We've all heard that imitation is the sincerest form of flattery. If that's true, Johnson & Johnson (NYSE:JNJ) should be feeling pretty flattered, because it seems like everybody is dipping their toes into the drug-eluting stent game.
The latest entrant is Abbott Labs (NYSE:ABT). Generally thought of as "just" a drug company, Abbott does have a presence in the vascular intervention market -- selling products like stents (uncoated), guide wires, and catheters.
Abbott announced on Thursday that it had received FDA approval to begin a pivotal U.S. clinical study of its ZoMaxx drug-eluting stent. The study will ultimately include 1,670 patients and they will be randomized to receive either Abbott's ZoMaxx stent or BostonScientific's (NYSE:BSX) Taxus Express2 stent.
The primary endpoint of the study will be nine-month, target-vessel revascularization. In English, that means that the principal goal of the study is to see how many patients need another procedure (whether it's a stent, brachytherapy, or surgery) to reopen the vessel that originally gets treated. In this case, lower is better and Abbott certainly hopes that its stent shows a lower need for subsequent retreatment.
The ZoMaxx stent will be coated with ABT-578, an immunosuppressant similar to rapamycin and designed by Abbott specifically for use with drug-coated stents. Investors should also note that this is the drug that Medtronic (NYSE:MDT) uses with its current drug-coated stent (Abbott and Medtronic have a licensing agreement in place).
So, how excited should Abbott investors get? Although I've actually spoken to a couple of docs who've used the stent and said "it feels good," I wouldn't expect Abbott to come close to threatening Johnson & Johnson or Boston Scientific for market leadership.
First of all, Abbott will be late getting into the game, as the ZoMaxx isn't likely to be approved any sooner than the second half of 2007. By that time, Abbott will face an uphill challenge in convincing doctors to switch from other stents, unless the ZoMaxx clinical data is remarkably better. Most docs that I've spoken to don't expect Abbott's data to be that good, so that approach might be something of a long shot.
What's more, some industry watchers have suggested that the ABT-578 drug isn't as potent as sirolimus (used by J&J) or pacliataxel (used by Boston Scientific through an agreement with Angiotech Pharmaceuticals (NASDAQ:ANPI). Of course, Abbott supporters could (and will) counter by contending that their coating (developed by Biocompatibles PLC (NASDAQ:BCTBF)) is better and will more than compensate.
When it's all said and done, I think that Abbott will end up with a pretty good product, but it will be the No. 4 player, well behind the likes of JNJ and Boston Scientific (and probably Medtronic, too). Of course, none of this means Abbott is "bad" in any way. Abbott is still a great health-care company (particularly on the pharmaceuticals side), with a strong business, attractive pipeline, and remarkable historical track record.
And who knows? If ZoMaxx turns out to be better (and/or more popular) than expected, Abbott shareholders could see a nice little bonus on top of all that.
For more stimulating stent stories, try these other Foolish takes:
- The Stent Wars Continue
- Is Medtronic's Heartbeat Slowing?
- Stent Maker's Healthy Returns
- SurModics Stays in the Hot Spot
Fool contributor Stephen Simpson owns shares of Johnson & Johnson. The Fool has a disclosure policy.
