J&J buys stent maker for $1.4 billion

The acquisition of Conor Medsystems will provide Cordis Corporation, a subsidiary of Johnson & Johnson with the cardiovascular treatment CoStar Stent System. The CoStar Stent is currently sold outside the US, and enrollment in its US clinical trial has been completed.

Conor Medsystems’ CoStar Stent employs a reservoir drug-delivery technology. These reservoirs enable site-specific drug delivery as well as the potential for delivery of multiple therapeutic agents that may be useful in the treatment of cardiovascular, peripheral vascular and neurovascular diseases. The technology also has potential in other non-vascular clinical indications.

Last year, Johnson & Johnson attempted to expand its cardiovascular portfolio by putting in a bid for heart device maker Guidant but lost out to Boston Scientific.

“With Conor Medsystems, we are positioned to lead the development of next generation technologies aimed at advancing the standard of care in the treatment of coronary artery disease,” said Nicholas Valeriani, Johnson & Johnson worldwide chairman, Cardiovascular Devices and Diagnostics.

Under the terms of the agreement, Conor Medsystems’ stockholders will receive $33.50 for each outstanding Conor Medsystems share. The transaction is expected to close in the first quarter of 2007.

Upon closing, Johnson & Johnson is expected to incur an estimated one-time after-tax charge of approximately $600 million, reflecting the write-off of in-process research and development charges. Excluding these charges Johnson & Johnson said the acquisition is expected to be modestly dilutive to its earnings per share in 2007.