Requests by

Johnson & Johnson

(JNJ) - Get Report

and

Boston Scientific's

(BSX) - Get Report

to have the other's heart stent pulled from the market were rejected, and their patent dispute will continue, a Delaware judged ruled.

The two companies will now fight head-to-head for market share in the $2.26-billion-a-year coronary stent market.

Both companies claim patents on drug-coated coronary stents, devices designed to keep heart arteries open after being unclogged through angioplasty. Last week, Boston Scientific won unanimous approval from the FDA's Circulatory System Devices Panel for its product, Taxus, and will likely launch the product in the first quarter of 2004.

Johnson & Johnson sought an injunction to prevent Boston Scientific from launching Taxus, a product it believes violates the patent on its own version of the product marketed under the brand name Cypher.

Such an injunction would have been devastating for Boston Scientific. In a research note on Friday, RBC Captial Markets analyst Phil Nalbone said that 2004 Taxus revenue is expected to be about $1.4 billion, or 26% of the company's total sales. Nalbone expects Taxus to have a 62% share of the market for drug-coated stents by the end of 2004, on the basis of doctors' strong preference for Boston Scientific's catheter delivery system, the device used to insert the stent.

Nalbone also said that "the safety and efficacy profile of Taxus appear roughly comparable to Johnson & Johnson's Cypher." Johnson and Johnson's Cordis division launched Cypher in April of 2003, and the product has since been the subject of two safety-related warning letters from the FDA. On Oct. 29, the FDA issued a warning letter to physicians that said Cypher had been associated with 60 deaths and an additional 230 serious adverse clotting events requiring medical or surgical intervention. In the October letter, the FDA also said it had received over 50 other adverse event reports, including deaths, due to hypersensitivity reactions.

Because of similar safety reports just after the product was launched in April, Cordis and the FDA issued a joint letter in July reminding physicians to follow the instructions for use and to report any adverse events to the agency.

Medtronic

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is currently seeking approval for its own drug-emitting stent and will likely bring its product to market in late 2005.

Guidant

(GDT)

is expected to follow with its own version in early 2006.