08.05.15
(a division of Johnson & Johnson)
$9.67 Billion ($74.3B total)
KEY EXECUTIVES:
Alex Gorsky, Chairman & CEO
Dominic J. Caruso, VP, Finance & Chief Financial Officer
Stephen J. Cosgrove, Corporate Controller & Chief Accounting Officer
Michel Orsinger, Worldwide Chairman, Global Orthopaedics
Gary J. Pruden, Worldwide Chairman, Medical Devices Group
Karen Licitra, Worldwide Chairman, Global Medical Solutions
Kathryn E. Wengel, VP, Johnson & Johnson Supply Chain
Charles Austin, Corporate VP, Global Supply Chain
Jesse J. Wu, Chairman, Johnson & Johnson China
NO. of EMPLOYEES: 23,000
HEADQUARTERS: Warsaw, Ind.; Raynham, Mass; and
West Chester, Pa.
“Creating a strong business and building a better world are not conflicting goals—they are both essential ingredients for long-term success.”
— William Clay Ford Jr., executive chairman, Ford Motor Co.
Milton Friedman remains as controversial a figure in death as he was in life.
Renowned for his free-market ideology and conservatism, Friedman’s antistatist views—mainly, the belief that unimpeded private competition produces better results than government—are still contentious subjects, nearly nine years after his demise. Yet the most fervent debates continue to revolve around his stance on corporate social responsibility, a concept he labeled “nonsensical” and harmful to the foundations of a free society. Writing in The New York Times Magazine in September 1970, the Nobel Prize laureate impenitently proclaimed that business has “only one social responsibility—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”
Friedman believed corporations are inhuman entities that cannot possibly have real responsibilities. In the ideal free market, he contended, “all cooperation is voluntary...There are no values, no ‘social’ responsibilities in any sense other than the shared values and responsibilities of individuals.”
Friedman’s unconventional business strategy initially resounded with Americans (journalist/author George Will called him “the most consequential public intellectual of the 20th century”) but support for the doctrine has dwindled considerably as companies respond to consumer demands for reputational excellence.
Numerous studies have shown that corporate social responsibility (CSR) policies influence consumer purchasing decisions. A survey by branding firm Landor Associates concluded that 77 percent of consumers believe it is important for companies to be socially responsible. “There’s a heightened awareness of the need to be, and to be seen as, a good corporate citizen,” noted Robert Grosshandler, CEO of iGive.com, which allows consumers to support their favorite charities through shopping.
Johnson & Johnson realized the value of good corporate citizenship quite some time ago. The company bible, a.k.a. its 72-year-old Credo, pledges responsibility to the “world community” as well as those in which the diversified healthcare firm operates. “We must be good citizens—support good works and charities and bear our fair share of taxes,” the Credo reads. “We must encourage civic improvements and better health and education. We must maintain in good order the property we are privileged to use, protecting the environment and natural resources.”
Like many companies, JNJ has refined its approach to CSR over the years by closely relating social causes to its core businesses, an approach scholars have dubbed “socially responsible capitalism.” Last year, for example, the company eliminated PVC (polyvinyl chloride) in its Enseal G2 Articulating Tissue sealers, and cut its energy and water consumption by 44 percent and 43 percent respectively, in disinfecting/sterilizing the DePuy Synthes TruMatch personalized Sigma Knee implants.
By embodying CSR initiatives into its business strategy, JNJ is both a good corporate citizen and a savvy investor—a combination that has helped the company continually boost its bottom line.
“Our credo is absolutely central to our culture and impacts everything we do. It reminds us that we are responsible to patients, medical professionals, consumers, families and communities worldwide, and it motivates our employees to come to work every day with the passion to make a difference in the world...” CEO/Board Chairman Alex Gorsky told Leaders Magazine last spring. “We share a belief that if we take care of those responsibilities, then everything else will take care of itself. Throughout our history, this has been true.”
And it was true last year as well. The New Brunswick, N.J.-based company grew net sales 4.2 percent in 2014 to $74.3 billion, bolstered mainly by a 15 percent jump in global pharmaceutical revenue ($32.3 billion). The increase in drug sales offset a 1.3 percent slide in worldwide Consumer sales ($14.5 billion) and a 3.4 percent decrease in Medical Devices proceeds ($27.5 billion). Excluding the net impact of M&A activity, including the June 2014 divestiture of Ortho Clinical Diagnostics, the medical devices segment had underlying operational growth of 1.5 percent.
JNJ’s Pharmaceutical segment traditionally has outperformed its brethren, but executives are planning to even the score a bit by seeking approval of more than 30 major products in its Medical Devices division by the end of 2016 while also focusing on fast-growing emerging markets. Much of that focus will be centered on China and Russia, where the medtech sector is growing three to four times faster than in developed markets.
“China is important to every medical device company given the number of people and the size of the market opportunity,” Glenn Novarro, an analyst with RBC Capital Markets in New York, told Bloomberg Business. “JNJ is one of the early investors in China and it’s paying off. They are ahead of the curve.”
