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January 10, 2022 12:44 PM

J&J partners with Microsoft to build out digital surgery portfolio

Jessica Kim Cohen
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    Microsoft

    Johnson & Johnson and Microsoft have embarked on a partnership to support development of the drug and device company's digital surgery products, the companies announced Monday.

    Johnson & Johnson Medical Devices will collaborate with the software company to advance its digital surgery platform and internet-connected medical devices. The deal establishes Microsoft as Johnson & Johnson's preferred cloud vendor for digital surgery tools, according to a news release.

    The companies plan to apply Microsoft's artificial intelligence, data analytics and "internet of things" capabilities to improve connectivity between Johnson & Johnson's surgical robotics, visualization and other digital tools. The companies plan to develop digital tools that streamline surgical workflow or support surgical decision-making.

    The Microsoft partnership is an "exciting step towards creating a connected patient journey across the entire care continuum, before, during and after a procedure," Larry Jones, Johnson & Johnson's group chief information officer and global vice president of medical devices, said in a news release.

    Devicemakers such as Johnson & Johnson have been pursuing more digitally connected surgical tools in recent years, including AI, pre-, intra- and post-operative care and "smart" surgical implants that send data directly to physicians. DePuy Synthes, the orthopedics arm of Johnson & Johnson's medical devices group, also has been researching how to incorporate sensors into patient care.

    Johnson & Johnson has previously cited digital surgery as an area for growth.

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    The company is in the midst of restructuring, with plans focus on pharmaceuticals and medical devices as it spins off its consumer health operation into a separate publicly traded company. Johnson & Johnson, which announced plans to break out its consumer business in November, expects to complete the separation by late 2023.

    Johnson & Johnson intends to accelerate its work in orthopedics, surgery and vision with a focus on digital surgery and to focus on oncology, immunology, and new cell and gene therapies in its pharmaceutical business, company executives said at the time.

    Johnson & Johnson recorded $23.3 billion in sales during the third quarter, the most recent quarter for which it filed an earnings report, including $13 billion from pharmaceuticals, $6.6 billion from medical devices and $3.7 billion from the consumer health products. Sales rose 10.7% from the year-ago quarter and net earnings increased 3.2% to $3.7 billion.

    Johnson & Johnson has three core priorities for this year, Duato said at the J.P. Morgan event: preparing to spin off its consumer operations; achieving 5% compounded average annual growth in prescription drug revenue; and rejuvenating its medical device business.

    Those plans will include entering into adjacent and higher-growth medical technology markets through research and development and acquisitions, Duato said. Over the past five years, Johnson & Johnson has spent $10 million on medical device mergers and acquisitions, he said.

    "M&A is a key element of our growth moving forward, in every segment—pharmaceuticals and medical devices," Duato said.

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