Sometimes, being first to market isn't all it's cracked up to be. Sure, it provides a bit of a moat; witness Netflix's (NASDAQ:NFLX) resilient ability to fight off Blockbuster's (NYSE:BBI) entry into the mail-order DVD business. But give companies enough time, and they'll figure out a way to make their own drawbridge.

When Johnson & Johnson's (NYSE:JNJ) drug-eluting stent, Cypher, won FDA approval in 2003, it had the market all to itself. Boston Scientific (NYSE:BSX) followed and eventually passed it, but that was tolerable. There was still plenty of room for a duopoly.

But last year, Medtronic (NYSE:MDT) and Abbott Labs (NYSE:ABT) entered the U.S. market in quick succession, and Johnson & Johnson was the big loser.

Source: Earnings conference calls and press releases.

Ouch! It's a good thing that Johnson & Johnson is well-diversified.

The health-care giant isn't taking things lying down, though. It has a new drug-eluting stent, Nevo, in clinical trials; yesterday, Johnson & Johnson said that it's going to roll the dice and test Nevo head-to-head against Abbott's Xience V. I don't see how it has a choice, since the Xience is becoming the standard of care. If J&J wants to get back in the game -- after it applies for marketing in the U.S. in 2011 -- it'll need to have data showing that its stent can compete with the best.

Of course, Abbott has another stent -- this one with a cool bioabsorbable feature -- hot on Nevo's heels (or "heals," if you're feeling punny). A few years after Nevo hits the market, I may once again be saying, "Good thing that Johnson & Johnson is well-diversified."

It never ends. Fortunately, Johnson & Johnson is an experienced competitor, having been around for more than 120 years. With or without competition, it'll be just fine.

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