders in the company’s 2020 annual report. “With this ambitious, urgent goal driving us forward, we set out to follow the science and to make our potential vaccine available on a not-for-profit basis for pandemic emergency use. This work was done around the clock, through innovative models of public-private partnerships and new heights of purpose-driven collaboration. At the start of 2020, no one could have imagined just how dramatically our world was about to change...By any measure, it was a year dominated by uncertainty—yet the pandemic helped to clarify our priorities and reinforce our values. And while the familiar yard signs may be faded now, their message is more resonant than ever: We’re all in this together.”
And together, the J&J enterprise—through its 260 subsidiary firms and 135,000 employees—survived the world’s worst health crisis in more than a century with just a few metaphorical bumps and bruises. Considering all the coronavirus-bred headwinds it faced last year (lockdowns, supply chain snafus, elective surgery postponements, tanking economies), the healthcare behemoth turned a profit in 2020, raising total sales 0.64 percent to $82.6 billion. Gross profit was flat at $54.1 billion ($346 million less than 2019) but net earnings fell 2.7 percent compared with fiscal 2019 to $14.7 billion. Earnings per share—both basic and diluted—also were down, slipping 2.3 percent and 2.1 percent respectively.
J&J’s Consumer Health and Pharmaceutical segments were cash cows last year, with the former increasing sales 1.1 percent to $14 billion, and the latter expanding revenue 8 percent to $45.6 billion.
Consumer Health benefited from higher public demand for oral care, wound care, and (outside-U.S.) skin health/beauty products, while Pharmaceutical proceeds grew from gains in nearly all therapeutic areas, save for cardiovascular/metabolism/other.
The Medical Devices segment, conversely, was J&J’s sole spoilsport, surrendering more than a decade of growth to the pandemic’s fiscal thrashing. Total revenue plummeted 11.6 percent in fiscal 2020 to a 13-year low of $22.95 billion as hospital volumes fell precipitously during the second and third quarters, and the medtech market shrunk between 30 percent and 70 percent. U.S. sales slid 11 percent to $11 billion, and international revenue contracted 12.2 percent to $11.92 billion.
Yet there were some bright spots amid the segment’s gloom: The company secured PPE for front-line workers, expanded its hip/knee and intraocular lens platforms, launched new solutions for stroke and arrhythmia treatments, and further developed its surgical robotics capabilities.
“Our Medical Devices business has made strong progress advancing our pipeline despite the pandemic, achieving and even accelerating certain key milestones throughout the year,” Gorsky told analysts during a Q4/2020 full-year earnings conference call in late January (2021). “We are developing an end-to-end digital ecosystem across three robotics platforms, and we achieved a significant milestone this month, receiving FDA clearance for our VELYS robotic-assisted solutions. We believe the industry is just starting to unlock the full potential and benefits of robotic and digital technologies. Johnson & Johnson is well-positioned to bring innovative, differentiated solutions to the surgery suite over the next 10, 20, and 30 years. Overall, we remain very confident in the long-term prospects around the medical device market.”
Those prospects will have to be quite propitious, however, for J&J to recoup its losses from the pandemic. Three of the Medical Devices segment’s four product franchises posted double-digit deficits due to significant hemorrhaging in all eight subdivisions.
The hemorrhaging was heaviest in J&J’s Vision franchise but somewhat blunted in Orthopedics (DePuy Synthes), which stemmed its losses better than its franchise brethren. The lower deficit total is quite surprising, really, considering the global orthopedics industry went dormant while elective surgeries were suspended.
DePuy Synthes’ total revenue fell 12.2 percent to $7.76 billion, driven by steep declines in all four product divisions. The 11 percent slide in Hips sales ($1.28 billion) was partially offset by strong demand for the Anterior approach (front of the hip), the ACTIS stem, and enabling technologies—KINCISE and VELYS Hip Navigation. The KINCISE Surgical Automated System is designed to replace the handheld mallet traditionally used in total hip arthroplasty, while VELYS aims to improve surgical accuracy.
