Tiger's 5 quick takes:
1/ Ortho Access Wars
This move validates my point that innovating in Ortho has gotten harder and harder over the last 5 years. Big Ortho cannot compete with innovation, so they must compete by controlling access - its a game of contracts, access, GPOs, trimming sales reps wings, VAC committees, etc. Recall that ZB spun out their Spine business into public entity called ZimVie (total disaster) and Stryker divested their Spine business to VB Spine (TBD). My friend Rick Gerhart says it best, " Pricing is back to the late 80’s or early 90’s level. With the cost of doing business significantly higher now of course. Second, total joints and trauma are cash intensive, too much so for most CFO’s if profits are declining. Third, the literature leads us to believe that total joints are a commodity. None of those three are welcome at J&J headquarters in NJ."
2/ Purging Profit Drags
This portfolio purge move is a surgical strike against creeping stagnation in Ortho. J&J has cut off the least profitable limb to make the body stronger. The spinout was prompted by financial pressures as Ortho is less profitable than their other J&J businesses (Oncology, Imm...
