Headquartered in New Brunswick, New Jersey, USA, Johnson & Johnson (J&J) is the world's most comprehensive and broadly-based manufacturer of healthcare products for the consumer, pharmaceutical, medical device and diagnostics markets. The company has over 200 operating companies in 57 countries, selling products in more than 175 countries worldwide. In fiscal 2006, ended 31st December 2006, J&J achieved revenue of US$53.3 billion, representing an increase of 6% from the previous year.

J&J's operating activities are conducted within three business segments: Pharmaceutical; Consumer; and Medical Devices & Diagnostics (MD&D), the latter of which is the focus of this profile.

Pharmaceutical - The Pharmaceutical segment focuses on anti-infective, antifungal, cardiovascular, contraceptive, dermatology, gastrointestinal, haematology, pain management, psychotropic, urology, neurology, immunology and oncology pharmaceuticals. It accounted for 44% of J&J's total sales and 48% of its pre-tax profit in fiscal 2006.

Consumer - The principal products in the Consumer segment are personal care and hygiene products, including oral and baby care products, first aid products, non-prescription drugs, sanitary protection products and skin and hair care products. It represented 18% of J&J's total sales and 10% of its pre-tax profit in fiscal 2006.

Medical Devices & Diagnostics - The world's largest medical device company. Includes suture and wound management products, surgical equipment and devices, interventional and diagnostic cardiology and endovascular products, diagnostic equipment, joint replacement and spinal products, diabetes care products, contact lenses and sterilisation products. The segment boasts a number of leading medical device companies, including Cordis, DePuy, Ethicon, Ethicon Endo-Surgery, LifeScan, Independence Technology, Therakos and Vistakon, all of which are covered in separate profile sections for each company within this report. The Advanced Sterilization Products unit is covered in the Ethicon Endo-Surgery profile section. The profile does not cover Ortho-Clinical Diagnostics, a company which offers diagnostic products. The MD&D unit accounted for 38% of J&J's total sales and 42.6% of its pre-tax profit in fiscal 2006, up from 37.8% and 39.8% in 2005, respectively.

J&J's MD&D segment includes the following companies and their divisions which are covered in separate profile sections for each company:-

Cordis - focused on interventional cardiology and peripheral and neuro vascular products, as well as electrophysiology through Biosense Webster. Cordis' main product line is its Cypher Sirolimus-Eluting Stent.

DePuy - a global market leader in joint reconstruction and spinal products. Focuses on less-invasive and more durable, motion-saving solutions. The company also includes DePuy Mitek, which offers sports medicine products, and Codman & Shurtleff, that provides products for the surgical treatment of central nervous system disorders.

Ethicon - the global market leader for sutures. Also offers surgical mesh and hernia repair, incontinence and gynaecology/urology products. It included CardioVations, a manufacturer of cardiovascular surgical products for off-pump coronary artery bypass grafting and valve surgery, until CardioVations was sold to Edwards Lifesciences in December 2007.

Ethicon Endo-Surgery - offers surgical instruments for minimally-invasive and traditional surgery, including surgical stapling products, energy-based devices, endoscopic surgery devices and breast biopsy products. Also includes Advanced Sterilization Products, a manufacturer of sterilising systems and solutions.

Independence Technology - markets the iBOT Mobility System, a gyro-balanced, battery-operated mobility system.

LifeScan - a market leader for blood glucose monitoring with the OneTouch brand. Also includes Animas, a manufacturer of insulin delivery products.

Therakos - offers products that use extracorporeal photopheresis, a cellular therapy first applied to patients with refractory cutaneous T-cell lymphoma.

Vistakon - the world's leading manufacturer of disposable contact lenses. Also planning to expand into contact lens solutions and ophthalmic pharmaceuticals.

J&J has recently undertaken restructuring initiatives in an effort to improve its cost structure. This action was taken in the third quarter of 2007 to offset the anticipated negative impacts associated with generic competition in the Pharmaceutical segment and challenges in the drug-eluting stent market which have been negatively impacting on the Cordis franchise. As part of the programme. J&J will eliminate approximately 4,400 positions and consolidate certain facilities, primarily within the Pharmaceutical segment and Cordis. During the third quarter of 2007, the company recorded US$745 million in pre-tax charges, including severance costs of US$450 million, asset write-offs of US$272 million and US$23 million related to leasehold obligations. The MD&D segment reported restructuring charges of US$301 million in the quarter. As a result of the plan, J&J expects to generate annual cost savings of US$1.3 to US$1.6 billion from 2008.