Global Insight Perspective | |
Significance | The decision to back away from one product and instead accelerate the journey to market of another stent, reportedly comes on the back of clinical data showing that Xience is a better product. |
Implications | Abbott had been planning to launch both of these stents, and its efforts to grab market share in the fast-growing drug-coated stents segment have subsequently been seriously undermined. |
Outlook | The fact that clinical data supports the superiority of Xience means that Abbott can still make a serious challenge to the dominance of U.S. players Boston Scientific and Johnson & Johnson (J&J) in this market segment. However, the near-term revenue potential of the company’s stents business has been dampened. |
Abbott Puts More Eggs in One Basket
U.S. company Abbott Laboratories announced yesterday that it plans to back away from its ZoMaxx drug-coated stent programme, although it remains unclear whether the company has dropped ZoMaxx permanently from its R&D stable. Simultaneously, the firm stated that it plans to bring its Xience stent to market in more European countries ahead of schedule. Abbott acquired the Xience V everolimus-eluting coronary stent system in April, from the U.S. medical devices manufacturer Guidant Corp, under whom the product was dogged by manufacturing problems (see United States: 30 March 2006: Guidant Delays Launch of Xience V Drug-Coated Stents). Meanwhile, Xience has been developed in-house by Abbott, with technology developed by Biocompatibles International (U.K.).
Observers had expected that both of these cardiovascular products would be launched by the end of this year. Specific reasons for the withdrawal from ZoMaxx have not been detailed, although company president and chief operating officer Richard A Gonzalez stated in a press release that clinical data showed Xience to be a "significantly better product". However, Gonzalez has emphatically denied any concerns over "safety issues" with regard to the ZoMaxx rejection. According to Dow Jones, the drug-coated stent market has been hit by recent concerns that the devices could be linked to an incremental rise in the risk of "dangerous clots when compared with bare-metal stents".
The firm has also said that it is now planning the immediate launch of Xience in a host of additional European countries; the European launch of this drug has already begun, but the announcement essentially means that the schedule for bringing the product to market in the remaining European countries will be brought forward by about two weeks. Xience recently demonstrated superiority over Boston Scientific's (U.S.) drug-eluting stent Taxus in the six-month Spirit II clinical trial, which involved 300 patients. The product performed better in respect of "late loss"—a measure of change in a blood vessel’s diameter immediately after surgery and after six months. The results spelt good news for Xience’s sales performance in Europe and the United States, when it is eventually launched there too. The company intends to launch Xience in the United States during the first half of 2008. However, the demise of ZoMaxx has come as an unexpected development, with Abbott previously expected to put equal weight behind both products and thereby significantly boost its share of the fast-growing drug-coated stent market, already worth an estimated US$5 billion. Zomaxx, which elutes the immunosuppressive drug zotarolimus from its Trimaxx stent platform, was itself expected to emerge as a major competitor to Boston Scientific's rival Taxus stent (see United States: 18 May 2006: Abbott Enrols First Patients in European Zomaxx Stent Trial).
Outlook and Implications
Although Abbott has said that financial projections for its vascular business remain unchanged on the back of this news, the company’s near-term potential revenue earnings in the drug-coated stent market have clearly taken a battering. The move to accelerate Xience’s launch in Europe is probably intended as a means of cushioning the earnings shortfall caused by the ZoMaxx debacle. The threat to Boston Scientific's Taxus from Abbott’s line-up of drug-eluting stents has been lessened somewhat, but the firm still faces a fierce fight to defend its market share from the entry of Xience. Abbott still looks set to undermine the dominance of Boston Scientific and Johnson & Johnson (J&J, U.S.) in the global stent market as it enters the fray. Meanwhile, U.S. company Medtronic, which is also trying to penetrate this market, is likely to suffer a setback from news of ZomMaxx’s fall. The company’s drug-eluting stent Endeavor is similar to ZoMaxx, as it uses the same zotarolimus drug. However, further information will be needed on the outcome of clinical trials on ZoMaxx, and the reason for Abbott’s move away from this product, before accurate assertions can be made about the impact on Medtronic.