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Guidant and Johnson & Johnson Announce Comprehensive Technology Agreement; Guidant Acquires Exclusive Option to Impulse Dynamics Heart Failure Technology.

Business Editors & Health/Medical Writers

INDIANAPOLIS, Ind.--(BW HealthWire)--April 4, 2000

Guidant Corporation (NYSE:GDT) (PCX:GDT), a world leader in the treatment of cardiovascular disease, and Cordis Corporation, a wholly owned subsidiary of Johnson & Johnson (NYSE:JNJ), announced today that they have entered into a broad agreement covering various technologies and patents. As part of the arrangement, Guidant obtains an exclusive option from Impulse Dynamics, N.V. to acquire emerging cardiovascular technology for the treatment of heart failure. In addition, Guidant and Cordis have agreed to dismiss all current patent litigation between them and agree to resolve the remaining disputes in future arbitration proceedings. The agreement also establishes Cordis as a U.S. customer of rapid-exchange balloon dilatation catheters made by Guidant and provides both companies with access to certain radiation patents.

Under the terms of the agreement with Impulse Dynamics, for an initial payment of $125 million, Guidant will have the exclusive right to evaluate cardiovascular technology currently under development by Impulse Dynamics. Impulse Dynamics is a pioneer in the development of technology that may be used in future implantable devices to provide additional benefit to patients with heart failure. If Guidant chooses to acquire exclusive rights to this technology, the total payment would be approximately $425 million, plus contingent payments based on future sales of covered products. The total payment could be financed by a combination of debt, equity, and equity-linked securities.

"The therapy under development by Impulse Dynamics provides Guidant exclusive access to innovative technology that has the potential to dramatically enhance the efficacy of implantable devices now in clinical trials for the treatment of heart failure," said Guidant Group Chairman A. Jay Graf. "This technology could dramatically expand the number of patients who will ultimately be able to receive treatment from these devices. Further, if successful, this technology would provide Guidant with a unique approach to the treatment of heart failure and redefine the standard for heart-failure therapy."

Heart failure is a debilitating condition that when in an advanced state, the heart is unable to pump enough blood to the body to allow a person to enjoy a normal, productive life. It affects well over 5 million people in the United States and an estimated 6.5 million in Europe. Nearly 1 million new cases are diagnosed annually, making it the most rapidly growing cardiovascular disorder. According to statistics provided by the American Heart Association, approximately $22.5 billion are spent annually on the direct and indirect costs of treatment of heart failure in the U.S.(a)

The agreement between Guidant and Cordis also provides for the dismissal of the pending patent disputes between the two companies. No monetary settlement has been paid with the dismissal of the litigation. The companies have agreed to resolve the remainder of their disputes in arbitration proceedings. Each company will receive licenses to the other's patents involved in the disputes to ensure future product availability. In addition, Guidant and Cordis have agreed that future disputes related to stent patents will also be resolved in a similar manner. This arbitration process will likely follow litigation involving Cordis and other coronary stent manufacturers.

Under other terms of the agreement, Cordis will become a non-exclusive distributor in the U.S. of rapid exchange dilatation catheters made by Guidant. The products covered by this distribution agreement will have balloon material unique to Cordis and must receive FDA approval prior to being marketed in the U.S.

"We are pleased to have Cordis as a customer for Guidant's proprietary rapid exchange catheters in the U.S.," said Guidant Group Chairman Ginger L. Graham. "This arrangement has the potential to significantly expand physicians' acceptance of rapid exchange technology, which Guidant pioneered nearly a decade ago. We are committed to providing rapid exchange alternatives for physicians, and believe that this agreement with Cordis will enhance this effort, while including Guidant technology in the therapy choice."

"This landmark agreement with Cordis saves litigation costs and removes uncertainty around certain intellectual property for both companies," said Ronald W. Dollens, Guidant's President and CEO. Dollens concluded, "We believe this agreement will provide a tremendous opportunity for Guidant to command a unique technological position in the treatment of heart failure, a medical problem of vast importance and consequence to patients, our physician customers and healthcare systems around the world."

A global leader in the medical device industry, Guidant provides innovative, minimally invasive and cost-effective products and services for the treatment of cardiovascular and vascular disease. For more information about Guidant's products and services, visit the company's Web site at http://www.guidant.com.

This release contains forward-looking statements about the company's prospects. This information is based upon management's current expectations and beliefs. However, actual results may differ materially from those discussed in the forward-looking statements. Other factors affecting future results include those outlined in Exhibit 99.1 to the company's Form 10-K for the fiscal year ended December 31, 1999, filed on March 20, 2000.

(a) Source - American Heart Association
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Publication:Business Wire
Geographic Code:1USA
Date:Apr 4, 2000
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