Knees proceeds nosedived 21 percent last year to $1.17 billion, and Trauma sales slipped 3.9 percent to $2.61 billion. Spine, Sports & Other revenue declined 15.7 percent to $2.7 billion, but new product sales helped the division avert further losses.
Some of those new products included the FIBULINK Syndesmosis Repair System and Radial Head Replacement System, both of which launched last October in the United States.
The FIBULINK system treats traumatic syndesmosis injuries and restores the ankle’s physiologic motion. Developed by Durham, N.C.-based Akros Medical Inc. (acquired last year by DePuy Synthes), FIBULINK features a short high-strength suture bridge, which eliminates potential complications associated with broken syndesmotic screws. DePuy claims the product is the only flexible syndesmotic repair system that can fine-tune and readjust tension intraoperatively, allowing surgeons to tighten and reverse suture tension as necessary to optimize the final gap between the tibia and fibula.
FIBULINK implants are manufactured in stainless steel or titanium, and they are compatible with all DePuy Synthes distal fibula plates and any plate hole that accepts a 4 mm non-locking cortex screw. The system delivers biomechanical superiority over the Arthrex Syndesmosis TightRope XP Implant, with FIBULINK providing three times the fixation strength and 71 percent less elongation in a model simulating poor bone quality, according to DePuy Synthes Fatigue Loading and Static Failure data.
The FIBULINK Repair system eliminates the need for medial incisions or hardware in syndesmotic fixations, thus avoiding such complications as neurovascular structure damage or soft tissue entrapment that may occur with suture button constructs. The implant also helps improve procedural efficiency by delivering fixation through a single lateral incision.
“This launch allows us to bring a differentiated solution that combines the benefits of stability and flexibility in the treatment of these common injuries,” I.V. Hall, worldwide president of Trauma, Extremities, CMF, and Animal Health at DePuy Synthes, said upon the FIBULINK’s release. “The acquisition of Akros and subsequent launch of this key technology demonstrate a clear focus on accelerating meaningful innovation and strengthening DePuy Synthes’ Extremities portfolio—providing diverse solutions that enable customers to provide greater benefit to their patients.”
DePuy’s other new beneficial solution for patients last year was the Radial Head Replacement System, designed for patients with destabilized radial head fractures. The system includes side loading spacers and single-use instrument kits to save time in the operating room, improve efficiency, and reduce costs. It reportedly is the first system to use radiolucent trials that allow for better visualization of the elbow joint during trialing and more accurate implant sizing during surgery. The Radial Head Replacement System also offers smooth stemmed implants, which are designed to allow for unrestricted motion, allowing the stem to self-center inside the radial canal.
“We are pleased to integrate this technology into our portfolio alongside our current offerings and provide comprehensive solutions for the treatment of fractures and conditions in extremities,” Hall noted in a news release. “This launch allows us to bring a differentiated solution to surgeons treating the common injury of radial head fractures, while also providing greater efficiency and reducing costs.”
Differentiated solutions—both new and old—proved helpful in curtailing DePuy Synthes’ sales losses last year. Its SYMPHONY OCT System and CONDUIT Interbody platform, for example, slightly offset pandemic-induced shortfalls, but the gains were hardly enough to replenish the company’s near-depleted coffers.
Adding to DePuy Synthes’ troubles last year was the lingering safety issues surrounding its USS II Polyaxial 3D head rings. Last summer, United Kingdom regulators warned patients of problems associated with the rings, which are part of the USS II Polyaxial system, a posterior pedicle screw fixation solution designed to stabilize the spine in skeletally mature patients.
The Medicines and Healthcare Products Regulatory Agency (MHRA) alert (dated July 10, 2020) forewarned patients to the possibility of the Polyaxial 3D head rings cracking and potentially causing the system to loosen before the bone heals.
The MHRA issued its alert eight months after DePuy Synthes released a field safety notice warning users of the rings’ cracking potential and the possibility of resulting loose rods, poor spinal mechanics, non-union or malunion, pain, or dislocation. In the field safety notice, DePuy Synthes said the majority of implant failures occurred during procedures, but noted the problems could surface post-operatively.
