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Guidant Receives FDA Warning Letter
Colchester, Conn., (PRWEB via PR Web Direct) December 28, 2005 -- Scott+Scott, LLC initiated a securities fraud class action on November 3, 2005, in the United States District Court for the Southern District of Indiana against Guidant Corp. ("Guidant") and certain individual defendants (No. 05CV1658). Guidant securities purchasers between December 1, 2004 and November 3, 2005, inclusive (the "Class Period") are putative class members. Guidant claims to provide therapeutic medical solutions for customers, patients, and healthcare systems worldwide.
If you purchased Guidant securities during the Class Period, you may, no later than January 3, 2006, move the Court to be appointed lead plaintiff and sign up with Scott + Scott as a client/shareholder. Signing with the Firm does not make you a proposed lead plaintiff without further consultation. If you wish to discuss this action or have questions concerning this notice or your rights as a class member, you may contact this firm for more information. Scott+Scott will provide class members with case materials; answer all questions regarding participation and assist investors with other services the firm provides. There is no cost or fee to you. Contact Scott+Scott partner Neil Rothstein directly at his cell phone at cell 619/251-0887 or at 800/332-2259, ext. 22 or partner David R. Scott 800/404-7770.
On December 27, 2005, various media outlets reported that the Food and Drug Administration had warned Guidant that it had failed to resolve all of its defects at its St. Paul, Minnesota facilities. Guidant stated Tuesday that it received the FDA’s warning letter on December 23, 2005, as reported by the Associated Press. This FDA letter comes four days after the Company said it would adjust its fourth-quarter revenue estimates to far below Wall Street expectations and the AP reported that the letter stated that the FDA will not approve the sale of certain devices from the St. Paul facility. The FDA letter termed these violations as “significant.” (See AP Article by Rick Callahan dated December 27).
The complaint alleges that Guidant and certain of its officers and directors violated provisions of the Securities Exchange Act of 1934, causing the Company's stock price to become artificially inflated. On December 15, 2004, Guidant entered into a $24.5 billion merger deal with Johnson & Johnson. According to the complaint, while the Company pointed to its defibrillator business as a key component of that deal, it concealed from investors significant unaddressed product defect and liability issues of the Company's implantable defibrillator product lines.
On June 17, 2005, the FDA issued a nationwide recall notification impacting Guidant's implantable defibrillators and cardiac resynchronization therapy defibrillators. Within that notification, the FDA advised the public that the malfunction of Guidant's devices could lead to a serious, life-threatening event for a patient. On July 18, 2005, the FDA published a "Recall -- Firm Press Release" on its website, that then revealed the Company's knowledge of pacemaker-related defects. In the recall publication, Guidant warned physicians and patients to seek replacement of at least nine different cardiac pacemaker models and product lines.
Johnson & Johnson representatives subsequently revealed to the investment community that, as of October 18, 2005, it was seeking alternatives to the merger deal in earnest, as a direct result of the "developments" at Guidant. On November 2, 2005, Johnson & Johnson warned that it might withdraw from the merger deal due to broad product recalls and a regulatory agency investigation. Finally, on November 3, 2005, the Attorney General of the State of New York filed a complaint, alleging ``repeated and persistent fraud'' by the Company in connection with its defibrillator sales. As investors learned the truth about the allegations of fraud made by the State of New York, the Company's shares tumbled from $60.40 on November 2, 2005, to as low as $57.05 per share in heavy trading.
The plaintiff is represented by Scott+Scott, LLC, which has significant experience in prosecuting investor class actions. The firm dedicates itself to client communication and satisfaction and currently is litigating major securities, antitrust and employee retirement plan actions throughout the United States. The firm represents pension funds, charities, foundations, individuals and other entities worldwide.
Contact:
Scott+Scott LLC
Neil Rothstein
http://www.scott-scott.com