Given Imaging Ltd. (Nasdaq: GIVN; TASE: GIVN) reports Johnson & Johnson (NYSE:JNJ) unit InScope, a division of Ethicon Endo-Surgery Inc. has ended its agreement to market and sell Given Imaging's PillCam ESO esophagus endoscopic capsule in the US. The company said that Ethicon Endo-Surgery cited a shift in its strategic priorities within gastroenterology and other areas as the reason for ending the relationship.
The agreement was signed in May 2004.
InScope will pay Given Imaging $7.6 million in cancellation fees. InScope will continue to support reimbursement activities for PillCam ESO and maintain its market development field force for up to six months, and agreed to continue funding ongoing clinical trials associated with esophageal diseases.
Given Imaging said that, as a result, it will record $13.5 million revenue in the fourth quarter of 2007 and and $12.5 million during the first two quarters of 2008. Earlier this month, the company cut its guidance.
Given Imaging president and CEO Homi Shamir said, "With the release of PillCam ESO 2, the improved ingestion procedure, a growing body of positive clinical data and reimbursement coverage momentum, we are confident about PillCam ESO's potential. At the start of this year, Given and InScope adjusted the way we worked together in the field and, as a result, our US sales and marketing teams have worked side-by-side with InScope's market development group to educate gastroenterologists and hepatologists. We are, therefore, well positioned to assume full sales and marketing responsibility now."
Published by Globes [online], Israel business news - www.globes-online.com - on November 8, 2007
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