And the company has managed to stay ahead of the curve by avoiding the bribery probes that have snared the likes of GlaxoSmithKline, and taking advantage of the Middle Kingdom’s growing middle class, government investments, and age-related conditions like arthritis, osteoporosis and degenerative joint disease.
For example, JNJ conducted clinical trials with bone repair devices manufactured at its Suzhou facility, and is branding them as locally made products to make them eligible for higher reimbursement from the Chinese government.
“My personal vision is to innovate more out of China, taking advantage of new thinking within R&D [research and development] to develop simpler, easier to use and more affordable products,” Michel Orsinger, worldwide chairman of JNJ’s global orthopedics group, told Bloomberg. “And we want to launch them not only in China but bring them into western countries, a reverse innovation.”
Orsinger’s vision could soon become a reality: Last fall, JNJ opened the Asia Pacific Innovation Center, a Shanghai-based medtech incubator with satellite hubs in Singapore, Australia and Japan. Armed with local science and technology experts and deal-making capabilities, the center is tasked with identifying and developing promising early-stage opportunities in drugs, medical devices/diagnostics, and consumer healthcare products.
The Center already has fostered several new collaborations in both Australia and China, including the establishment of a partnering office at Suzhou BioBAY, an incubator with more than 400 companies in the areas of drug discovery, biotech, in-vitro diagnostics, medical devices and nanotechnology. The office, according to executives, will function as an extension of the Center to work with academics and entrepreneurs on a more local basis. The Center’s partnering offices are part of a broader strategy to interact more directly with life science clusters worldwide.
“The Johnson & Johnson Family of Companies has a long standing presence in China extending back almost 30 years. Our on the ground presence across the region allows us to work side by side with our partners with speed, agility, and insight to translate innovations into new products,” noted Jesse Wu, chairman, Johnson & Johnson China. “The Asia Pacific Innovation Center supports our larger goal to address China’s specific healthcare needs, invest in local capabilities, and increase our external collaborations.”
JNJ’s Medical Devices division accounted for 37 percent of the firm’s total worldwide sales in fiscal year 2014 (ended Dec. 31). The segment houses 11 businesses under its roof, including BioSense Webster; the troubled orthopedic and neurological focused DePuy Synthes; Janssen Diagnostics; and advanced surgical care units Ethicon and Ethicon Endo-Surgery.
One of the division’s best performers was the DePuy Synthes orthopedic franchise, which grew sales 1.7 percent to $9.67 billion—more than one-third of the Medical Devices segment’s 2014 gross. Executives attributed the gain to robust sales of trauma, sports medicine, hip and knee products, some of which made their debut last spring.
Product Premieres
The company launched a bevy of new joint replacement parts within a two-month period last year, adding a rotating platform design and anatomic patella to the Attune Knee System lineup in March (at the American Academy of Orthopaedic Surgeons Annual Meeting) and debuting a hip system and anatomic shoulder in May.
The Attune rotating platform design increases the level of conformity to provide stability while delivering freedom of mobility, DePuy Synthes bigwigs noted. Rotating platform knees aim to restore more natural movement to the joint by allowing the bearing to rotate in the same manner as an anatomical knee. Rotating knees also are designed to reduce stress and wear on the implant by 94 percent.
The anatomic patella—unique to DePuy Synthes—works with the Attune knee femoral components and is compatible with both the Attune fixed bearing and rotating platform knees. It is designed to have more natural sagittal plane kinematics than traditional dome style patella components; the more natural kinematics can reduce soft tissue interaction with the femoral component and thereby help prevent soft tissue irritation, according to product spec sheets. Also, the unique kinematics of the anatomic patella are designed to increase quadriceps efficiency in deep flexion, allowing the knee to more easily flex and extend.
Less than 24 hours after unveiling its Attune enhancements, the company introduced the DePuy Synthes Advantage, a suite of provider-focused solutions that complement the firm’s product portfolio and help improve clinical and economic outcomes.
The Advantage suite features an exclusive licensing agreement with MedTrak to offer subscription-based services through a software solution called CareSense. The software allows healthcare providers to collect and analyze real-time data on the “triple aim” measures (patient outcomes, patient satisfaction and costs).
The suite also includes the Geriatric Fracture Program, a tool designed to streamline and standardize preoperative assessments to enable geriatric patients to undergo surgery within 24 hours of injury.
“By providing solutions that, for example, are designed to save time in the operating room, potentially reduce hospital stays or provide real-time analytics that lead to improved efficiency and patient satisfaction, we create value for the healthcare system as a whole,” said Gary Fischetti, company group chairman of Orthopedics.
In May, DePuy Synthes supplemented its Attune rotating platform system with the addition of the Trumatch Resection Guide and Pin Guide solution. The company also enhanced its hip and shoulder portfolios with the release of the Corail Revision Hip system and Global Unite Anatomic Shoulder.
