Published January 13, 2015
Heart device maker Guidant Corp. (GDT) said Monday the Food and Drug Administration (search) has approved the relaunch of its top-selling implantable defibrillator, which was recalled in June because of a faulty switch.
Guidant officials said they expect to resume distribution of the Contak Renewal 3 (search) defibrillator by the middle of this week and reach full product supply by the end of August.
"Patients can have full confidence in the products and services of Guidant," said Fred McCoy, president of the company's Cardiac Rhythm Management division.
About 40,000 of the devices are implanted in patients worldwide, and the model is the company's biggest seller, McCoy said.
The Contak Renewal 3 was recalled June 24 by Indianapolis-based Guidant after the company discovered a faulty magnetic switch. Implantable defibrillators shock the heart back into a correct rhythm when it beats too quickly.
The relaunched Contak Renewal 3 line will have a new switch, approved by the FDA on Friday.
Analysts said the relaunch came weeks earlier than expected.
"It's a positive, there's no way of getting around that," said John Putnam, an analyst with Stanford Group Co. in Boca Raton, Fla. "But we don't know what kind of permanent market share changes will occur."
Guidant is the nation's second-largest manufacturer of cardiac devices.
The Contak Renewal 3 was one of 11 models the company recalled in June, totaling about 88,000 defibrillators. In July, the company also issued safety warnings on 28,000 pacemakers.
Jan Wald, an analyst with A.G. Edwards & Sons, said it is still too early to find out what impact the series of announcements will have on Guidant's sales and credibility.
"The longer it went, the more difficult it would be to get doctors and patients back," he said. "But with this kind of quick turnaround, I think the damage has been mitigated and they are likely to be able to regain their market share."
The FDA approved software to help physicians better manage existing Renewal 3 patients. The company expects the software to be out later this year.
Guidant shares rose $2.76, or 4 percent, to $71.56 on the New York Stock Exchange, the highest level since June 20.
Guidant shareholders voted in April to accept $76 per share in a cash and stock offering worth $25.4 billion from New Jersey-based Johnson & Johnson (JNJ). The deal has been expected to go through this year.