The profits at JNJ come from the RX and the OTC pharma business. I would woory much more about the health of Tylenol, oral contraceptives, Risperdal, EPO and Propulsid that Cordis and the stent business. JNJ will leave Cordis alone as long as the business perfomrs and when it slips the boys and girls from New Brunswick Finance will hack out the disease and return the business to health or sell it off!!
>How could they have gotten a monorail in the US if GDT was sitting on the patent? Or was the outcome of the patent dispute still in question at that time?<
No, you're correct in assuming GDT's Yock patent and Scheider's Bonzel patent were firmly in place and, from SciMed's experience, everyone knew that these patents were very well written.
The obvious choice for Cordis, BSX, and others was to try to find a way to engineer around the patents, much easier said than done, if the end-result would be something competitive. That is what makes it all the more interesting, that Cordis' pledge to have a competitive monorail would not be met with cautious skepticism. But, shareholders were virtually giddy with the success that Cordis was achieving at the time and, obviously, believed every thing they were told. The joke is that that Cordis never did have a competitive design and they "were betting on the come" that they could come up with one within 18 months. That obviously hasn't happened.
Of course, there has been some speculation that Cordis recently negotiated with MDT the rights to MDT's Falcon monoral design. However, that has not only been challenged by GDT but, even more relevant, at its best it's not a very poor substitute for the GDT monorail.
JNJ had sales of 22 billion this year. GDT 1.1 billion BSX 1.8 billion. Stents make up a small part of JNJ's sales. Stick with J&J for bandaids and tylenol. They are a solid blue chip health care company. Definitely a long term buy and hold.
So stents is a small part of JNJ. My understanding is that JNJ paid something like 2 billion for Cordis. This is a lot of money for a small part of the company. I know JNJ is huge, but 2 billion is a lot of money. Was this a management faux pas.