Starboard Value, the activist investor pushing for changes at Pfizer, unveiled its goals for another healthcare company — Johnson & Johnson’s consumer spinout Kenvue.
In a presentation Tuesday at an investor conference, Starboard said that Kenvue needs to reinvigorate its skin and beauty lines to spur larger corporate growth. The investor’s stake in Kenvue became public earlier this week.
Starboard believes Kenvue “must embrace a new marketing-driven culture” and said that under J&J, the division wasn’t prioritized. The firm said there’s an opportunity to get the skin care and beauty division to at least an industry growth rate of 4.4% and highlighted recent examples of improved product marketing.
Kenvue was the second large healthcare bet Starboard made in October after taking a $1 billion position in Pfizer. CEO Jeff Smith also used the conference to detail Starboard’s demands for the New York pharma, saying the board must “hold management accountable” for what it said was underperformance in R&D and with dealmaking.
Spinning out consumer units has been a popular move in the pharma world, with many large pharma conglomerates in recent years separating them into independent businesses. In addition to J&J, Pfizer and GSK recently spun out their joint consumer venture Haleon, and Sanofi is currently separating its consumer business. The argument — similarly adopted by Starboard — is that consumer businesses are too dissimilar from core pharma work.
A spokesperson for Kenvue said the company would “look forward to engaging with Starboard Value, as well as our other shareholders.” Starboard could not be reached for comment.
Starboard maintains that Kenvue is underperforming its peers. Since going public, its shares are down more than 13%. Shares of Haleon, a joint consumer unit run by Pfizer and GSK, is up about 13% over the same period. Fellow competitor Procter & Gamble has seen its share price grow about 8.7% since early May 2023.
With a market cap north of $40 billion, Kenvue is known for brands like Tylenol, Band-Aid and Listerine.