Guidant said Monday it received approval from the Food and Drug Administration to relaunch of its top-selling implantable defibrillator, which was recalled June 24 because of a faulty switch that in many cases could be fixed through reprogramming. The electronic devices shock the heart back into a correct rhythm when it beats too quickly.
The Indianapolis-based company said it expects to resume distribution of the Contak Renewal 3 defibrillator by the middle of this week. With about 40,000 implanted in patients worldwide, the model is the company's biggest seller. One device costs about $30,000.
"Our withdrawal from the market was painful for us," said Fred McCoy, president of the company's Cardiac Rhythm Management division. "I believe over the long term and even over the short term, patients will understand fully the quality that is resident in Guidant."
Guidant, the second-biggest U.S. maker of cardiac devices, has recalled 88,000 defibrillators - including the Contak Renewal 3 - and 28,000 pacemakers this summer because of malfunctions. McCoy blamed the recalls, which analysts say affected about 20 percent of the company's output, on "small, residual imperfections."
But for some leery cardiac patients, Monday's announcement wasn't enough.
Gail Morell's 28-year-old son George is on his fifth defibrillator in 10 years. Even though his current model - made by Guidant - has not been recalled, Morell says her disabled son has decided not to have a new defibrillator implanted in his chest.
"I don't trust any of these medical equipment companies any more," said Morell, who lives in Scranton, Pennsylvania. "He will take his chances."
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, Florida. "But we don't know what kind of permanent market share changes will occur."
Dr. Eric J. Rashba, an electrophysiologist at the University of Maryland Medical Center in Baltimore, said Guidant's strong reputation in the medical community will help sales rebound.
"I think I would start to use it again in selective patients," he said. "They've been in this business for a long time and people have used them for a long time. So, I would hope they would come around." Guidant shares rose $2.52, or 3.7 percent, to close at $71.32 in trading Monday on the New York Stock Exchange, the highest level since June 17.
The company's shareholders voted in April to accept $76 per share in cash and stock from New Jersey-based Johnson & Johnson, in an offering worth $25.4 billion.
Guidant's McCoy said he believed that deal would happen.
"It is my expectation and belief that the transaction will, in fact, close as early as the third quarter," he said. A Johnson & Johnson spokesman declined to comment.