Guidant

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The Guidant logo. Guidant logo.png
The Guidant logo.

Guidant Corporation, part of Boston Scientific and Abbott Labs, designs and manufactures artificial cardiac pacemakers, implantable cardioverter-defibrillators, stents, and other cardiovascular medical products. Their company headquarters is located in Indianapolis, Indiana. Their main competitors are Medtronic, St. Jude Medical, and Johnson and Johnson.

Contents

History

In February 1972, Cardiac Pacemakers, Inc. (CPI) of St. Paul, Minnesota was formed. CPI was a highly successful start up venture, increasing sales from zero in 1972 to over $47 million and highly profitable when it was acquired by Eli Lilly in 1978 for $127 million. [1] In 1977 Eli Lilly & Co. buys IVAC of San Diego (a manufacturer of medical pumps and other hospital equipment) for $60.5 million. [2] In 1980, Eli Lilly & Co. acquires Physio-Control of Redmond, WA. and Advanced Cardiovascular Systems of Santa Clara, CA [1984] (balloon dilatation catheters and guidewires) along with Devices for Vascular Intervention(DVI) of Redwood City, CA [1988] (athetectomy catheter). These companies formed the core product/therapy areas of the Medical Devices Division of Eli Lilly and Company.

In 1994, Lilly had a change in senior management and Randy Tobias, the new president & CEO, decided that Lilly would focus on its pharma and other related businesses. The Medical Devices Division was spun off and went public in late 1994 under the name of Guidant Corporation (NYSE and PCX: GDT). The new company focused on cardiac rhythm management (pacemakers and implantable defibrillators) and cardiac and vascular intervention products via coronary and peripheral stents, guidewires and balloon dilatation catheters. Less invasive heart surgery was another small business unit of Guidant.

In February 1999 the business acquired Sulzer Medicas electrophysiology business for $810 million cash [3] and in November of the same year, acquired CardioThoracic Systems, Inc. [4]

In July 2002 the company acquired Cook Group Incorporated, [5] and months later in December, Guidant acquired Cardiac Intelligence Corporation. [6]

In April 2003 the business acquired SyneCor, LLC, developer of a fully bioabsorbable vascular stent. [7] Months later, in June 2003 Guidant acquired X Technologies, Inc. for $60 million. [8]

In January 2004, the company acquired AFx inc., a pioneer in the field of microwave surgical cardiac ablation. [9]

Acquisition offer by Johnson & Johnson

Johnson & Johnson announced that it was acquiring Guidant on December 15, 2004, for $76 a share, at a cost of $25.4 billion. The deal was approved by Guidant stockholders on April 27, 2005. On May 25, Guidant reported 26 cases of implantable defibrillator failure, including one death. The same day, the New York Times published an article accusing Guidant of waiting years before notifying physicians about the problems. On June 17, Guidant issued a safety advisory on seven models of defibrillator, followed a week later by advising doctors to discontinue use of four models. The scope of the problems steadily increased, and on July 18, 2005, Guidant issued a warning for nine different models of pacemakers from 1997 to 2000. The next day, Johnson & Johnson warned that the acquisition may be delayed due to these issues. On September 22, Guidant issued safety advisories and recalls for 170,000 of their pacemakers, 56% of their total pacemakers. On October 18, Johnson & Johnson gave an announcement that they were exploring alternatives to the acquisition, followed by a November 2 warning that they might pull out of the deal due to the regulatory issues and legal liabilities. On November 7, 2005, Guidant sued Johnson & Johnson to force them to complete the deal. On November 15, the two companies announced a renegotiated purchase price of $63 a share, or $21.5 billion, a 15% price reduction.

Acquisition offer by Boston Scientific

On December 5, 2005, Boston Scientific made a surprise unsolicited $24.6 billion bid to acquire Guidant, offering $72 per share of Guidant, $36 in cash and a fixed number of Boston Scientific shares valued at $36 a share. Guidant's stock price rose 10% on the news. The offer was not actually finalized until after due diligence had been completed on January 8, 2006.

Counter-offers

On January 11, 2006, Johnson & Johnson presented a counteroffer of $23.2 billion, still less than their original 2004 bid, which the Guidant board accepted. The next day, Boston Scientific increased their bid to $25 billion, followed the next day by Johnson & Johnson increasing their bid to $24.2 billion. It was not until January 17 that Boston Scientific produced a new offer of $27.2 billion ($80 per share), with the help of Abbott Laboratories. Abbott agreed to purchase $1.4 billion of Boston Scientific stock and pay $4.1 billion for Guidant's vascular intervention business upon completion of the merger. Without Abbott's financial assistance, it would have been unlikely that Boston Scientific could have produced the counteroffer.

On January 25, 2006, after Johnson & Johnson refused to raise their bid higher than $24.2 billion, Guidant declared Boston Scientific's offer "clearly superior" and accepted their bid. Guidant paid a $705 million termination fee to Johnson & Johnson.

