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Guidant Lawsuit Resolution Monitoring - February 19
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Street Smart With Trish Regan
Feb 19, 2015 | Bloomberg - Business talk show on the cable station Bloomberg
By Link to segment: http://beta.criticalmention.com/app/#clip/view?13083731/token/8c65a682-6467-482b-a559-0ae02d3a2c32
Boston Scientific shares rising, the most in a year and a half. The medical device company settling a lawsuit with Johnson & Johnson over its acquisition of Guidant, which took place almost a decade ago. Boston Scientific is going to pay 600 million bucks, Johnson & Johnson had originally sought $7 billion in damages. -
Power Lunch
Feb 19, 2015 | CNBC – Business talk show on cable station CNBC
By Link to segment: http://beta.criticalmention.com/app/#clip/view?13083737/token/8c65a682-6467-482b-a559-0ae02d3a2c32
Rough Transcript: Welcome back to power lunch. Boston scientific leading the way in the S&P 500 today. Currently up about 11%. This following news that the medical device maker will pay Johnson & Johnson $600 million to settle a lawsuit over Boston Scientific's acquisition of fellow device maker Guidant; that was back in 2005. Now, with the settlement J&J will dimsiss its legal challenge, so again, BSX up 11% on that bit of news. -
In the Loop with Betty Liu
Feb 19, 2015 | Bloomberg – Business talk show on the cable station Bloomberg
By Link to segment: http://beta.criticalmention.com/app/#clip/view?13063139/token/0ad53366-a5e7-4335-928d-2e1c7f66db7f
Rough Transcript: We are looking at Boston Scientific settling a long-running dispute with Johnson & Johnson. They will pay $600 million to J&J to settle a lawsuit that is almost a decade old over Boston Scientific's $27.5 billion acquisition of Guidant. J&J had said Guidant had pursued that higher offer from Boston Scientific, and shouldn’t have. -
Fox 25 Morning News
Feb 19, 2015 | WFXT – Morning show on the local FOX affiliate in Boston, MA
By Link to segment: http://beta.criticalmention.com/app/#clip/view?13063131/token/0ad53366-a5e7-4335-928d-2e1c7f66db7f
Rough Transcript: Boston Scientific is settling a lawsuit with Johnson & Johnson for $600 million. Boston Scientific sparked a bidding war with J&J for a cardiac device maker in 2006. The New Jersey-based company sued Boston Scientific for $7 billion for damaging its business. The issue has been in and out of court since 2006 and this settlement will finally end the longstanding litigation. -
Business NECN
Feb 19, 2015 | NECN – Business show on regional New England cable channel based in Newton, MA
By Link to segment: http://beta.criticalmention.com/app/#clip/view?13062829/token/0ad53366-a5e7-4335-928d-2e1c7f66db7f
Rough Transcript: Briefly this evening, Boston Scientific has agreed to pay Johnson & Johnson $600 million. This payment settles a lawsuit over Boston Scientific’s acquisition of Guidant in 2006. Johnson & Johnson lost a bidding war for Guidant, it then accused Boston Scientific of interfering with its bid for Guidant. Also as part of the deal Boston Scientific will not sue Johnson & Johnson over several stent products. -
Nightly Business Report WNET
Feb 19, 2015 | PBS – Evening business show on national public broadcasting station
By Link to segment: http://beta.criticalmention.com/app/#clip/view?13063107/token/0ad53366-a5e7-4335-928d-2e1c7f66db7f
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Boston Scientific's J&J settlement cheers investors
Feb 19, 2015 | Minneapolis Star Tribune
By Joe Carlson
One down, two to go. Boston Scientific Corp., the global medical devicemaker that employs 5,000 people in the Twin Cities, pleased investors Tuesday by settling a potentially $7 billion lawsuit with its longtime adversary Johnson & Johnson for the relative bargain price of $600 million. The news sent Boston Scientific’s stock to one of its largest single-day gains in a decade. -
Boston Scientific hands over $600M to settle breach-of-contract Guidant suit with J&J
| Fierce Medical Devices
By Emily Wasserman
Boston Scientific ($BSX) is forking over $600 million to settle its ongoing breach-of-contract lawsuit with Johnson & Johnson ($JNJ) over a failed bidding war for devicemaker Guidant, laying its decade-old courtroom saga to rest. -
Boston Scientific And J&J Feud Ends With $600M Settlement
Feb 19, 2015 | Medical Device and Diagnostics Industry
By Arundhati Parmar
It's finally over. The longstanding feud between Boston Scientific and Johnson & Johnson over the former's acquisition of Guidant back in 2006 has been settled. In a news release Tuesday, Boston Scientific announced that it will pay a total of $600 million to the New Jersey medtech, pharma and consumer packaged goods company. That would settle the whopping $7.2 billion lawsuit that Johnson & Johnson had brought against the Massachusetts company the same year it acquired Guidant. -
Here’s Why Boston Scientific Corporation (BSX) Is Trading Up In After-Hours
Feb 19, 2015 | Bidness Etc.
