Alex Gorsky, J&J CEO (Andrew Harnik/AP Images)

UP­DAT­ED: J&J sets out to split the world's largest health­care con­glom­er­ate, hiv­ing off the con­sumer di­vi­sion

J&J is join­ing the move­ment in phar­ma to dou­ble down on risky but high-growth drugs and de­vices while hiv­ing off huge con­sumer di­vi­sions. CEO Alex Gorsky says that some­time in the next 18 to 24 months they’ll be split­ting the com­pa­ny in­to 2 dif­fer­ent op­er­a­tions, di­vid­ing the largest con­glom­er­ate in health­care.

Just as Mer­ck and Pfiz­er and Glax­o­SmithK­line be­fore, which fol­lowed sim­i­lar strate­gies, the move will put a bea­con on the R&D side of the busi­ness, where new drug de­vel­op­ment — and the high mar­gins they can de­liv­er — will be crit­i­cal to the new com­pa­ny’s suc­cess.

In a Fri­day morn­ing an­a­lyst call, J&J vice chair­man Joaquin Du­a­to said about 65% of the slim­mer com­pa­ny will fo­cus on the phar­ma­ceu­ti­cal busi­ness, while the re­main­ing 35% will cen­ter around its med­ical de­vice op­er­a­tions. Du­a­to high­light­ed the par­tic­u­lar “syn­er­gies” be­tween these two en­ter­pris­es, say­ing J&J could pair pre­ci­sion on­col­o­gy med­i­cines with com­pan­ion ro­bot­ics to bet­ter treat pa­tients.

“The new John­son & John­son will re­main the world’s largest, most di­verse health­care com­pa­ny and will con­tin­ue to lead in glob­al R&D and in­no­va­tion,” Du­a­to pro­claimed on the call.

Though de­tails were scant on which spe­cif­ic drugs the new J&J would look to cap­i­tal­ize, Du­a­to teased more in­fo would come out at the com­pa­ny’s Phar­ma Day next week. The lack of clar­i­ty prompt­ed ques­tions from an­a­lysts, how­ev­er, about the true promise of such syn­er­gies be­tween phar­ma­ceu­ti­cals and de­vices.

A Wells Far­go an­a­lyst kicked off the Q&A ses­sion ask­ing about ex­act­ly that top­ic, call­ing out the com­pa­ny for un­der­de­liv­er­ing on promis­es of “syn­er­gies” in the past. The an­a­lyst blunt­ly asked Du­a­to, Gorsky and CFO Joseph Wolk “why things will be dif­fer­ent this time,” to which Gorsky re­spond­ed, in part:

In this par­tic­u­lar case, we’ve seen sig­nif­i­cant evo­lu­tion in these mar­kets par­tic­u­lar­ly on the con­sumer side … [such as] the shift to e-com­merce. As we ob­serve that, and I must say I think it was ac­cel­er­at­ed sig­nif­i­cant­ly by Covid-19, why we’re see­ing greater in­ter­est in per­son­al care and tak­ing care of fam­i­lies, we felt this was the right time to rec­og­nize the dif­fer­ences be­tween our con­sumer fac­ing busi­ness and that of de­vices and phar­ma­ceu­ti­cals.

Wolk, like Du­a­to, al­so not­ed the up­com­ing Phar­ma Day and claimed any fears about “mid-decade ex­pi­ra­tions” of patents or IP for cur­rent phar­ma prod­ucts would be “al­layed” at the event.

Mean­while, the new com­pa­ny doesn’t yet have a name, but will be­come the home for es­sen­tial­ly all of J&J’s biggest name brand prod­ucts. That in­cludes OTC drugs like Tylenol, Zyrtec and Motrin; skin health and beau­ty prod­ucts such as Neu­tro­ge­na; and es­sen­tial health and spe­cial­ty brands like Band-Aid, John­son’s Ba­by and fem­i­nine care prod­ucts.

