Boston Scientific paying $296 million settlement

AP News
Posted: Nov 06, 2009 10:11 AM

Medical device maker Boston Scientific Corp. said Friday it will pay $296 million to settle a Department of Justice investigation into the company's Guidant unit.

The company also said it will take a charge of $294 million in the third quarter.

The investigation involved product advisories issued by Guidant in 2005, a year before Boston Scientific paid $27 billion for the heart device maker. Throughout 2007, Boston Scientific agreed to various settlements over heart patients' legal claims that Guidant knowingly sold defibrillators with potentially life-threatening defects over a three-year period.

The company was also criticized for taking too long to notify doctors, patients and regulators about potential problems.

Under the current deal, Guidant will plead to two misdemeanor charges related to failure to include information in reports to the U.S. Food and Drug Administration.

Natick, Mass. Boston Scientific updated its third-quarter profit results to reflect the charge. It is now reporting a third-quarter loss of $94 million, or 6 cents per share, instead of a $250 million, or 13 cents per share profit.

Adjusted profit, which excludes the charge, still stands at 19 cents per share.

The company now expects a charge of 20 cents per share to be included in full-year profit results. It now expects profit between 23 cents and 28 cents per share in 2009, while analysts surveyed by Thomson Reuters had forecast profit of 50 cents per share.

Boston Scientific shares rose 10 cents to $8.15 in morning trading.