Cordis makes products including catheters and guide wires, and is part of J&J’s medical-device business. While the unit pioneered the market for drug-coated heart stents, it subsequently moved away from that business as competitors such as Medtronic and Boston Scientific introduced products that were more effective and easier to implant. Last year, medical devices were the weakest performer among J&J’s three main divisions, with a 3.4 percent decline in sales.
Cardinal Health, based in Dublin, Ohio, distributes drugs and also manufactures medical equipment including surgical supplies. The company had sales of $91.1 billion in fiscal 2014.
Frost & Sullivan Medical Devices Industry Manager Venkat Rajan says that this deal, if it goes through, could have significant implications for the cardiovascular devices market sector. “The trend of large transactions in the medical technologies space speaks to the significant uncertainty that exists among many leading developers,” says Rajan.
J&J Chief Executive Officer Alex Gorsky has been quoted saying the company is open to divesting smaller business. Last year, J&J sold its Ortho-Clinical Diagnostics business, which makes tests for everything from high cholesterol to hormones, to Carlyle Group LP for about $4 billion.