GDT Guidant Corp

Guidant Corporation (NYSE:GDT) has received the Report on findings and recommendations from the Independent Panel that the company convened in August 2005 to address various issues arising out of the actions taken by Guidant's Cardiac Rhythm Management (CRM) business in mid 2005. The Panel was asked to study and analyze the CRM policies and actions regarding postmarket device evaluation of cardiac device-related performance and communications of reliability and patient safety information to physicians and patients. Based on its observations, the Panel recommends guidelines for enhanced evaluation of postmarket devices and communication of information to physicians and patients about these life-sustaining implantable devices. Dr. Robert J. Myerburg, Professor of Medicine and Physiology at the University of Miami, chaired the Panel that included 11 other distinguished experts covering a broad range of disciplines. Dr. Myerburg personally presented the report yesterday to the Chief Executive Officer and Board of Directors of Guidant Corporation. The Panel's report in its entirety and background information regarding the Panel can be viewed at http://www.guidant.com/panel/. James M. Cornelius, Chairman of the Board and Chief Executive Officer of Guidant Corporation, stated, "I want to express our deep appreciation to the Independent Panel for its careful analysis, as well as for the incisive and thorough recommendations contained in the Panel's report. The Panel has presented Guidant with a blueprint for improvement and enhancement of our postmarket evaluation of product reliability and communications procedures regarding the performance and safety of our devices. We intend to implement the recommendations to further benefit patients and physicians. We are already working closely with Boston Scientific to ensure a smooth transition of these recommendations following the completion of the pending merger between Guidant and Boston Scientific." Dr. Myerburg commented, "I, and the other Panelists, were pleased that Guidant Corporation executives assiduously honored their commitment to unencumbered access to information, in the form of documents, interviews, and site visits, resulting in our ability to clearly understand the problems that led to the current stresses. We found overall device reliability to be well within acceptable performance expected of devices of that type, but internal and external communications methods burdened the company's ability to manage and communicate low frequency malfunctions. As a result, we are gratified that the Panel's work has been able to lead to a series of recommendations that we believe will improve the company's ability to manage warning signals regarding potential malfunctions - a fact-of-life for any manufactured product - and improve transparency and the communication process between Guidant, physicians and patients. I want to express my appreciation to each Panel member who participated in this complex project for dedicating their time and expertise to this important effort. The Panel noted that the company now has an opportunity to transform a painful experience into a benefit for itself and others in its industry who must confront similar problems. By taking the appropriate actions, Guidant can emerge as an industry leader in responding to the evolving societal expectations for transparency and enhanced communications regarding product performance and safety. Although many of the details of the recommendations are specific to Guidant, the general principles embodied in the statements will likely be applicable to the cardiac rhythm management industry in general." -0- *T The Panel made the following major recommendations to Guidant: 1. Establish an external committee of experts to serve as advisors to Guidant regarding evaluation of product performance and health risk assessment, potential actions to be taken in regard to device failures and malfunctions, and guidance on when and how to communicate with physicians and patients. 2. Designate or hire an in-house physician whose primary responsibility is patient safety and who will participate in product performance analysis, health hazard analysis, internal communications and external communication policies and procedures. 3. Strengthen management links between the Corporation and its CRM business unit, with specific attention to postmarket product performance, patient safety issues and communication policies. 4. Enforce the general policy of the CRM business on the primacy of patient safety by better integrating patient safety concerns into the factual and statistical analysis of product performance and performance failures. 5. Ensure that the CRM business, and the Company generally, implement and enforce policies of transparency of information regarding product performance and health hazard risk both to physicians and the general public as new information is emerging. 6. Develop processes for confronting the challenge of achieving more effective surveillance of marketed devices, in conjunction with others in the industry, the Heart Rhythm Society, and the FDA. 7. In addition to the analysis of product performance and safety event trends, develop processes to identify and act on even a single event when it is associated with risk of death or serious injury, has a suspected or defined basis for the malfunction or failure, and is likely to be systematic and to occur in other patients. 