The Corail hip is claimed to be the first tapered wedge revision stem in the United States, designed to help treat patients with mild to moderate femoral defects who need hip revisions, whereas the Global Unite shoulder allows surgeons to use the same humeral stem to repair shoulder fractures, perform total shoulder replacements or reverse total replacements using the previously implanted humeral stem without the use of a stack-on adaptor.
The Global Anatomic Shoulder allows surgeons to use the same humeral stem to repair shoulder fractures or perform a total shoulder replacement. For patients who might later need a reverse total replacement, the system’s already-implanted humeral stem converts to a total reverse construct without using a stack-on adaptor, which could over-stuff the joint and limit its range of motion.
Conversion with the Global shoulder system occurs by exchanging the top of the humeral stem with a reverse component that can be tailored to meet varying patient anatomies.
DePuy Synthes rounded out its joint reconstruction offerings in November with the introduction of the Gryphon Anchors with Proknot technology, an arthroscopic hybrid anchor solution for shoulder repair and hip instability. The Gryphon Anchor uses a proprietary pre-tied sliding knot that forms a construct that is up to 41 percent stronger than tested arthroscopic knots and knotless devices, and up to 64 percent smaller than standard arthroscopic knots. It also is touted as the only suture anchor that, with just one-half hitch, results in a secure knot, enabling surgeons to add incremental tension at any point in the repair.
The Gryphon Proknot Anchor is indicated for use in Bankart and SLAP lesion repair, capsular shift or capsulolabral shoulder reconstruction and hip capsular and acetabular labral repairs. It is manufactured either in non-absorbable PEEK (polyether ether ketone) or absorbable Biocryl Rapide material.
DePuy Synthes added to its Trumatch craniomaxillofacial (CMF) product line in April with the debut of patient specific plates for mandible (PSPM)—customized plates based on surgeon specifications and individual patient anatomy. The CMF PSPM contains a range of customizable design features that surgeons can select before procedures, including plate thickness and shape, screw hole locations, pattern and angulation. Designed and manufactured to the pre-planned patient anatomy, the plate is 3-D milled from a solid block of titanium to its final shape and never bent, thus eliminating the need for plate bending in the operating room, which can induce mechanical stress and increase its risk of breaking.
The CMF patient specific plate for mandible is ideal for use with Proplan CMF surgical guides. These guides have integrated drill markers for creating the bone holes, designed to align with the plate holes to facilitate transfer of the surgical plan to the operating room. Anatomic bone models can be created from original patient computed tomography scans or to the planned outcome to provide tactile and visual representation of the surgery.
DePuy Synthes manufactures its CMF PSPM in 2 millimeter- and 2.5 millimeter-thick profiles, both of which can better withstand fatigue over the firm’s 2.5 millimeter MatrixMandible flat plates; the 2 millimeter-thick plates offer greater strength with a lower profile compared with the 2.5 millimeter MatrixMandible flat devices.
The company beefed up its Spinal portfolio with the release of the Conform Sheet, the ViviGen Cellular Bone Matrix and the Anspach EG1 high-speed electric drill, the latter of which can be used in neurosurgical and otology procedures as well. DePuy Synthes claims its Anspach drill has 30 percent more power than the XMAX and EMAX 2 Plus models. The device is used to cut and shape bone, including the spine and cranium, and has various quick-coupling attachments, dissection tools and accessories for greater flexibility across procedures. The Anspach EG1 drill also features integrated air cooling, an operating speed of up to 80,000 rpms, minimal start-up kick, and is compatible with automated washing and sterilization.
The Conform Sheet is a hydrated, pliable and totally demineralized cancellous bone matrix that fils voids during posterolateral spinal fusion surgery and provides a natural scaffold for new bone formation. Processed by the Musculoskeletal Transplant Foundation, the allograft implant has both osteoinductive and osteoconductive properties. A demineralization process forces bone morphogenic proteins to be exposed, giving Conform Sheet its osteoinductive properties (the scaffold’s cancellous structure gives the Sheet its osteoconductive characteristics). The implant is wickable, readily absorbing various hydrating fluids including bone marrow aspirate, blood or saline; when combined with bone marrow aspirate, Conform Sheet becomes osteogenic.
Conform Sheet comes in four sizes, but it can be cut to fit irregular-shaped anatomies. The implant is compatible with DePuy Synthes’ Spine Matrix Minimally Invasive Pedicle Screw system and Expedium Spine system, among others.
ViviGen is a human cell, tissue and cellular/tissue-based product comprised of crypreserved live, viable cells within a cortical cancellous bone matrix and demineralized bone, delivering all of the properties required for bone formation. “The science behind VivGen, combined with the intraoperative flexibility it provides, drove me to try it initially,” said Kennedy Yalamanchili, M.D., of Christiana Care Hospital in Newark, Del., one of several institutions that has used the product. “My experience early on has shown that ViviGen has desirable handling characteristics and is an appropriate alternative to taking the patient’s own bone for many of my spinal procedures.”
