Johnson & Johnson
Johnson & Johnson, together with its subsidiaries, engages in the research and development, manufacture, and sale of a range of products in the healthcare field worldwide. It operates in two segments, Innovative Medicine and MedTech. The Innovative Medicine segment offers products for various therapeutic areas, such as oncology, immunology, neuroscience, pulmonary hypertension, infectious diseases, and cardiovascular and metabolism distributed through retailers, wholesalers, distributors, hospitals, and healthcare professionals for prescription use. The MedTech segment provides a portfolio of products used in the surgery, orthopedic, cardiovascular, and vision fields distributed through wholesalers, hospitals and retailers, and used in the professional fields by physicians, nurses, hospitals, eye care professionals and clinics. This segment also offers products and enabling technologies that support joint reconstruction, trauma, spine, sports related injuries, and others, as well as open, laparoscopic, and robotic surgical procedures; instrumentation, energy devices, stapling systems, wound closure, biosurgery products, and digital and robotic technologies; breast aesthetics and reconstruction; contact lenses under the ACUVUE brand; intraocular lenses for cataract surgery, and other products used in cataract and refractive procedures under the TECNIS brand. The company was founded in 1886 and is based in New Brunswick, New Jersey.
What does it do?
Johnson & Johnson is one of the biggest healthcare companies on the planet. They make prescription drugs — like cancer treatments and immune system medications — and medical devices, like the robots surgeons use to perform knee replacements. You probably know the brand from Band-Aids and baby shampoo, but J&J actually spun off that consumer products division in 2023 to focus entirely on the more profitable medical side. Today, if a hospital is treating a patient for cancer, rheumatoid arthritis, or a heart condition, there's a good chance a J&J product is involved.
J&J is one of only a handful of companies in the world with a AAA credit rating — meaning it's considered more financially reliable than most governments. With a market cap of $550 billion, it's a cornerstone holding in almost every major index and healthcare fund, so when J&J moves, it ripples across portfolios worldwide. Right now, investors are watching closely as J&J rebuilds its identity as a pure-play pharmaceutical and medical device company after shedding its consumer brands.
How does it make money?
J&J makes money through two main divisions. The Innovative Medicine segment — essentially its drug business — sells treatments for cancer, immune disorders, and other serious conditions to hospitals, pharmacies, and distributors worldwide. The MedTech segment sells surgical equipment, orthopedic implants, and medical technology to hospitals and clinics. Total revenue hit $94.2 billion in the latest year, up from $88.8 billion the prior year, a 6% increase. Net income was a very healthy $26.8 billion, meaning J&J kept about 28 cents of profit from every dollar it earned.
Why do investors care?
The growth story at J&J right now is about its drug pipeline — the new medicines it has in development that could become blockbusters. Its cancer drug Darzalex and immune drug Stelara are already billion-dollar products, and J&J is betting heavily on expanding their uses. The MedTech division is growing too, driven by demand for robotic surgery systems and electrophysiology tools used to treat irregular heartbeats. For the thesis to work, J&J needs its pipeline drugs to gain regulatory approval, and it needs to navigate the upcoming patent expiry on Stelara — which will face cheaper generic competition — without losing too much revenue.
Deep Dive
MemberA full investor briefing on Johnson & Johnson — history, leadership, risks, and outlook.