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Johnson and Johnson now focus on stents outside heart

J and J are now focusing on areas like diagnostics and stents for blood vessels outside the heart. They are moving out of heart stents and giving way to medical device makers like Boston Scientific Corp. to realize that the market for implantable cardioverter defibrillators remains softer than expected. The market has also seen better stents by Abbott Laboratories, Boston Scientific Corp. and Medtronic Inc. than the New Brunswick. Stents are basically mesh-wire tubes used to hold arteries open after they are surgically cleared of fatty plaque. Cypher stents also come coated with drugs to help prevent scar tissue from forming over the tube and eventually re-narrowing the artery. Analysts believe J&J’s decision puts about $140 million in 2012 revenues up for grabs. We see Boston Scientific and Abbott to pick up most of that business, with Medtronic adding the remainder. The analyst also said first-quarter comments from Boston Scientific and Medtronic show doctors and hospitals are taking a “more conservative stance” on implantable cardioverter defibrillators, or ICDs, which treat rapid heartbeats. Denhoy reduced forecasts for the overall market and now expects it to fall 5 percent this year and grow only a modest 2 percent next year. But the analyst said the market also could be stabilized later this year, as Medtronic and St. Jude Medical Inc. release new systems.

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