Johnson & Johnson plans to spin off Depuy operations next year

Depuy has operated in Cork since 1997, and employs around 1,700 people at its site in Ringaskiddy

The DePuy Synthes/Johnson & Johnson manafacturing facility at Loughbeg, Ringaskiddy. J&J plans to spin off Depuy, Synthes next year. Picture: David Creedon

Johnson & Johnson plans to spin off Depuy, Synthes, its hips and knees business which has major operations in Cork, next year.

J&J chief financial officer Joe Wolk, in an interview with CNBC, said they are targeting mid-2027 for the spinoff. "We're not cash strapped. We don't have to pursue a deal that maybe is not optimal," Mr Wolk told CNBC. "We can sit this out for a little bit, separate the business sometime next year."

Depuy has operated in Cork since 1997, and employs around 1,700 people at its site Ringaskiddy. In 2019, the company invested €36m in a 3D Printing Development & Launch Centre in Cork, with the company producing its first commercial 3D printed knee product.

DePuy Synthes would become the world’s largest orthopedics company if it does become a standalone entity. In 2025, Depuy generated $9.3bn (€8.3bn) in sales. Global alternative asset manager Apollo Global Management is in talks to acquire the orthopedics unit in a ​deal that could value it at close to $20bn (€17.7bn), Bloomberg News reported in September.

Johnson & Johnson's Irish operations span nine sites across five counties — Cork, Dublin, Limerick, Galway, and Mayo - with more than 5,000 employees.

Q3 profits beat market expectations

Mr Wolk gave the update on the future of Depuy on Tuesday as Johnson & Johnson reported a slightly higher-than-expected profit in its third quarter results, driven by strong sales of immune disease treatment Tremfya. The company posted third-quarter revenue of $25.4bn, above analysts' average estimate of $25.28bn, and adjusted earnings of $2.59 per share also topped Wall Street expectations of $2.54.

Mr Wolk said the Mideast conflict, austerity measures in Europe, and pricing in China continued to weigh on results internationally, "but maybe in a little bit more pronounced way". He said the Mideast conflict, which has led to soaring fuel costs, has yet to impact the company's costs, but has hurt sales in the region.

"These are countries that still value and actually want premium healthcare systems, think Kuwait, UAE, Saudi Arabia. They pride themselves on having solid healthcare, very good healthcare," Mr Wolk said. "But their budgets now are being resourced and allocated towards defence."

Medical technology division sales rose only 2.5% to $8.6bnoverall, but missed estimates of $8.71bn, according to LSEG data. Outside the US, sales in the division were basically flat.

In MedTech, the miss was largely in cardio and surgery, said JP Morgan analyst Chris Schott.

The company raised its full-year forecast for reported sales to about $101.2bn (€90.43bn) at the midpoint, from $101.1bn (€90.34bn) previously. It increased its adjusted earnings forecast range with a new midpoint of $11.10 per share, up from $11.04.

Sales at its Abiomed heart pump business also remained slow after a UK study earlier this year raised questions about the use of Impella pumps during certain high-risk ​coronary procedures.

Quarterly pharmaceutical sales jumped 7.7% in the quarter to $16.76bn.

Tremfya sales rose 68% to $2.4 billion, exceeding analyst estimates of about $2.19 billion, while sales of Stelara, which is facing generic competition, fell 54% to $716 million, still well above Wall Street expectations of $591 million. Tremfya has increasingly replaced lost Stelara revenue following recent approvals in inflammatory bowel diseases.

Sales of blood cancer treatment Darzalex rose about 16% to $4.24bn, short of analyst expectations of $4.4bn.

J&J shares closed at $263.73 on Monday. They have risen 27% this year, outperforming both the broader market and most healthcare peers.

Reuters

CORK BUSINESS

A collection of the latest business articles and business analysis from Cork.