January 03, 2003
Guidant (NYSE: GDT) announced late yesterday that it has cancelled its plans to acquire privately held Cook for $3 billion in stock. Guidant and Cook have been working together to develop drug-coated stents, competing with Johnson & Johnson (NYSE:
JNJ) and, more directly, Boston Scientific (NYSE:
BSX). Guidant had hoped that by buying Cook, it would be able to avoid the patent litigation issues brought by Boston Scientific against Guidant related to Angiotech’s (NASDAQ:
ANPI) patent licenses. However, this hope was dimmed in late September when a U.S. District Court ruled that Guidant could not use clinical data from its drug-coated stent trials to support regulatory approval in the U.S. and elsewhere. At the time, it appeared that this decision nullified a major incentive for the acquisition to go forward.
Guidant nominally cancelled the acquisition because interim analysis showed that the DELIVER clinical trial’s primary endpoint – a 40% reduction in 270-day target vessel failure (9TVF) – would not be achieved for the Cook / Guidant Achieve system compared to Guidant’s bare Multi-Link Penta system. How poor these data are remains to be seen. According to Guidant, the Achieve system outperformed Penta to a degree that may prove to be clinically relevant (9TVF of 11-12% vs. 14-15% and 16-17% vs. 21-22% binary restenosis rate). However, the magnitude of Achieve’s performance advantage, a 14% to 27% relative risk reduction for the primary endpoint, was not great enough for Guidant to continue to support the Achieve system. Guidant is already making moves that appear to indicate it will give up entirely on its partnership with Cook to develop paclitaxel-coated stents, partnering instead with Biosensors International to develop new drug-coated stent systems.
These events are a major blow to both Guidant and Cook, setting their drug-coated stent business back several years. JNJ’s Cypher, which received a unanimous recommendation from an FDA advisory panel in late October, will be approved drug-coated stent in the U.S. Boston Scientific’s drug-coated stent system has also generated impressive clinical data that support its approval.
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