Business

Johnson & Johnson is breaking up Band-Aids, pharmaceuticals

This Feb. 24, 2021 photo shows a Johnson & Johnson logo on the exterior of a first aid kit in Walpole, Mass. (AP Photo/Steven Senne)

(CNN) — Johnson & Johnson, the world’s largest health products company, is splitting up.

The company, which traces its roots back to 1886, will break into two: One company will focus on consumer health products customers can buy over the counter, including Benadryl, Band-Aids and Tylenol. The other business will sell prescription drugs and medical devices. Both will be publicly traded companies.

The separation is aimed at creating “two global leaders that are better positioned to deliver improved health outcomes for patients and consumers through innovation,” the company said in a statement. Leadership and the new name of the consumer-focused division haven’t yet been announced.

Johnson & Johnson shares spiked more than 4% in premarket trading. The Wall Street Journal first reported the news.

Johnson & Johnson CEO Alex Gorsky said the changes is the “best way to accelerate our efforts to serve patients, consumers, and healthcare professionals, create opportunities for our talented global team, drive profitable growth, and — most importantly — improve healthcare outcomes for people around the world.”

The pharmaceutical business unit, which makes a Covid-19 vaccine and will keep the Johnson & Johnson name, will remain one of the world’s largest makers of drugs and health products.

Gorsky also told the Journal that lawsuits surrounding its baby powder didn’t play a role into the breakup. Johnson & Johnson traces its roots to a health products company formed by Robert Wood Johnson and his brothers.

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