Slick Deal for Johnson & Johnson
Johnson & Johnson who last year opted out of filling out the proper paperwork the FDA required regarding some of their KY-Brand, it appears has learned how to fill out paperwork for a different reason. Pharmaceutical giant Reckitt Benckiser announced that it has signed a definitive agreement to acquire global rights to Johnson & Johnson’s KY-Brand.
According to the article the focus is gradually shifting from medical devices (KY is a medical device) and consumer products to pharmaceutical business, and in other words, the move is in line with the company’s core strategy. That statement is actually inconsistent and contradictory to what CEO Alex Gorsky has publically stated:
“…[W]e’re cautiously optimistic, I would say, regarding the fundamentals of some of these markets,” he said. “Longer term, we still think they (medical device) represent a very significant opportunity.” January 22, 2014 J&J CEO More Optimistic About Medical Device Market, ACA After Q4 2013
Also there was Johnson & Johnson’s $21.3 billion purchase of medical device company Synthes or the $785 million purchase of medical device company Acclarent which lends to the latest inconsistent and contradictory messaging from the company.
Johnson & Johnson also mentioned that 70% of its sales are coming from products that are at the first or the second position in their respective markets. While that looks good on the surface, what’s important to understand is that most of these products belong to medical devices & diagnostics segment.
“You don’t have to be 100% right,” he says. “If you get 60%, go.” Gorsky is a firm believer that if you wait for 100% certainty before you move, you’ll miss out on the speed advantage. “Don’t let perfect be the enemy of good,” he says. “Then run fast.”
Perhaps this messaging is more consistent with Johnson & Johnson’s business model.