Contents:

Executive Summary Which companies are the major players in the cardiovascular device market? Which companies are the emerging players developing cardiovascular devices? What is the potential impact of industry consolidation on both major and emerging players developing cardiovascular devices? What is the commercial outlook for the cardiovascular devices market? . Chapter 1. Introduction to Cardiovascular Devices . Cardiovascular Devices—An Opportunity for Sustainable Growth Scope of the Report Chapter 2. Indications Treated with Cardiovascular Devices . Overview Arrhythmias Tachyarrhythmias Premature Complexes Supraventricular Tachyarrhythmias Wolff-Parkinson-White (WPW) Syndrome Ventricular Tachyarrhythmias Bradyarrhythmias Coronary Artery Disease Myocardial Infarction Acute Myocardial Infarction Post-Myocardial Infarction (PMI) Heart Failure Sudden Cardiac Death Chapter 3. Features of Cardiovascular Devices Cardiac Rhythm Management Implantable Devices Pacemakers Implantable Cardioverter Defibrillators Cardiac Resynchronization Therapy External Defibrillators Electrophysiology Catheters—Cardiac Ablation Interventional Cardiology Angioplasty Stents Embolic Protection Systems Chapter 4. Pipeline Analysis of Key Companies in Cardiovascular Devices Medtronic Products CRT and ICD Pacemakers and ICD External Defibrillator Vascular/Interventional Cardiology Angioplasty Stents. Embolic Protection Systems Company Strategy Select Alliances Relating to Cardiovascular Devices Financial Details Johnson & Johnson Products Company Strategy Select Alliances Relating to Cardiovascular Devices Financials Guidant Products Cardiac Rhythm Management Interventional Cardiology Company Strategy Select Alliances Relating to Cardiovascular Devices Financial Details Boston Scientific Products Stents Microsurgical Dilatation Intravascular Ultrasound Electrophysiology Company Strategy Select Alliances Relating to Cardiovascular Devices Financial Details St. Jude Medical Products Pacemakers ICDs and CRT-Ds Cardiology and Vascular Access (VA) Company Strategy Select Alliances Relating to Cardiovascular Devices Financial Details Abbott Laboratories Products Company Strategy Select Alliances Relating to Cardiovascular Devices Financial Details Sorin Group Products Cardiac Rhythm Management Vascular Therapy and New Businesses Company Strategy Select Alliances Relating to Cardiovascular Devices Financial Details Biotronik Products Select Alliances Relating to Cardiovascular Devices Financial Details Conor Medsystems Products Select Alliances Relating to Cardiovascular Devices Financial Details Chapter 5. Outlook for Cardiovascular Devices Overview. Cardiac Rhythm Management Stents Conclusion Bibliography Tables and Figures Table 1. List of Abbreviations Used in this Report Table 2 . Cardiovascular Devices—Key Competitors by Segment Table 3. Drug-Eluting Stent Launches Table 4. Pipeline of Cardiovascular Device Products—Medtronic Table 5. Medtronic’s Alliances in the Cardiovascular Devices Area (2001-2004) Table 6. Pipeline of Cardiovascular Device Products—Johnson & Johnson Table 7. Johnson and Johnson’s Alliances in the Cardiovascular Devices Area (1999-2004) Table 8. Pipeline of Cardiovascular Device Products—Guidant Table 9. Guidant’s Alliances in the Cardiovascular Devices Area (2000-2004) Table 10. Pipeline of Cardiovascular Device Products—Boston Scientific Table 11. Boston Scientific’s Alliances in the Cardiovascular Devices Area (2001-2004) Table 12. Pipeline of Cardiovascular Device Products—St. Jude Medical Table 13. St. Jude Medical’s Alliances in the Cardiovascular Devices Area (1999-2004) Table 14. St. Jude Medical Financial Information, 1999-2003 Table 15. Pipeline of Cardiovascular Device Products—Abbott Laboratories Table 16. Abbott’s Alliances in the Cardiovascular Devices Area (1999-2004) Table 17. Pipeline of Cardiovascular Device Products—Sorin Group Table 18. Sorin Group’s Alliances in the Cardiovascular Device Area (2001-2004) Table 19. Pipeline of Cardiovascular Device Products—Conor Medsystems and Biotronik Table 20. Biotronik Alliances in the Cardiovascular Devices Area (2003-2004) Table 21. Conor Medsystems’ Alliances in the Cardiovascular Devices Area (2003-2004) Table 22. Product Line Estimated Peak-Year Sales Figure 1. Structure of the Heart Figure 2. Contributors to Atrial Fibrillation Figure 3. Anatomy of Coronary Arteries Figure 4. Implantation of an Intracoronary Stent Figure 5. Worldwide Market Share of Cardiovascular Device (CRM and Stents) Players, 2003 Figure 6 . Medtronic: Financial Information, FY2000-FY2004 Figure 7. Johnson & Johnson: Financial Information, 1999-2003 Figure 8. Guidant: Financial Information, 1999-2003 Figure 9. Boston Scientific: Financial Information 1999-2003 Figure 10. Abbott Laboratories: Financial Information, 1999-2003 Figure 11. Estimated Market Share in 2008, Assuming Comined Companies

