Johnson & Johnson (J&J) has announced its plans to separate its consumer health business as a new publicly traded company to deliver improved health outcomes.

After the separation, J&J would continue as a large-scale, diverse healthcare company focused on pharmaceuticals and medical devices.

J&J CEO Alex Gorsky will be appointed as executive chairman, while current executive committee vice chairman Joaquin Duato will be the chief executive officer, from January 2022.

The new consumer health company would operate as a global consumer health company, serving more than one billion consumers worldwide.

It would offer brands including Neutrogena, AVEENO, Tylenol, Listerine, JOHNSON’s, and BAND-AID and continue its legacy of innovation.

The Board of Directors and executive leadership of the new consumer health business will be announced soon as the planned spinning-off completes.

Gorsky said: “Throughout our storied history, Johnson & Johnson has demonstrated that we can deliver results that benefit all our stakeholders, and we must continually be evolving our business to provide value today, tomorrow and in the decades ahead.

“Following a comprehensive review, the Board and management team believe that the planned separation of the Consumer Health business is the best way to accelerate our efforts to serve patients, consumers, and healthcare professionals.”

According to the company, the separation will increase the management focus, resources, and speed to address differing industry trends and needs of patients and consumers.

Post-separation, the new consumer health company would have a powerful portfolio comprising four megabrands worth $1bn, and 20 brands valuing $150m.

Also, the new unit will be well-positioned in Self Care (OTC), Skin Health and Essential Health, which includes baby care, feminine care, wound care and oral health markets.

The new consumer health business is anticipated to generate around $15bn in revenue for full-year 2021 and would generate sales in more than 100 countries after the separation.

Also, the business is expected to benefit from a strong investment-grade profile and balance sheet, and extend its position across important categories.

The design for the new consumer health unit is planned to be completed by the end of 2022, subject to requirements including consultation with works councils and employee leaders.

Goldman Sachs and J.P. Morgan Securities served as financial advisors, while Cravath, Swaine & Moore and Baker & McKenzie as legal counsel to J&J on the transaction.

Duato said: “This planned transaction would create two businesses that are each financially strong and leaders in their respective industries.

“We believe that the new Johnson & Johnson and the New Consumer Health Company would each be able to more effectively allocate resources to deliver for patients and consumers, drive growth and unlock significant value.

“Importantly, the new Johnson & Johnson and the New Consumer Health Company would remain mission-driven companies with exceptional brands, commitments to innovation, and remarkable talent. Each company would carry on the Johnson & Johnson legacy of putting the needs and well-being of the people we serve first.”