Johnson & Johnson (NYSE:JNJ) CEO Joaquin Duato says the company isn’t harping on mergers and acquisitions as it grows its MedTech business.
Speaking on the company’s second-quarter earnings call, Duato emphasized that Johnson & Johnson MedTech, its rebranded medical devices business, has its sights set on strengthening current strongholds and accessing high-growth market segments to accelerate its own growth.
“When it comes to MedTech, the focus continues to be strengthening our current strongholds and also accessing some high-growth market segments to accelerate growth,” Duato said on the call, as transcribed by The Motley Fool. “And the target areas are the ones that we are operating today: high health orthopedics, cardiology, surgery, historically, it’s been a predictor of our success to the extent we were closer to the areas that we have capabilities.”
Johnson & Johnson MedTech saw a 1.1% decrease in sales for the quarter, pulling in nearly $6.9 billion in revenues for the three-month period. The company’s adjusted operational sales grew 3.4%, driven primarily by contact lenses and surgical vision products, as well as electrophysiology products.
Despite recent suggestions from analysts — and company officials themselves at the end of the first quarter — that Johnson & Johnson was looking to get active on the M&A front, with Boston Scientific suggested as one realistic option, Duato stressed that the company takes a “strategic approach,” looking at improvements in the standard of care that the company is eyeing. While playing down any rumored eagerness to make acquisitions, Duato still emphasized that opportunities do exist on the market.
“As we look at the opportunities today in the market, we are not opportunistic about it, and we are still looking always at the fundamentals of these companies,” Duato said. “And, obviously, there are different opportunities in the market that are interesting and can complement our existing franchises or built into adjacencies.”
Duato added, “Down the road, we continue to see M&A as an important source of building our pipeline and also fortifying our current portfolio, and we are now in a position that, for the first time… in the last five years, we’re in a cash-neutral position. And we continue to look at the opportunities that are out there, and we’ll continue to do it.”