Figure Warren Buffett (photo) liked the idea. First, we see that Berkshire Hathaway boosted its stake in Johnson & Johnson. Next, J&J announces a sweeping reorganization. On the agenda: A new office of strategy and growth, designed to identify opportunities beyond the healthcare giant's current endeavors. And two new operating divisions, one devoted to surgical care and the other, comprehensive care.
The regrouping requires a management shuffle. Nicholas J. Valeriani, now worldwide chairman of medical devices and diagnostics, will lead the strategy and growth office. Sherilyn S. McCoy will chair the surgical group; she had been chair of Ethicon, one of the franchises that will fold into her new domain. Donald M. Casey Jr., who now oversees J&J's diabetes group, will head up the comprehensive care effort.
Meanwhile, J&J's drug business chairman is retiring early next year; he'll be replaced by Vice Chairman Christine Poon (photo).
The reorganization comes at a time when J&J has been cutting jobs and costs, partly in response to the sluggish market for drug-eluting stents, partly because of declining drug sales. But things must be looking up; Berkshire Hathaway spent some $119 million during the third quarter to almost double its stake in the company, to 48.7 million shares from 24.6 million.