ST. PAUL, Minn. – Abbott Laboratories’ purchase of Guidant Corp.’s heart stent business Friday could realign the worldwide market for heart stents and help Boston Scientific secure its hold on the $6 billion industry.
No. 1 stent maker Boston Scientific was required to sell off Guidant’s stent business to satisfy antitrust concerns in its $27.5 billion acquisition of Guidant, which closed Friday. Abbott played a major role in helping Boston Scientific beat out archrival Johnson & Johnson in a bidding war for Guidant.
North Chicago, Ill.-based Abbott will go from being an also-ran in the stent business to a major player once its drug-coated stent hits the market in the United States early in 2008, analysts say. Although Indianapolis-based Guidant was late to the drug-coated stent game, it owned valuable stent-delivery technology and had some promising drug-coated stents in the works.
Stents are wire mesh tubes used to prop open arteries that have been cleared by angioplasty; the drug-coated ones, which sell for about $2,200 each, help keep the artery open.
“I think eventually the fight will be between Boston Scientific and Abbott, with J&J being third and Medtronic fourth,” said Jan Wald, a securities analyst with A.G. Edwards.
Three of the players have major operations in the Twin Cities area: Boston Scientific in Maple Grove, Guidant in Arden Hills and Medtronic Inc. in Fridley. Guidant’s division here eventually will be called Boston Scientific Cardiac Rhythm Management.
Abbott’s $4.1 billion acquisition puts at least seven stent products in its pipeline. Abbott also bought a $1.4 billion stake in Boston Scientific stock and lent it $900 million at a favorable interest rate.
Natick, Mass.-based Boston Scientific, whose main stent division is in Maple Grove, secures its market-leading position in drug-coated stents by acquiring the rights to share Guidant’s stent technologies with Abbott.
“Now they will be able to offer a variety of top-selling stents to doctors,” said Thomas Gunderson, a securities analyst at Piper Jaffray Cos.
The deal is bad news for New Brunswick, N.J.-based Johnson & Johnson, the No. 2 drug-coated stent maker. J&J lost out on Guidant’s share of the fast-growing $10 billion market for heart rhythm devices like pacemakers and implantable cardioverter defibrillators as well as Guidant’s stent technology.
Meanwhile, Medtronic, which had hoped to be the No. 3 player for stents once its product enters the U.S. market by early 2008, likely will be relegated to fourth place. Medtronic also lost out to Abbott in trying to buy the rights to Guidant’s stent-delivery technology.
Boston Scientific acquisition of Guidant makes it the world’s largest heart device company.
In trading Friday, Boston Scientific’s shares were up 23 cents to $22.49, Guidant’s shares were up 57 cents to $80.10, Abbott’s shares were up 9 cents to $42, Medtronic’s shares were up 7 cents to $49.52 and J&J’s shares were up 15 cents to $58.37.
(c) 2006, St. Paul Pioneer Press (St. Paul, Minn.).
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