Healthcare giant Johnson & Johnson has announced that its subsidiary Cordis will stop manufacturing Cypher stents by the end of the year, as part of a restructuring programme that will likely result in around 1,000 job losses.
Under the plans, Cordis will also pull the plug on the development of the NEVO Sirolimus-Eluting Coronary Stent, in order to focus its efforts on other cardiovascular therapies "where significant patient need exists".
In its hey day Cypher reigned the stents market pulling in sales of over $2.5 billion (around five years ago), but revenues slipped dramatically as rival products from companies such as Abbott and Medtronic flooded the market, and it now stands to make just $400 million this year, Gabelli & Co analyst Jeff Jonas told Reuters.
“Due to evolving market dynamics in the drug-eluting stent business, we see greater opportunities to benefit patients and grow our business in other areas of the cardiovascular device market,” noted Seth Fischer, company group chair and worldwide chairman, Cordis Corporation, explaining the move.
Going forward, Cordis will now focus on access, diagnostic and therapeutic products for cardiology procedures and the treatment of lower extremity disease, as well as the INCRAFT Stent-Graft System for treating abdominal aortic aneurysm, which is currently being tested in trials.
Jobs to go
On the downside, the company will have to axe to manufacturing facilities under the restructure, with a site in Cashel, Ireland, where the NEVO Stent was to be produced, and San German, Puerto Rico, the manufacturing site for Cypher products, up for the chop.
In addition, research and development teams in Fremont, California, will be consolidated, and overall the company said it expects around 900-1,000 job losses, subject to consultation procedures.
According to J&J, it expects to record an after-tax restructuring charge of $500-$600 million in the second quarter of 2011 because of the changes at Cordis, which, it says, will be treated as a special item.