In December, the company received U.S. Food and Drug Administration 510(k) clearance to market its Vertical Expandable Prosthetic Titanium Rib devices (VEPTR) for the treatment of Thoracic Insufficiency Syndrome, a rare congenital condition characterized by severe chest, spine or rib deformities that impair breathing and lung growth in children. The VEPTR products only were previously available under Humanitarian Device Exemption regulations.
The VEPTR/VEPTR II devices include a system of curved titanium rods that surgically are attached to the ribs, spine or pelvis to stabilize and straighten the spine, and to create a separation between ribs to potentially improve breathing and enable normal lung growth and development. After an initial procedure, VEPTR/VEPTR II are lengthened as the child grows. The rods are ideal for treating children with progressive congenital, neuromuscular, idiopathic or syndromic scoliosis.
In July, DePuy Synthes’ Mitek Sports Medicine unit unveiled the Monovisc High Molecular Weight Hyaluronan, a single-injection treatment for knee pain related to osteoarthritis, and the Peak Platelet Rich Plasma (PRP) System, a new device that produces high quality PRP in two-and-a-half minutes.
Monovisc is a single-injection hyaluronan treatment that can provide up to six months of pain relief and helps restore joint mobility in patients suffering from knee osteoarthritis pain. It is injected directly into the knee to help replace the naturally occuring hyaluronan found in healthy joint fluid, and to cushion, protect and lubricate the knee joint.
Monovisc is specifically for patients who have failed to respond adequately to conservative non-pharmacologic therapy and simple analgesics such as acetaminophen.
The Peak Platelet-Rich Plasma (PRP) system works by separating PRP from a sample of a patient’s own blood. The device consistently produces 3 mL of high-quality PRP from 27 mL of whole blood in two-and-a-half minutes, yielding up to seven times the normal concentration of platelets, according to DePuy Synthes.
The company’s Codman Neuro unit experienced a busy second half of 2014, releasing two catheters and a disposable forceps, and securing approval in China, South Korea and Taiwan for its Revive SE Thrombectomy device, a next-generation self-expanding clot removal product intended to restore blood flow in patients with acute ischemic stroke secondary to intracranial occlusive vessel disease.
The Revive SE device is designed to ease navigation through small and tortuous blood vessels and arteries in the cerebral vasculature. The product enables rapid restoration of blood flow to the brain during an acute ischemic stroke.
DePuy Synthes debuted its catheters during the Society of NeuroInterventional Surgery 11th Annual Meeting last summer in Colorado. The Envoy DA XB Guiding Catheter enables access to more distal anatomy and is designed to provide additional proximal support of the catheter when more stability is required. It features end-to-end braided construction, a distal 10 centimeter hydrophilic coating, soft distal tip with a recessed metal marker, and Brite Tip Technology for enhanced visibility.
The 7F Envoy Guiding Catheter is the largest-diameter guiding catheter the company has ever offered, expanding upon its 6F Envoy line. With stainless steel end-to-end hybrid braid technology and soft distal Brite Tip Technology, the new catheters are offered in multiple shape configurations to navigate and treat different anatomy.
Courtroom Drama
JNJ is no stranger to the judicial system. As the world’s largest and most diversified healthcare firm, it spends a considerable amount of time in the courtroom fending off legal challenges from rivals, defending its integrity and protecting its proprietary technology. A summary of the more notable cases in 2014 follows:
• Baxter International lodged a patent infringement complaint against JNJ in January 2014, accusing its rival of violating six patents protecting Baxter’s biosurgery products, including Floseal, used to control bleeding during surgery. The suit contends JNJ’s hemostasis delivery devices, including its SurgiFlo product line, directly compete with Baxter’s biosurgery products. Floseal and SurgiFlo are indicated for use in surgical procedures as an adjunct to hemostasis when control of bleeding by ligature or other conventional methods is ineffective or impractical, according to the suit.
• The rivalry between Stryker Corp. and DePuy Synthes reached a boiling point last summer, when the former accused the latter (and five former sales team employees) of breach of contract. A complaint filed in a New Jersey federal court alleged the five Stryker sales reps resigned en masse in April (2014) and immediately began soliciting customers in North Carolina, and promoting DePuy products among area doctors, moves that reportedly cost the firm roughly $3.4 million. The five accused were key members of the Stryker Howmedica team assigned to promote and sell orthopedic reconstructive and trauma products to physicians and surgeons in the Fresno and Bakersfield, CA areas, according to the complaint. Stryker claims their illegal actions will cost the company up to 90 percent of its reconstructive devices sales and between 60 and 70 percent of its trauma parts sales in the region. The suit alleges that the five company defectors submitted almost identical resignation letters simultaneously in April and did not respond to phone calls, emails, or text messages.
• In August, Stryker extended an olive branch (of sorts) to DePuy Synthes, dismissing the company from a patent infringement lawsuit over its hip implant acetabular cup, which features a “dual-locking mechanism and is capable of accommodating a plurality of bearings with different characteristics.”
• Bonutti Skeletal Innovations LLC rang in a merry holiday season with its federal lawsuit (in December) claiming DePuy Synthes’ product line of spinal devices infringes six patents owned by Bonutti, generally covering wedge implants and their methods of implantation.
