Johnson & Johnson has appointed Joaquin Duato as chief executive officer to replace veteran Alex Gorsky to steer the healthcare conglomerate through the remainder of the coronavirus pandemic.
Duato, the current vice chairman of the executive committee, will take the reins and a seat on the board from 3 January 2022. Gorsky, who was at the helm for nine years, will become executive chairman.
The transition will put the world's largest drugmaker by market value in the hands of a company veteran who took a leading role in J&J's COVID-19 response and helped shape its pharmaceutical business strategy.
Gorsky said in a statement it was the right time to make the switch for both the company and him personally as he focuses more on family due to "family health reasons."
Gorsky oversaw massive growth during his tenure, establishing J&J as a major player in the rare diseases market and leading its development of the first single shot COVID-19 vaccine.
But he was also at the helm during some of the biggest crises in the company's history, including allegations its Baby Powder contained cancer-causing asbestos and litigation claiming it contributed to the US opioid epidemic.
The "surprise and unexpected" leadership change comes at a challenging time for J&J, but the transition is likely to be smooth given that Duato is a well-known executive with a successful track record, CFRA Research analyst Sel Hardy said in an email.
Duato has held a variety of roles during his more than 30 years at J&J, most recently overseeing its pharmaceutical and consumer health businesses, which have a combined $60 billion in sales.
He helped establish a focus on the company's fastest growing therapeutic areas and helped lead the integration of data science and computer automation into J&J's research and operations.
During the pandemic, Duato led global initiatives "to safeguard the health of employees and ensure business and supply chain continuity," Gorsky said. Duato was also the chairman of the trade group Pharmaceutical Research and Manufacturers of America.
J&J's market capitalisation rose from nearly $180 billion to more than $470 billion under Gorsky's tenure, while its its share price increased by more than 170%.
The company's cancer drug business grew from $2 billion in sales in 2011 to over $12 billion in 2020 thanks in large part to blockbuster blood cancer treatments Darzalex and Imbruvica.
The move into medicines for rare diseases was boosted by its $30 billion acquisition of Actelion, the largest in its history. The vaccines division made significant breakthroughs beyond its COVID-19 shot, including inoculations against Ebola.
Lawsuits And Product Recalls
But Gorsky's tenure has been coloured by lawsuits and product recalls.
Along with litigation over its Baby Powder and painkillers, J&J in 2019 paid over $100 million to settle claims from states that it misrepresented the safety and effectiveness of its transvaginal surgical mesh devices.
The drugmaker recently recalled certain spray sunscreen products after discovering some of them contained low levels of benzene, a carcinogen.
J&J also faced major setbacks in its COVID-19 vaccine rollout earlier this year, when quality problems at a Baltimore manufacturing facility wasted millions of doses and delayed its production.