The U.K. government urged affected customers to identify and quarantine all affected devices and consult with patients to determine whether they exhibit symptoms of the cracking rings. Those without symptoms should be monitored annually for symptoms for two years after their implantation surgery date, the government said.
$7.76 Billion ($82.58B total)
Prior Fiscal: $8.83 Billion
Percentage Change: -12.2%
No. of Employees: 18,000
Global Headquarters: West Chester, PA; Raynham, Mass.; and Warsaw, Ind.
KEY EXECUTIVES:
Alex Gorsky, Chairman and CEO
Joaquin Duato, Vice Chairman
Paulus Stoffels, Vice Chairman, Chief Scientific Officer
Joseph J. Wolk, Executive VP and CFO
Ashley McEvoy, Executive VP, Worldwide Chairman, Medical Devices
Kathryn E. Wengel, Executive VP, Chief Global Supply Chain Officer
Michael H. Ullmann, Executive VP, General Counsel
Robert J. Decker Jr., Corporate Controller, Chief Accounting Officer
Matthew Orlando, Corporate Secretary and Worldwide VP, Corporate Governance
Stronger together.
That was the message touted last summer by the Pan American Health Organization and Caribbean Development Bank as the two agencies worked to buoy mental wellness and resiliency in the West Indies region.
Inspired by the historic 2017 Atlantic hurricane season (17 named storms, $294.92 billion damage total) and launched two years later, the “Stronger Together” campaign aims to bolster sound mental health and coping strategies during crises. The initiative also attempts to allay the stigma surrounding mental health treatment, and improve publicly available pyscho-social support.
Such support was critical last year as COVID-19 lockdowns forced the planet’s populace into months of unbroken solitude, leaving individuals battling loneliness, depression, fear, anxiety, irritability, and post-traumatic stress disorder. Many of these feelings have snowballed among Caribbean island folk whose lives have been upended in recent years by five (consecutive) unusually active hurricane seasons.
“...as we grapple with COVID-19, we are in the middle of our 2020 hurricane season, which is predicted to be above normal,” Diedre Clarendon, division chief for the Caribbean Development Bank’s Social Sector Division, said in campaign kickoff remarks last July. “The impacts for these hurricanes are likely to include heightened stress, fear, depression, and anxiety across populations that are already coping with COVID-19 impacts...we have expanded the scope of our collaboration to include the pandemic. The call to action connecting to feel safe, calm, and hopeful aims to offer information and strategies to assist communities in promoting mental well-being and positive coping strategies, and raise awareness to reduce the stigma about seeking mental health and pyscho-social support while also considering social distancing guidelines. In this way, we will indeed be resilient and we are stronger together.”
Stronger indeed.
Though it targeted a specific audience, Clarendon’s underlying message had worldwide relevance last year in the global battle against SARS-CoV-2. It quickly became the healthcare industry’s mantra as companies temporarily set aside their rivalries and collaborated on coronavirus treatments and pandemic-induced supply shortages.
Johnson & Johnson, for example, partnered with Merck to manufacture its single-shot COVID-19 vaccine, while its Ethicon subsidiary teamed with non-profit firm Prisma Health on the latter’s ventilator expansion device. The product (dubbed VESper Ventilator Expansion Splitter) enables a single ventilator to be used by two patients; Ethicon manufactured and distributed the device at no cost to U.S. healthcare providers.
“Johnson & Johnson has been investing in and applying the best science to take on the most serious public health threats for more than a century—and there was never any question that we would contribute the full breadth and depth of our company’s expertise to global efforts to combat COVID-19,” Chairman and CEO Alex Gorsky told shareholders in the company’s 2020 annual report. “With this ambitious, urgent goal driving us forward, we set out to follow the science and to make our potential vaccine available on a not-for-profit basis for pandemic emergency use. This work was done around the clock, through innovative models of public-private partnerships and new heights of purpose-driven collaboration. At the start of 2020, no one could have imagined just how dramatically our world was about to change...By any measure, it was a year dominated by uncertainty—yet the pandemic helped to clarify our priorities and reinforce our values. And while the familiar yard signs may be faded now, their message is more resonant than ever: We’re all in this together.”
