Ortho Diagnostic Systems Inc.
Division of Johnson & Johnson
Latest From Ortho Diagnostic Systems Inc.
With current technology and resources, a well-funded in vitro diagnostics company can create and pursue a strategy of information gathering and informatics application to create medical knowledge, enabling it to assume the risk and manage certain segments of patients. But few if any pharma or diagnostics firms appear poised to take advantage.
Vulnerable plaque is the hottest cardiovascular device opportunity in years. But in shifting thinking about coronary disease from structural to biological processes, it challenges what it means to be a device company. As more evidence suggests vulnerable plaque is a systemic rather than local problem and as the underlying assumptions about coronary disease shift from a structural view to a biological one, conventional device approaches are challenged.
Three years into a new CEO's regime, Chiron is trying to forge a unique compromise between research and commercial focus and the stability which comes from a diversified business. But Chiron is at a crossroads: its earnings growth, boosted significantly by a now complete cost-reduction program, doesn't look sustainable without major new products. And those Chiron does not appear to have. Moreover, its major shareholder, Novartis, has an option to buy the company and top management fears they will should the stock show significant signs of weakness, brought on, perhaps, by investments (and consequent earnings reductions) in potential high-growth areas. In effect, Chiron managers are afraid to invest significantly for fear of what Novartis will do should the stock price fall. Moreover, to some degree, Chiron is caught by its business diversity: it can't focus its spending on any one area, particularly biopharmaceuticals, without starving its other businesses--but without a significant increase in R&D spending, particularly in the drug unit, observers don't see how Chiron, which has been uniquely unsuccessful with its pipeline projects, can drive the long-term earnings growth it needs.
Chiron's HCV patents have given it enormous clout over the blood banking market. HCV screening is essential in blood testing. Chiron's leverage makes blood screening a cash cow that is protected from competition in a guaranteed market for at least another six years. Plus, Chiron has effective control over access to the only new and growing portion of the market--NAT, a DNA-based probe methodology that can be used for earlier detection of hepatitis and retrovirus. The question for Chrion is not whether it can benefit from the opportunity in NAT, but how to maximize its returns to generate revenues it can use to fund its long-term gene therapy and genomics programs.
- In Vitro Diagnostics
- Therapeutic Areas
- North America
- Parent & Subsidiaries
- Johnson & Johnson
- Senior Management
- Contact Info
Ortho Diagnostic Systems Inc.
Phone: (908) 218-1300
1001 US Highway 202
P.O. Box 350 Raritan, NJ 08869-0606