Guidant Problems Remain, FDA Says
In another blow to troubled Guidant Corp., the Food and Drug Administration has warned the medical device maker that it has failed to resolve all of the problems the agency found this year during an inspection at the company’s cardiac unit in St. Paul, Minn.
The Indianapolis-based company said Tuesday that it had received the FDA’s warning letter Friday, about three months after it replied to a report by the agency on manufacturing and record-keeping problems found during an August inspection of the company’s St. Paul operations.
Guidant’s announcement of the letter came four days after the company said it would adjust fourth-quarter revenue estimates to well below Wall Street expectations as it tries to regain consumer confidence after months of product recalls and safety warnings.
The announcement also comes as Boston Scientific Corp. duels with Johnson & Johnson to pay more than $20 billion for the company.
The FDA’s letter states that it will not approve for sale certain Guidant devices made at the company’s St. Paul operations until the problems are corrected. It also said it would not approve new requests for certificates that were needed before Guidant could market overseas the devices made at the plant.
Jan Wald, an analyst with A.G. Edwards & Sons, said the FDA’s warning letter had been anticipated by the investment community in the wake of Guidant’s announcement Sept. 22 that the FDA had found 15 problems at its Minnesota manufacturing operations. But he said expectations were for a “more benign” response than what Guidant received.
“If the company can resolve the issues quickly it shouldn’t be a problem, but if it goes longer than six to nine months, it could pose a problem,” Wald said.
Guidant said in a statement that it would respond promptly to the FDA’s letter, and “has taken a broad, thorough and systemic review of its quality system and has made substantial steps toward addressing all” of the problems found by the agency.
Shares of Guidant closed down $2.29, or 3%, to $64.69. Boston Scientific shares fell 77 cents, or 3%, to $25.07, while Johnson & Johnson dropped 81 cents, or 1%, to $60.30.
