To: Board of Directors – Johnson & Johnson Company
This report is a written recommendation by Top Side Consulting on the acquisition of St. Jude Medical by Johnson & Johnson. The following provides relevant information and the final recommendation on acquisition.
Based on our preliminary evaluation of St. Jude Medical we see it as both a significant market share opportunity and profitable growth opportunity for J&J. We have conducted extensive research on the aspects of the business and market we felt were important to your company and have summarized these findings below that led to our acquisition recommendation.
St. Jude is a producer of heart rhythm devices that has recently taken a number two in the industry by extensive product launches. These include twenty new products with aggressive contract selling. Their main product lines include implantable cardioverter defibrillators (ICD’s) and pacemakers.
Johnson & Johnson Company needs growth among its drugs and devices, the heart rhythm market can offer this growth. If your company acquires St. Jude Medical it will create a shorter path to access this growing market and would avoid the decades of work with patents, engineering, clinical testing and regulatory approval to enter the heart rhythm market. Analyst predict the growth in this industry to continue mainly in part to the increase in long-lived lives of our population, which means an increase in elderly patients and these patients are in need of defibrillators and pacemakers.
St. Jude Medical has also been acquiring and seeking increased market share throughout the years. In the past year they have acquired three small medical device companies to compliment their product lines. These companies have included Advanced Neuromodulation Systems, Velocimed, which develops and manufactures specialty interventional cardiology devices, and Endocardial Solutions, which develops and manufactures devices to diagnose and treat cardiac rhythm disorders....