MD+DI Online is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

What Does Johnson & Johnson's CEO Think of the Medtronic-Covidien Merger?

What Does Johnson & Johnson's CEO Think of the Medtronic-Covidien Merger?
Alex Gorsky said J&J saw the trend toward consolidation in medtech coming a mile away.  

Gorsky

In Johnson & Johnson’s second quarter 2014 earnings call today, one analyst asked chairman and CEO Alex Gorsky for his take on Medtronic’s $42.9 billion acquisition of Covidien last month.  

Learn more about what trends are shaping the medical device industry at the MD&M Minneapolis conference and exposition October 29–30, 2014.

Gorsky’s response, in essence, was that J&J saw something like this coming a mile away and beat its competitors to the punch.

“…[A]s you think back to about three years ago, when we announced the Synthes acquisition—I think 2.5 to 3 years—part of the strategy rationale that we made at that time was that we definitely saw consolidation in the future simply because of the number of different participants you had in the market,” he said in a Seeking Alpha transcript of the call.

Part of Medtronic’s motivation for acquiring Ireland-based Covidien was to build scale. Gorsky believes, for the most part, J&J already has that.

“…[I]f we look at ourselves today, we think we’re clearly the broadest medical device company,” he said. “We think we’re well positioned—particularly when you consider areas like general surgery, like orthopedics, we have not only broad but also deep offerings that give us solid market positions across the number of different platforms.”

But there is one area in which the company hasn’t achieved the breadth it might need.

“We realized that in cardiovascular we’re subscale,” Gorsky said, adding that although the company’s electrophysiology business is performing well with a growth rate of 14%, cardio is an area where the company might look to make an acquisition in the future.

“We’re going to continue to watch that area very close to augment potentially onto our EP business,” he said.

Stay up to date on the goings-on at FDA by attending the MD&M Minneapolis conference October 29–30, 2014.

Jamie Hartford, managing editor, MD+DI
[email protected]

[image courtesy of JOHNSON & JOHNSON]

TAGS: News
Hide comments
account-default-image

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish