December
2004 Archives
December 31, 2004
End of Year Wrap
In the arena of interventional therapy,
certainly
2004 must be called the year of the drug-eluting
stent. Johnson & Johnson's Cypher
pioneered the use of this new device through the first quarter,
then Boston Scientific's Taxus came on board and briefly snatched
away 70% of the
market until a one-in-ten-thousand glitch in
the catheter-delivery
system caused Boston Scientific to recall and replace most of its
product
over the summer. It looked for a while like they were in serious
trouble; however, they regained a large part of their market-share
and continued to dominate the field (Paul LaViolette, who guided
the cardio division through this crisis, was recently rewarded for
his efforts with the COO spot). Then J&J ponied up $24
billion and bought Guidant, one of the major interventional
players --
the
result
of this mega-merger
will be fleshed out in 2005: who will stay on, who will go -- stay
tuned.
It was a good year for our site, Angioplasty.Org as
well. We've doubled our monthly
readership
from
a year ago. We currently are getting a quarter-of-a-million page
views monthly and we continue to be a source of information
to patients, media, investors, doctors and nurses worldwide. And,
of course, I started this blog....
I'd personally like to thank all the people out
there who've taken the time to share their experiences with us. We're
basically a not-for-profit enterprise and a lot of what keeps us
going is the knowledge that we're providing some help and comfort.
A Healthy and Happy New Year to All.
December
16, 2004
Birthday Present
Guidant celebrated its tenth birthday as a company on Tuesday. It
was formed from a number of small devices companies spun off by
Eli Lilly in 1994,
the major ones of which were John
Simpson start-ups; Simpson originally learned
angioplasty from Andreas
Gruentzig, and then started inventing
his own version of balloon catheters (ACS) and atherectomy
devices (DVI) which revolutionized the field.
Anyway, Guidant turned ten -- and a day later
became one -- with Johnson & Johnson. They plan to keep the
Guidant name, a new division under which they'll merge the Cordis
and Guidant
companies. Once finalized, and they indicate they want this to
happen quickly, J&J
will become a major player in the ICD market, as well as having a
large
new stent design portfolio on which to develop future products (like
second and third generation drug-eluting stents). I think they will
also get a good boost of PR among the interventional cardiologists
who might have been miffed by initial supply problems
with the Cypher stent. Before drug-eluting stents, Guidant had
the top-selling bare metal stent, and the Guidant reps were the interventionalists'
best friends, so some of that "currency" is bound to rub
off.
As for the antitrust worries that have been wafting through the
various articles, I said a week ago that
I didn't think it would be a problem. Evidently J&J agrees:
Officials saw no significant antitrust
concerns in combining the two companies, which both have significant
operations in heart
stents. "We
clearly do not see any material divestitures being required" by
antitrust regulators in order to combine the companies, said Robert
J. Darretta, chief financial officer of Johnson & Johnson.
So does Jim Tobin, Boston Scientific's CEO, as per yesterday's
WSJ article, which noted:
If the companies are forced to divest themselves
of part of their coronary-stent business, it is unclear who the
buyer could be.
Abbott Laboratories has said it isn't interested. Boston Scientific
probably
wouldn't be allowed to buy it. "We would have the same antitrust
difficulties that J&J
would have," said Boston Scientific's chief executive, James
Tobin.
December 15, 2004
J&J to Buy Guidant
This just in...the deal everyone's been waiting
for has happened. You can read all the news in our News
Section. More about this tomorrow, but for those investors and
other interested parties, there's gonna be a CC Thursday at 9:00am
Eastern. Here's the info from the press release:
Johnson & Johnson and Guidant will conduct a conference call
with financial analysts to discuss this news release on December
16, 2004 at 9:00 a.m., Eastern Standard Time. A simultaneous webcast
of the call for interested investors and others may be accessed by
visiting the Johnson & Johnson website at www.jnj.com and clicking
on “Webcasts/Presentations” in the Investor Relations
section or by visiting the Investor Resources section on the
Guidant website at www.guidant.com. A replay will be available
at both websites.
December 13, 2004
Addendum to Last Entry
On the heels of my comment that the military is going to have to
study up on the diseases of the aging, comes this
story from the Marion Ohio Star about a
70-year-old surgeon who has been ordered to Afghanistan.
December 11, 2004
On To More Serious Subjects
Mergers, acquisitions, market-shares...that's
just great! But all that MBA "excitement" comes to a screeching
halt when you get an
email from
a soldier
who's been fighting the fight in Iraq. From the frontlines, I got
a patient comment yesterday from a MedEvac -- a pilot whose job
it is to pickup and fly injured soldiers from the Iraq "theater" to
the
military hospital in Germany. He's from my generation, the Vietnam
generation; he flew casualties in Vietnam and he was doing the same
for those in Iraq. Except he suddenly needed to have an angioplasty
and was sent to a private hospital in Germany where they
spoke no English and he wrote that he wished he knew more about what
was
going
on.
