Johnson & Johnson moved to consolidate its position in the market for drug-eluting stents with a $1.4 billion offer for Conor Medsystems.
The offer for Conor comes after J&J lost out to its arch-rival in the drug-eluting stent market, Boston Scientific, in a bidding war for Guidant, another medical device specialist.
Conor won European approval to sell its paclitaxel-eluting stent CoStar in Europe earlier this year, and already sells the device in a number of markets outside North America. It is currently undertaking a pivotal trial to support an application to file for approval of the product in the USA.
Rick Anderson, who has responsibility for Cordis, said the acquisition would allow the company to “offer physicians and the patients they treat the most comprehensive portfolio of stents, therapeutic agents, delivery platforms and polymers.”
J&J and Boston Scientific dominate the market for drug-eluting stents, with around half of the $5.5 billion market apiece, although other companies are launching products into the sector.
For example, Abbott Laboratories, which bought Guidant’s stent business to facilitate the company’s takeover by Boston Scientific, recently entered the market with its Xience V stent, and Medtronic has launched its Endeavour (zotarolimus) device in Europe and other parts of the world and is scheduled to introduce it in the USA next year.
Meanwhile, debate over the safety of drug-eluting stents is also shaking up the sector. The issue came to a head at the World Congress of Cardiology earlier this year, when two studies suggested that the products were linked to an increased risk of death and cardiac events compared with their bare metal counterparts.
All this has put pressure on J&J’s flagship Cypher (sirolimus) stent, which saw a 3% decline in third-quarter sales fell 6% in the USA to $327 million and 3% overseas to $300 million.
In a statement, J&J said it expected charges related to the acquisition to be around $600 million after tax, and this would have a ‘modest’ impact on earnings per share next year.
The deal is expected to close in the first quarter of next year.