* J&J interested in heart valve, heart pump technologies
* May acquire heart device products or develop internally
* Sees healthcare utilization stabilizing, but no rebound
By Susan Kelly
Sept 13 Johnson & Johnson (JNJ.N) is interested
in adding heart valves and heart pumps to its product lineup as
it reshapes its medical device portfolio but won't overpay to
acquire the technology, its chief financial officer said.
Three months after J&J announced it would stop selling
drug-coated heart stents, once a key product line, CFO Dominic
Caruso said the company sees other attractive technologies in
the cardiac device market and could enter those markets either
by acquiring another company or by developing the products
He pointed to heart valves and left ventricular assist
devices, which are pumps implanted in patients with advanced
heart failure who are awaiting a transplant, as two promising
opportunities in medical technology.
"Both are interesting. We are interested in looking at
them," said Caruso, speaking Tuesday on a webcast from an
investor conference in New York.
J&J in June said it would stop selling drug-coated heart
stents, a technology it pioneered but whose sales slumped in
recent years due to safety concerns and fierce competition,
ceding the market to Abbott Laboratories Inc (ABT.N), Boston
Scientific Corp (BSX.N) and Medtronic Inc (MDT.N).
Caruso said J&J exited the market because stents, which are
implanted in clogged arteries to prop them open, had become a
"commodity business" subject to pricing wars. Patients are well
served with products already available, and the market is not
rewarding companies for innovations in this area, he said.
J&J would consider acquiring a maker of heart valves or
heart pumps at the right price, Caruso said. "Unfortunately,"
he added, "they are overvalued today." He did not name specific
companies J&J might be interested in.
Heart valve innovator Edwards Lifesciences Corp (EW.N), an
often-rumored takeover target, and heart pump makers Thoratec
Corp THOR.O and Heartware International Inc HTWR.O have
seen their stocks benefit from anticipation of new products in
Caruso said the downturn in healthcare utilization that has
hurt medical device sales over the past six quarters is
stabilizing, but the industry remains under pressure. Patients
continue to delay treatment due to high unemployment and
steeper insurance deductibles as employers shift more of the
cost of care to their workers.
"We have not seen any rebound in utilization," he said.
Industry procedure volumes will improve as the healthcare
reform law brings more patients into the marketplace beginning
in 2014, Caruso said.
The industry is unlikely to see a repeal of a planned 2.3
percent tax on device sales, as some have called for, Caruso
Caruso also said J&J's planned $21.67 billion purchase of
Swiss orthopedic device maker Synthes SYST.VX is likely to
close in the first half of 2012.
(Reporting by Susan Kelly in Chicago, editing by Dave