One of the biggest players in the coronary stent market is getting out of the business.
Cordis Corp., one of the medical device arms at Johnson & Johnson (NYSE:JNJ), announced the decision this morning, saying it will shut down development of its next-generation Nevo drug-eluting stent and stop making the Cypher DES line altogether by the end of 2011.
“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,” Cordis group chair and worldwide chairman Seth Fischer said in prepared remarks.
Those dynamics include lower demand, pricing and reimbursement pressure and a more stringent regulatory environment, Cordis said, noting that "unlicensed competition from products that infringe Cordis patents, both owned and licensed" has cut into Cypher’s market share and "dampened the prospects" for commercializing the Nevo stent.
"At the same time, long-term data show some competitive DES offerings will adequately meet patients’ medical needs once Cordis exits the market," the company said in a press release.
In a separate release, J&J said it expects to log $500 million to $600 million in after-tax charges as a result of the plan, which will also mean layoffs for up to 1,000 workers. The move also means Cordis will shutter plants in Ireland and Puerto Rico and consolidate its research & development efforts in Fremont, Calif.
Cordis will focus its efforts on its BioSense Webster division, which makes electro-physiology products for cardiac applications and on its own, non-DES offerings in the cardiology and endovascular spaces. Those businesses threw off $1.9 billion in sales last year, excluding the drug-eluting stents operation, the company said.