Johnson & Johnson plans to spin off its orthopedics business into a new company named DePuy Synthes within the next 18 to 24 months. The move is part of J&J’s focus on higher-growth healthcare segments, with expectations for faster growth through 2026. The orthopedics unit generated $9.2 billion in revenue last year and will be led by Namal Nawana post spinoff. J&J’s recent stock rally may limit further upside, but the company raised its 2025 sales forecast to $93.5 billion to $93.9 billion. J&J’s Q3 sales of $23.99 billion and adjusted earnings of $2.80 per share beat Wall Street expectations.

J&J announced a spinoff plan for its orthopedics business following a two-year restructuring program in 2023. The orthopedics unit represents about 30% of J&J’s MedTech segment and is expected to generate growth in line with the rest of the portfolio post spinoff. The move aligns with J&J’s focus on high-growth, high-margin areas like oncology, immunology, and cardiovascular products. J&J is exploring various options for the separation, primarily focusing on a tax-free spinoff. The company expects no major updates on the transaction until mid-2026, causing some concerns among investors.

J&J’s Q3 sales and earnings exceeded analysts’ expectations, with pharmaceutical sales up 6.8% and medical device sales rising 6.8%. Blood cancer treatment Darzalex brought in $3.67 billion in sales, while electrophysiology products drove medical device sales. J.P. Morgan analysts view J&J as a strong player in the healthcare industry despite challenges like losing exclusivity for Stelara. CEO Joaquin Duato declined to comment on reports of acquiring Protagonist Therapeutics, stating satisfaction with the current arrangement.

Read more at Yahoo Finance: J&J to spin off orthopedics business, sees 2026 sales growth of over 5%