Johnson & Johnson, one of the largest healthcare products manufacturers in the world, announced that it is considering the sale or spinoff of its Ortho Clinical Diagnostics business. The potential sale of the diagnostics division is part of CEO Alex Gorsky's strategy to streamline the company.
According to information from Bloomberg, the diagnostics division at the company earned approximately $2.16 billion in total sales in 2012. This represented 3.3 percent of Johnson & Johnson's total earnings. In total, its medical device and diagnostics segments pulled in $27.4 billion, making MD&D the largest segment of the company. However, its Ortho Clinical Diagnostics unit yielded $100 million less than expected targets.
Gorsky is under pressure to drive growth in its medical device and diagnostics division. With its recent $21 billion purchase of Synthes, the company is looking to cut divisions that are stagnating or have limited future potential growth. The Ortho Clinical Diagnostics unit, which develops blood screening supplies for use in transfusions, may be the first to go.
In a prepared statement, Gorsky said, "As we look to the future we're advancing innovative new products in our pipeline, continuing to take a disciplined approach to managing our portfolio and adapting our business to the changing marketplace."