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
When Johnson & Johnson's
But last year, Medtronic
Metric |
Q1 2008 |
Q2 2008 |
Q3 2008 |
Q4 2008 |
---|---|---|---|---|
U.S. sales of drug-eluting stents (in millions) |
$170 |
$167 |
$97 |
$70 |
Year-over-year sales (decrease) |
(28%) |
(20%) |
(47%) |
(63%) |
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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