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Boston Scientific Warns of Faulty Defibrillators

From Bloomberg News

Boston Scientific Corp. said Monday that it had warned physicians that an additional 996 defibrillators made by its Guidant unit might quit prematurely, which would leave heart failure patients unprotected from sudden cardiac arrest.

No deaths or injuries have been linked to the battery failures, the Natick, Mass.-based company said. The defect, a faulty low-voltage capacitor, was confirmed in 30 defibrillators removed from patients as of May 8 and is suspected in at least 46 devices still implanted, Boston Scientific said.

The company said it learned of the failures after purchasing Guidant Corp. on April 21 for $27.5 billion. U.S. regulators imposed sanctions on Guidant in December because of quality-control flaws after the recall last year of 109,000 defibrillators linked to at least seven deaths. Many recalled devices were sold years after Guidant learned of the flaws and began making models free of the problem.

“This is much better than [what] Guidant did,” said Rob Faulkner, an analyst with JMP Securities. “This is very organized. If the others had been like this, there wouldn’t have been a problem because you know exactly to whom it applies.”

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He said the news, however, wouldn’t help boost consumer confidence in the company’s medical devices. Guidant told patients that the affected defibrillators might operate normally and still need early replacement.

“It’s another piece of sand on the scale,” said Faulkner, whose firm owns no Boston Scientific shares and does no investment banking with the company. “Any evidence that someone had a surgery to get a product and it might not be working the way it was expected to is a blow to confidence.”

Boston Scientific shares fell 13 cents to $20.57. The shares through Friday had dropped 8% since the acquisition and 15% this year.


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