The Multi-link is mounted on a dinosaur of a monorail, the ellipse. The ML is not available in an OTW version. It's only
available in 2 diameters and 2 lengths (Note AVE's plethora of options). Yes, you can and do use the Rocket for pre and post (or BSX
OTW balloons). BSX also makes a monorail called the rebel that gets around the patent but it uses a different inflation method.
Hasn't caught on like the rocket. The rockedt really is good. It's only a matter of time before GDT mounts the ML on the Rocket.
The mount it on the Comet VP first a very marginal improvement on the ellipse.
Cordis doesn't have a monorail to my knowledge, at least not in the us.
AVE would be a natural takeover target for somebody, MDT or JNJ.
I agree with you. The stakes are extremely high for AVEI with all of their eggs in one basket. If they are not able to meet
their sales objectives, they will have to compete on price. If this occurs, it will not be offered on a wholesale basis to the
market. Rather, it will happen on an account-by-account basis, with an agreement that the customer will keep the discount
"confidential". That is precisely the type of rationalization that precedes every pricing war, However, the news always leaks.
On the other hand, if GDT fails to meet their objectives, they will try the bundling route.
Thus, it really depends upon the sales objective of each company and whether the element of "greed" overtakes either GDT or AVE.
For my money, I think the pricing war starts when BSX enters the market, not to suggest they will start it but, rather, they will upset the status quo between GDT and AVE. By that time, the earnings of both companies will have grown substantially and neither company will be able to absorb a setback in earnings.
>It's interesting that J&J bought Cordis while Lilly spun off GDT and their fortumes have gone in opposite directions. Maybe J&J will spin off Cordis again.<
You're right, that would be interesting but who would be foolish enough to buy Cordis until the "smoke" clears? Cordis still
doesn't have a monorail balloon for the U.S., unless they've picked up the rights to the MDT design, but that's hardly an
alternative. Likewise, from the European market's experience, it doesn't appear that Cordis has a competitive stent in the pipeline.
Thus, it would be awful hard to figure out how big the the loss in value will eventually be for JNJ. At some point, they may be
able to "cut their losses" and sell it for scrap.
From a purely speculative perspective, I think JNJ should buy AVE and get back into a competitive position. Although AVE's PE is about 100 based on trailing earnings, the PE is only about 40 based on anlaysts projected earnings. JNJ bought Cordis for well in excess of 40 times earnings.
I agree with your analysis. The marketing of these products is very slick. These reps are in the labs frequently and are very good at what they do. AVEi may have trouble "playing with the big dogs". You don't always have to have the best product to make money. Just look at Microsoft.
That is correct, we couldn't buy the stents individually. That has changed now. Now I typically pre and post dilate with BSX OTW balloons and use multilinks to stent.
It's interesting that J&J bought Cordis while Lilly spun off GDT and their fortumes have gone in opposite directions. Maybe J&J will spin off Cordis again.
>I don't think price will be as big a factor in the us. BSX, AVE, GDT have the premium stents and you will not see
GRII prices on their stents. Look how long pacemakers have been around and they aren't cheap.<
Tacit agreement within an oligopoly is legal and can be as effective in controlling pricing as outright collusion. To initiate a pricing war, one or more of the companies within the oligopoly must decide to break out of the pack by "trading margin for market share". This is the case in cardiac pacemakers, where MDT, GDT and STJ are reluctant to compete on price; i.e., the customer can't play one company against the other.
In a high physician-preference market, the companies in the oligopoly have to have competitive products, thus discounting by companies with lesser quality products has no effect.
This was teh situation in balloons when ACS and BSX constituted the oligopoly. Other balloons were always discounted; i.e., MDT, BAX, Schneder, USCI, etc., but they had no effect. When Cordis entered the market, they achieved the status very quickly as competitor to ACS and BSX. The difference is that Cordis decided to compete on price, thereby forcing ACS and BSX to eventually compete on price.
If that is correct, the dynamics within the stent market will be interesting to watch. Currently, the technological oligopoly inlcudes GDT and AVE, with BSX to follow when the Nir is approved. If none of these companies competes on price, the price will remain high, despite the deep discounts which will be offered by JNJ and others. However, if any of these companies fires the first volley, the price of stents will fall like a rock, as it has in Europe.
>When GDT first released the Multi-link, we could only buy it bundled. If that isn't forcing us, I don't know what is.<
If I interpret correctly, you are saying that GDT refused to sell you a stent unless you purchased other GDT products
simultaneously. From my limited knowledge of the law, that falls into the category of "unfair business practices" and is referred to a
"tie-in." I'm surprised that GDT's competitors; presumably Cordis, would not have intervened on your behalf by challenging GDT. Of
course, it's pretty obvious that Cordis has been "asleep at the wheel" and may have missed that opportunity. If anyone can shed more
light on this, it would be helpful.
Of course, GDT has every right to target their current customers and, thereby, prioritize customers in the process of determining who gets the stent first. That's different, however, that denying you the opportunity to buy "unless" you buy other products.
I'm not sure what is going on in Europe, I would be skeptical of everyone's numbers and claims. The situation in the US is
different, more regulation, fewer physicians doing more procedures, more litigation. The price of balloons never seemed to fall much
because they kept improving them and charging the same for the new generation. Scimed (BSX) was and is the best at this, beating
everyone to market. I don't think price will be as big a factor in the us. BSX, AVE, GDT have the premium stents and you will not see
GRII prices on their stents. Look how long pacemakers have been around and they aren't cheap.
When GDT first released the Multi-link, we could only buy it bundled. If that isn't forcing us, I don't know what is.
>Long stents aren't any cheaper. The only long stent that is cheap is the GRII and it's not so great. If a stent maker has a
great product, they charge a premium for it. Right now it's about $10 per millimeter.<
The question referred to pricing in Europe, not the U.S. Obviously, there has been no discounting in the U.S. due to JNJ's virtual monopoly. Also, I assume you meant $100 per mm. I would still like to hear the answer for Europe. I know for a fact that it is not $100 per mm in that market.
>Bundling doesn't save much either. You can get all the components of the bundle (balloon, wire and stent) for the same price buying them individually.<
If you are referring to Cordis' strategies prior to GDT and AVE approval, you are correct. Likewise, GDT has not had a need to offer a discount in competing against Cordis because they have a significantly better stent. However, do you think Cordis is not going to respond by offering deep discounts on a bundle? Also, is GDT going to be forced to do likewise, to compete against AVE?
>GDT is forcing hospitals to buy the multilink bundled with their monorail and no one likes being forced to buy something.<
This makes no sense, not the least of which, a tie-in is illegal; i.e., you can't deny a customer the right to purchase a product (a stent), unless they purchase other products (balloons, etc.) If what you mean is that GDT is not offering discounts on a bundle, that OK. But, its a long leap from there to suggest that GDT is forcing hopsitals to buy the bundle to get the stent. Please clarify your position.