Rank: #17 (Last year: #16) $8.25 Billion
Prior Fiscal: $8.19 Billion
Percentage Change: +0.7%
R&D Expenditure: $775M
Best FY24 Quarter: Q2, Q3 $2.08B
Latest Quarter: Q1 $2.07B
No. of Employees: 22,000
Global Headquarters: Saint Paul, Minn.

On April 1, 2024, 3M officially completed the planned spin-off of its healthcare business, which formally launched Solventum as an independent company. It’s listed on the New York Stock Exchange (NYSE) as SOLV and joined the S&P 500.

“This is an important day for 3M and Solventum, and I extend my sincere congratulations to members of both teams who have made this possible,” Mike Roman, 3M chairman and CEO said in prepared remarks. “Both companies are positioned to pursue their respective growth and tailored capital allocation plans, and I am excited to see both companies succeed as they innovate new solutions and create value for their respective stakeholders.”

The company sells 3M’s medical devices, including its stethoscopes, IV port protectors, and negative wound pressure therapy devices. It also houses 3M’s dental, health IT, and filtration products.

“Today Solventum marks our first day as a publicly traded company and dedicated global healthcare leader,” Bryan Hanson, Solventum’s CEO, said in a press release announcing the company’s trading on the NYSE. “We’re a new company with a long legacy of creating breakthrough solutions that solve our customers’ toughest challenges. Solventum colleagues worldwide are united in our mission to enable better, smarter, safer healthcare to improve lives.”

At the time, Solventum remained operating within Minnesota in its legacy 3M facilities. In October, Minnesota Gov. Tim Walz’s office said the new company is likely to stay put. The governor’s office said Solventum plans to invest $209 million on a new research and development facility in Eagan, Minn. The expansion will retain about 2,000 Minnesota jobs, though not all at the Eagan facility.

“Solventum is now better positioned to create long-term value for shareholders through a greater focus on our core business, an enhanced ability to execute on industry-specific growth and market strategies and tailored capital allocation strategies,” Hanson continued.

In its first full year as an independent company, Solventum posted fiscal year 2024 (ended Dec. 31) revenues of $8.25 billion, rising a slight 0.7% over the prior year. In the U.S., both total sales and organic sales increased—3.2% and 1.7%, respectively. Organic growth here was led by the MedSurg and Health Information Systems businesses.

ANALYST INSIGHTS: “With their spin-out from 3M, (relatively) new CEO Bryan Hanson is “bringing the Covidien band back together again”. Watch Bryan and his team continue to incorporate successful portfolio management and targeted inorganic activities to accelerate Solventum’s growth in 2026 and beyond.”

—Dave Sheppard, Co-Founder and Managing Director, MedWorld Advisors

International total sales decreased last year, while organic sales increased (-2.5% and 0.6%, respectively). Organic growth was led by the Purification and Filtration business.

MedSurg sales were flat at $4.64 billion, with a slight increase of 0.1%. Organic sales growth of 1.2% arose from volumes, mainly because of benefits from medical OEM products, I.V. site management, and single-use negative pressure wound therapy. This was somewhat curtailed by declines in traditional negative pressure wound therapy and sterilization assurance products. Sales were also lost from certain healthcare businesses retained by 3M India related to the spin-off.

The V.A.C. Peel and Place Dressing hit the shelves in September. It’s indicated for wounds as deep as 6cm including chronic, acute, traumatic, subacute, and dehisced wounds, as well as partial thickness burns, ulcers (such as diabetic, pressure or venous insufficiency), flaps, and grafts. The integrated dressing and drape can be applied in under two minutes and worn for up to seven days.

An all-in-one dressing and drape design simplifies application and reduces time and training needed for dressing application and training. It also features a built-in perforated, non-adherent layer to reduce tissue ingrowth and make dressing removal less painful.

The company’s Double-Coated Medical Tape with Hi-Tack Silicone and Acrylate Adhesives on Liner (2487 Hi-Tack Silicone Tape) launched in October. The adhesive was designed for sensitive skin and can be repositioned after first application. It’s made with a clean, non-fluorinated release liner, and the backing bond design leaves minimal residue on both skin and medical devices when removed. The new breathable medical tape is fluid-resistant and can be worn for up to seven days with minimal to no skin trauma during removal.

