Company Issues Pacemaker Warning

Guidant Corp., already under fire for problems with its implantable defibrillators, on Monday warned physicians replacements might be needed for nine pacemaker models made between 1997 and 2000.

The safety advisory, which affects 28,000 devices in use worldwide, heightened concerns among heart patients and raised new questions about the wisdom of a planned $25.4 billion acquisition of Guidant by New Brunswick, N.J.-based Johnson & Johnson.

"They have a lot of trouble to fix. Guidant has killed their name," said Lisa Salberg, president and founder of the Hypertrophic Cardiomyopathy Association, a patient advocacy group. "There's going to be a lack of trust."

The Indianapolis-based company said a sealing component in the pacemakers has degraded in some cases, resulting in higher-than-normal moisture in the devices and possible malfunction.

Guidant distributed about 78,000 pacemakers, about 18,000 of which are still in use in U.S. patients. The devices, which send electrical pulses to the heart to accelerate a slow heartbeat, have a seven- to 10-year life span before they must be replaced.

The company said it has identified 69 failures among the pacemakers — all after they had been used for at least 44 months. The models include: Pulsar Max, Pulsar, Discovery, Meridian, Pulsar Max II, Discovery II, Virtus Plus II, Intelis II and Contak TR.

Several patients have lost consciousness or developed possible heart failure, the company said. The statement reported the death of one person whose pacemaker may have failed, but Guidant said the device was not returned for testing and its role could not be confirmed.

The company said it would replace the devices, which are about the size of two half dollars held together, at no charge through the end of the year, even though the warranty on many has expired. Guidant will also reimburse patients up to $2,500 for medical expenses. Pacemakers are implanted during a short surgery when an incision is made near the shoulder.

Food and Drug Administration spokeswoman Julie Zawisza said the agency was evaluating Guidant's warning. Guidant said the FDA might classify the warning as a recall.

During two separate announcements, the company recalled 11 defibrillator models last month because of faulty mechanisms, which in two cases resulted in death. About 88,000 of the devices remain implanted worldwide.

Defibrillators shock the heart when it beats too quickly. They are three times the size of pacemakers and require surgery similar to pacemakers for implantation.

Dr. Angel Leon, chief of cardiology at Emory Crawford Long Hospital in Atlanta, said Guidant's latest safety warning poses less risk for patients than its defibrillator recalls. That's because of the relatively small number of pacemakers implanted and because the deterioration occurs gradually, allowing patients more time to seek help.

Leon also said he expects more warnings from medical-device makers.

"These device recalls have been happening for years," he said. "By no means do they suggest these companies are making bad products. It's how they handle the recalls that's important. I think they've learned a big lesson here."

Guidant shares fell $2.10 to close at $67.31 in trading on the New York Stock Exchange Monday; they have traded in a 52-week range of $49.95 to $75.15. On June 24, after the second of two recalls, shares sank 6.9 percent, or $4.70, to $63.90.

Those levels compare with the $76 per share offer from Johnson & Johnson, which Guidant shareholders voted to accept in April. The deal is pending.

The acquisition is contingent on the average Johnson & Johnson common share trading from $55.45 to $67.09 when the deal is finalized. There is no similar requirement for Guidant stock.

Johnson & Johnson stock fell 43 cents to close at $64.60 on the New York Stock Exchange.

Johnson & Johnson spokesman Jeffrey Leebaw said Monday the company stood by its June 17 statement that it was still working to close the acquisition in the third quarter. It called the initial safety advisories "serious matters."

John Putnam, an analyst with Stanford Group Co. in Boca Raton, Fla., said the deal is overvalued, even at Guidant's current stock price.

"If J&J continues to pay $76 a share, they're just being foolish about it," he said.