Economic crisis hits home

Justine Cadet, News Editor

Last week, two major cardiovascular healthcare companies—GE Healthcare and Philips Healthcare—reported losses for the 2008 fiscal third quarter. In unveiling their shaky financials, execs from both vendors cited trouble in the credit markets as a reason for problems they face in the U.S. healthcare sector, as hospitals are finding it difficult to get funding for capital equipment purchases.

This week, more bleak financial news emerged from various cardiovascular device makers and pharmaceutical companies. Merck announced that it was going to cut 7,200 more jobs, in addition to the more than 10,000 positions that were eliminated over the past three years. These layoffs are partly due to the falling sales of their once-popular statins, Zetia and Vytorin, which saw sales drop by 15 percent in the third quarter.

Merck is not the only company affected by the financial crisis: Boston Scientific posted losses as well, enduring slumping stent sales and a Johnson & Johnson settlement, which affected its bottom line. While rising sales for Angiomax helped The Medicines Company to narrow its net losses, soaring research and development costs pushed the pharma company into the red.

However, there are still a few bright spots on the horizon, Edwards Lifesciences posted gains for the third quarter, bolstered by strong heart valve sales, prompting the company to increase its 2008 fiscal year prediction. And, last week, impressive drug-eluting stent orders for Xience catapulted Abbott into double-digit profits.

While the gloomy financial crisis seems to be casting its shadow across every market, the need for improved cardiovascular care will continue to fuel the vendors of this space, who provide the much-need devices and drugs.

On these topics or any others, feel free to contact me.

Justine Cadet, News Editor
jcadet@cardiovascularbusiness.com