Owning only 30% of the drug-coated stent market did not disrupt that upward track of Johnson & Johnson's
Today Boston Scientific was scheduled to report earnings. This was to be a blowout quarter -- the first with three months of Taxus drug-coated stent sales. The company earned $0.62 a share for all of 2003. Analysts had expected earnings of $0.48 a share this quarter and $1.77 this year. Taxus was to provide the majority of the lift that would have almost tripled earnings.
Although Taxus sales and earnings will be robust when they are reported next Monday, investors will be most interested in order rates, since the company recalled 96,000 stent delivery systems (1.1 million have been manufactured). The recall will reverse $45 million in sales, require a $50 million inventory write-down, and cause service disruptions (mostly in international markets).
More telling, though, will be the three deaths and 43 serious injuries that have been reported. This will certainly cause doctors to pause and consider returning to the Johnson & Johnson product.
It is ironic (for lack of a better word) that the delivery system (and not the stent or its drug coating) is the focus of the recall. One of the touted Taxus strengths was its ease of delivery.
Investors have a lot to weigh. Johnson & Johnson and its drug partner, SurModics
The stock prices of Boston Scientific and its drug partner, Angiotech
Fool contributor W.D. Crotty had a cardiac catheterization last year. The doctor and attending nurse were J&J shareholders. They laughed at the thought of implanting a J&J product, knowing W.D. was (and still is) a Boston Scientific shareholder. W.D. also owns stock in Medtronic.