Johnson & Johnson Misses MedTech Crown but Reclaims Top 4 Spot in Cardiovascular Devices

Mar 05, 2024 10:38 CST Updated 10:38

Johnson & Johnson

Medical Device R&D and Manufacturer

Source of the article:Heart NotCome;Editor: Bai Xiaofei

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Heart Future

Previously, Johnson & Johnson (NYSE: JNJ) announced its full-year financial results for the fiscal year 2023.Sales in fiscal year 2023 reached 85.2 billion USD (approximately 613.1 billion CNY), an increase of 6.5% year-on-year.Among themThe sales of the medical technology department were 30.4 billion USD (approximately 218.7 billion CNY)., an increase of 10.8% year-on-year;ComparisonMedtronic's revenue for the fiscal year 2023 was $31.227 billion (approximately 224.728 billion RMB).，Behind by $827 millionYuan(Approximately 5.952 billion RMB)。

Thus far,Medtronic Again Tops the 2023 Global Medical Device Revenue Ranking!

In the first half and the first three quarters of 2023, Johnson & Johnson Medical once surpassed Medtronic to temporarily take the top spot in the global medical device industry. However, due to Medtronic's significant revenue lead in the fourth quarter, Johnson & Johnson Medical ultimately missed out on the annual championship position.

However, it is expected thatJohnson & Johnson Medical Set to Secure Second Place in the 2023 Global MedTech Rankings with Strong Growth MomentumIn contrast, Medtronic's overall revenue declined by 1.4% year-over-year due to the impact of the pandemic in the first half of the fiscal year.

Looking back at the past five years, Johnson & Johnson Medical has maintained steady growth, gradually approaching the top position, as if aiming to regain its former glory as the global leader. Among these developments...One obvious change is:Johnson & Johnson Medical is expanding its cardiovascular business layout.。

FirstCardiovascular is the second largest细分领域 in the medical device field, with a sufficiently large market space;

SecondJohnson & Johnson once launched the world's first drug-eluting stent in the cardiovascular field, but in its current business portfolio, orthopedics, surgery, and ophthalmology have already achieved global leadership, with only the cardiovascular business "lagging behind."

In fact,The first three quarters of 2023,Johnson & Johnson MedicalRevenue of $4.415 billion surpasses Edwards Lifesciences ($3.793 billion), ranked fourth globally in cardiovascular.Ranked among the TOP4 in CardiovascularIn the fourth quarter, Johnson & Johnson's cardiovascular business maintained a growth of 24.7%, with annual revenue reaching $5.994 billion.

In the future, as Johnson & Johnson Medical makes moreInvestment, it will directly challenge the top 3 in cardiovascular (Medtronic, Abbott, and Boston Scientific)。

▲Data source: Company official website

# A Single Merger Reshapes the Landscape

Johnson & Johnson was once an industry leader in the cardiovascular field, but after selling its core cardiovascular business Cordis in 2015, the only notable asset it has left in the cardiovascular sector is Biosense Webster, with almost no significant achievements in other cardiovascular areas.

November 2022,Johnson & Johnson Announces $16.6 Billion Acquisition of Abiomed, Leader in Artificial Heart Technology, with the latter's exclusive product——currentlyThe only one in the world to receive FDA approvalThe Interventional Cardiac Pump ImpellaIn 2023, contributed revenue of $1.306 billion.

▲ImageSource: Company's official website

This acquisition is the first major acquisition by Johnson & Johnson since it announced the spin-off of its consumer health business, and one of the largest acquisitions in the company's history.It is precisely this incremental revenue that has enabled Johnson & Johnson Medical to gain the strength to compete with Medtronic in overall revenue.。

With Johnson & Johnson's acquisition of Abiomed, it has gained significant influence in the cardiovascular field, particularly in the structural heart sector.The addition of Abiomed will undoubtedly inject new vitality into Johnson & Johnson's cardiovascular business.

Abiomed inIndustry-leading in heart failure and rehabilitation, its addition will make Johnson & Johnson Medical Technologies (JJMT) product portfolio increasingly diversified.Abiomed's Impella® heart pump is a breakthrough technology that has received exclusive FDA approval for use in high-risk PCI (percutaneous coronary intervention), treatment of AMI (acute myocardial infarction) cardiogenic shock, or right heart failure, among others. This willComplement Biosense Webster's electrophysiology business of JJMT and further accelerate JJMT's transformation into high-growth markets.。

In terms of growth rate，Johnson & Johnson Medical's momentum is also better than Edwards'Johnson & Johnson Medical's cardiovascular business grew 50% year-over-year in Q1-Q3 of 2023, with Q3 growth exceeding 19.3%; Edwards Lifesciences' cardiovascular business increased by 11.4% year-over-year in Q1-Q3 of 2023, with Q3 growth at 13.3%.

