By Michelle Chapman and Tom Murphy

Johnson & Johnson is splitting into two companies, peeling off the division selling Band-Aids and Listerine from its medical device and prescription drug business.

The world’s biggest maker of health care products, founded in 1886, said Friday the move will help improve the focus and speed of each company to address trends in their different industries.

The company selling prescription drugs and medical devices — J&J's two largest businesses — will keep the Johnson & Johnson name. That company sells treatments such as Darzalex, Erleada, Imbruvica, Stelara and Tremfya as well as medical devices for orthopedics and surgery.

The pharmaceutical arm also makes one of three COVID-19 vaccines currently approved for use in the United States.

The new consumer health company, which has yet to be named, will house brands including Neutrogena, Aveeno, Tylenol, Listerine, Johnson’s, and Band-Aid.

“Following a comprehensive review, the board and management team believe that the planned separation of the consumer health business is the best way to accelerate our efforts to serve patients, consumers, and healthcare professionals, create opportunities for our talented global team, drive profitable growth, and – most importantly – improve healthcare outcomes for people around the world,” CEO Alex Gorsky said in a statement.

Johnson & Johnson expects the split to occur in the next two years, if approved by the company's board of directors.

Pharmaceuticals and medical devices pulled in a combined $19.6 billion in revenue in the company’s recently completed third quarter, which turned out better than analysts expected. Consumer health brought in $3.7 billion.

J&J is beginning its split as it also undergoes a leadership transition. The company said in August that Gorsky will step and be replaced in January by longtime company executive Joaquin Duato.

The split also comes as J&J deals with criticism from some Democrats in Congress over another corporate move. J&J is facing thousands of lawsuits claiming that its talc-based baby powder, which it has stopped selling in the U.S. and Canada, caused ovarian cancer.

U.S. Senators Dick Durbin of Illinois and Elizabeth Warren of Massachusetts, among others, recently sent a letter to the company asking for more information about a newly created subsidiary that filed for Chapter 11 bankruptcy protection.

The senators in a Nov. 10 letter called the move a “corporate shell game” that would shield the company from liability in those cases.

Company officials said Friday that their announcement was “separate and distinct” from the baby powder situation.

J&J's announcement Friday comes just days after General Electric said that it plans to split into three separate companies.

It also follows similar moves by other large health care firms who sought to narrow their focus. Rival drugmaker Pfizer Inc. spun off its consumer health product business in 2019 to help create a joint venture with GlaxoSmithKline.

Another drugmaker, Merck & Co. Inc., slimmed down in June with a spinoff that combined its Organon women’s health unit with its businesses selling biosimilars, or near-copies of pricey biologic drugs, and off-patent former blockbusters like respiratory drugs Singulair and Nasonex.

Shares of New Brunswick, New Jersey-based Johnson & Johnson climbed more than 3% before the market opened. The company has been a component of the Dow Jones Industrial Average since 1997.

Share:
More In Business
State Department Halts Plan to buy $400M of Armored Tesla Vehicles
The State Department had been in talks with Elon Musk’s Tesla company to buy armored electric vehicles, but the plans have been put on hold by the Trump administration after reports emerged about a potential $400 million purchase. A State Department spokesperson said the electric car company owned by Musk was the only one that expressed interest back in May 2024. The deal with Tesla was only in its planning phases but it was forecast to be the largest contract of the year. It shows how some of his wealth has come and was still expected to come from taxpayers.
Goodyear Blimp at 100: ‘Floating Piece of Americana’ Still Thriving
At 100 years old, the Goodyear Blimp is an ageless star in the sky. The 246-foot-long airship will be in the background of the Daytona 500 — flying roughly 1,500 feet above Daytona International Speedway, actually — to celebrate its greatest anniversary tour. Even though remote camera technologies are improving regularly and changing the landscape of aerial footage, the blimp continues to carve out a niche. At Daytona, with the usual 40-car field racing around a 2½-mile superspeedway, views from the blimp aptly provide the scope of the event.
Is U.S. Restaurants’ Breakfast Boom Contributing to High Egg Prices?
It’s a chicken-and-egg problem: Restaurants are struggling with record-high U.S. egg prices, but their omelets, scrambles and huevos rancheros may be part of the problem. Breakfast is booming at U.S. eateries. First Watch, a restaurant chain that serves breakfast, brunch and lunch, nearly quadrupled its locations over the past decade to 570. Fast-food chains like Starbucks and Wendy's added more egg-filled breakfast items. In normal times, egg producers could meet the demand. But a bird flu outbreak that has forced them to slaughter their flocks is making supplies scarcer and pushing up prices. Some restaurants like Waffle House have added a surcharge to offset their costs.
Trump Administration Shutters Consumer Protection Agency
The Trump administration has ordered the Consumer Financial Protection Bureau to stop nearly all its work, effectively shutting down the agency that was created to protect consumers after the 2008 financial crisis and subprime mortgage-lending scandal. Russell Vought is the newly installed director of the Office of Management and Budget. Vought directed the CFPB in a Saturday night email to stop work on proposed rules, to suspend the effective dates on any rules that were finalized but not yet effective, and to stop investigative work and not begin any new investigations. The agency has been a target of conservatives since President Barack Obama created it following the 2007-2008 financial crisis.
Load More