On April 21, 2006, the deal with Boston Scientific was complete. This deal included Abbott Labs buying the vascular intervention business of Guidant for approximately $4.5 billion. Fortune magazine characterized the deal as the second worst deal ever, stating that the company paid too much for Guidant. [10] On July 27, 2006, Boston Scientific posted a loss of $4.26 billion for the quarter. [11]

Locations

Related Research Articles

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Abbott Laboratories is an American multinational medical devices and health care company with headquarters in Abbott Park, Illinois, United States. The company was founded by Chicago physician Wallace Calvin Abbott in 1888 to formulate known drugs; today, it sells medical devices, diagnostics, branded generic medicines and nutritional products. It split off its research-based pharmaceuticals business into AbbVie in 2013.

<span class="mw-page-title-main">Medtronic</span> Irish tax-registered medical device company

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St. Jude Medical, Inc. was an American global medical device company headquartered in Little Canada, Minnesota, U.S., a suburb of Saint Paul. The company had more than 20 principal operations and manufacturing facilities worldwide with products sold in more than 100 countries. Its major markets include the United States, Europe, Latin America and Asia-Pacific. The company was named after Jude the Apostle, the patron saint of lost causes.

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<span class="mw-page-title-main">Anthony Adducci</span> Inventor and entrepreneur

Anthony J. Adducci was a pioneer of the medical device industry in Minnesota. He is best known for co-founding Cardiac Pacemakers, Inc., the company that manufactured the world's first lithium battery powered artificial pacemaker. The lithium-iodide cell revolutionized the medical industry and is now the standard cell for pacemakers.

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<span class="mw-page-title-main">Mir Imran</span>

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Morton Maimon Mower was an American cardiologist specializing in electrophysiology and the co-inventor of the automatic implantable cardioverter defibrillator. He served in several professional capacities at Sinai Hospital and Cardiac Pacemakers Inc. In 1996, he became the chairman and chief executive officer of Mower Research Associates. He was inducted into the National Inventors Hall of Fame in 2002 for the development of the automatic implantable cardioverter defibrillator with Michel Mirowski in the 1970s. He continued his research in the biomechanical engineering laboratories at Johns Hopkins University.

Julio Palmaz is a doctor of vascular radiology at University of Texas Health Science Center at San Antonio. He studied at the National University of La Plata in Argentina, earning his medical degree in 1971. He then practiced vascular radiology at the San Martin University Hospital in La Plata before moving to the University of Texas Health and Science Center at San Antonio. He is known for inventing the balloon-expandable stent, for which he received a patent filed in 1985. It was recognized in Intellectual Property International Magazine as one of "Ten Patents that Changed the World" in the last century. His early stent research artifacts are now part of the medical collection of the Smithsonian Institution in Washington, DC. He continues to innovate on his initial designs, developing new endovascular devices.

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<span class="mw-page-title-main">Cardiac Pacemakers, Inc.</span>

Cardiac Pacemakers, Inc.(CPI), doing business as Guidant Cardiac Rhythm Management, manufactured implantable cardiac rhythm management devices, such as pacemakers and defibrillators. It sold microprocessor-controlled insulin pumps and equipment to regulate heart rhythm. It developed therapies to treat irregular heartbeat. The company was founded in 1971 and is based in St. Paul, Minnesota. Cardiac Pacemakers, Inc. is a subsidiary of Boston Scientific Corporation.

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MicroPort is a multinational medical technology developer and manufacturer that is primarily headquartered in Shanghai, China. It mainly designs and produces medical devices for a range of fields including cardiology, interventional radiology, orthopedics, electrophysiology, and surgical management. MicroPort is considered one of the global Medtech Big 100 and has been consistently known as the leading spender in research and development by percentage of revenue.

References

  1. "Pioneers of the Medical Industry".
  2. San Diego Union Tribune article
  3. "Feb 2, 1999Guidant Corporation Completes Purchase of Sulzer Medica's Electrophysiology Business, Announces Related Product and Manufacturing Strategy".
  4. "Nov 15, 1999Guidant Completes its Acquisition of CardioThoracic Systems, Inc".
  5. "Jul 30, 2002
    Guidant Agrees to Acquire Cook Group Incorporated"
    .
  6. "Dec 11, 2002Guidant Acquires Cardiac Intelligence Corporation".
  7. "Apr 1, 2003Guidant Acquires Majority Stake in Bioabsorbable Stent Company".
  8. "Jun 16, 2003Guidant to Complete Acquisition of Innovative Device for Treatment of Coronary Artery Disease".
  9. "Jan 22, 2004Guidant Announces Agreement to Acquire Surgical Cardiac Ablation Company".
  10. Boston Scientific paid too high a price for Guidant - October 16, 2006
  11. "Boston Scientific Posts $4.26 Billion Loss (Published 2006)". The New York Times . Archived from the original on 2020-11-09.