(My thought: if the U.S. military has men of my generation
in the active war theater, they're going to need to study up on diseases
of the aging!)
In my letter to him, I noted that Germany figures
importantly into the history and development of angioplasty. Just
as the Vietnam conflict was starting, Portland, Oregon-based radiologist Charles
Dotter came up with the idea of using a catheter-based system
to treat atherosclerosis
from
the
inside-out. He
was ridiculed by the vascular surgeons in the U.S. and it took
a visionary compatriot like Eberhardt Zeitler from Nuremburg,
Germany to see the
brilliance of Dotter's concept. Zeitler taught Andreas
Gruentzig,
a fellow German,
the technique. Gruentzig, now considered the father of coronary
angioplasty, refined it for use
in the heart
in 1977.
Gruentzig, by
the way,
was born in Dresden, Germany, only five years before it was
totally incinerated by our Air Force in the final months of WWII.
His mother got her family out in time. And now our soldiers go to
Germany for medical treatment....
Then
yesterday, an article
in the Boston Globe was published, discussing the
casualty/death rate in the Iraq War. It was titled, "Amputation
rate for US troops twice that of past wars". But the
point was that the death rate of American soldiers in the Iraq
War has
been far less than that in previous conflicts. Why? Kevlar!
Actually it's a material that has been used in coronary guide catheters.
The Kevlar vests have saved many lives. I already knew about
this phenomenon -- Bill Blaisdell, one of the pioneers of vascular
surgery,
discussed this with me during an interview I did with him a couple
of years ago. He was talking about the Afghanistan war and how
he had been asked to consult for the U.S. military and how deaths
were down, but amputations were up. The vests protected the vital
organs, but extremities were unfortunately still vulnerable to
bombs. While over 1,000 soldiers have been killed in Iraq, almost
10,000 have been injured, half seriously enough to be sent back
home.
Hippocrates said, "If you want to
be a surgeon,
follow an army." You can see a "brief history" of
vascular surgery and how it literally was advanced during the various
wars the U.S.
fought in Chapter 1 of my documentary "Vascular
Pioneers: Evolution of a Specialty". The odd thing is that
amputations were significantly reduced from WWI through Vietnam
because of the development of vascular repair in the field (thank
you, M.A.S.H., Frank
Spencer, Norm
Rich, etc.). But the advent of Kevlar vests, while saving lives,
has increased the amputation rate to the extent that Brown University
and M.I.T.
have launched a research
project to develop better prosthetic limbs for a new generation
of returning soldiers. There is also a very comprehensive
report in this week's New England Journal
of Medicine about the role of the courageous surgeons who
have been working under tremendous pressure and dangerous situations
in the Iraq and Afghanistan wars.
December 10, 2004
Epilogue on My Merger Commentary
Okay. I'll try to stop discussing this as-yet-non-event, but today's
Reuters
article echoes my comments of yesterday. It quotes:
J&J's
biggest medical device is its Cypher stent, which is coated
with a drug, called sirolimus, that prevents
it from reclogging with scar tissue. But Cypher's third-quarter
U.S. sales plunged by one third to $269 million, hurt by fierce
competition
from Boston Scientific Corp.'s Taxus drug-coated stent.
Dr.
Samin Sharma, head of interventional cardiology at Mt.
Sinai Medical Center, said he and many other cardiologists are
hoping J&J
will buy Guidant and coat the smaller company's highly maneuverable
bare metal Vision stent with sirolimus.
"It would be a marriage made in heaven -- the most flexible
stent on the market coated with the best drug, and that's why J&J
and Guidant need each other," said Sharma, who said he has
no financial ties to either company.
December 9, 2004
Media Merger Swirl
Dozens of reports (read many
of them in Angioplasty.Org's "news"
section) about the impending acquisition of device-maker Guidant
by giant J&J, first
floated two
days ago by the New
York Times. The hometown newspapers of the other medical device
industry players (Abbott, Boston Scientific, Medtronic, St. Jude)
all have run articles on how this may affect sales, local jobs, etc.
The biggest questions seem to be, "will Federal anti-trust regs force
J&J to sell off part of Guidant to another company?", "Will the acquisition
of the Guidant sales force help J&J regain their market share from
Boston
Scientific",
"Will the acquisition of Guidant's bare metal
stent designs give J&J a new and better platform for the next generation
DES stent?" and "Will the removal of one player (Guidant)
help the others?"
My thought on the anti-trust area, not being a
lawyer (or a doctor -- guess I should have listened to my mom) is
this: why would it not be an anti-trust issue for another device
company, let's say...Medtronic, buying Guidant's stent business?