$9.67 Billion ($74.3B total)
KEY EXECUTIVES:
Alex Gorsky, Chairman & CEO
Dominic J. Caruso, VP, Finance & Chief Financial Officer
Stephen J. Cosgrove, Corporate Controller & Chief Accounting Officer
Michel Orsinger, Worldwide Chairman, Global Orthopaedics
Gary J. Pruden, Worldwide Chairman, Medical Devices Group
Karen Licitra, Worldwide Chairman, Global Medical Solutions
Kathryn E. Wengel, VP, Johnson & Johnson Supply Chain
Charles Austin, Corporate VP, Global Supply Chain
Jesse J. Wu, Chairman, Johnson & Johnson China
NO. of EMPLOYEES: 23,000
HEADQUARTERS: Warsaw, Ind.; Raynham, Mass; and
West Chester, Pa.
“Creating a strong business and building a better world are not conflicting goals—they are both essential ingredients for long-term success.”
— William Clay Ford Jr., executive chairman, Ford Motor Co.
Milton Friedman remains as controversial a figure in death as he was in life.
Renowned for his free-market ideology and conservatism, Friedman’s antistatist views—mainly, the belief that unimpeded private competition produces better results than government—are still contentious subjects, nearly nine years after his demise. Yet the most fervent debates continue to revolve around his stance on corporate social responsibility, a concept he labeled “nonsensical” and harmful to the foundations of a free society. Writing in The New York Times Magazine in September 1970, the Nobel Prize laureate impenitently proclaimed that business has “only one social responsibility—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”
Friedman believed corporations are inhuman entities that cannot possibly have real responsibilities. In the ideal free market, he contended, “all cooperation is voluntary...There are no values, no ‘social’ responsibilities in any sense other than the shared values and responsibilities of individuals.”
Friedman’s unconventional business strategy initially resounded with Americans (journalist/author George Will called him “the most consequential public intellectual of the 20th century”) but support for the doctrine has dwindled considerably as companies respond to consumer demands for reputational excellence.
Numerous studies have shown that corporate social responsibility (CSR) policies influence consumer purchasing decisions. A survey by branding firm Landor Associates concluded that 77 percent of consumers believe it is important for companies to be socially responsible. “There’s a heightened awareness of the need to be, and to be seen as, a good corporate citizen,” noted Robert Grosshandler, CEO of iGive.com, which allows consumers to support their favorite charities through shopping.
Johnson & Johnson realized the value of good corporate citizenship quite some time ago. The company bible, a.k.a. its 72-year-old Credo, pledges responsibility to the “world community” as well as those in which the diversified healthcare firm operates. “We must be good citizens—support good works and charities and bear our fair share of taxes,” the Credo reads. “We must encourage civic improvements and better health and education. We must maintain in good order the property we are privileged to use, protecting the environment and natural resources.”
Like many companies, JNJ has refined its approach to CSR over the years by closely relating social causes to its core businesses, an approach scholars have dubbed “socially responsible capitalism.” Last year, for example, the company eliminated PVC (polyvinyl chloride) in its Enseal G2 Articulating Tissue sealers, and cut its energy and water consumption by 44 percent and 43 percent respectively, in disinfecting/sterilizing the DePuy Synthes TruMatch personalized Sigma Knee implants.
By embodying CSR initiatives into its business strategy, JNJ is both a good corporate citizen and a savvy investor—a combination that has helped the company continually boost its bottom line.
“Our credo is absolutely central to our culture and impacts everything we do. It reminds us that we are responsible to patients, medical professionals, consumers, families and communities worldwide, and it motivates our employees to come to work every day with the passion to make a difference in the world...” CEO/Board Chairman Alex Gorsky told Leaders Magazine last spring. “We share a belief that if we take care of those responsibilities, then everything else will take care of itself. Throughout our history, this has been true.”
And it was true last year as well. The New Brunswick, N.J.-based company grew net sales 4.2 percent in 2014 to $74.3 billion, bolstered mainly by a 15 percent jump in global pharmaceutical revenue ($32.3 billion). The increase in drug sales offset a 1.3 percent slide in worldwide Consumer sales ($14.5 billion) and a 3.4 percent decrease in Medical Devices proceeds ($27.5 billion). Excluding the net impact of M&A activity, including the June 2014 divestiture of Ortho Clinical Diagnostics, the medical devices segment had underlying operational growth of 1.5 percent.
JNJ’s Pharmaceutical segment traditionally has outperformed its brethren, but executives are planning to even the score a bit by seeking approval of more than 30 major products in its Medical Devices division by the end of 2016 while also focusing on fast-growing emerging markets. Much of that focus will be centered on China and Russia, where the medtech sector is growing three to four times faster than in developed markets.
“China is important to every medical device company given the number of people and the size of the market opportunity,” Glenn Novarro, an analyst with RBC Capital Markets in New York, told Bloomberg Business. “JNJ is one of the early investors in China and it’s paying off. They are ahead of the curve.”
