As it became clear that J&J would beat them to market, Boston Scientific and Angiotech grew worried. “If you go back to the financial-analyst reports at the time, they thought that J&J having a one-year lead would be hard for Boston Scientific to overcome. [They felt that] doctors would become very comfortable with J&J’s stent,” Hunter recalls.
Barry’s methodical approach drew criticism from market analysts, and even from Hunter. “I remember telling [Boston Scientific CEO] Jim Tobin, ‘We’ve got the polymer, we know the drug release [characteristics], we should go forward….As a scientist, as soon as you have positive animal data, you can’t understand why you’re not treating a patient the next day. But Boston Scientific had to work to get the polymer formulated just right. They had to get uniform drug delivery. There are so many of those steps. Things you think should be solvable in a week end up taking a year.”
Hunter was not alone in his discomfort. Barry felt pressure from both Hunter and Tobin. “I would be sitting in this big conference room, alone with [Tobin]. One day he looked at me and said, ‘Jim, we’re fifth in a three-horse race.’ I had Bill on one side of me and Jim Tobin on the other side. It [felt] like a vise,” Barry says.
In the end, though, both Tobin and Hunter deferred to Barry’s drive to get the release kinetics just right, and in retrospect, it seems it was a wise decision. J&J did indeed ultimately beat Boston Scientific to market, but it had supply problems. This resulted in a shortfall that angered patients and cardiologists.
Moment of Truth
The Taxus stents passed through the early clinical trials, performing well. In 2003, Taxus was launched in Europe, but a final trial dubbed Taxus 4 remained before the FDA would approve the stent for the U.S. market. To much press coverage and fanfare, it was announced that the results of the pivotal Taxus 4 trial would be presented at the Transcatheter Cardiovascular Therapeutics meeting in September 2003.
The night before, Hunter, Tobin, and others from the two companies gathered together. Hunter recalls his trepidation. “I hadn’t seen the data, Boston management hadn’t seen it, and there were lots of rumors of failure. I remember Tobin: he’d look at a slide and laugh and hand it to me, and then he’d look at the next slide and laugh again.”
The trial had been a big success, with results on a par with J&J’s. Restenosis occurred in 7.9 percent of patients receiving the Taxus stent, compared with 26.6 percent of patients receiving bare-metal stents.
Hunter now believes that his angst was unnecessary. “Boston decided this could be a blockbuster, and they wanted to make sure it was bulletproof before they went forward. In the end, you could see the benefit. When the product launched, and there was all this demand, they were able to meet it right away,” Hunter explains. The Taxus stents did suffer some difficulties. Boston Scientific recalled about 85,000 stents from the market in July 2004 because of malfunctions in the catheter system that delivers the stent, but those problems were solved without incurring a significant loss of market share.
Taxus overtook J&J’s Cypher stent quickly. Boston Scientific sold about $42 million worth of Taxus stents in the first 10 selling days alone. A little more than a month after launch, the company estimated the Taxus accounted for 70 percent of DES sales. Today, Taxus sales constitute 30 percent of Boston Scientific’s income. So why did the Taxus so rapidly displace the Cypher? After all, the stents’ clinical trials were approximately equivalent, says Rui Avelar, senior vice president of medical affairs and communications at Angiotech. “Despite the fact that we beat them, I think they’re both very good, comparable stents. You’d be hard pressed to say there’s a medical difference.”
In fact, Boston Scientific may have its competition to thank for the Taxus’s ascendance. J&J made an operational mistake when it introduced the Cypher. It aggressively distributed the results of its trial, generating a great deal of press coverage and buzz among cardiologists. As launch day approached, J&J had to deal with a setback: the FDA told J&J that it couldn’t use stents more than six months old. This forced J&J to discard thousands of stents just a few weeks before the launch. According to Fortune magazine, when the Cypher hit the market, 100,000 patients were waiting for stents, and J&J had 40,000. That made the Cypher vulnerable when Boston Scientific introduced the Taxus.
Partnerships with pharmaceutical companies are now the most common form of collaboration in the medical-device industry, and cross-fertilization between industries is likely to continue. It’s a natural trend, says Hunter. Most medical devices were initially developed decades ago, and years of improvements and fine-tuning have narrowed the gap between competing devices, leaving companies casting about for new ways to distinguish their products from competitors’. “Companies are looking to biology to provide product differentiation,” says Hunter.
That’s something that Angiotech is counting on. After its success with the Taxus stents, the company entered into similar agreements with Broncus, CABG Medical, and other companies. Cook also continues to work with paclitaxel-eluting stents; its new Zilver system is intended for use in the leg. Angiotech sees the possibility of building more business on the kind of arrangement it made with Boston Scientific. Its goal is to become “effectively the pharmaceutical arm of the medtech industry,” says Avelar. Angiotech, and the trend its partnerships represent, are both worth watching.