After all, Boston
Scientific
greatly expanded when it was
able to purchase SciMed in 1995 and then Schneider in 1998, both
major players in the angioplasty
field (Schneider actually manufactured the first PTCA balloons for
Andreas Gruentzig in
a garage). I'm not sure the acquisition of the
sales force is that big a deal anyway, although I'm sure there will
be a "consolidation" of the force. Getting a better platform design,
however, may be very important to J&J. With Boston Scientific readying
their Liberte' second-generation stent, J&J/Cordis are going to need
to update their Cypher product -- and Guidant's Multi-Link, etc.
designs were the market leaders before the advent of coated stents.
Of course, such a new generation stent would not
beat the Liberte' to market which is already in trials. But what
I've mentioned before, about J&J obtaining Guidant's patent portfolio
in the deal, might be one of the most important aspects -- these
could be used to defend new products, as well as litigate against
others.
Just a few thoughts.... Word is that a Board meeting
has been scheduled for Sunday, so we should hear news very soon.
December 7, 2004
More on Merger Talks
More on the possible J&J/Guidant
merger and what
its implications might be. One criticism sometimes heard has been
that J&J's CYPHER stent isn't as easy to position ("deliverable")
as Boston Scientific's. A new J&J stent, using Guidant's very
popular platform,
now could
be developed. Or, will anti-trust issues force the sell-off of Guidant's
drug-eluting stent technology? Abbott has been discussed as a possible
buyer, but they say they're happy with their own program and want
nothing to do with Guidant's, or anybody else's stent. Regardless
of the outcome, the impending J&J/Guidant venture, if it happens,
would be a significant event -- Guidant owns many many important
patents (read that, "ammunition for use in legal battles")
and,
prior to drug-eluting stents, Guidant was the leader in the bare
metal stent market. They also make the first FDA-approved carotid
artery
stent/protection
system, the RX AccuLink and AccuNet, plus a host of other
interventional products. These new devices will be very important
in the future of expanded
endovascular therapies (please excuse the self-serving plug for
our new website, VascularTherapy.Org...).
Moreover, eyes
are on the upcoming REALITY trial data. J&J-sponsored
this trial which puts their CYPHER stent head-to-head with Boston
Scientific's TAXUS. Results to be announced in three
months at the ACC in Orlando. What does the winner get
(besides
a trip
across the
street to Disney World)? If the data shows one stent
to have significantly better restenosis results than the other,
the winner
will get lots. Of course, there will be big debates about
what the results will mean. There are many measures; no doubt
terms like late lumen loss, TVR, TLR, edge effect, etc. will
be spun
by both sides. While cardiologists will decide what they'll use
based on a number of criteria, including something
called "deliverability",
ease of use and available sizes, the retail press is sure to
amplify
the announced results, not necessarily accurately -- remember
the panic headlines of this past year -- and that will affect
patients' preferences. Heart patients research their
disease and procedures, using our site, Angioplasty.Org, and
others; they're hip
to the
devices
and,
if they read a news article that says Stent
A
prevents
restenosis
better than Stent B, they're going to ask their cardiologist
why he's using stent B. This already happens with pharmaceuticals
-- and device companies have discovered DTC (Direct To Consumer).
So with a possible acquisition
of Guidant and the upcoming REALITY trial, J&J should have
an interesting quarter.
December 6, 2004
Merger Talks Heat Up
This just in...the New
York Times reports that Johnson & Johnson is in "advanced
talks" to purchase Guidant. $24 billion is the figure mentioned.
With Cook having recently dropped out of the coronary stent business,
this would represent a further narrowing in the field -- of
course, there are only
two "real" (i.e.
drug-eluting) stents being marketed -- one by J&J (Cypher)
and the other by Boston Scientific (Taxus) -- but Guidant is
in clinical trials, as are Abbott and Medtronic, and a few smaller
companies, like Conor.
I first coined the term "Stent Wars" almost
three years ago (sorry, Motley Fool) -- and it's an apt metaphor,
although we're not sure who are the Rebels and who is the Evil
Empire. Guidant was one of the first to create a drug-eluting stent,
a co-project with Cook -- only problem was it didn't work so well
and they dropped development. That, plus legal issues brought against
them by Boston Scientific, scrapped their anticipated merger with
Cook. Then J&J
got their approval, but stumbled when they couldn't supply enough
product
in enough
sizes and subsequently
experienced
a media panic over the issue of stent thrombosis. Within months,
Boston Scientific came in with their newly-approved Taxus and grabbed
70% of the market. Great going until they found a serious problem
in a very small number of catheters this summer and, as a precaution,
recalled virtually their entire inventory. Ouch! More media panic.
But four months later, they report that their major market share
is back.
Stay tuned.
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