And the company has managed to stay ahead of the curve by avoiding the bribery probes that have snared the likes of GlaxoSmithKline, and taking advantage of the Middle Kingdom’s growing middle class, government investments, and age-related conditions like arthritis, osteoporosis and degenerative joint disease.
For example, JNJ conducted clinical trials with bone repair devices manufactured at its Suzhou facility, and is branding them as locally made products to make them eligible for higher reimbursement from the Chinese government.
“My personal vision is to innovate more out of China, taking advantage of new thinking within R&D [research and development] to develop simpler, easier to use and more affordable products,” Michel Orsinger, worldwide chairman of JNJ’s global orthopedics group, told Bloomberg. “And we want to launch them not only in China but bring them into western countries, a reverse innovation.”
Orsinger’s vision could soon become a reality: Last fall, JNJ opened the Asia Pacific Innovation Center, a Shanghai-based medtech incubator with satellite hubs in Singapore, Australia and Japan. Armed with local science and technology experts and deal-making capabilities, the center is tasked with identifying and developing promising early-stage opportunities in drugs, medical devices/diagnostics, and consumer healthcare products.
The Center already has fostered several new collaborations in both Australia and China, including the establishment of a partnering office at Suzhou BioBAY, an incubator with more than 400 companies in the areas of drug discovery, biotech, in-vitro diagnostics, medical devices and nanotechnology. The office, according to executives, will function as an extension of the Center to work with academics and entrepreneurs on a more local basis. The Center’s partnering offices are part of a broader strategy to interact more directly with life science clusters worldwide.
“The Johnson & Johnson Family of Companies has a long standing presence in China extending back almost 30 years. Our on the ground presence across the region allows us to work side by side with our partners with speed, agility, and insight to translate innovations into new products,” noted Jesse Wu, chairman, Johnson & Johnson China. “The Asia Pacific Innovation Center supports our larger goal to address China’s specific healthcare needs, invest in local capabilities, and increase our external collaborations.”
JNJ’s Medical Devices division accounted for 37 percent of the firm’s total worldwide sales in fiscal year 2014 (ended Dec. 31). The segment houses 11 businesses under its roof, including BioSense Webster; the troubled orthopedic and neurological focused DePuy Synthes; Janssen Diagnostics; and advanced surgical care units Ethicon and Ethicon Endo-Surgery.
One of the division’s best performers was the DePuy Synthes orthopedic franchise, which grew sales 1.7 percent to $9.67 billion—more than one-third of the Medical Devices segment’s 2014 gross. Executives attributed the gain to robust sales of trauma, sports medicine, hip and knee products, some of which made their debut last spring.
Product Premieres
The company launched a bevy of new joint replacement parts within a two-month period last year, adding a rotating platform design and anatomic patella to the Attune Knee System lineup in March (at the American Academy of Orthopaedic Surgeons Annual Meeting) and debuting a hip system and anatomic shoulder in May.
The Attune rotating platform design increases the level of conformity to provide stability while delivering freedom of mobility, DePuy Synthes bigwigs noted. Rotating platform knees aim to restore more natural movement to the joint by allowing the bearing to rotate in the same manner as an anatomical knee. Rotating knees also are designed to reduce stress and wear on the implant by 94 percent.
The anatomic patella—unique to DePuy Synthes—works with the Attune knee femoral components and is compatible with both the Attune fixed bearing and rotating platform knees. It is designed to have more natural sagittal plane kinematics than traditional dome style patella components; the more natural kinematics can reduce soft tissue interaction with the femoral component and thereby help prevent soft tissue irritation, according to product spec sheets. Also, the unique kinematics of the anatomic patella are designed to increase quadriceps efficiency in deep flexion, allowing the knee to more easily flex and extend.
Less than 24 hours after unveiling its Attune enhancements, the company introduced the DePuy Synthes Advantage, a suite of provider-focused solutions that complement the firm’s product portfolio and help improve clinical and economic outcomes.
The Advantage suite features an exclusive licensing agreement with MedTrak to offer subscription-based services through a software solution called CareSense. The software allows healthcare providers to collect and analyze real-time data on the “triple aim” measures (patient outcomes, patient satisfaction and costs).
The suite also includes the Geriatric Fracture Program, a tool designed to streamline and standardize preoperative assessments to enable geriatric patients to undergo surgery within 24 hours of injury.
“By providing solutions that, for example, are designed to save time in the operating room, potentially reduce hospital stays or provide real-time analytics that lead to improved efficiency and patient satisfaction, we create value for the healthcare system as a whole,” said Gary Fischetti, company group chairman of Orthopedics.
In May, DePuy Synthes supplemented its Attune rotating platform system with the addition of the Trumatch Resection Guide and Pin Guide solution. The company also enhanced its hip and shoulder portfolios with the release of the Corail Revision Hip system and Global Unite Anatomic Shoulder.
The Corail hip is claimed to be the first tapered wedge revision stem in the United States, designed to help treat patients with mild to moderate femoral defects who need hip revisions, whereas the Global Unite shoulder allows surgeons to use the same humeral stem to repair shoulder fractures, perform total shoulder replacements or reverse total replacements using the previously implanted humeral stem without the use of a stack-on adaptor.