8. When a life-threatening defect has been identified and mitigated in a specific product line, Guidant Corporation and its CRM business should expedite review for immediate consideration of ceasing shipments of unmitigated devices, and retrieving those in possession of the sales force or in hospital inventories. *T "Guidant has already begun to implement changes that will address some of these recommendations, including taking steps to provide enhanced information through the expanded Product Performance Report we now make available to physicians and patients on our website. This Guidant initiative will be supplemented by additional communication recommendations made by the Panel. And, as an immediate response to one of the Panel's major recommendations, the company is actively recruiting for the newly created position of Chief Medical and Patient Safety Officer at CRM, a physician who will be responsible for overseeing all issues relating to patient safety," Cornelius continued. Cornelius added, "Clearly, this has been a challenging time for our patients, customers and our employees. Our commitment has always been and always will be to saving and improving lives through innovative medical technologies. We are pleased that the Panel recognized in its report that 'the function and reliability of products manufactured by the CRM business have made it a respected leader in its industry.' We recognize that the environment has changed, not just for Guidant but also for our industry as a whole and we are taking the necessary steps to improve surveillance of device performance and safety, as well as physician and patient communications. "I am enormously proud of Guidant's decades-long tradition of innovation and commitment to quality. The people of Guidant are conscientious professionals of the highest integrity, pride and ability. Nothing is more important to them or to me than keeping and maintaining the trust of the public and physicians. I am confident that the talented men and women of Guidant will help us achieve that goal," concluded Cornelius. Guidant Corporation pioneers lifesaving technology, giving an opportunity for better life today to millions of cardiac and vascular patients worldwide. The company develops, manufactures and markets a broad array of products and services that enable less-invasive care for some of life's most threatening medical conditions. For more information, visit www.guidant.com. Boston Scientific and Guidant have filed a definitive prospectus/joint proxy statement with the SEC in connection with the proposed transaction. The material contained herein is not a substitute for the definitive prospectus/joint proxy statement or any other documents that Boston Scientific and Guidant have filed or will file with the SEC. Investors and security holders are urged to read the definitive prospectus/joint proxy statement and any other relevant documents filed or to be filed by Boston Scientific or Guidant, because they contain or will contain important information about the proposed transaction. The definitive prospectus/joint proxy statement is, and other documents filed or to be filed by Boston Scientific and Guidant with the SEC are or will be, available free of charge at the SEC's website (www.sec.gov) or from Boston Scientific by directing a request to Boston Scientific Corporation, One Boston Scientific Place, Natick, Massachusetts 01760-1537, Attention: Milan Kofol, Investor Relations, or from Guidant by directing a request to Guidant Corporation, 111 Monument Circle, 29th Floor, Indianapolis, Indiana 46204, Attention: Investor Relations. Boston Scientific, Guidant and their respective directors, executive officers and other employees may be deemed to be participants in the solicitation of proxies from the security holders of Boston Scientific or Guidant in connection with the proposed transaction. Information about Boston Scientific's directors and executive officers is available in Boston Scientific's Annual Report on Form 10-K for the year ended December 31, 2005, and information about Guidant's directors and executive officers is available in Guidant's Annual Report on Form 10-K for the year ended December 31, 2005. Additional information about the interests of potential participants is included in the definitive prospectus/joint proxy statement referred to above. -0- *T Guidant Independent Panel ---------------------------------------------------------------------- Robert J. Myerburg, M.D., Professor of Medicine and Chairman, Independent Panel Physiology Division of Cardiology American Heart Association Chair in Cardiovascular Research University of Miami Miller School of Medicine ---------------------------------------------------------------------- George E. Apostolakis, Ph.D. Professor of Nuclear Science and Engineering, and Professor of Engineering Systems Massachusetts Institute of Technology ---------------------------------------------------------------------- George A. Beller, M.D., MACC, FAHA Professor of Cardiology University of Virginia Health System; Past President of American College of Cardiology ---------------------------------------------------------------------- John P. DiMarco, M.D., Ph.D., FACC, FAHA Professor of Medicine University of Virginia Health System ---------------------------------------------------------------------- David W. Feigal, M.D., MPH Research Professor Arizona Biodesign Center at Arizona State; Past Director of Center for Devices and Radiological Health (CDRH), United States Food and Drug Administration ---------------------------------------------------------------------- Kenneth Goodman, Ph.D. Associate Professor of Medicine and Philosophy, and Director of the Bioethics Program University of Miami Ethics Program ---------------------------------------------------------------------- Sharon A. Hunt, M.D., FACC Professor of Medicine Stanford University School of Medicine ---------------------------------------------------------------------- Bruce D. Lindsay, M.D., FACC Associate Professor of Medicine, and Director of Clinical Electrophysiology Lab Washington University School of Medicine ---------------------------------------------------------------------- Edward W. Maibach, Ph.D., MPH Professor and Director of the Public Health Communication Program School of Public Health and Health Services George Washington University ---------------------------------------------------------------------- Gerald V. Naccarelli, M.D., FACC, FAHA The Bernard Trabin Chair in Cardiology Professor of Medicine Chief of Division of Cardiology Director of the Cardiovascular Center Penn State University College of Medicine ---------------------------------------------------------------------- M. Jane Teta, Dr.PH, MPH Principal Scientist and Practice Director of Health Sciences at Exponent, Inc. ---------------------------------------------------------------------- Joel I. Verter, Ph.D. Senior Investigator Statistics Collaborative, Inc. ---------------------------------------------------------------------- ---------------------------------------------------------------------- Counsel to the Panel: Senior Partner Peter O. Safir, Esq. Covington & Burling ---------------------------------------------------------------------- *T