NEW BRUNSWICK, N.J. - Johnson & Johnson (NYSE:JNJ) announced today the completion of its acquisition of Shockwave Medical (NASDAQ:SWAV), a move set to expand its footprint in the medical technology sector, particularly in cardiovascular intervention. Shockwave Medical, known for its intravascular lithotripsy (IVL) technology, is expected to operate as a distinct business unit within Johnson & Johnson MedTech.
The acquisition positions Johnson & Johnson MedTech in a leadership role in cardiovascular intervention, complementing its existing portfolio in heart recovery and electrophysiology. Shockwave's IVL platform, which is the only one of its kind currently available for treating coronary artery disease (CAD) and peripheral artery disease (PAD), is anticipated to become Johnson & Johnson MedTech's thirteenth priority platform, generating annual sales of at least $1 billion.
Johnson & Johnson's Chairman and CEO, Joaquin Duato, expressed enthusiasm for the acquisition, stating that it represents a significant step in transforming the treatment landscape for cardiovascular disease. Tim Schmid, Executive Vice President and Worldwide Chairman of Johnson & Johnson MedTech, echoed this sentiment, highlighting the potential for bringing more innovations to patients.
Financially, the transaction is expected to accelerate revenue growth for both Johnson & Johnson and its MedTech division. It is projected to be accretive to operating margin, although it is anticipated to dilute adjusted earnings per share by approximately $0.10 in 2024 and about $0.17 in 2025, reflecting the impact of financing costs.
As a result of the acquisition, Shockwave's common stock has ceased trading on NASDAQ. This development underscores the evolving landscape of the medical technology industry and Johnson & Johnson's strategic efforts to maintain and enhance its position in high-growth market segments.
The information for this article is based on a press release statement.
In other recent news, Johnson & Johnson has been the subject of several analyst notes and significant business developments. Goldman Sachs reinstated coverage on the company, setting a Neutral rating due to expected low single-digit growth in the near term, citing potential challenges such as loss of exclusivity for key products. Conversely, Wells Fargo reiterated an Equal Weight rating on Johnson & Johnson following the company's divestiture of its KVUE shares, a strategic move that resulted in approximately $3.6 billion in acquired funds.
Johnson & Johnson has also been actively expanding its portfolio, acquiring global rights to NM26, a Phase 2-ready investigational bispecific antibody for atopic dermatitis, from Numab Therapeutics. This acquisition, valued at approximately $1.25 billion, underscores the company's commitment to developing therapies that address unmet needs in immune-mediated diseases.
Furthermore, RBC Capital maintained an Outperform rating on Johnson & Johnson, highlighting the potential of the company's drug TREMFYA for Crohn's Disease and Ulcerative Colitis. The company anticipates that TREMFYA could generate over $1 billion in annual sales, a projection that RBC Capital deems conservative. Similarly, UBS reaffirmed a Buy rating on Johnson & Johnson, largely influenced by the anticipated impact of Tremfya in the inflammatory bowel disease market.
InvestingPro Insights
In light of Johnson & Johnson's (NYSE:JNJ) recent acquisition of Shockwave Medical, a deeper look into the company's financial health and market position may provide investors with a clearer picture of its potential. According to InvestingPro data, Johnson & Johnson boasts a robust market capitalization of $349.64 billion, underscoring its significant presence in the healthcare sector. Additionally, the company's P/E ratio stands at an attractive 9.39, with a slightly higher adjusted P/E ratio for the last twelve months as of Q1 2024 at 18.18, suggesting a strong earnings base relative to its share price.
Investors might also take note of Johnson & Johnson's impressive dividend track record, as the company has not only maintained but also raised its dividend for 54 consecutive years, reflecting a strong commitment to shareholder returns. Moreover, the company's dividend yield as of mid-May 2024 is 3.41%, which is particularly appealing for income-focused investors. The InvestingPro Tips highlight Johnson & Johnson's low price volatility and its status as a prominent player in the Pharmaceuticals industry, which may reassure investors looking for stability and industry leadership.
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