By Hannah Ishmael
Boston Scientific Corporation (NYSE:BSX) settled one of the longest ongoing merger-related lawsuits on Tuesday, when it agreed to pay Johnson and Johnson (NYSE:JNJ) $600 million to settle an 11-year-old legal wrangling. Johnson and Johnson had claimed that Guidant Corp. — a medical device company that Boston Scientific acquired — did not play by the books when it chose to sell itself to Boston Scientific for a higher offer. Johnson & Johnson had had its eyes on the company back in 2004. -
Boston Sci Pays J&J $600M To Settle Guidant Merger Suit
| Law360
By Daniel Siegal
Boston Scientific Corp. announced Tuesday it would pay Johnson & Johnson $600 million to settle claims that acquisition target Guidant Corp. breached a contract by scuttling a proposed $21.5 billion merger with J&J, the deal coming before a judge could rule in the case’s concluded bench trial.
Television Coverage
Regional Outlets
Pharmaceutical Trades
Business Trades
Legal Trades
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Feb 19, 2015 | Bloomberg - Business talk show on the cable station Bloomberg
By Link to segment: http://beta.criticalmention.com/app/#clip/view?13083731/token/8c65a682-6467-482b-a559-0ae02d3a2c32
Boston Scientific shares rising, the most in a year and a half. The medical device company settling a lawsuit with Johnson & Johnson over its acquisition of Guidant, which took place almost a decade ago. Boston Scientific is going to pay 600 million bucks, Johnson & Johnson had originally sought $7 billion in damages.
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Feb 19, 2015 | CNBC – Business talk show on cable station CNBC
By Link to segment: http://beta.criticalmention.com/app/#clip/view?13083737/token/8c65a682-6467-482b-a559-0ae02d3a2c32
Rough Transcript: Welcome back to power lunch. Boston scientific leading the way in the S&P 500 today. Currently up about 11%. This following news that the medical device maker will pay Johnson & Johnson $600 million to settle a lawsuit over Boston Scientific's acquisition of fellow device maker Guidant; that was back in 2005. Now, with the settlement J&J will dimsiss its legal challenge, so again, BSX up 11% on that bit of news.
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Feb 19, 2015 | Bloomberg – Business talk show on the cable station Bloomberg
By Link to segment: http://beta.criticalmention.com/app/#clip/view?13063139/token/0ad53366-a5e7-4335-928d-2e1c7f66db7f
Rough Transcript: We are looking at Boston Scientific settling a long-running dispute with Johnson & Johnson. They will pay $600 million to J&J to settle a lawsuit that is almost a decade old over Boston Scientific's $27.5 billion acquisition of Guidant. J&J had said Guidant had pursued that higher offer from Boston Scientific, and shouldn’t have.
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Feb 19, 2015 | WFXT – Morning show on the local FOX affiliate in Boston, MA
By Link to segment: http://beta.criticalmention.com/app/#clip/view?13063131/token/0ad53366-a5e7-4335-928d-2e1c7f66db7f
Rough Transcript: Boston Scientific is settling a lawsuit with Johnson & Johnson for $600 million. Boston Scientific sparked a bidding war with J&J for a cardiac device maker in 2006. The New Jersey-based company sued Boston Scientific for $7 billion for damaging its business. The issue has been in and out of court since 2006 and this settlement will finally end the longstanding litigation.
