In an obvious bid to play catch-up in the drug-eluting stent (DES) sector, Guidant (Indianapolis, Indiana) has gotten a rocket boost through a new agreement announced last month with Cordis (Miami Lakes, Florida), a business of Johnson & Johnson (J&J; New Brunswick, New Jersey) and the leader in this sector with its FDA-cleared Cypher stent. In an announcement that perhaps not so coincidentally came the day after a Boston Scientific (Natick, Massachusetts) meeting with market analysts in which it predicted capturing 70% of the domestic DES market, Guidant and Cordis reported an alliance for the co-promotion of DES technology and new technology in coronary stent delivery systems. Additionally, Cordis said that the agreement gives it a chance to participate with Guidant in the future platform of bioabsorbable vascular stents. The co-promotion pact may remain in force for up to eight years.
The agreement, which Guidant said gives it "immediate access" to the drug-eluting stent market, was termed a "blockbuster" by Larry Haimovitch, president of Haimovitch Medical Technology Consultants (Mill Valley, California), who follows the cardiovascular sector for The BBI Newsletter and its sister publications, Cardiovascular Device Update and Medical Device Daily. "This is a big deal I don't think anyone had an inkling of it," he told BBI. Haimovitch especially praised Ron Dollens, president and chief executive officer of Guidant, for pushing forward with the agreement. "I think from the minute that [Dollens] saw that Guidant was falling behind in the drug-eluting stent sector, he has spared no energy and effort to get the company back in the game," he said, referring to Guidant's difficulties in keeping up with Cordis/ J&J and Boston Scientific in DES development. "I really admire his boldness and his aggressiveness, and his not knowing how to say 'we can't do any better than we're doing,'" he said.
While the benefits of the agreement are obvious for Guidant, Haimovitch also noted the benefits for J&J/Cordis, which he said "gets a potent marketing partner" in Guidant. "And it gives Cordis a huge ally to beat back Boston Scientific," which is next in line to win FDA clearance for its Taxus Express2 drug-eluting stent system. "In the ring with Boston Scientific, now it's two on one," he said. As an example, he cited the quality of Guidant's delivery system for its bare-metal stents and said that the Cordis/Guidant hookup now gives Cordis an improved delivery system to compete with Boston Scientific's soon-to-be-approved system.
Rick Anderson, president of the Cardiology Division of Cordis, told BBI that "the genesis of our thinking around this alliance with Guidant is that we're passionate about the [Cypher stent] product" and the need for providing the technology to the many patients that can be helped by it. Besides being good for patients, he added two other points: "It's also good for physicians [since] the arrangement makes Cypher a transformation technology with a world-class delivery system. And it's good for J&J because we have the opportunity to participate in another transformational technology in the future with bioresorbable stent technology." He noted that the agreement does not foreclose R&D options for either company. Thus, Guidant can continue with its own DES development efforts and Cordis can continue its work in bioresorbable stents.
Anderson also emphasized the agreement as bolstering the competitive positions of the partners to the agreement. "When you combine two world-class organizations, one-plus-one is clearly greater than two," he said. Noting Boston Sci's pending entry to the DES sector, he said, "We're prepared to compete head-to-head in the marketplace, and we're not willing to give an inch."
Dollens said that the partnership "leverages Cordis' and Guidant's broad capabilities and innovative positions in this important market. We believe this strategic alliance will provide significant benefits to both organizations through the collaboration of our sales, marketing and product development resources." Sales and marketing resources of both Cordis and Guidant will join to focus on promoting the Cypher sirolimus-eluting coronary stent in the U.S., with an option to pursue a future parallel arrangement in Japan, the companies said in a statement.
Cordis said it will obtain access to Guidant's current and next-generation technologies for delivery of coronary stents, and the companies will initiate development and regulatory plans for a Cypher stent that utilizes Guidant's Multi-Link Vision Stent Delivery System. The agreement also provides for the immediate settlement of all outstanding patent disputes between the companies. Perhaps not accidentally, this initiative follows closely upon the dismissal of patent infringement lawsuits between Guidant and Boston Scientific, announced just days before.
Zimmer to shutter Texas operations
Orthopedic giant Zimmer Holdings (Warsaw, Indiana) reported last month that it will phase out operations at the former Centerpulse Orthopedics facility in Austin, Texas, and will transfer the plant's volume to its other manufacturing facilities in Warsaw; Winterthur, Switzerland; and Ponce, Puerto Rico. Zimmer said that the phase-out period will begin in late August, but manufacturing will continue at the plant until the end of 2005. Other Austin functions, such as finance, marketing, product development and research, had previously been identified for transfer to other locations.
The company said about 550 Austin employees, about 340 of them involved in manufacturing, are affected by the decision. In addition to retention incentives being offered to employees to maintain production during the phase-out period, terminated employees will receive severance payments and transition assistance. A small number of manufacturing employees will be offered transfers to other locations. Relocations also were offered to a number of the non-production work force. Zimmer said it will maintain a smaller facility in Austin where its worldwide orthobiologics research and development activity is based.
Ray Elliott, chairman, president and chief executive officer of Zimmer, called the shutdown and relocation "a difficult decision that is in no way a reflection on the capabilities of the employees at our Austin facility. Rather, this action is a result of our analysis of where we could most cost-effectively manufacture the products made in Austin and all other Zimmer facilities, and how we could rebalance our worldwide production network for greatest efficiencies." The transfers to other Zimmer facilities will take place over the next 22 months, Elliott said. He said that with the input of the employees at the Austin facility, the company "will finalize the exact timing and process by which we make the transfers."
Zoetron 'therapy' for cancer banned by FTC
CSCT (British Columbia), John Armstrong and Michael Reynolds, defendants in a bogus cancer cure lawsuit, are banned from marketing and selling their cancer treatment as part of a settlement with the Federal Trade Commission (FTC). The defendants claimed that their treatment known as Cell Specific Cancer Therapy or "Zoetron Therapy" was able to kill cancerous cells selectively with the use of an electromagnetic device, without harming surrounding normal cells. The treatments consisted of exposing consumers to the "Zoetron machine," a device that purportedly uses a pulsed magnetic field to heat and kill cancer cells. The FTC said that the defendants' cancer-killing claims are false.
The settlement contains a suspended judgment of $7.65 million, based on the defendants' inability to pay, but it authorizes the commission to obtain the entire judgment if the defendants misrepresented their financial status. In addition to the ban, the settlement prohibits the defendants from making false claims in connection with the marketing and sale of any service, program, food, drug or device.