Summary:

Which companies are the major players in the cardiovascular device market? The two key segments of the cardiovascular device market are cardiac rhythm management (CRM) and stents. In 2003, the leading manufacturers in these lucrative segments were Medtronic, Boston Scientific, Johnson & Johnson, Guidant, and St. Jude Medical. As of 2004, Medtronic continued to be a leader in CRM with approximately 47% market share. Although Medtronic is not currently a major player in the stents arena, its very large presence in CRM will allow the company to remain a major player in the overall cardiovascular device market in the future. Guidant is not far behind Medtronic in the CRM market but lacks a presence in the expanding drug-eluting stent (DES) area. Johnson & Johnson and Boston Scientific are both major players in the stents market but have not yet entered into the fast-growing segment of CRM. A company that provides both these important components of the cardiovascular device market will be best positioned for the future. Which companies are the emerging players developing cardiovascular devices? Emerging players in the cardiovascular devices market are Abbott Laboratories, the Sorin Group, Biotronik, and Conor Medsystems. We believe these companies will strive to augment their sales in the cardiovascular device market via new product introductions and will attempt to support growth via acquisitions. Abbott, with a foothold in the European stent market, plans to expand its presence, in the United States as well, with a new DES. Conor anticipates launching its DES in Europe, Asia, and ultimately in the U.S. market. Biotronik and Sorin, European-based companies with both CRM and stent programs, have a small but expanding presence in the U.S. CRM market. Sorin recently launched its DES in Europe, and it plans to expand to the United States. While emerging companies expand their market presence, by broadening both their product lines and their selling geography, the product depth and market strength of major companies competing in CRM and stents will increasingly subdue the efforts of emerging companies unless their products are proven to provide superior outcomes. What is the potential impact of industry consolidation on both major and emerging players developing cardiovascular devices? More consolidation among larger companies could be spurred by the new competitive landscape that will emerge following the proposed Johnson & Johnson acquisition of Guidant. Although Johnson & Johnson's purchase of Guidant would provide the company with a critical missing component to its cardiovascular franchise, CRM, it also pressures competitors to adopt this new business model—stents, or an interventional cardiology focus, plus electronics (primarily an HF/arrhythmia focus)—to remain viable. This business model effectively provides treatments for the entire continuum of cardiovascular disease, from coronary artery disease (CAD) to heart failure/arrhythmias to sudden cardiac death (SCD). We believe that a purchase of St. Jude Medical (SJM) by Boston Scientific is a possibility. Such an acquisition would certainly make sense following Boston Scientific's announcement of its intention to enter the CRM segment. For SJM, the combination could enable the company to exploit its newly expanded CRM product line and provide the big missing piece of its business: stents. Should such an acquisition not proceed, both companies would be left with their respective segments, but in the long term, both would find it difficult to compete with the two powerhouse companies—Medtronic and Johnson & Johnson/Guidant. A Boston Scientific/SJM combination would lead to a 2008 scenario in which three key companies with nearly equivalent market shares compete in both stents and CRM. What is the commercial outlook for the cardiovascular devices market? Medtronic holds the leading market position (47% market share) among pacing systems and implantable cardiac rhythm device manufacturers; primary competitors in CRM include Guidant and St. Jude Medical. Medtronic and Guidant, together, command approximately 78% of sales in the CRM market. CRM sales will continue to expand from $7.3 billion in 2003 to $15 billion through 2008 (15% compound annual growth rate [CAGR]). This expansion will occur as additional landmark clinical trial data are released in support of further extension of indications appropriate for use of implantable cardioverter defibrillators/cardiac resynchronization therapies (ICDs/CRTs) and as a result of the improved reimbursement environment following expanded Medicare coverage of ICDs. Pacemaker sales will also increase, albeit to a lesser extent, as more patients undergo atrioventricular (AV) nodal ablation procedures after which a pacemaker is implanted. In general, participants in the CRM segment will enjoy a steady expansion of the market (15% CAGR) due to wider indications for use, the aging population (which is at higher risk of developing cardiovascular problems requiring treatment), and reimbursement approvals for expanded use of these products. Primary competitors in the interventional cardiology segment are Medtronic, Boston Scientific, Guidant, and Johnson & Johnson’s Cordis. DESs are driving growth in interventional cardiology, and Boston Scientific is carrying the leading market share (55% in 2004) despite Cordis’s one-year lead in launching the first-to-market DES. The stent segment is quite volatile, and sales often shift rapidly from one manufacturer to another. As new technologies are incorporated into stent design, frequent upheavals in market leadership are likely to occur through 2008.

Companies Mentioned

- Medtronic - Johnson & Johnson - Boston Scientific - St. Jude Medical - Abbott Laboratories - Sorin Group - Biotronik - Guidant