J&J is just the lat­est ma­jor phar­ma con­glom­er­ate to siphon off parts of its busi­ness in­to new com­pa­nies. GSK has been plot­ting a move for months in an at­tempt to helm off ac­tivist in­vestors, Mer­ck re­cent­ly launched Organon for its women’s health and lega­cy busi­ness­es and Sanofi spun out its API man­u­fac­tur­ing ca­pa­bil­i­ties in­to its own or­ga­ni­za­tion.

That’s not to men­tion Pfiz­er’s joint spin­off with GSK in 2019 for their con­sumer busi­ness as well. No­var­tis, too, is con­sid­er­ing a sim­i­lar move in sell­ing its San­doz unit.

The split should al­so help con­tain the lin­ger­ing woes around J&J’s Ba­by Pow­der con­tro­ver­sy as law­suits mount over al­le­ga­tions that it caus­es can­cer. J&J last month spun out its talc li­a­bil­i­ties in­to its own firm that im­me­di­ate­ly filed for Chap­ter 11 bank­rupt­cy, a move used by some com­pa­nies fac­ing opi­oid lit­i­ga­tion that crit­ics de­ri­sive­ly re­fer to as a “Texas Two-Step” ma­neu­ver.

For the record, though, Gorsky told the Wall Street Jour­nal that the claims did not dri­ve this de­ci­sion. J&J has al­so faced a steady round of re­calls that can now be re­served to the team that will be des­ig­nat­ed to lead an in­de­pen­dent con­sumer group.

Even af­ter trim­ming the huge con­sumer di­vi­sion, the new J&J is ex­pect­ed to have sales near $80 bil­lion a year go­ing in­to the split. And it will be rid of a con­sumer op­er­a­tion known for tighter mar­gins and slow­er growth.

At the In­flec­tion Point for the Next Gen­er­a­tion of Can­cer Im­munother­a­py

While oncology researchers have long pursued the potential of cellular immunotherapies for the treatment of cancer, it was unclear whether these therapies would ever reach patients due to the complexity of manufacturing and costs of development. Fortunately, the recent successful development and regulatory approval of chimeric antigen receptor-engineered T (CAR-T) cells have demonstrated the significant benefit of these therapies to patients.

Stéphane Bancel, Moderna CEO

'This is not go­ing to be good': Mod­er­na CEO Ban­cel warns of a 'ma­te­r­i­al drop' in vac­cine ef­fi­ca­cy as Omi­cron spreads

Even as public health officials remain guarded about their comments on the likelihood Omicron will escape the reach of the currently approved Covid-19 vaccines, there’s growing scientific consensus that we’re facing a variant that threatens to overwhelm the vaccine barricades that have been erected.

Stéphane Bancel, the CEO of Moderna, one of the leading mRNA players whose quick vault into the markets with a highly effective vaccine created an instant multibillion-dollar market, added his voice to the rising chorus early Tuesday. According to Bancel, there will be a significant drop in efficacy when the average immune system is confronted by Omicron. The only question now is: How much?

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 124,400+ biopharma pros reading Endpoints daily — and it's free.

With on­ly burns to show in gene ther­a­py, Astel­las inks deal with AAV spe­cial­ist Dyno in push for a bet­ter cap­sid

On the hunt for a better AAV capsid for gene therapy, Eric Kelsic’s Dyno Therapeutics has set itself apart with its focus on machine learning to help speed discovery. Now, Japanese drugmaker Astellas — fresh off a slate of gene therapy burns — is taking a bet on Dyno as it looks to the future.

Astellas and Dyno will work together as part of an R&D pact to develop next-gen AAV vectors for gene therapy using Dyno’s CapsidMap platform directed at skeletal and cardiac muscle, the companies said Wednesday. Under the terms of the deal, Dyno will design AAV capsids for gene therapy, while Astellas will be responsible for conducting preclinical, clinical and commercialization activities for gene therapy product candidates using the capsids.

