In a move that the company attributes to “evolving market dynamics”, Johnson & Johnson’s subsidiary Cordis is pulling out of the drug-eluting heart stents sector, cutting 900–1000 jobs in the process. Cordis will cease the development of its NEVO sirolimus-eluting coronary stent, as well as the manufacture of CYPHER and CYPHER Select Plus sirolimus-eluting coronary stents. Manufacturing will cease by the end of 2011.
Unfortunately, the move will also lead to the closure of two manufacturing sites: the Cashel (Ireland) site, where the NEVO stent was to be produced, and the San German site (Puerto Rico), which manufactured CYPHER products. Cordis has also said that it will consolidate its R&D project teams in Fremont (CA, USA). Overall, the company expects to axe 900–1000 positions.
“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,” Seth Fischer, company group chair and worldwide chairman of Cordis, said in a statement.
According to Cordis, the drug-eluting stent market has changed considerably in recent years in areas including demand, pricing and reimbursement, and regulatory requirements for new technologies. “Unlicensed competition from products that infringe Cordis patents, both owned and licensed, has eroded CYPHER Stent pricing, sales and market share, and has dampened the prospects for NEVO Stent commercialisation,” explained the company’s press statement. “At the same time, long‐term data show some competitive drug-eluting stent offerings will adequately meet patients’ medical needs once Cordis exits the market.”
In a separate statement, J&J said that it expects to record an after-tax restructuring charge in the range of $500-$600 million in the second quarter of 2011 because of Cordis’ restructuring.
According to a story in the New York Times, Cordis’ announcement has been long expected by many analysts because of a dwindling market. Last year, the company’s global sales of drug-eluting heart stents fell to $627 million from $2.6 billion in 2006.