Johnson & Johnson MedTech (NYSE: JNJ) has officially set a target for the departure of its DePuy Synthes orthopedics unit in the middle of next year, while reporting broader device sales coming in below analyst expectations for the quarter.
The company’s leadership described facing international headwinds in medtech, including volume-based procurement changes in China and the ongoing conflicts in the Middle East, all while it works to reshape its surgery program and drop non-strategic product lines ahead of the planned launch of its Ottava robot platform.
While the surgery division reported 3.7% growth stateside for the third quarter, U.S. gains were eclipsed by international operational sales falling 4.2%, amounting to a 1.0% contraction compared to the prior year and a global haul of about $2.53 billion.
Revenue in certain cardiovascular sectors also fell, including 1.5% among its Abiomed Impella products following lower patient volumes, while its Shockwave intravascular lithotripsy unit added 17.2% to international sales. Electrophysiology brought in about $1.49 billion, up 4.4% year-over-year despite increasing competition in pulsed field ablation. Cardiovascular as a whole was up 4.1%, totaling $2.31 billion.
All told, J&J’s medtech portfolio brought in $8.64 billion for 2.5% growth, under Wall Street’s consensus estimates of $8.74 billion.
“We are clear on where MedTech performance needs to improve, specifically Cardiovascular and Surgery outside the U.S., and are taking action to strengthen results,” J&J’s chief financial officer, Joseph Wolk, said on a call with investors. “While disappointing, the underlying fundamentals of the MedTech business remain strong, supporting our confidence in the long-term for that business.”
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J&J’s vision business, meanwhile, posted 5.1% gains to $1.46 billion, on the back of its Acuvue Oasys contacts and Tecnis surgical intraocular lenses. Finally, orthopedics rose 3.4% to $2.34 billion, following new launches in hips and trauma products.
The company first outlined plans to divest its DePuy Synthes unit in October 2025, which if it spun out independently would become one of the largest pure-play orthopedics companies in the world. After reportedly eyeing deals valued north of $20 billion earlier this year, Bloomberg said last month that J&J was in talks with Apollo Global Management to sell off all or part of the business. However, the company said today that a spin was more likely.
“Regarding Orthopaedics, we remain on track for the planned separation of DePuy Synthes by mid-2027. I am really proud of the team working to evaluate all separation vehicles and all options are better positioned today than when we announced our intentions with this business,” Wolk said during the earnings call.
“Given the way DePuy Synthes is performing and the momentum [President] Namal Nawana and his team are generating, we are leaning towards a spin as being the best option to create long-term value for Johnson & Johnson shareholders,” he added.
The company is also planning an enterprise business review event, including a closer view of Ottava and its 2027 outlook, scheduled for December 8.
Pharmaceutical sales added another $16.75 billion for the quarter, up 7.9%, for a company-wide total of $25.4 billion and 6.0% growth. J&J’s stock slipped by more than 5% on the report, down to about $249 per share.
