Johnson & Johnson plans to leave the market later this year for the drug-coated heart stents it pioneered, a move that analysts say bodes well for rivals Boston Scientific Corp. and Medtronic Inc.
The New Jersey maker of Cypher and Cypher Select Plus stents, plus an experimental next-generation stent called Nevo, has lost considerable ground to competitors in the drug-coated stent market since the product's blockbuster introduction in 2003.
Part of a $4 billion global market, stents are tiny mesh struts that prop open clogged heart arteries. When coated with drugs, vessels are less likely to reclog. The device revolutionized the field of cardiology because it let some patients avoid more-invasive open-heart surgery.
J&J, once the world's leading maker of the artery-clearing devices, has lost ground to Boston Scientific and Abbott Laboratories in a market where fierce competition dragged down prices, said Jeff Jonas, an analyst with Gabelli & Co. Inc.
J&J suspended a clinical trial last year for the Nevo stent after encountering difficulties with a catheter used to insert the device in patients.
"The market's just so unattractive for drug-eluting stents right now and expectations for Nevo weren't very high," Jonas said. "This is just them finally throwing in the towel."
The news proved "disappointing" to Gary Maharaj, CEO of Eden Prairie-based SurModics Inc., which provides the polymer coating on the Cypher stent.
J&J pays SurModics royalties to use the polymer. But as sales of Cypher have declined, so too have SurModics' royalties. In its most-recent fiscal year, Cypher royalty revenue declined 26 percent.
