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Thoughts on Cordis’ withdrawal from the DES market

Thoughts on Cordis’ withdrawal from the DES marketThoughts on Cordis’ withdrawal from the DES market

By ankit shakyaPublished 2 years ago 3 min read
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One step back, two steps forward for Cordis?

Something had to give in the faltering drug-eluting stent (DES) market, but the move by Johnson & Johnson to withdraw from the cardiovascular stent sector by the end of 2011 still raised a few eyebrows at Medical Industry Week.

The decision, which will cost the company around US$600 million and the closure of two factories, is a bitter pill to swallow but looks set to be the right decision in the long run.

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It brings to an abrupt end Cordis’ participation in a market that it had played such a pivotal role in developing.

The DES industry has always suffered to a degree by over expectations. When Cordis won the race to get a DES onto the market in the US back in 2003, it could be forgiven for giving itself a pat on the back and a “well done” to its R&D team.

The company could effectively write its own cheque for the technology and the profits rolled in.

In retrospective, this head start was as good as got for Cordis. It didn’t take long for others to notice the profits rolling in and soon enough, Boston Scientific, Medtronic and Abbott responded with their own stent programmes and it didn’t take long for Cordis’ lead at the top to be usurped by Boston Scientific.

Chasing the dream led the two to lock horns together in a multi-billion dollar duel for Guidant back in 2004.

Boston Scientific may have won the battle for Guidant, but Cordis didn’t wait too long to hit back and paid US$1.4 billion in February 2007 for a cardiovascular start-up, Conor MedSystems, an astonishing sum considering the relative size of Conor.

It would prove to be a costly mistake as barely a year later Conor’s core DES programme – the CoStarr paclitaxel programme – failed to meets its primary endpoint in a pivotal trial, leaving Cordis to focus entirely on sirolimus.

By 2008, however, the signs were clear that the DES market was suffering from a significant downturn in its fortunes.

Although not alone in the industry, J&J’s Cypher DES sales, which peaked at the US$2.5 billion mark at one stage have annually declined and reached barely US$627 million in 2010, with sales expected to nearly halve again in 2011.

In truth, the DES market hasn’t helped itself either by failing to adapt quickly to the environmental challenges out there.

In a contracting market for healthcare spending, DESs biggest selling point – their cost effectiveness against bare metal alternatives – ultimately proved to be its Achilles heel.

When questions were raised over their long-term restenosis rates, the industry struggled to persuade the market not to ditch their use in preference to alternatives.

In the UK, National Institute for Clinical Excellence went from recommending the device in 2003 to limiting its use in only 30 per cent of UK patients.

Competition has also hit the industry hard, particularly outside of the US where the regulatory framework is much kinder and it’s easier for the devices to be cleared.

However, in all markets, margins are forever being tightened and clearly there is just not enough profit to go round. Worse still, the company is not likely to be in pole position for the next chapter in the story of DES – biodegradeable DESs.

Abbott, Boston Scientific and Medtronic are all in advanced stages in development. It’s also noticeable that the company has effectively chosen to shut down its operations rather than attempt to find a buyer for the assets.

It’s not all doom and gloom. Although J&J hates not being number one, J&J’s expensive withdrawal will mean the company will no longer have to spend time answering questions about its faltering DES sales from persistent analysts and allow the focus of attention to turn to its more successful cardiovascular technologies.

It will also help reduce the over capacity in the DES market going forward, with Boston Scientific and Abbott the strongest placed to benefit.

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About the Creator

ankit shakya

I am a marketing executive in a virtual SEO Expert. I have knowledge of on-page & off-page SEO, Analytics and ads. Apart from this, I have knowledge of local listing.

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