Johnson & Johnson (NYSE: NJN) said it is exiting the drug-coated heart stents, resulting in hundreds of likely job losses.
The formerly profitable stent unit recently succumbed to concerns about safety as well as tough competition from rival firms.
The decision means that J&J will end development of its Nevo heart stent and also stop manufacturing its Cypher stent. By year end, the company Cordis unit will stop selling drug-coated stents.
Manufacturing facilities in San German, Puerto Rico, and Cashel, Ireland will be closed, resulting in the elimination of up to 1,000 jobs.
As a result, the company will take a second-quarter charge of $500 million to $600 million related to the Cordis restructuring.
Gabelli & Co analyst Jeff Jonas told Reuters that the stents were kind of an albatross, and added that the remaining cardiovascular business is attractive.
Jonas indicated that while Cypher once generated annual sales of $2.6 billion, but this year was expected to raise only about $400 million this year.
JNJ shares were down 1.64 percent to $66 per share in mid-day trading.