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Feb 19, 2015 | NECN – Business show on regional New England cable channel based in Newton, MA
By Link to segment: http://beta.criticalmention.com/app/#clip/view?13062829/token/0ad53366-a5e7-4335-928d-2e1c7f66db7f
Rough Transcript: Briefly this evening, Boston Scientific has agreed to pay Johnson & Johnson $600 million. This payment settles a lawsuit over Boston Scientific’s acquisition of Guidant in 2006. Johnson & Johnson lost a bidding war for Guidant, it then accused Boston Scientific of interfering with its bid for Guidant. Also as part of the deal Boston Scientific will not sue Johnson & Johnson over several stent products.
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Feb 19, 2015 | PBS – Evening business show on national public broadcasting station
By Link to segment: http://beta.criticalmention.com/app/#clip/view?13063107/token/0ad53366-a5e7-4335-928d-2e1c7f66db7f
Rough Transcript: It was the opposite story for Boston scientific- that company announced news that investors liked. It has reached a $600 million settlement with Johnson & Johnson over a breach of merger. The lawsuit was brought by J&J against Guidant, which Boston Scientific acquired. Shares popped initially in after-hours trading. Before the market closed, shares were off slightly at $14.84.
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Boston Scientific's J&J settlement cheers investors
Feb 19, 2015 | Minneapolis Star Tribune
By Joe Carlson
One down, two to go.
Boston Scientific Corp., the global medical devicemaker that employs 5,000 people in the Twin Cities, pleased investors Tuesday by settling a potentially $7 billion lawsuit with its longtime adversary Johnson & Johnson for the relative bargain price of $600 million. The news sent Boston Scientific’s stock to one of its largest single-day gains in a decade.
Two clouds of litigation still hang over the company. One involves claims from about 20,000 women who say they were injured by a Boston Scientific pelvic mesh product, and the other centers on a demand for more than $1 billion in back taxes from the Internal Revenue Service dating back to 2001.
Stock analysts have voiced concern that the company’s mounting legal problems are depressing its stock price. That concern seemed borne out Wednesday, as Boston Scientific’s stock climbed 12.4 percent to close at $16.68 on the news of the J&J settlement.
Investors are now watching the company’s other cases for signs of resolution. But if walking a legal high-wire bothers company executives, they don’t show it. The company has already set aside $972 million to cover litigation costs, and has pooled another large sum related to the IRS dispute.
“For a company of our size, with more than $7 billion in sales and very profitable, that is a very manageable number,” Chief Financial Officer Dan Brennan said in an interview earlier this month, when asked about the legal reserves.
On Tuesday, Boston Scientific announced it would pay its courtroom nemesis Johnson & Johnson a pretax settlement of $600 million to resolve a decade-old contract dispute. The first $300 million will come within 10 days of the agreement, and the rest will follow within 60 days. Boston Scientific is not admitting wrongdoing as part of the settlement.
The case stemmed from a binding agreement J&J had in 2006 to buy heart-device maker Guidant, which was based in Indianapolis with major operations in the Twin Cities. J&J lawyers argued that Guidant broke the contract when it shared confidential company data that allowed Boston Scientific to put in a better offer and buy Guidant for $27 billion. J&J claimed the tactic cost it $4 billion in revenue, plus another $3 billion in interest.
Tuesday’s settlement was only latest milestone in a long-running legal rivalry with J&J. In 2010, Boston Scientific paid $1.7 billion to settle three lawsuits over patents with J&J, just six months after Boston Scientific agreed to pay $716 million to settle a dozen other patent cases with J&J. All the settlements involve disputes over patents on stents, tiny metal tubes that prop open clogged blood vessels.
This week, Boston Scientific revealed that it had been considering a lawsuit against J&J over the rights to a different stent technology. But on Tuesday, it announced that as part of the settlement, it would agree to not to bring infringement cases related to flexible stents and related products sold by Johnson & Johnson.
