By Joseph Walker

Johnson & Johnson is relaunching sales of a promising heart-rhythm device after a safety scare, but with a new warning for doctors that analysts say could hamper its market potential.

J&J said late Friday it would resume sales of Varipulse, after pausing its rollout last month to investigate unspecified neurovascular events in several patients. A federal device-safety database contains several reports of strokes associated with the device, The Wall Street Journal has reported.

J&J has high hopes for Varipulse, as the healthcare company vies for a piece of the fast-growing billion-dollar market dominated by Boston Scientific and Medtronic. The devices transmit high voltage bursts of electricity to zap heart cells-called ablations-to help treat irregular heart rhythms.

J&J says the device works as intended, but that it will instruct doctors of a potential increased risk of neurovascular problems if Varipulse is used in certain ways. The risk may increase, for example, with a high number of ablations or if the device is used outside of pulmonary veins, J&J said.

Analysts said doctors were likely to become more wary of using J&J's device, likely to the benefit of competing products that don't carry warnings.

The J&J warning could limit the device's potential to just 5% to 10% total market share, Wells Fargo estimates.

"It seems that JNJ is acknowledging that there is, in fact, an increased risk of stroke with Varipulse if the device is used in certain ways," said Needham & Co. analyst David Saxon on Tuesday. He said the product would remain "tainted" in doctors' eyes until J&J can show Varipulse's stroke risk is similar to competing products.

J&J shares were little changed Tuesday.

Read more: J&J Goes to Trial on Third Talc Bankruptcy Plan

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February 18, 2025 11:21 ET (16:21 GMT)

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