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Popular Johnson & Johnson brands such as Tylenol, Aveeno and Listerine will soon be housed at a new company over the next two years.
The New Jersey-based healthcare company said on Friday it would separate its consumer products business from its pharmaceutical and medical device division as part of an effort to better meet the needs of its patients and customers.
The new consumer branding company, whose name has not yet been revealed, will be a publicly traded entity independent of Johnson & Johnson. The design for the new organization is expected to be formed by the end of 2022, with the formal separation to be completed within 18-24 months.
Johnson & Johnson’s consumer products segment is expected to generate around $ 15 billion in revenue this year and would be available in more than 100 countries after the separation, the company said.
Other consumer health brands that Johnson & Johnson sells include Benadryl, Motrin, Zyrtec, Nicorette, Sudafed, and Band-Aid.
“Following a comprehensive review, the Board of Directors and the management team believe that the planned separation of the consumer healthcare business is the best way to accelerate our efforts to serve patients, consumers and healthcare professionals, creating opportunities for our talented global team, driving profitable growth and – most importantly – improving healthcare outcomes for people around the world, ”said Alex Gorsky, CEO of Johnson & Johnson.
Following the separation, Johnson & Johnson will remain focused on manufacturing pharmaceuticals and medical devices, which include its single-dose COVID-19 vaccine, cancer treatments, prescription drugs and surgical tools. The company’s medical arm is expected to generate $ 77 billion in revenue this year.
Joaquin Duato, vice chairman of the company’s executive committee, will take over as CEO of Johnson & Johnson on January 3. A management team for the new consumer products company has yet to be formed.
According to the New York Times, Johnson & Johnson is the latest healthcare company in recent years to transform its consumer products arm into a new company.
Merck sold its consumer healthcare business to Bayer for more than $ 14 million in 2014. Two years ago Pfizer and GlaxoSmithKline agreed to merge their respective consumer brands into a new company slated to go public in 2022. .
Other notable companies, such as General Electric and Toshiba, recently unveiled plans to split their businesses into parts in an effort to improve their stock prices and simplify their companies.
One of Johnson & Johnson’s best-known consumer products, its talc-based baby powder, has been at the center of a number of lawsuits alleging it can cause cancer. The company has denied the claims and insisted the product is safe, but J&J halted sales of its talc-based baby powder in North America last year.
