Alongside its third-quarter earnings report, Johnson & Johnson announced a two-year restructuring of its orthopedics business. The move aims to simplify and focus operations so the company can better meet demand. DePuy Synthes will exit certain product lines and markets. All told, the restructuring will incur a modest $250 million revenue disruption and cost up to $800 million over the two-year project.
The company generated $8.6 billion in total orthopedic sales in 2022. We project DePuy Synthes will finish 2023 with $8.9 billion in sales, reflecting growth of 3.6%
Our chart of the month tracks DePuy Synthes’ sales by business unit from 2016 through our 2023 projection. The company’s joint replacement sales have largely offset in recent years, with a CAGR of 0.5%. Trauma’s growth is below market, but increasing steadily at about 2% annually against a massive revenue base of nearly $3 billion. The Spine, Sports and Other segment has declined 3% annually, with punishing losses concentrated in spine.
The orthopedic market’s growth is expected to remain elevated through 2024, and companies are jockeying to win those procedures. Companies with operational inefficiencies, like DePuy Synthes and Smith+Nephew, have largely missed out on the market’s upside so far. We’ll see if Johnson & Johnson can fix things on the fly without significant exits or divestments.
Alongside its third-quarter earnings report, Johnson & Johnson announced a two-year restructuring of its orthopedics business. The move aims to simplify and focus operations so the company can better meet demand. DePuy Synthes will exit certain product lines and markets. All told, the restructuring will incur a modest $250 million revenue...
Alongside its third-quarter earnings report, Johnson & Johnson announced a two-year restructuring of its orthopedics business. The move aims to simplify and focus operations so the company can better meet demand. DePuy Synthes will exit certain product lines and markets. All told, the restructuring will incur a modest $250 million revenue disruption and cost up to $800 million over the two-year project.
The company generated $8.6 billion in total orthopedic sales in 2022. We project DePuy Synthes will finish 2023 with $8.9 billion in sales, reflecting growth of 3.6%
Our chart of the month tracks DePuy Synthes’ sales by business unit from 2016 through our 2023 projection. The company’s joint replacement sales have largely offset in recent years, with a CAGR of 0.5%. Trauma’s growth is below market, but increasing steadily at about 2% annually against a massive revenue base of nearly $3 billion. The Spine, Sports and Other segment has declined 3% annually, with punishing losses concentrated in spine.
The orthopedic market’s growth is expected to remain elevated through 2024, and companies are jockeying to win those procedures. Companies with operational inefficiencies, like DePuy Synthes and Smith+Nephew, have largely missed out on the market’s upside so far. We’ll see if Johnson & Johnson can fix things on the fly without significant exits or divestments.
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Mike Evers is a Senior Market Analyst and writer with over 15 years of experience in the medical industry, spanning cardiac rhythm management, ER coding and billing, and orthopedics. He joined ORTHOWORLD in 2018, where he provides market analysis and editorial coverage.
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