Johnson & Johnson (NYSE:JNJ) CEO William Weldon is to step down as CEO in April as part of a multiyear succession plan, according to a statement from the company. The move comes amidst a stream of recalls that include over-the-counter products and artificial hip implants that have cut sales.
Weldon will be succeeded by Alex Gorsky, the vice chairman of J&J’s executive committee who has responsibility for the medical devices and diagnostics group, global supply chain, healthcare compliance and privacy and government affairs and policy, at the company’s annual general meeting April 26.
Although analysts generally agreed Gorsky is well qualified for the role, they said he will be saddled with several challenges. Reuters cited Morgan, Keegan & Co. analyst Jan Wald who said:
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“He is inheriting a consumer division that’s still embroiled in problems and he is getting a medical device business that he needs to refresh and restructure and get it to grow again.”
The New Brunswick, New Jersey-based company’s recent $21 million acquisition of Synthes has underlined its status as the world’s largest medical device producer.
DePuy Orthopedics’ recall of its ASR metal-on-metal hip replacement system cost the company $521 million and it eventually withdrew the system from the market because of a high failure rate. Last month, reporting its quarterly earnings, the company had only $218 million in profits on sales of $16.2 billion.
At that time, Weldon told analysts in a conference call that the McNeill Consumer Healthcare plant that has been a source of product recalls, would not reopen until 2013 in connection with recalls of Motrin and other over-the-counter products.
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