J&J; Stock Jumps on New Stent Findings
Researchers reported Tuesday that an antibiotic-coated stent developed by Johnson & Johnson to prop open clogged arteries completely prevented reclogging during a seven-month period, and doctors said it could radically change the treatment of coronary artery disease.
The news sent shares of J&J;, a component of the Dow Jones industrial average, up $3.44, or 6.5%, to $56.15 on the New York Stock Exchange, while shares of rival device makers plunged.
Stents, tiny metal tubes used to prop open clogged arteries, often narrow from scar tissue that develops after insertion of the devices. Some companies are coating stents with various drugs in an effort to block growth of the scar tissue and thereby remove the need for surgeons to repeat the procedures.
Results of the so-called Ravel study of the J&J; device, which involved 238 patients in 19 centers across Europe and Latin America, were presented Tuesday at the European Society of Cardiology Annual Congress in Stockholm.
The device, produced by J&J;’s Cordis unit, prevented clogging for up to 210 days after implantation in patients with stable or unstable angina--chest pains that often precede a heart attack.
The results from the study show that J&J;’s drug-coated stent had a significant advantage over normal metal stents. In the test, 26% of patients receiving conventional stents experienced new clogs.
Charles Davidson, director of cardiac catheterization at Northwestern Memorial Hospital in Chicago and a participant in the U.S. trial of the J&J; device, said that a higher success rate in reducing the threat of renewed blocking, or restenosis, will make physicians more likely to choose stents for treatment of patients who are at high risk of requiring a repeat heart procedure.
The J&J; device releases the drug sirolimus, a naturally occurring antibiotic, preventing excess tissue from forming after a stent is placed in the body.
“While most investors were anticipating the data would be favorable for coated stents, a zero rate of restenosis is better than expected and will likely result in rapid uptake of coated stents once launched in Europe [in] early 2002, and the United States [in] early 2003,” said Merrill Lynch analyst Dan Lemaitre.
“It’s amazing data,” said Lehman Bros. analyst David Gruber. “Zero percent restenosis is a big deal.” He said that if follow-up data confirm the initial findings, this “establishes a high hurdle for competitive stents.”
Industry analysts said the stent market, worth $2.3 billion a year in sales, could easily double in size in the next three to four years as clinicians convert to coated stents that would fetch a hefty premium over bare metal stents.
J&J;’s device could help it win back market share in the stent business, where it has fallen behind in recent years.
The news drove up shares of medical device coatings maker SurModics Inc., which is in a pact with Cordis for stent-coating technology. The stock soared $7.57, or 16%, to $54.17 on Nasdaq.
But shares of some J&J; rivals tumbled. Guidant Corp., another stent maker, fell $1.27, or 3.5%, to $34.85 on the NYSE.
Also, Novoste Corp., a maker of a radiation-based treatment for clogged arteries, plunged $8.23, or 45%, to $10.02 on Nasdaq.
Separately, J&J;’s Janssen Pharmaceuticals unit said it is seeking regulatory approval for a longer-acting version of its antipsychotic drug Risperdal that is injected once every two weeks.
The new version of the drug will address the problem of schizophrenia patients failing to take their medication, either intentionally or from forgetfulness. The drug has been available only as a once-daily pill.
