Boston Scientific Will Settle

- Wall Street Journal

08/31/2007 - Boston Scientific Corp. agreed to pay $16.8 million to 35 states and the District of Columbia over allegations that its Guidant unit concealed flaws in its defibrillators.

The settlement brings Boston Scientific closer to resolving Guidant's legal difficulties, which it has estimated will cost $706 million in total. Boston Scientific purchased Guidant for $28.4 billion last year.

The company, based in Natick, Mass., is still grappling with a lawsuit from the state of New York and inquiries from the Department of Justice. Last month, Boston Scientific agreed to settle suits from individual patients for $195 million.

Boston Scientific has 26% of the market for such defibrillators. The company's defibrillator sales are off 20% from two years ago, when a series of recalls hurt its reputation. The company has issued warnings and recalls for about 200,000 defibrillators and pacemakers.

Separately, a federal judge dismissed much of a lawsuit filed by Johnson & Johnson against Guidant, Boston Scientific and Abbott Laboratories. J&J alleged that Boston Scientific and Abbott improperly interfered with its own deal to purchase Guidant in 2005.

Guidant paid Johnson & Johnson a $705 million breakup fee in 2006, but J&J says it is entitled to more because Guidant improperly shared confidential information with Abbott.

The ruling, by U.S. District Judge Gerard E. Lynch in Manhattan, dismissed Abbott from the case, and said Boston Scientific's position had "strong equitable appeal." The judge let J&J proceed with a breach of contract claim against Boston Scientific, but dismissed another.

The firms all said they were "pleased" with the ruling.

Boston Scientific shares slipped 16 cents, or 1.3%, to $12.69. J&J shares shed 26 cents to $61.60, while Abbott shares slipped nine cents to $51.40, all in 4 p.m. composite New York Stock Exchange trading yesterday.

Ennis & Ennis, P.A. is representing individuals that have been harmed as a result of Guidant side effects. If you or a loved one have suffered as a result of Guidant related vision complications you may be entitled to compensation. Click here to contact one of our Guidant Attorneys about a Guidant lawsuit today.