The Dental Solutions franchises’ revenue dropped 2.6% to $1.3 billion. Solventum cited volume declines related to softening end-market demand as the main reason for the decrease. This was partially offset by the positive impact of prior year price actions. Sales were also lost from the dental aesthetics business sold in August 2023 and some healthcare businesses kept by 3M India in connection with the spin-off.

The 3M Clarity precision grip attachments rolled out in November. The attachments aim to change aligner treatment because they remove the attachment creation process, which can introduce variability into treatment. The procedure for the attachments also eliminates the risk that an overfilled template results in residual cured composite flash on the tooth.

The attachments are manufactured via 3D printing and customized to fit each patient’s tooth anatomy. A combination of inorganic filler and organic resin, combined with post-processing techniques, ensure the 3D-printed attachments are durable and stain resistant.

Health Information Systems revenue totaled $1.31 billion last year, growing 1.6% over the previous fiscal year. Positive sales growth was driven by the continued adoption of the company’s 3M 360 Encompass. Clinician productivity solutions declined mainly due to the impact of changing market conditions.

June saw released of the Solventum Revenue Integrity System, an artificial intelligence (AI)-driven payment integrity and revenue cycle solutions. Developed in partnership with Sift Healthcare, the solution is meant to help health systems reduce potential denials, prevent them, and ensure timely and accurate payer reimbursement.

The tool targets clinical documentation integrity, coding, and utilization workflows. The company strives to transform denials prevention by integrating machine learning-based interventions, coding, and prebill validation into the healthcare revenue cycle’s front end.

Purification and Filtration sales were up a slight 0.6% to $956 million. This was mainly provoked by higher sales volume in the bioprocessing filtration product category, somewhat tempered by sliding membranes OEM and drinking water filtration performance. Some sales were also lost from healthcare businesses retained by 3M India connected to the spin-off.

$8.20 Billion
Prior Fiscal: $8.43 Billion
Percentage Change: -2.8%
R&D Expenditure: $1.84B (3M total)
Best FY23 Quarter: Q2 $2.08B
Latest Quarter: Q1 $2.02B
No. of Employees: 22,000

The words “solving” and “momentum” were used to create the new name of the spun-out 3M Health Care unit. The company noted in the brand’s announcement it would “listen closely to healthcare professionals and never stop solving for them” as well as the patients for which they care. With the latter term, the company noted it “symbolizes swifter, nimbler innovation.” In addition, as an independent entity, with every success, the company’s “momentum propels it past barriers, towards breakthroughs.”

The initial announcement of the plan to spin off 3M’s Health Care unit came in the middle of 2022, but news of how the company would take shape did not begin to emerge until the following year. This type of move within the medical device industry was not unique to 3M as it mirrored several top company peers who have experienced a similar transformation themselves—Zimmer Biomet launching ZimVie, GE splitting from its HealthCare division, J&J’s separation from its Consumer portion, and the Danaher/Veralto divorce.

“As we build this new company, Solventum will embody our mission of enabling better, smarter, safer healthcare to improve lives,” said Bryan Hanson, the firm’s CEO. “The name signifies who we are as a team—problem solvers who create innovative solutions that touch millions of lives, transform the patient experience, and save time for healthcare professionals.”

Hanson took on the role while the unit was still under the purview of its former parent. On Sept. 1, 2023, he joined 3M as CEO of the Health Care Business Group; he would then become Solventum’s CEO upon completion of the spin-out. Hanson had previously been with Zimmer Biomet where he was CEO, president, and chairman. Prior to Zimmer Biomet, he led Medtronic’s Minimally Invasive Therapies Group, where he oversaw and provided strategic direction to an approximately $9 billion business. He also served in a number of executive roles of increasing responsibility at Covidien including group president of Medical Devices and group president of Surgical Solutions.

“We are pleased to have Bryan join us to advance the spin-off of our Health Care business and build a leading independent medical technology innovation company,” said Mike Roman, 3M chairman and CEO. “His industry expertise, ability to drive growth, and track record of building a strong culture and teams will make an immediate impact.”