Philip Dormitzer, new GSK global head of vaccines R&D

Glax­o­SmithK­line poach­es Pfiz­er's vi­ral vac­cines lead in rush to cap­i­tal­ize on fu­ture of mR­NA

GlaxoSmithKline has appointed Philip Dormitzer, formerly chief scientific officer of Pfizer’s viral vaccines unit, as its newest global head of vaccines R&D, looking to leverage one of the leading minds behind Pfizer and BioNTech’s RNA collaboration that led to Covid-19 jab Comirnaty, the British drug giant said Tuesday.

Dormitzer had been with Pfizer for a little more than six years, joining up after a seven-year stint with Novartis, where he reached the role of US head of research and head of global virology for the company’s vaccines and diagnostics unit.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 124,400+ biopharma pros reading Endpoints daily — and it's free.

In­tro­duc­ing End­points Stu­dio, a new way to ad­ver­tise with End­points-craft­ed brand­ing cam­paigns

Since our start in 2016, Endpoints has grown fast while executing our mission to cover biopharma’s most critical developments for industry pros worldwide. As readership has grown, our advertising business has too. Endpoints advertising partners support the mission and engage their desired audiences through announcements on our email and web platforms, brand recognition in our event coverage and sponsorships of Endpoints daily and weekly reports.

Paul Hudson, Sanofi CEO (Cyril Marcilhacy/Bloomberg via Getty Images)

Sanofi snaps up new vac­cine can­di­date and de­vis­es mR­NA game plan around it — but not for what you think

Paul Hudson has spotlighted vaccines, immunology and dermatology as some of the top R&D focuses at Sanofi. His latest deal brings all of them together.

The French pharma giant isn’t sharing any financial details about the buyout of Origimm, a low-profile, private Austrian biotech whose technology promises to identify antigens causing skin disease and build vaccines against them. Their lead candidate targets acne vulgaris.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 124,400+ biopharma pros reading Endpoints daily — and it's free.

As first Omi­cron case in US crops up, re­searchers won­der: which an­ti­bod­ies, vac­cines will hold up?

As Covid-19 drug and vaccine developers race to figure out which of their products might be hampered by the new variant, the CDC on Wednesday afternoon announced the first confirmed case of the Omicron variant (B.1.1.529) in the US, found in San Francisco.

The unidentified individual was a traveler who returned from South Africa on Nov. 22, 2021, was fully vaccinated, and had mild symptoms that the CDC described as improving. All close contacts have been contacted and have tested negative, the centers said.

Mod­er­na los­es lat­est bat­tle in key vac­cine de­liv­ery patent fight as fed­er­al ap­peal falls flat

The US Court of Appeals for the Federal Circuit on Wednesday rejected Moderna’s attempt to overturn key patents related to the delivery vehicle for its Covid-19 vaccine after the biotech sought to preempt a potentially risky infringement lawsuit.

For years, Moderna has been battling a tiny Pennsylvania biotech known as Arbutus over patents for a technology required to deliver its mRNA drugs and vaccines, known as lipid nanoparticles or LNP. Moderna is concerned there’s a substantial risk that Arbutus will assert the ’069 patent in an infringement suit targeting Moderna’s Covid-19 vaccine, particularly as Arbutus has boasted of its patent protection and refused to grant a covenant not to sue Moderna.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 124,400+ biopharma pros reading Endpoints daily — and it's free.

Lan Huang, BeyondSpring CEO

Months af­ter shock­ing in­vestors with lung can­cer win, Be­yond­Spring's lead drug hits road­block at the FDA

BeyondSpring shocked investors in early August after its once-marginal lead drug suddenly showed a lot of promise in a common form of lung cancer. With hopes high, the FDA has now slammed the door on that drug in another indication — does that spell bad news for BeyondSpring’s Cinderella story?

The FDA issued BeyondSpring a complete response letter for its plinabulin in combination with granulocyte colony-stimulating factor (G-CSF) for the prevention of chemotherapy-induced neutropenia, effectively shutting down the drug’s immediate chances at a marketing approval, the biotech said Wednesday.

Endpoints News

Keep reading Endpoints with a free subscription

Unlock this story instantly and join 124,400+ biopharma pros reading Endpoints daily — and it's free.