Johnson & Johnson’s cardiovascular group has recently been a bright spot for the company, but the business did not meet the healthcare giant’s expectations in the second quarter.
J&J’s cardiovascular unit grew year over year by 4% to $2.4 billion in the second quarter, compared with growth of 13% and nearly 12% in the first quarter and fourth quarter of last year, respectively.
“Let me first acknowledge that our Q2 growth is not where you wanted it, and frankly, it's not where we wanted it,” Tim Schmid, J&J’s worldwide chairman of medtech, told investors on a Wednesday earnings call. “That said, we know what happened, and we know exactly what we're doing about it.”
Within the business, Shockwave remained a strong contributor with 14.6% year-over-year growth, and electrophysiology grew by 4.4%, though it dealt with competitive challenges in the pulsed field ablation space and inventory issues in China. However, the Abiomed unit declined by 2% in the quarter, bringing in $440 million in revenue. Growth internationally was offset by a decline in the U.S.
Schmid said the decline is attributable to slower procedure volumes following a clinical trial in the U.K. that was not favorable for Abiomed’s Impella heart device.
The trial, called CHIP-BCIS3, studied 300 patients with severe left ventricular dysfunction and extensive coronary disease receiving complex percutaneous coronary interventions. Evaluation after nearly two years showed that the standard of care led to better outcomes for 43% of patients, compared with 36.6% of patients treated with Impella. There was no difference in about 20% of patients.
There was also a higher rate of death from any cause for patients treated with Impella (47) than with the standard of care (33).
“Our findings strongly suggest that we shouldn’t be using this device routinely without more evidence of benefit,” lead study author Divaka Perera said in a statement when the study was presented at the American College of Cardiology’s annual meeting earlier this year.
Schmid said that the decline in procedure volumes for Impella is due to caution among surgeons rather than an underlying problem with the business.
“I think it's important, firstly, to really reinforce that the impact is behavioral,” Schmid said. “It's really driven by physician caution as they really interpret this new data, rather than anything structural, and there's no change in the underlying need, access or reimbursement.”
Schmid added that J&J remains “very confident in the long-term potential for Impella, supported by the significant runway for growth, no current commercialized competitors — which is a key point — opportunities for further geographic expansion, and the large and growing global burden of heart disease.”
Schmid said the company is waiting for results from its PROTECT IV study of nearly 1,300 patients that is focused on high-risk percutaneous coronary interventions. Results are expected to come out in 2027.
In terms of Abiomed’s recovery, Schmid said it will take some time, but the company expects performance in the back half of the year to be stronger than the first half, with gradual improvement until the business returns to double-digit growth.
Schmid remained confident in cardiovascular’s overall recovery after stumbling in the most recent quarter.
“To put it all in context, three out of our four businesses performed well, and we're confidently addressing the fourth,” Schmid said. “And nothing we see changes our conviction in the long-term growth thesis for both our [cardiovascular] business as well as J&J MedTech at large.”
