Abbott: Cracking the Cardiology Cartel
Executive Summary
Abbott Laboratories, a major player in the traditional hospital products business, is starting from scratch in the interventional cardiology device market, which offers large opportunities, but involves selling to new customer groups and competing with four entrenched major players: Boston Scientific, Guidant, Johnson & Johnson and Medtronic. Rather than attacking this market at its base and attempting to develop a full-line of cardiology devices, Abbott's strategy is to target certain unmet clinical needs and address those primarily with innovative technologies obtained through acquisitions, a pattern it started with the deal to buy femoral artery closure company, Perclose.Abbott is also looking to leverage its pharmaceutical core competency to develop synergies with devices in areas like drug-coated stents, an approach the company believes provides a competitive advantage.The challenge for Abbott will be whether it can develop enough innovative technologies to compete without having a broad basic product line in a market that has undergone significant consolidation. More importantly, in an area where J&J's recent successful stent patent prosecution has demonstrated the importance of intellectual property, it remains to be seen whether Abbott's strategy will make it more than just a niche player in cardiology devices, a position that would be unfamiliar to a company accustomed to major pharmaceutical and diagnostics franchises.
You may also be interested in...
From Guidant to Abbott: An Interview with John Capek
Some industry executives argue that the real winner in the battle between Johnson & Johnson and Boston Scientific for Guidant was Abbott, who came away with a bulked up interventional cardiology business and what promises to be the next big winner in drug-eluting stents. John Capek played a major role in growing Guidant's business and, post-sale, helped guide a successful integration within Abbott. Now, he's running all of Abbott's medical device businesses.
In Devices, Abbott Bulks Up: An Interview with Rick Gonzalez
Abbott's recent acquisition of Guidant's vascular business was an important boost in the company's efforts to build a major cardiovascular franchise, but it was only the latest in a concerted effort to create a broad-based device business. One of the key architects of Abbott's growth in the field is COO Rick Gonzalez. In the an interview, Gonzalez looks back on a career that has taken him to the top at Abbott and reflects on what the Guidant deal and other important moves will mean to Abbott's device operations.
Total Occlusions: Device Obstacle or Opportunity?
The market is promising for using catheters, instead of surgery, to open vascular blockages. But the right technology remains elusive.