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Guidant Boosted by Strong Outlook

Maker of treatments for heart disease sees robust sales and early release of clinical trial results.

August 27, 2003|From Reuters

Guidant Corp. forecast strong quarterly sales of heart-regulating devices Tuesday and said clinical trial results of a treatment for clogged arteries would be ready in time for a key meeting of heart specialists.

The Indianapolis-based company, which makes pacemakers, defibrillators and other treatments for heart disease, backed its 2003 sales and earnings forecasts and said it would buy back as much as $250 million of its shares during the next year.

J.P. Morgan analyst Michael Weinstein said strong sales of defibrillators and the earlier-than-expected release of the Future II clinical trial results lifted Guidant's shares Tuesday. The stock rose about 4% on the New York Stock Exchange while the broader market rose slightly.

Guidant said it would meet the higher financial goals it set more than a month ago, citing the strength of its new products to treat heart failure and a slower-than-expected conversion to rival Johnson & Johnson's drug-coated stents, a revolutionary new treatment for clogged heart arteries.

The market's slow acceptance of that new technology has proved a boon to Guidant, the market-share leader in conventional bare-metal stents.

Guidant said it would submit clinical data on its own drug-coated stent to European regulators this week.

Drug-coated stents represented 42% of the U.S. stent market in July, up from 36% in June, and Mead said he expected that market penetration to continue.

For the third quarter, Guidant backed forecasts for sales of $910 million to $950 million and earnings of 52 cents to 57 cents a share.

For the full year, the company backed its earlier estimates for sales of $3.65 billion to $3.80 billion and earnings of $2.27 to $2.37 a share before special items. Including items, such as charges for a device withdrawn from the market because of safety problems, Guidant said it expected earnings of $1.30 to $1.40 a share, down from $1.58 last year.

Shares of Guidant gained $1.73 to close at $49.60.

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