J&J Stent Maker to Cut 1,000 Jobs
J&J Stent Maker to Cut 1,000 Jobs [Asbury Park Press, N.J.]
From Asbury Park Press (NJ) (June 16, 2011)
June 16--A subsidiary of Johnson & Johnson that makes vascular devices plans to eliminate up to 1,000 jobs because it has lost sales to the competition, company officials said Wednesday.
As part of its decision to leave a segment of the stent business, Bridgewater-based Cordis Corp. will close its Warren research and development office by the end of the year and consolidate research teams in Fremont, Calif., officials said.
Warren administrator Mark Krane said about 150 employees work in the facility. The company wouldn't say if they would be offered jobs elsewhere. "We are still communicating with employees on a one-on-one basis regarding their specific impact," Cordis spokeswoman Sandra Pound said.
Johnson & Johnson has about 114,000 employees, including 14,000 in New Jersey. Its employment has declined by about 7 percent since 2006. It doesn't break out employment by subsidiary.
At issue for Cordis is its stent product --a tube that can open arteries and restore blood flow, allowing patients to avoid more invasive surgery. Cordis was a pioneer in the field, developing a bare-metal stent in 1994 and then a drug-coated stent in 2002. It amounted to about a quarter of Cordis' sales.
The competition in the $4 billion industry, however, has been fierce. Cordis and its competitors have filed lawsuits, each alleging the other infringed on patents. Most recently, Boston Scientific last month was awarded $19.5 million after a jury found Cordis infringed on a patent.
Cordis' drug-eluting stent sales dropped from about $2.7 billion in 2006 to $628 million last year. And its market share fell from 50 percent to less than 15 percent, while Abbott and Medtronic gained ground, according to a report by Leerink Swann, a New York investment bank.
"It was the leading stent, revolutionary," said Damien Conover, an analyst with Morningstar in Chicago. "Since then, several firms have launched stents with better clinical data."
Cordis on Wednesday said it would stop manufacturing drug-eluting stents by the end of the year, and it would halt development on a new stent product. It would focus instead on diagnostic and therapeutic products for heart procedures and products to treat lower extremity disease.
To that end, the company said it would close manufacturing plants in Cashel, Ireland, and San German, Puerto Rico.
Its parent company, New Brunswick-based Johnson & Johnson, said it will record an after-tax restructuring charge of $500 million to $600 million in the second quarter. Johnson & Johnson's stock was at $66.16, down 94 cents, or 1.4 percent.
Michael L. Diamond; 732-643-4038; mdiamond@ njpressmedia.com; www.twitter.com/ mdiamondapp
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Posted: June 2011