Guidant Q4 Sales Down 15% Amid FDA Warnings

Guidant Corp. (GDT), which is the target of a bidding war between Johnson & Johnson (JNJ) and Boston Scientific Corp.(BSX), said Tuesday its fourth-quarter sales fell 15 percent, reflecting the impact of a series of problems with its devices to treat irregular heart beats.

Guidant also said it has received a follow-up letter from the Food and Drug Administration related to a warning letter over its implantable heart defibrillators received last month related an inspection of a Guidant plant in St. Paul, Minn.

Guidant said the follow-up letter makes no new observations on the company's quality system. Guidant said it believes questions contained in the warning letter and the follow-up letter can be fully addressed and said it should be ready for a follow-up inspection in mid-2006.

Guidant said preliminary fourth-quarter sales were about $828 million, off 15 percent from the quarter a year ago. Guidant said the results exceeded the company's prior outlook of $790 million to $820 million, due primarily to higher U.S. implantable defibrillator sales.

Analysts on average expected fourth quarter revenue of $810.2 million, according to Reuters Estimates.

U.S. sales of implantable defibrillators, which are used to treat dangerously fast heart beats, fell 23 percent to $272 million in the quarter. Worldwide implantable defibrillator sales fell 19 percent to $372 million.

The company also announced that it has received a follow-up letter from the FDA related to the previously reported warning letter received from the FDA in late December 2005.

The warning letter and follow-up letter both relate to the FDA's inspection of Guidant's Cardiac Rhythm Management facility in St. Paul, Minnesota. The follow-up letter makes no new observations on the company's Quality System.