Johnson & Johnson to Spin Off Orthopedics Business, Focuses on High-Growth Medtech Sectors

Johnson & Johnson (J&J) announced plans to spin out its orthopedics business, DePuy Synthes, into a standalone company within the next 18 to 24 months. This strategic move aims to sharpen J&J's focus on higher-growth medical technology sectors, particularly cardiovascular and robotic surgery.

Orthopedics Spinoff Details

The orthopedics unit, which generated $9.2 billion in sales in fiscal year 2024, will become the largest company in the $50 billion orthopedics market upon separation. J&J CEO Joaquin Duato stated that the spinoff would allow DePuy Synthes to "benefit from a more focused business model, with greater flexibility to extend its market leadership, invest in its commercial capabilities and capitalize on profitable growth opportunities."

Namal Nawana has been appointed as the worldwide president of DePuy Synthes, effective immediately. Nawana will lead the business through the separation process and beyond.

Strategic Shift in Medtech Portfolio

J&J's decision to separate its orthopedics business reflects a broader industry trend of focusing on higher-growth and higher-margin markets. Tim Schmid, J&J's worldwide chairman of medtech, explained, "We've been on a journey over the last several years to really aggressively move our portfolio into higher-growth markets, and adding attractive assets such as Abiomed and Shockwave Medical in high-growth markets like cardiovascular are good examples."

The company's cardiovascular portfolio, which includes electrophysiology and recent acquisitions, grew sales by 12.6% in the third quarter to $2.21 billion. In contrast, the orthopedics business experienced a 0.3% year-over-year decline in revenue through the first nine months of 2025, although it rebounded with 3.8% growth in the third quarter.

Impact on J&J's Medtech Division

Following the spinoff, J&J's medtech unit will comprise its cardiovascular, surgery, and vision businesses. The company reported overall medtech revenue of $8.43 billion in the third quarter, representing year-over-year growth of 6.8%.

CFO Joe Wolk indicated that updates on the separation process would be provided throughout, with significant developments not expected until mid-2026. The move follows a similar trend in the medical device industry, with Medtronic announcing plans to spin out its diabetes business earlier this year.