NEW BRUNSWICK, NJ—Johnson & Johnson (J&J), the Hub City-based multinational pharmaceutical company is seeking a buyer for its Bridgewater-based Cordis medical device unit.

Cordis employes 5,000 people and makes vascular medical devices and is said to have created the market for drug-coated heart stents. The global market for cardiac stents is roughly $5 billion. But according to published reports, Cordis is struggling.

J&J owns 270 businesses, including 12 businesses devoted strictly to medical devices such as Depuy Synthes, Janssen Diagnostics, Ethicon, and Ethicon Endo-Surgery.

As we reported J&J is looking to shed slower-growth businesses and reduce its annual costs by $1 billion.

The global market for drug-eluting stents isn’t what it used to be.  In 2011, J&J said it would leave the cardiac stent business after years of falling sales.

J&J ended production of its Cypher drug-eluting stents for good in 2012.  Newer, more efficient competitors gained market share and J&J no longer holds its position as the market leader.

At a recent Morgan Stanley global Healthcare Conference where J&J Vice President of Finance and Chief Financial Officer Dominic Caruso spoke, a person not with J&J jokingly called the medical devices sector the “Ugly duckling.”

The person acknowledged the company’s recent sale of Ortho-Clinical Diagnostics and increase in merger and acquisition activity among major drug companies in general.

He then asked Caruso to explain what J&J’s strategy for medical devices is?

“We’ve taken the position that we don’t want to be in commodities markets, so that’s one reason why we got out of the drug-eluting stent business.” 

Carusso explained that the strategy pivots on innovation and what particular markets you are playing in.

“We want to be in markets where there is significant innovation — where we can do well,” said Carusso.

We will continuously look to make bigger bets where we think the growth rates are sustainable for longer periods of time, Carusso said.

“And [J&J] will continue to prune and pair the business back where we think the growth rates are not going to be attractive longer-term, or where we think we have better opportunities to invest,” said Carusso.

He also noted that acquisitions have transformed J&J over the past several decades,  and that the company is not ruling out large acquisitions.

“The bottom line with acquisitions is whether we will get a return,” Carusso said.

In July, Chairman and Chief Executive Officer Alex Gorsky told Carol Massar of Bloomberg TV, that the company is open to selling off of its smaller business units.

Notably, Gorsky added that he was “very confident” that a year from now “the size and scale of our medical device business will be paying off great for patients and for shareholders.”

The Cordis business could sell for as much as $2 billion, according to published reports.

J&J declined to comment on the matter, according to published reports.

Business Reporter at New Brunswick Today |

Dave is an award-winning business reporter who has authored over 200 articles for New Brunswick Today.

Dave is an award-winning business reporter who has authored over 200 articles for New Brunswick Today.