The Global Anatomic Shoulder allows surgeons to use the same humeral stem to repair shoulder fractures or perform a total shoulder replacement. For patients who might later need a reverse total replacement, the system’s already-implanted humeral stem converts to a total reverse construct without using a stack-on adaptor, which could over-stuff the joint and limit its range of motion.
Conversion with the Global shoulder system occurs by exchanging the top of the humeral stem with a reverse component that can be tailored to meet varying patient anatomies.
DePuy Synthes rounded out its joint reconstruction offerings in November with the introduction of the Gryphon Anchors with Proknot technology, an arthroscopic hybrid anchor solution for shoulder repair and hip instability. The Gryphon Anchor uses a proprietary pre-tied sliding knot that forms a construct that is up to 41 percent stronger than tested arthroscopic knots and knotless devices, and up to 64 percent smaller than standard arthroscopic knots. It also is touted as the only suture anchor that, with just one-half hitch, results in a secure knot, enabling surgeons to add incremental tension at any point in the repair.
The Gryphon Proknot Anchor is indicated for use in Bankart and SLAP lesion repair, capsular shift or capsulolabral shoulder reconstruction and hip capsular and acetabular labral repairs. It is manufactured either in non-absorbable PEEK (polyether ether ketone) or absorbable Biocryl Rapide material.
DePuy Synthes added to its Trumatch craniomaxillofacial (CMF) product line in April with the debut of patient specific plates for mandible (PSPM)—customized plates based on surgeon specifications and individual patient anatomy. The CMF PSPM contains a range of customizable design features that surgeons can select before procedures, including plate thickness and shape, screw hole locations, pattern and angulation. Designed and manufactured to the pre-planned patient anatomy, the plate is 3-D milled from a solid block of titanium to its final shape and never bent, thus eliminating the need for plate bending in the operating room, which can induce mechanical stress and increase its risk of breaking.
The CMF patient specific plate for mandible is ideal for use with Proplan CMF surgical guides. These guides have integrated drill markers for creating the bone holes, designed to align with the plate holes to facilitate transfer of the surgical plan to the operating room. Anatomic bone models can be created from original patient computed tomography scans or to the planned outcome to provide tactile and visual representation of the surgery.
DePuy Synthes manufactures its CMF PSPM in 2 millimeter- and 2.5 millimeter-thick profiles, both of which can better withstand fatigue over the firm’s 2.5 millimeter MatrixMandible flat plates; the 2 millimeter-thick plates offer greater strength with a lower profile compared with the 2.5 millimeter MatrixMandible flat devices.
The company beefed up its Spinal portfolio with the release of the Conform Sheet, the ViviGen Cellular Bone Matrix and the Anspach EG1 high-speed electric drill, the latter of which can be used in neurosurgical and otology procedures as well. DePuy Synthes claims its Anspach drill has 30 percent more power than the XMAX and EMAX 2 Plus models. The device is used to cut and shape bone, including the spine and cranium, and has various quick-coupling attachments, dissection tools and accessories for greater flexibility across procedures. The Anspach EG1 drill also features integrated air cooling, an operating speed of up to 80,000 rpms, minimal start-up kick, and is compatible with automated washing and sterilization.
The Conform Sheet is a hydrated, pliable and totally demineralized cancellous bone matrix that fils voids during posterolateral spinal fusion surgery and provides a natural scaffold for new bone formation. Processed by the Musculoskeletal Transplant Foundation, the allograft implant has both osteoinductive and osteoconductive properties. A demineralization process forces bone morphogenic proteins to be exposed, giving Conform Sheet its osteoinductive properties (the scaffold’s cancellous structure gives the Sheet its osteoconductive characteristics). The implant is wickable, readily absorbing various hydrating fluids including bone marrow aspirate, blood or saline; when combined with bone marrow aspirate, Conform Sheet becomes osteogenic.
Conform Sheet comes in four sizes, but it can be cut to fit irregular-shaped anatomies. The implant is compatible with DePuy Synthes’ Spine Matrix Minimally Invasive Pedicle Screw system and Expedium Spine system, among others.
ViviGen is a human cell, tissue and cellular/tissue-based product comprised of crypreserved live, viable cells within a cortical cancellous bone matrix and demineralized bone, delivering all of the properties required for bone formation. “The science behind VivGen, combined with the intraoperative flexibility it provides, drove me to try it initially,” said Kennedy Yalamanchili, M.D., of Christiana Care Hospital in Newark, Del., one of several institutions that has used the product. “My experience early on has shown that ViviGen has desirable handling characteristics and is an appropriate alternative to taking the patient’s own bone for many of my spinal procedures.”
In December, the company received U.S. Food and Drug Administration 510(k) clearance to market its Vertical Expandable Prosthetic Titanium Rib devices (VEPTR) for the treatment of Thoracic Insufficiency Syndrome, a rare congenital condition characterized by severe chest, spine or rib deformities that impair breathing and lung growth in children. The VEPTR products only were previously available under Humanitarian Device Exemption regulations.