“To me, this is just another piece of [Boston Scientific CEO Michael Mahoney’s] strategy to get rid of distractions, get rid of overhangs on earnings, and moving the business forward,” said Eric Simso, a Twin Cities medical device consultant and a former vice president at Boston Scientific.
Whether that spirit will translate into the company’s other lawsuits remains to be seen.
The IRS tax disputes are long-range issues that are tougher to predict, but the company right now is fighting the vaginal-mesh claims. It has won two in Massachusetts and lost two in Texas. More than 20,000 women now say the company’s netlike implant to treat pelvic organ prolapse and urinary incontinence left them injured because of bad product design. Several major devicemakers face thousands lawsuits of their own over the same types of devices.
Analysts with Leerink Partners in Massachusetts predict Boston Scientific will settle the cases en masse for just over $1 billion, which was “manageable” considering the company’s free cash flow of well over $1 billion.
“Ultimately, we think the mesh litigation will largely be resolved by the end of 2016,” the analysts wrote.
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Boston Scientific hands over $600M to settle breach-of-contract Guidant suit with J&J
| Fierce Medical Devices
By Emily Wasserman
Boston Scientific ($BSX) is forking over $600 million to settle its ongoing breach-of-contract lawsuit with Johnson & Johnson ($JNJ) over a failed bidding war for devicemaker Guidant, laying its decade-old courtroom saga to rest.
The Marlborough, MA-based company will pay far less than the $7.2 billion originally requested by J&J, and will not have to acknowledge any liability by Guidant. Boston Scientific also agreed not to bring any patent infringement claims over J&J's S.M.A.R.T., S.M.A.R.T. Control and S.M.A.R.T. Flex stent products in the future. The company will use $587 million in cash at the end of Q4 2014 and future cash flows to finance its $600 million charge.
"We feel this settlement is in the best interests of the company and its shareholders," Tim Pratt, executive vice president and chief administrative officer, general counsel and secretary for Boston Scientific, said in a statement. "We are pleased to end this longstanding litigation between Guidant and Johnson & Johnson, and to continue focusing on delivering innovative products and solutions to physicians and patients."
Boston Scientific and J&J's beef dates back to 2004, when J&J struck a deal to purchase Guidant and later agreed to shell out $21.5 billion for the company. J&J said it would sell a portion of Guidant's business to Abbott Laboratories ($ABT) to clear the acquisition of antitrust hurdles, and wagered a "no-solicitation" clause that prevented Guidant from seeking a better offer.
But before the merger closed, Boston Scientific swooped in with a $25 billion offer and said it would sell assets to Abbott to ease through the deal. J&J and Boston Scientific had a heated bidding war, with Boston Scientific emerging the winner and shelling out $27 billion for Guidant. J&J walked away with a $705 million termination fee.
In September 2006, J&J sued Guidant, Abbott and Boston Scientific for breach of contract, claiming that Guidant told Abbott about the asset deal, leaving the door open for Boston Scientific to make a better offer. Abbott was subsequently dismissed from the case.
The settlement could allow Boston Scientific to wipe its slate clean and recoup from fallout over its Guidant purchase--a deal Forbes deemed "arguably the second-worst ever." In 2012, the Massachusetts device giant took a $3.4 billion goodwill impairment write-off tied to the acquisition and faced slumping revenues from outstanding debt. Boston Scientific also inherited a crop of pending product liability lawsuits through the deal and paid out more than $30 million in October 2013 to settle the last federal claims over two recalled defibrillators.
Even though the company still faces a raft of product liability suits over vaginal mesh products, its settlement with J&J takes its "largest potential burden" off the table, Leerink analyst Danielle Antalffy said in a note to investors. Armed with more cash, Boston Scientific could take a more aggressive stance toward M&A, focusing on smaller bolt-on acquisitions and next-generation technologies.
The company is trading up 10% upon news of the settlement.
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Boston Scientific And J&J Feud Ends With $600M Settlement
Feb 19, 2015 | Medical Device and Diagnostics Industry
By Arundhati Parmar
It's finally over.
