The marketer said demand has continued to be greater than anticipated since Cordis Corp., a Miami-based subsidiary of J&J that developed and manufactures the product, launched the Cypher in April following approval from the Food and Drug Administration.
The Cypher is a first-of-its-kind, drug-eluting coronary stent. Tiny, wire-mesh stents were first used in the early `90s for opening clogged blood vessels in heart patients, a procedure known as an angioplasty. But in more than 30% of cases the stents encountered restenosis, the body's natural inclination to produce scar tissue to protect the artery that creates another blockage and forces a second surgical procedure.
The Cypher stent is laced with the drug sirolimus, made by Wyeth Pharmaceuticals, which is slowly released into the artery in the first six to eight weeks after the procedure and has reduced the formation of scar tissue to less than 9% of patients, clinical trials showed.
J&J's Director of Investor Relations, Helen Short, admitted in a conference call with analysts that doctors and patients have expressed dissatisfaction with the company for not providing the Cypher to various markets quickly enough. "Right now, there are shortages in every hospital in the country," Dr. Mark Porway, a cardiologist at Morristown (N.J.) Memorial Hospital, said in a published report. "Virtually every patient who comes to see me, who is in anyway knowledgeable, asks for it."
Ms. Short attributed the delay to an unprecedented demand from patients and physicians, and said J&J should have the product distributed to the entire market before the end of September. Nonetheless, Cypher helped increase sales for Johnson & Johnson's Medical Devices and Diagnostics division to $3.6 billion in the second quarter, up 14.6% from last year. Analysts predict the Cypher will help double the stent market to $5 billion in sales by 2007.
"I have a hunch that in the long run that's all we're going to be using," said Dr. Donald LaVan, cardiologist at the University of Pennsylvania School of Medicine and a spokesman for the American Heart Association.
The excitement around the development of the Cypher stent was palpable to begin with. Once approved by the FDA and with the launch of professional ads, the PR buzz took off. Lehman-Millett, Boston, is the agency of record that handles the professional business for the Cypher. There is no DTC marketing for the product, and Cordis has no plans to introduce a consumer campaign.
"We've been able to talk to the patient through the health-care professional," said Cordis' Marty Schildhouse, director-corporate commu- nications.
Lehman-Millett, a 45-person firm that specializes in medical devices and diagnostics, created a campaign that uses the tagline "Make your first intervention your last." The ads have appeared in medical journals and publications.
"With this particular product, it's not a drug, it's not a device, it's a combination," said Stacey Minton, Lehman-Millett's management supervisor on the Cypher account. "There is plenty of education that needs to take place."
More than 1 million angioplasties are performed each year just in the U.S. alone. But J&J has a short-term window to capitalize on the Cypher. Boston Scientific Corp. is developing its own drug-eluting stent and should gain FDA approval in early 2004, while Chicago-based Abbott Laboratories has a product in development that could hit the market in 2005.
"When competition hits in eight months," said UBS Warburg analyst David Lothson, "all bets are off."
The Cypher currently costs $3,195, more than three times the cost of a regular stent. Medicare is covering most of the cost, but not all, forcing hospitals to eat the difference. That could put a further economic strain on hospitals, since angioplasties and heart surgeries typically account for 20% to 50% of a hospital's profit.