The VEPTR/VEPTR II devices include a system of curved titanium rods that surgically are attached to the ribs, spine or pelvis to stabilize and straighten the spine, and to create a separation between ribs to potentially improve breathing and enable normal lung growth and development. After an initial procedure, VEPTR/VEPTR II are lengthened as the child grows. The rods are ideal for treating children with progressive congenital, neuromuscular, idiopathic or syndromic scoliosis.
In July, DePuy Synthes’ Mitek Sports Medicine unit unveiled the Monovisc High Molecular Weight Hyaluronan, a single-injection treatment for knee pain related to osteoarthritis, and the Peak Platelet Rich Plasma (PRP) System, a new device that produces high quality PRP in two-and-a-half minutes.
Monovisc is a single-injection hyaluronan treatment that can provide up to six months of pain relief and helps restore joint mobility in patients suffering from knee osteoarthritis pain. It is injected directly into the knee to help replace the naturally occuring hyaluronan found in healthy joint fluid, and to cushion, protect and lubricate the knee joint.
Monovisc is specifically for patients who have failed to respond adequately to conservative non-pharmacologic therapy and simple analgesics such as acetaminophen.
The Peak Platelet-Rich Plasma (PRP) system works by separating PRP from a sample of a patient’s own blood. The device consistently produces 3 mL of high-quality PRP from 27 mL of whole blood in two-and-a-half minutes, yielding up to seven times the normal concentration of platelets, according to DePuy Synthes.
The company’s Codman Neuro unit experienced a busy second half of 2014, releasing two catheters and a disposable forceps, and securing approval in China, South Korea and Taiwan for its Revive SE Thrombectomy device, a next-generation self-expanding clot removal product intended to restore blood flow in patients with acute ischemic stroke secondary to intracranial occlusive vessel disease.
The Revive SE device is designed to ease navigation through small and tortuous blood vessels and arteries in the cerebral vasculature. The product enables rapid restoration of blood flow to the brain during an acute ischemic stroke.
DePuy Synthes debuted its catheters during the Society of NeuroInterventional Surgery 11th Annual Meeting last summer in Colorado. The Envoy DA XB Guiding Catheter enables access to more distal anatomy and is designed to provide additional proximal support of the catheter when more stability is required. It features end-to-end braided construction, a distal 10 centimeter hydrophilic coating, soft distal tip with a recessed metal marker, and Brite Tip Technology for enhanced visibility.
The 7F Envoy Guiding Catheter is the largest-diameter guiding catheter the company has ever offered, expanding upon its 6F Envoy line. With stainless steel end-to-end hybrid braid technology and soft distal Brite Tip Technology, the new catheters are offered in multiple shape configurations to navigate and treat different anatomy.
Courtroom Drama
JNJ is no stranger to the judicial system. As the world’s largest and most diversified healthcare firm, it spends a considerable amount of time in the courtroom fending off legal challenges from rivals, defending its integrity and protecting its proprietary technology. A summary of the more notable cases in 2014 follows:
• Baxter International lodged a patent infringement complaint against JNJ in January 2014, accusing its rival of violating six patents protecting Baxter’s biosurgery products, including Floseal, used to control bleeding during surgery. The suit contends JNJ’s hemostasis delivery devices, including its SurgiFlo product line, directly compete with Baxter’s biosurgery products. Floseal and SurgiFlo are indicated for use in surgical procedures as an adjunct to hemostasis when control of bleeding by ligature or other conventional methods is ineffective or impractical, according to the suit.
• The rivalry between Stryker Corp. and DePuy Synthes reached a boiling point last summer, when the former accused the latter (and five former sales team employees) of breach of contract. A complaint filed in a New Jersey federal court alleged the five Stryker sales reps resigned en masse in April (2014) and immediately began soliciting customers in North Carolina, and promoting DePuy products among area doctors, moves that reportedly cost the firm roughly $3.4 million. The five accused were key members of the Stryker Howmedica team assigned to promote and sell orthopedic reconstructive and trauma products to physicians and surgeons in the Fresno and Bakersfield, CA areas, according to the complaint. Stryker claims their illegal actions will cost the company up to 90 percent of its reconstructive devices sales and between 60 and 70 percent of its trauma parts sales in the region. The suit alleges that the five company defectors submitted almost identical resignation letters simultaneously in April and did not respond to phone calls, emails, or text messages.
• In August, Stryker extended an olive branch (of sorts) to DePuy Synthes, dismissing the company from a patent infringement lawsuit over its hip implant acetabular cup, which features a “dual-locking mechanism and is capable of accommodating a plurality of bearings with different characteristics.”
• Bonutti Skeletal Innovations LLC rang in a merry holiday season with its federal lawsuit (in December) claiming DePuy Synthes’ product line of spinal devices infringes six patents owned by Bonutti, generally covering wedge implants and their methods of implantation.