(Bloomberg) -- Johnson & Johnson shares jumped after the company said it will break itself up into two public companies, one focused on drugs and medical devices, and the other on consumer products.
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The health-care giant will split off its consumer division in 18 to 24 months, the company said in a statement. The consumer unit has been beset by lawsuits involving products such as baby-powder, which has been linked to ovarian cancers in some users. The shares gained 4.9% in trading before U.S. markets opened.
J&J’s pharmaceutical arm its strongest performer. The drug unit generated 55% of the company’s sales in 2020, with another 28% coming from the medical device unit, and 17% from the consumer arm. Altogether in 2020, J&J made $83 billion in revenue. As the company continues to demonstrate strong growth, analysts estimate J&J will produce $94 billion in 2021 sales.
Though J&J’s consumer unit brings in the smallest piece of the revenue pie, it’s got immense brand recognition. The division boasts over-the-counter medications such as Tylenol, Motrin, Zyrtec, as well as household name brands like BAND-AID, Listerine, Neutogena, Neosporin, Aveeno, Clean & Clean, Rogaine, and more.
J&J has gained just 3.6% this year through Thursday’s close. Meanwhile, Pfizer Inc. has risen 36%, while Lilly has surged 55% and Merck 7.7%
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