When Alex Gorsky takes the helm at Johnson & Johnson (NYSE:JNJ) tomorrow, he’ll become responsible for a company bedeviled by a series of high-profile, big-ticket recalls, a more than $1 billion legal settlement – and blessed with the world’s largest medical device business.
In his first public comments ahead of replacing Bill Weldon as CEO, Gorsky told Bloomberg that he plans to make that business even bigger, using some of the $14 billion in cash at his disposal to expand J&J’s footprint in med-tech.
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Saying there’s value in being a diversified conglomerate, Gorsky told the news service that he has no plans to emulate rival Abbott (NYSE:ABT), which is in the process of carving out its research pharmaceuticals business into a separate firm called AbbVie. The focus at J&J under his watch will be on growth, especially in emerging markets like China, he said.
"We are committed to being diversified across the whole health-care continuum," Gorsky said. "When there are large opportunities that we think can give us some strategic advantage, we will obviously take a look."
As for those recalls, including the shelving of J&J’s DePuy ASR hip implant – which is shaping up to be the most expensive recall ever, with about 6,000 lawsuits filed so far – the new CEO said he’ll work to get the recalled metal-on-metal hip devices and over-the-counter drugs back on the market as soon as possible. Changes are already afoot to address the problems, he said, but declined to go into detail, according to Bloomberg.
"We realize we have a lot of work to do, but the most important thing we think we can do is get the products back on the shelf," Gorsky said. "We know we are going to have to win the hearts and minds and pocketbooks of the consumer."
"I don’t think the company is so broken that it needs to be completely repaired," Thrivant Financial for Lutherans portfolio manager David Heupel told the news service. "A lot of the elements you need for improvement are there. It’s just an execution issue."
Fitch holds steady on J&J’s long-term debt
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Accuray deepens its stake in Compact Particle Acceleration
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Arrhythmia Research gets de-listing notice
Arrhythmia Research Technology (NYSE:HRT) said the New York Stock Exchange’s AMEX exchange warned of a possible de-listing due to its failure to file an annual report on time. The exchange gave the company until May 1 to submit a compliance plan, but Arrhythmia Research might have gotten off the hook today, when it released its 2011 earnings report.
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CorMedix does too
Arrhythmia Research wasn’t the only publicly traded device maker to run afoul of is exchange’s rules. CorMedix (NYSE:CRMD)
said the NYSE’s Amex market warned it could get the boot, too, unless it submits a compliance plan by May 21 to rectify "losses in 2 of its most recent fiscal years with equity below $2 million."
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Gabelli slashes stake in Zoll
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- Solos Endoscopy cuts debt by half a mil
- Mass. Life Sciences Center loans out another $2.3M
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Analysts’ ups and downs
- 3M Co. (NYSE:MMM): UBS raises estimates, boosts price target to $100, maintains "buy" rating; Goldman Sachs increases price target from $87 to $90, maintains "sell" rating; Jefferies & Co. increases price target from $102 to $108, maintains "buy" rating.
- C.R. Bard (NYSE:BCR): Leerink Swann maintains "market perform" rating.
- Cynosure (NSDQ:CYNO): Needham & Co. re-affirms "buy" rating.
- Edwards Lifesciences (NYSE:EW): Canaccord Genuity reinforces "buy" rating, $86 price target.
- Integra LifeSciences (NSDQ:IART): Bank of America raises price target from $26 to $36.
- Intuitive Surgical (NSDQ:ISRG): Zacks Equity Research upgrades to "outperform," sets $701 price target; Raymond James upgrades to "outperform."
