Name: 巨大な製薬会社が進化している理由（Why The Biggest Pharma Company In The U.S. Is Breaking Up）
Uploaded: 2022-02-19T21:36:04.000Z
Duration: 11 min 23 s
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Johnson & Johnson is the biggest pharmaceutical company in the US

基礎受動態

based on its market cap. It was named number 36 on the 2021

Fortune 500 list of the largest United States corporations by

total revenue. Johnson and Johnson has experienced dividend

growth for nearly 60 years and has consistently outperformed

The analyst community has been talking about splitting up J&J

for years - as long as I've known the company.

Johnson & Johnson announcing that is going to be splitting

The pharma and medical device company, which will be called

Johnson and Johnson, and then the Tylenol, Listerine, Band-Aid

They're now separating the consumer business away from

pharmaceutical and the medical device division. And I think

that's going to create significant shareholder value.

But some investors question why J&J would choose to break up

now. The company is embroiled in a series of lawsuits regarding

its talcum powder, as well as its role in the opioid crisis.

J&J also took a hit when the CDC recommended Americans receive

one of the mRNA Covid vaccines from either Pfizer or Moderna,

rather than J&J due to "the risk of serious adverse events."

The timing situation is critical, just because people

Johnson & Johnson is one of the most influential companies in

the pharmaceutical industry. It's really seen as a bellwether

Why is the largest pharmaceutical company in the US

breaking itself up and what does it mean for investors?

Johnson & Johnson is made up of three unique business segments:

Consumer, medical devices - which is also called Med Tech -

The consumer business sells everything from Tylenol to

Neutrogena. The pharmaceutical and medical device side of the

company develops vaccines, like its single dose Covid vaccine

cancer treatments, joint replacement materials and other

Separation right now makes a lot of sense. You're going to have

two companies with good financial strength and cash

flows in order to pursue the objectives that they need to to

have normal growth for the foreseeable future.

Analysts say the split allows J&J to bring in a management

team to specifically focus on the consumer division, while

also giving that segment new branding and marketing

The strategy of running these consumer businesses is very,

very dissimilar to a medical device or a pharmaceutical

business. There's a lot more direct to consumer, obviously,

the sales and marketing effort, the social media effort is very

pronounced in consumer, it's much less so for the other

businesses. So allowing a management team just to focus on

what has to be done in order to resume growth or drive better

revenue growth over the next couple of years, I think is very

Our pharma and our medical device business tends to be much

more of a business to business relationship in the way that we

work through other intermediaries, you know,

compared to the consumer business. And most importantly,

where we see things going into the future, we feel it now is

the right time to make this kind of a move. And again,

ultimately, it's going to allow us to reach more patients, more

consumers have more innovation, and execute in a much more

It's a somewhat common practice for companies with diverse

segments to break apart. Pfizer, Eli Lilly and Merck all

reorganize their business structures within the last five

years by spinning off segments into separate companies.

What the market is saying is that companies should focus on

their core competencies and let us diversify. We've already seen

several examples of large pharma separating out non core assets.

I think they finally came to terms with the fact that they

weren't really seeing value in the share price from having that

When you're a conglomerate, you never get credit for the various

different pieces. And quite frankly, you probably shouldn't,

because some other parts of the company are not investing the

way they should. They're not focus the way they should. And

so when you separate out various different businesses, we now as

analysts and portfolio managers can appreciate what the each of

the businesses are. And they do over time, there have been

studies that have been done, both Remain Co. and New Co. can

outperform because they are on their own.

So far, investors reaction to the divide has been mild with

the stock only moving modestly higher on the news. The stock

went on to underperform the week following the announcement.

The market hasn't really reacted to the news. There are some

risks to this execution from separating out the consumer

business. And I think investors aren't fully convinced yet of

the standalone earnings potential of both companies. So

from a consumer perspective, I think people wonder how the

consumer business can compete with companies such as Procter &

Gamble, and some of these larger, more established players

J&J's business move may also help attract a different type of

You're going to get people that are consumer staples and

consumer oriented. You'll get them focused on the consumer

piece. And of course, you're now more of a pure play healthcare.

And so you'll get more health care analysts.

You finally get a situation in J&J, where the balance of the

business is not impacted by what's going on, good or bad,