Johnson & Johnson JNJ 1.73% plans to break up into two companies, splitting off the $15-billion-a-year division that sells Band-Aid bandages, Tylenol medicines and Johnson’s Baby Powder in a shift indicating just how much healthcare has changed since the company helped pioneer the industry.
The world’s largest health-products company by sales will separate its high-margin but less predictable prescription-drug and medical-device business from its storied but slower-growing consumer group, creating two publicly traded companies.
J&J will shed its consumer division in 18 to 24 months, Chief Executive Alex Gorsky said. J&J decided to make the change, he said, because the businesses, their customers and markets have diverged so much in recent years, including during the pandemic. Lawsuits that alleged use of Johnson’s Baby Powder caused cancer didn’t play a role, he said.
“The best path forward to ensure sustainable growth over the long term and better meet patient and consumer demands is to have our consumer business operate as a separate healthcare company,” Mr. Gorsky said in an interview.
