Johnson & Johnson Goes Back Into Cardiology With A Big Splash


  • JNJ announced the $16.6 billion-plus acquisition of Abiomed, agreeing to pay $380/share in cash upfront and up to $35/share tied to longer-term performance targets.
  • Abiomed sells heart pumps that assist damaged hearts with their core pumping functions, improving survival and quality of life.
  • Abiomed’s products address multibillion-dollar opportunities, but usage has been held back by a lack of large-scale randomized trial data; something management is now addressing.
  • Acquiring Abiomed is a bold move and consistent with JNJ management’s stated intentions of investing in more “moon-shot” high-growth med-tech opportunities.
  • JNJ shares look like a reasonable GARP investment opportunity.
heart attack and heart disease


For some time I had felt that Johnson & Johnson (NYSE:JNJ) has been neglecting its MedTech business while building up the Pharmaceutical business into an impressive player in oncology and immunology. While I liked management’s more recent comments about

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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