Synthes Eyes: J&J Lands Swiss Medical Device-Maker

from Brand Channel - Sheila Shayon, April 27th, 2011

Johnson & Johnson has signed a deal to buy Swiss medical device-maker Synthes for $21.3 billion.

In so doing, J&J is making "all the right moves" (as CNN recently put it) to rise from the ashes of a very bad period since early last year, plagued by more than 50 drug and device recalls, lawsuits and enforced government supervision of its McNeil Consumer Healthcare plant in Fort Washington.

The announcement from the pharma giant of its intention to purchase Synthes, the #1 maker of devices that treat bone fractures and trauma, is J&J’s biggest deal in twenty years.

Synthes reach is almost 50% of the trauma market, bringing to J&J “hip screws, plates, surgical power tools and instruments to treat spinal and soft-tissue injuries that generated $3.69 billion in sales last year,” and a sweet antidote to the recall of artificial hips from 93,000 patients using J&J product.

It’s a good deal according to financial analysts as the skeletal trauma market is now bigger than the hip and knee business, and “is more of a specialized niche that hasn’t attracted many players, and Synthes is the dominant presence in that market,” Jeff Jonas, a Gabelli & Co. analyst, told Bloomberg News.

Putting its product line back on track is one thing, but rebuilding brand reputation in a laser-focused world of social media is quite another.

“J&J had a severe challenge to its premier reputation given all the recalls. This relatively bold step to buy a premier company is a significant move to regain their luster,” said Michael Holland, chairman of Holland & Co. in another Bloomberg article.

Exacerbating the situation, J&J had achieved a level of social media savvy and accolade. The brand swept the pharma/healthcare categories at ast year’s Dosie Awards, nabbing best Facebook page, best Facebook YouTube channel, best Twitter feed and best company blog.

J&J’s Director Corporate Communication and Social Media, Marc Monseau, was integral in building the company’s social media presence through the following steps:

Start small, with noncontroversial topics. Monseau and team created a corporate blog about the 120-year history of the company for proof of concept and to gain the confidence of legal and compliance teams.
Create helpful policies.
Create plans for when and how to respond.

A detailed case study by Monseau can be seen in the video below, titled "Johnson & Johnson: Engagement in a Highly Regulated Environment."

Product performance and brand reputation are under ever increasing scrutiny as the corporate/consumer dialogue has been irrevocably altered by social media.

It will be interesting to watch how this iconic, American brand – one we’ve trusted for 120 years, regains public confidence, moving from internal turmoil to reemerge as the king of trauma.