And together, the J&J enterprise—through its 260 subsidiary firms and 135,000 employees—survived the world’s worst health crisis in more than a century with just a few metaphorical bumps and bruises. Considering all the coronavirus-bred headwinds it faced last year (lockdowns, supply chain snafus, elective surgery postponements, tanking economies), the healthcare behemoth turned a profit in 2020, raising total sales 0.64 percent to $82.6 billion. Gross profit was flat at $54.1 billion ($346 million less than 2019) but net earnings fell 2.7 percent compared with fiscal 2019 to $14.7 billion. Earnings per share—both basic and diluted—also were down, slipping 2.3 percent and 2.1 percent respectively.
J&J’s Consumer Health and Pharmaceutical segments were cash cows last year, with the former increasing sales 1.1 percent to $14 billion, and the latter expanding revenue 8 percent to $45.6 billion.
Consumer Health benefited from higher public demand for oral care, wound care, and (outside-U.S.) skin health/beauty products, while Pharmaceutical proceeds grew from gains in nearly all therapeutic areas, save for cardiovascular/metabolism/other.
The Medical Devices segment, conversely, was J&J’s sole spoilsport, surrendering more than a decade of growth to the pandemic’s fiscal thrashing. Total revenue plummeted 11.6 percent in fiscal 2020 to a 13-year low of $22.95 billion as hospital volumes fell precipitously during the second and third quarters, and the medtech market shrunk between 30 percent and 70 percent. U.S. sales slid 11 percent to $11 billion, and international revenue contracted 12.2 percent to $11.92 billion.
Yet there were some bright spots amid the segment’s gloom: The company secured PPE for front-line workers, expanded its hip/knee and intraocular lens platforms, launched new solutions for stroke and arrhythmia treatments, and further developed its surgical robotics capabilities.
“Our Medical Devices business has made strong progress advancing our pipeline despite the pandemic, achieving and even accelerating certain key milestones throughout the year,” Gorsky told analysts during a Q4/2020 full-year earnings conference call in late January (2021). “We are developing an end-to-end digital ecosystem across three robotics platforms, and we achieved a significant milestone this month, receiving FDA clearance for our VELYS robotic-assisted solutions. We believe the industry is just starting to unlock the full potential and benefits of robotic and digital technologies. Johnson & Johnson is well-positioned to bring innovative, differentiated solutions to the surgery suite over the next 10, 20, and 30 years. Overall, we remain very confident in the long-term prospects around the medical device market.”
Those prospects will have to be quite propitious, however, for J&J to recoup its losses from the pandemic. Three of the Medical Devices segment’s four product franchises posted double-digit deficits due to significant hemorrhaging in all eight subdivisions.
The hemorrhaging was heaviest in J&J’s Vision franchise but somewhat blunted in Orthopedics (DePuy Synthes), which stemmed its losses better than its franchise brethren. The lower deficit total is quite surprising, really, considering the global orthopedics industry went dormant while elective surgeries were suspended.
DePuy Synthes’ total revenue fell 12.2 percent to $7.76 billion, driven by steep declines in all four product divisions. The 11 percent slide in Hips sales ($1.28 billion) was partially offset by strong demand for the Anterior approach (front of the hip), the ACTIS stem, and enabling technologies—KINCISE and VELYS Hip Navigation. The KINCISE Surgical Automated System is designed to replace the handheld mallet traditionally used in total hip arthroplasty, while VELYS aims to improve surgical accuracy.
Knees proceeds nosedived 21 percent last year to $1.17 billion, and Trauma sales slipped 3.9 percent to $2.61 billion. Spine, Sports & Other revenue declined 15.7 percent to $2.7 billion, but new product sales helped the division avert further losses.
Some of those new products included the FIBULINK Syndesmosis Repair System and Radial Head Replacement System, both of which launched last October in the United States.
