Johnson & Johnson on Oct. 14 said it plans to separate its slower-growing orthopedics business to enhance the strategic and operational focus of each company and drive value for stakeholders.
The standalone orthopedics business would operate as DePuy Synthes, which J&J says would be the largest orthopedics-focused company in the world. Namal Nawana was appointed to serve as Worldwide President of DePuy Synthes, effective immediately.
According to a report in the business publication Barron’s, Johnson & Johnson’s orthopedics business accounted for 9.5% of the company’s total sales in the third quarter of the year. Even though sales for J&J’s medical devices division grew 5.6% on an operational basis between the third quarter of 2024 and the third quarter of 2025, orthopedics sales rose just 2.4% over the same period. J&J reported third-quarter earnings that were better than expected.
The spinning off of its orthopedics business is the latest move by J&J to spin off businesses it believes do not fit its overall strategy. Two years ago, the New Brunswick pharmaceutical giant cut loose its consumer health unit, which sold Tylenol and Band-Aids and other consumer products that now operate independently under the name Kenvue.
The company said the planned separation would “further strengthen the focus of Johnson & Johnson as an innovation powerhouse, serving areas of high unmet needs across Innovative Medicine and MedTech, accelerating the ongoing shift of the company’s MedTech portfolio toward higher-growth and higher-margin markets.”
“This transaction enables Johnson & Johnson to further strengthen its focus and investment toward higher-growth areas where we can meaningfully extend and improve patient lives,” said Joaquin Duato, chairman and chief executive officer, Johnson & Johnson. “The planned separation reflects our long-standing commitment to portfolio optimization and value creation. We are confident that our orthopedics business will be better positioned to improve top-line growth and operating margins as a standalone business.”
Johnson & Johnson said it expects the separation would increase its top-line growth and operating margins.
“This move would further enhance the market-leading position for DePuy Synthes and strengthen our overall MedTech business with a focus on cardiovascular, surgery and vision,” said Tim Schmid, executive vice president, worldwide chairman, MedTech. “Through the separation process, we will remain focused on setting our talented teams up for long-term success, while continuing to serve our customers and create healthier futures for patients around the world.”
J&J said DePuy Synthes is expected to “benefit from a more focused business model and be better positioned to advance patient care while delivering clinical and economic value to health care systems worldwide. DePuy Synthes would continue to address a $50 billion+ global market opportunity and serve approximately 7 million patients.”
For fiscal year 2024, the orthopedics business generated about $9.2 billion in sales. J&J said DePuy Synthes would be expected to have an investment-grade profile and balance sheet that would allow it to build on its long history of innovation and maintain and extend its leadership position.
Nawana will lead the orthopedics business through the separation process, reporting directly to Duato. He is expected to continue to lead DePuy Synthes following the completion of the separation.
Nawana most recently served as executive chairman and founder of Sapphiros, a privately held platform company focused on building the next generation of consumer diagnostic technologies. Previously, he served as chief executive officer and a member of the board of directors of Smith & Nephew Plc, a global medical technology business. Prior to that, he served as president and CEO and a member of the board of directors of Alere Inc., a point-of-care diagnostics company, until its purchase by Abbott. Before joining Alere, he spent more than 15 years at J&J.
“I am honored to take on this role to lead the new DePuy Synthes, a global market leader with a deep heritage of innovation and a strong commercial platform that is well positioned to succeed as a standalone company,” said Nawana. “I look forward to working together with the broader team to meet our mission and keep people around the globe moving.”
Johnson & Johnson is targeting completion of the separation within 18 to 24 months. Citi and Goldman Sachs & Co. LLC are acting as financial advisers to Johnson & Johnson and Freshfields LLP is acting as legal counsel.