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Johnson & Johnson will spin out its orthopaedics division as the US-based healthcare group seeks to shift the focus of its medical technology division towards faster-growing areas.

Johnson & Johnson said on Tuesday it would pursue options for divesting its business for knee, hip and other orthopaedic replacements, which analysts said was losing market share to competitors.

“This transaction enables Johnson & Johnson to further strengthen its focus and investment toward higher-growth areas where we can meaningfully extend and improve patient lives,” said Joaquin Duato, chief executive.

The split, expected to be completed in the next 18 to 24 months, comes after Duato last month acknowledged that orthopaedics was not a fast-growing segment.

The company said the move would create “a standalone orthopaedics business, operating as DePuy Synthes, that would be the largest, most comprehensive orthopaedics-focused company with leading market share positions across major categories”. It added that the division had generated $9.2bn in sales in its 2024 fiscal year.

Chief financial officer Joseph Wolk told the Financial Times a public listing for the division was unlikely, adding that “in the scheme of where the other growth rates are for Johnson & Johnson’s platforms, it falls a little short”.

Johnson & Johnson was one of 17 companies that drew President Donald Trump’s ire this summer over drug prices.

Two of the others, Pfizer and AstraZeneca, have since agreed to lower their prices in the US Medicaid insurance programme for low-income Americans. Shares in Pfizer, the first large pharmaceutical company to announce a pricing deal with the White House in late September, jumped as investors applauded the détente. 

Wolk said there was “no anxiety whatsoever” in the company about drug pricing, adding that the dialogue with the White House had been “constructive”.

Wolk added that there had been no change to the company’s July forecast for a tariff hit this year of $200mn.

Johnson & Johnson last week lost a jury decision in Los Angeles that awarded $966mn to the family of a woman who died from cancer after allegedly using the company’s talcum powder. The company intends to appeal against the decision.

“Last week’s decision was unconstitutional on its face,” Wolk said. “We are going to continue to fight these.”

“We are making our voice heard on Capitol Hill, looking at some of the practices by plaintiffs’ attorneys, how these cases are financed from sovereign wealth funds,” Wolk added, noting that the decision did not affect the company’s guidance.

For the three months ending September 30, Johnson & Johnson reported adjusted earnings per share of $2.80, in line with analysts’ estimates. The company reaffirmed its 2025 earnings guidance of $10.80-$10.90 per share.

Johnson & Johnson shares fell almost 1 per cent in morning trading in New York, but remain up 32 per cent this year.