The FIBULINK system treats traumatic syndesmosis injuries and restores the ankle’s physiologic motion. Developed by Durham, N.C.-based Akros Medical Inc. (acquired last year by DePuy Synthes), FIBULINK features a short high-strength suture bridge, which eliminates potential complications associated with broken syndesmotic screws. DePuy claims the product is the only flexible syndesmotic repair system that can fine-tune and readjust tension intraoperatively, allowing surgeons to tighten and reverse suture tension as necessary to optimize the final gap between the tibia and fibula.
FIBULINK implants are manufactured in stainless steel or titanium, and they are compatible with all DePuy Synthes distal fibula plates and any plate hole that accepts a 4 mm non-locking cortex screw. The system delivers biomechanical superiority over the Arthrex Syndesmosis TightRope XP Implant, with FIBULINK providing three times the fixation strength and 71 percent less elongation in a model simulating poor bone quality, according to DePuy Synthes Fatigue Loading and Static Failure data.
The FIBULINK Repair system eliminates the need for medial incisions or hardware in syndesmotic fixations, thus avoiding such complications as neurovascular structure damage or soft tissue entrapment that may occur with suture button constructs. The implant also helps improve procedural efficiency by delivering fixation through a single lateral incision.
“This launch allows us to bring a differentiated solution that combines the benefits of stability and flexibility in the treatment of these common injuries,” I.V. Hall, worldwide president of Trauma, Extremities, CMF, and Animal Health at DePuy Synthes, said upon the FIBULINK’s release. “The acquisition of Akros and subsequent launch of this key technology demonstrate a clear focus on accelerating meaningful innovation and strengthening DePuy Synthes’ Extremities portfolio—providing diverse solutions that enable customers to provide greater benefit to their patients.”
DePuy’s other new beneficial solution for patients last year was the Radial Head Replacement System, designed for patients with destabilized radial head fractures. The system includes side loading spacers and single-use instrument kits to save time in the operating room, improve efficiency, and reduce costs. It reportedly is the first system to use radiolucent trials that allow for better visualization of the elbow joint during trialing and more accurate implant sizing during surgery. The Radial Head Replacement System also offers smooth stemmed implants, which are designed to allow for unrestricted motion, allowing the stem to self-center inside the radial canal.
“We are pleased to integrate this technology into our portfolio alongside our current offerings and provide comprehensive solutions for the treatment of fractures and conditions in extremities,” Hall noted in a news release. “This launch allows us to bring a differentiated solution to surgeons treating the common injury of radial head fractures, while also providing greater efficiency and reducing costs.”
Differentiated solutions—both new and old—proved helpful in curtailing DePuy Synthes’ sales losses last year. Its SYMPHONY OCT System and CONDUIT Interbody platform, for example, slightly offset pandemic-induced shortfalls, but the gains were hardly enough to replenish the company’s near-depleted coffers.
Adding to DePuy Synthes’ troubles last year was the lingering safety issues surrounding its USS II Polyaxial 3D head rings. Last summer, United Kingdom regulators warned patients of problems associated with the rings, which are part of the USS II Polyaxial system, a posterior pedicle screw fixation solution designed to stabilize the spine in skeletally mature patients.
The Medicines and Healthcare Products Regulatory Agency (MHRA) alert (dated July 10, 2020) forewarned patients to the possibility of the Polyaxial 3D head rings cracking and potentially causing the system to loosen before the bone heals.
The MHRA issued its alert eight months after DePuy Synthes released a field safety notice warning users of the rings’ cracking potential and the possibility of resulting loose rods, poor spinal mechanics, non-union or malunion, pain, or dislocation. In the field safety notice, DePuy Synthes said the majority of implant failures occurred during procedures, but noted the problems could surface post-operatively.
The U.K. government urged affected customers to identify and quarantine all affected devices and consult with patients to determine whether they exhibit symptoms of the cracking rings. Those without symptoms should be monitored annually for symptoms for two years after their implantation surgery date, the government said.