Johnson & Johnson Announces Its Fiftieth Acquisition Worth $12.5 Billion

Pharmaceutical giant Johnson & Johnson (J&J) is acquiring medical device manufacturer Shockwave Medical for approximately $12.5 billion, thereby expanding its portfolio in the medical device segment. This California-based company produces a device that uses shock waves to break down calcified plaque in heart vessels, similar to how kidney stones are treated.

According to Reuters, J&J would need to pay $335 per share in cash to acquire this company, and the offered price implies a premium of 4.7 percent compared to Shockwave’s last trading price on the stock exchange on Thursday, which was $319.99.

Shockwave has a market value of about $12 billion, and the company’s shares rose only one percent after the news was announced.

According to Tracxn, this is the fiftieth acquisition of the pharmaceutical giant since its founding, with the last one occurring just three months ago when the company acquired Ambrx Biopharma, which develops drugs for cancer patients, for $2 billion.

Additionally, in November, they also acquired Laminar, a company that develops medical devices aimed at eliminating the left atrial appendage. J&J paid $400 million for this California company.

Focus on MedTech

A year prior, in November 2022, the world’s largest pharmaceutical company also acquired Abiomed, a leader in revolutionary technologies for treating the heart, lungs, and kidneys. This acquisition was valued at $16.6 billion. However, the largest acquisition in the company’s history occurred in 2017 when J&J purchased the Swiss Actelion, focused on treating lung diseases, for about $30 billion.

At the beginning of this year, the pharmaceutical giant reported total revenues of $21.40 billion in the fourth quarter of last year, which is a 7.3 percent increase compared to the same quarter in 2022, and it recorded a net profit of $4.13 billion, while in 2022 it was $3.23 billion.

The company was also shaken last year by the spin-off of Kenvue from its group, although it retained a stake of about 9.5 percent. Many portals called it ‘the biggest upheaval in the company during its century-long history’, but J&J executives emphasized that the company is now focusing on its ‘MedTech’ division, which relates to pharmaceutical and medical devices for which they anticipate ‘relatively consistent’ growth this year, making this latest acquisition come ‘quite naturally’.

Namely, J&J’s medical device business recorded sales revenue of $7.67 billion last year, which is a 13.3 percent increase compared to the previous year.