Johnson & Johnson MedTech has been involved in some of the biggest medtech M&A deals in recent years and that trend is likely to continue.
Tim Schmid, J&J MedTech’s EVP and worldwide chair, spoke about the company’s approach to M&A after recent deals totaled more than $30 billion in spending during a “CEOs Unplugged” session at AdvaMed’s The MedTech Conference in San Diego today.
Recent noteworthy buys include Shockwave Medical, V-Wave, Laminar and Abiomed within the past few years. On another MedTech Conference panel, Johnson & Johnson Head of Business Development Jennifer Kozak said that the larger deals (Abiomed cost about $16 billion and Shockwave cost about $13 billion) have performed well and should deliver long-term value creation. (Kozak spoke about the company’s tuck-in M&A strategy on that panel — read about it here.)
Schmid said those types of deals get a lot of attention, and that’s the risk that comes with high price tags.
“There’s a lot of risk and certainly a lot of opportunity in taking such a big bite,” Schmid said. “Frankly, there are not that many great assets like [Abiomed and Shockwave] out there. In J&J’s history, more than 95% of our assets are sub-$1 billion. There are a lot of opportunities out there. We’re certainly open to business.”
Schmid will be among top medtech leaders discussing M&A strategy at DeviceTalks West next week — Oct. 15–16, 2025 in Santa Clara, California. Register here. (Here’s a 25% off discount code: MD25OFF)
Schmid says Johnson & Johnson MedTech views M&A through three lenses
According to Schmid, there are three qualifications that need to be satisfied for J&J to pursue a deal: scientific, strategic and financial fits.
On the scientific front, the company needs to see a significant unmet need an a technology that addresses that need. Ideally, Schmid says, that technology could even change the standard of care.
Strategically, J&J MedTech has to see a right to win, business adjacencies and capabilities it can leverage. Financially, the deal has to make sense.
Schmid explained that Abiomed and Shockwave, specifically, “were clear shots on goal” when it came to that three-pronged approach.
“In both of those businesses, we acquired technologies that didn’t exist and were already changing the standard of care,” Schmid said. “It was a natural evolution for us to build on our leadership position in electrophysiology and move into heart failure to create a beachhead there, then move more directly into interventional heart failure with Shockwave. Financially, both of those assets were accretive to J&J from day one. That’s how we typically look at it.”
Integrating those acquisitions
Schmid said all acquisitions are different and that unique nature of each asset a company acquires makes integrating them a difficult proposition at times.
“They’re all full of challenges,” Schmid said. “There’s a reason why most M&A doesn’t deliver the value that most companies expect, but we don’t look at it that way. They’re also, frankly, an incredible source of opportunity to reach and change the lives of more patients. That’s where it starts.”
Early-stage buys, he says, carry challenges related to technical risk with the innovation, plus a lack of clarity around reimbursement and regulatory pathways. Later-stage acquisitions, though, are “all about the integration,” Schmid explained.
With Abiomed and Shockwave, Schmid said J&J offers good examples of buying strong groups of talented people with incredible R&D and existing commercial presences. All investments went into those areas, and the company let the businesses run with that. Everything else, like supply chain capabilities and enterprise resource planning, gets done over time.
“When you try and integrate too fast, you try and standardize businesses too much to your processes,” he said. “Sometimes, you destroy value. We’ve very clear in picking those elements of the businesses that we’re acquiring that really need to be invested in and protected and we’re deliberate about protecting those. Everything else, you standardize.”
Words of wisdom for buyers and those looking to be acquired
Schmid says Johnson & Johnson MedTech approaches M&A by ensuring that it has a shared perspective with whoever it aims to acquire. The company wants to be on the same page about “what success looks like.”
“The deals that go south for us are where they are only about financials,” Schmid said. “The best ones are where you’re acquiring companies that actually share your values and are trying to do the right thing for patients.
“We do a cultural assessment to better understand what these companies see as success and there has to be a win-win for both. When we can align on those elements, that’s where the magic happens. Financials are important, but cultural integration, that is as much an art as it is a science.”
For Johnson & Johnson MedTech, Schmid says most transactions come in the form of early-stage deals. His advice for early-stage companies looking for a potential buyer? Talk to the potential buyer sooner than you might think.
“Most of these deals are never consummated in a month or two, it’s actually years,” Schmid said. “Come earlier. Give us perspective on what you’re trying to do. Be clear on what your goals and objectives are and hit them. Build credibility. Those are our critical elements.”