At the same time as the Hanson announcement, it was also revealed Carrie Cox would become the chairman of the Board of Directors for Solventum. Cox had experience in the role having served as such for Organon, as well as being on the boards of Cardinal Health, Selecta BioSciences, Texas Instruments, and Celgene (before its sale to Bristol-Myers Squibb). In addition, Cox was chairman and CEO of Humacyte Inc. According to Roman, Cox was also instrumental in Hanson’s selection.

Moving over from diabetes specialist Insulet, Wayde McMillan came aboard the departing Solventum ship on Nov. 1, 2023, to ultimately become the firm’s CFO. He had served in a similar position at Insulet—executive vice president, CFO, and treasurer—since 2019. Prior to his time at that company, McMillan was CFO and vice president of Finance of the Minimally Invasive Therapies Group at Medtronic, managing an $8 billion revenue business with more than 20,000 employees and a global finance team. Like Hanson, he also held leadership positions at Covidien from November 2006 until Medtronic’s acquisition of the company in January 2015, including CFO and VP of Finance of the Medical Devices Group and United States, CFO and VP of Finance of the Surgical Solutions Business Unit, and VP of Finance and Controller of the Respiratory and Monitoring Solutions Business Unit.

In another senior management move ahead of the completion of the separation, Jeff Lavers, group president of 3M’s Health Care Business Group, left the firm on Dec. 1, 2023.

In one of the final required moves to ensure the spin-out continued as expected, the 3M board formally approved the action near the start of March, less than a month before the launch date.

Then, on April 1, 2024, SOLV began trading on the New York Stock Exchange as the move finally became official. “Today, Solventum marks our first day as a publicly traded company and dedicated global healthcare leader,” said Hanson. “We’re a new company with a long legacy of creating breakthrough solutions that solve our customers’ toughest challenges. Solventum colleagues worldwide are united in our mission to enable better, smarter, safer healthcare to improve lives.”

The newly independent firm will be seeking to improve on its latest fiscal year in which it took in $8.2 billion, representing a fall of 2.8% over 2022. Much of that decrease, however, can be attributed to the $244 million Food Safety brought in during the prior year. 3M had split this business off to Neogen Corp. during that same period. The remaining units within Health Care experienced gains and losses to ultimately put forth an otherwise flat year.

The Medical Solutions portion grew modestly at 1% to end the 2023 year at $4.63 billion. Falling 3.2%, the Health Information Systems unit completed the fiscal with $1.22 billion in revenue. Meanwhile, Oral Care was effectively flat year-over-year, growing by only $2 million to contribute $1.33 billion to the company’s coffers. Rounding out Health Care, Separation and Purification Sciences shrank by 4.1% to add $951 million to the sales tally, while Other was responsible for $71 million.

Oral Care may have experienced more than its reported $2 million gain had the organization not sold off specific assets to Pierrel S.p.A. in May. The deal involved parts of its dental local anesthetic portfolio. The $70 million transaction consisted of products sold primarily in Europe and Asia under the brands of Ubistesin, Xylestesin, and Mepivastesin, as well as related syringe and needle products. The matter was made official in August.

On the other hand, 3M put a plan in place to expand the capabilities of the Separation and Purification Sciences. The May announcement noted the investment would bolster its ability to support biotech manufacturing, which it saw as a fast-growing area of healthcare. The $146 million would accelerate 3M’s development and delivery of vital filtration equipment designed for bioprocessing, biological, and small molecule pharmaceutical manufacturing applications, which would enable biotech customers to continue to innovate therapies used for the treatment of conditions such as rheumatoid arthritis, multiple sclerosis, and certain cancers.

April saw a U.S. FDA clearance for two of the organization’s Veraflo Therapy dressings—the 3M Veraflo Cleanse Choice Complete Dressing and the 3M V.A.C. Veraflo Cleanse Choice Dressing.

According to 3M, the negative pressure wound therapy dressings (NPWT) gained the first-ever FDA clearances for hydromechanical removal of infectious materials, non-viable tissue, and wound debris (which reduces the number of surgical debridements required). Veraflo Therapy is an NPWT with instillation and dwell that helps cleanse and stimulate the formation of granulation tissue (which promotes wound healing) for patients with open soft tissue wounds.