In terms of new product progress，Johnson & Johnson Medical Subsidiary's Multiple New Cardiac Ablation Products Receive FDA Approval, including: THERMOCOOL SMARTTOUCH™ SF dual-energy radiofrequency ablation catheter; CARTO® VIZIGO® bidirectional guiding sheath; PENTARAY® NAV ECO high-density mapping catheter; Webster® CS catheter ……These products can be used without X-ray fluoroscopy, allowingJohnson & Johnson becomesThe world's first and currently only oneCompany with FDA-approved products for AF ablation without fluoroscopy guidance。

# Cardiovascular Pipeline Competition

In December 2023, Johnson & Johnson Medical announced its long-term sales outlook at the investor meeting, stating that it would "continue to expand into high-growth markets such as interventional cardiology, robotics, and digital solutions." This indicates thatCardiovascular has become one of its medium and long-term business strategies.。

Although Johnson & Johnson Medical covers significantly fewer cardiovascular subfields compared to Medtronic, Abbott, and Boston Scientific, it is highly active in three major subcategories: electrophysiology, heart failure, and structural heart disease.Johnson & Johnson Medical has already established itself in two major fields (Electrophysiology and Heart Failure) has already gained a certain advantage。

(1) Electrophysiology Field

Johnson & Johnson's electrophysiology business has grown so rapidly, closely related to two companies it once acquired.1. Cordis, 2. Biosense。

Cordis Webster (Webster Laboratories), a subsidiary of Cordis, was co-founded by senior engineer Will Webster and a cardiologist. It was acquired by Cordis in 1994 and established as Cordis Webster. Data shows that Will Webster and his team not only focused on catheter technology but also developed radiofrequency ablation catheters for the treatment of arrhythmias.

Biosense was founded in 1993 by Professor Shlomo Ben-Haim, a visiting professor at Harvard University, focusing on electrophysiological mapping catheters. In 1995, Biosense launched the world's first three-dimensional cardiac electrophysiological mapping system. Although its revenue was less than one million US dollars, the product’s leadership, convenience, and effectiveness were unanimously recognized by clinicians.

In 1996, Johnson & Johnson officially entered the market, acquiring Cordis and Biosense for $1.8 billion and $400 million, respectively.Officially Enter the Cardiac Electrophysiology FieldAt the same time, Johnson & Johnson merged Cordis Webster (part of Cordis' business) with Biosense, combining Cordis Webster's catheter ablation technology with Biosense's 3D electrophysiological mapping technology to form what would later become the globally renowned cardiac electrophysiology giant, Biosense Webster, Inc. In this merger, Will Webster served as the senior scientific advisor of Biosense Webster, and Biosense's original R&D team also transferred to Biosense Webster to continue research, development, and innovation.

After completing the merger, Biosense Webster began its path to dominate the global cardiac electrophysiology market, continuously leading in market share.。

Considered to be the next generation of technologyPulsed Electric Field Ablation, Johnson & Johnson Medical also has a presence. In January 2024,Johnson & Johnson announces Japan's MHLW approval for its first PFA product – VARIPULSE，VARIPULSE is suitable for treating symptomatic drug-refractory recurrent paroxysmal atrial fibrillation.At the same time, it is applying for CE certification in the European Union.

(2) Heart Failure Field

For $16.6 billion, Johnson & Johnson is buying not only Abiomed's past successes but also two major products in its pipeline. Following the acquisition, Abiomed will be integrated into Johnson & Johnson's operations.Impella products are marketed globally, especially in emerging markets such as China and Southeast Asia.。

In terms of surgical difficulty, TAVR procedures are being performed in major centers across China. Compared to TAVR procedures, the surgical difficulty of using an interventional cardiac pump is lower, and the learning curve for doctors is not steep, with an expected relatively shorter potential promotion time.

Another growth point lies in Abiomed's revolutionary products.Abiomed's pipeline assets include two heavyweights: Impella ECP and Impella BTR.。

Impella ECP The biggest difference from the Impella series lies inDesign of External Motor and Foldable Impeller，Is the world's smallest heart pump, with a size of only 9Fr (3 millimeters), provides a flow rate greater than 3.5 L/min. The Impella ECP places the impeller into the left ventricle, with the motor positioned outside the femoral artery (extracorporeal), connecting the power unit and the impeller through a flexible drive shaft. When the device is in operation, the catheter aspirates blood from the left ventricle into the aorta, increasing cardiac output.

Currently,The ECP series has been obtainedFDA Breakthrough Medical Device Designation, and conduct clinical trials。

Impella BTRIs implanted through the axillary artery and located in the left ventricle.Pre-flow Cardiac Pump, which can pump more than six liters of blood per minute, is used for cardiac recovery or remodeling and auxiliary treatment in patients with stage III/IV heart failure.

Compared with the Impella series,Impella BTR Can Achieve Long-Term ImplantationIn the past, due to complications caused by the rotating impeller of micro-interventional pumps, they could not be used for long-term circulatory support in clinical practice and were more commonly applied in internal medicine and emergency scenarios.Impella BTR is expected to break the limitations of interventional cardiac pumps., willPercutaneous Ventricular Assist Device (pVAD)The application scenarios extend to long-term use cases.

CurrentlyImpella BTR Completes World's First Implantation，For the disease of heart failure,The breakthrough of Impella BTR lies in enabling early intervention., it will become a revolutionary product in the field of heart failure treatment.

# Latest M&A Challenges Boston Scientific

2023In November, Johnson & Johnson Medical Technologies announced,Completed the acquisition of Laminar, a left atrial appendage closure device company, for a prepayment of $400 million (approximately RMB 2.6 billion).。Laminar to Receive Additional Potential Clinical and Milestone Payments in 2024 and Beyond; Company to Join Johnson & Johnson MedTech as Part of Biosense Webster, the Global Leader in Arrhythmia Treatment.

▲ImageSource: Company's official website

The left atrial appendage occluder not onlyHuge Market Potential, and currentlyFewer players，remains a blue ocean market.。According to data from Boston Scientific at the 2022 Transcatheter Cardiovascular Therapeutics (TCT) conference, there are currently approximately 38 million patients with atrial fibrillation worldwide, and this number is expected to reach 60.8 million by 2050, indicating a significant increase in market demand for left atrial appendage devices. According to a forecast by KBV Research in 2022,By 2028, the global market size for left atrial appendage closure devices is expected to reach USD 4 billion, with a compound annual growth rate of 19.3% during the forecast period.

This major acquisition has further intensified the market competition for left atrial appendage (LAA) closure procedures.CurrentlyTop 3 cardiovascular companies, Medtronic, Abbott, and Boston Scientific, all have received approval for their left atrial appendage devices.。

And their market performance also proves the value of this niche track:

Boston ScientificStarting from 2022, the revenue of the left atrial appendage device WATCHMAN was recorded separately. In 2022, the revenue was $1.019 billion, and in the first three quarters of 2023, the revenue has already approached the total of 2022, reaching $931 million, andHaving achieved year-on-year growth of over 20% for three consecutive quarters；

AbbottThe revenue of the left atrial appendage device was not separately counted, but it was also highlighted in the financial report: Abbott's structural heart business achieved 13% growth in 2022.Mainly driven by the left atrial appendage device Amplatzer Amulet; In Q3 2023, the medical device business grew by 16.6%,Also contributed by the Amplatzer Amulet product.。

From this perspective, the left atrial appendage closure market is mainly led by Boston Scientific's Watchman, with Abbott also occupying a certain share.To break the monopoly situation, revolutionary technology is required.Laminar LAA, developed by Laminar, is such a disruptive product. Laminar LAA is fundamentally different from Boston Scientific's Watchman series and Abbott's Amplatzer Amulet.Laminar LAA Eliminates the Left Atrial Appendage Through "Rotational Motion" Rather Than Occlusion。Laminar LAAExpected to avoid the drawbacks of traditional left atrial appendage occluders(such as thrombosis, leakage, lifelong use of anticoagulants, etc.).

▲Image SourceOfficial CompanyNet

Even in high-barrier fields such as pacemakers, defibrillators, automated external defibrillators, and heart valves,Johnson & Johnson MedicalNot yet ventured into, but it alreadyBecoming a Top 4 in Cardiovascular with the Advantage of ElectrophysiologyIn the future, Johnson & Johnson Medical will bring more pressure to Medtronic, Abbott, and Boston Scientific.

And topping the list in cardiovascular isMedtronic, it will inevitably not show weakness, and in July 2023, it stated,The future business focus will be on five rapidly growing fields, one of which is cardiac electrophysiology.——This is exactly Johnson & Johnson Medical's "core" business. The futureThe competition for the top spot in the medical device field will also become more exciting.

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