The longstanding feud between Boston Scientific and Johnson & Johnson over the former's acquisition of Guidant back in 2006 has been settled. In a news release Tuesday, Boston Scientific announced that it will pay a total of $600 million to the New Jersey medtech, pharma and consumer packaged goods company. That would settle the whopping $7.2 billion lawsuit that Johnson & Johnson had brought against the Massachusetts company the same year it acquired Guidant.
In the lawsuit, Johnson & Johnson alleged that Guidant had breached the merger agreement it had with J&J when Boston Scientific became another bidder. The lawsuit charged that Guidant allowed Abbott to conduct due diligence on a business unit that Abbott would buy to help Boston Scientific resolve any potential antitrust issues in its purchase of Guidant, according to the New York Times. By allowing Abbott to do so, Guidant violated the merger agreeement that it had with Johnson and Johnson, the firm said.
Under Tuesday's settlement, Johnson & Johnson has agreed to permamently dismiss the action and without acknowledging any liability on the part of Guidant.
The settlement seems to have been expected.
"Although Guidant may have willfully breached confidentiality, we assumed the lawsuit would be settled for a fraction of $7.2B, as it would be difficult to prove J&J suffered substantial financial damages," wrote Gregory Chodaczek, an analyst with Stern Agree, in a research note Tuesday.
While the saga is over, the settlement agreement shows how costly the Guidant acquisition has been to Boston Scientific over the years both in terms of pure dollars and cents as well as in reputation.
in 2010, Guidant, the maker cardiac devices such as ICDs, pleaded guilty to criminal charges of misleading the FDA and failing to submit a labeling change to the FDA relating to faulty ICDs, according to the Department of Justice. It forfeited $42.1 million and paid a criminal fine of $296 million and submitted to supervision of the U.S. Probation office for three years. Later, the government joined a whistleblower lawsuit which extracted another $30 million from Boston Scientific in 2013. In 2007, the company paid $196 million to settle 4,000 patient claims stemming from defective devices. That same year it agreed to pay $16.75 million to settle probes by attorneys general of 35 states.
That adds up to about $1.2 billion. A Boston Scientific spokeswoman didn't immediately respond to a question about the total payments Boston Scientific had to bear since the Guidant purchase.
Boston Scientific paid $27 billion to acquire Guidant in 2006.
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Here’s Why Boston Scientific Corporation (BSX) Is Trading Up In After-Hours
Feb 19, 2015 | Bidness Etc.
By Hannah Ishmael
Boston Scientific Corporation (NYSE:BSX) settled one of the longest ongoing merger-related lawsuits on Tuesday, when it agreed to pay Johnson and Johnson (NYSE:JNJ) $600 million to settle an 11-year-old legal wrangling. Johnson and Johnson had claimed that Guidant Corp. — a medical device company that Boston Scientific acquired — did not play by the books when it chose to sell itself to Boston Scientific for a higher offer. Johnson & Johnson had had its eyes on the company back in 2004.
The amount, while sizable, is puny compared to the over $7 billion Johnson & Johnson was seeking in damages to dismiss the merger lawsuit pertaining to Guidant, which dates back to 2004. The case resurfaced after almost 10 years when Johnson & Johnson sued Boston Scientific for an amount that is almost half of Boston Scientific’s market cap.
Johnson & Johnson has now agreed to dismiss the lawsuit without having Guidant acknowledge any liability. Boston Scientific, on the other hand, has also agreed to not bring up patent infringement cases related to certain Johnson & Johnson’s stent products. Boston Scientific will include the settlement charges in its fourth-quarter results. Earlier this month, the company reported that its fourth-quarter earnings came out to be $87 million, or six cents a share, on revenue of $1.89 billion.
The lawsuit dates back to 2006 when Boston Scientific snatched Guidant by extending a last-minute bid over and beyond what Johnson & Johnson was willing to offer. Johnson & Johnson, back at that time, had worked almost 18 months to acquire Guidant in an attempt to get its foothold in a market that regulates errant heart rhythms. Boston Scientific was able to step in and lap up Guidant when Johnson & Johnson lowered its offer to $21.5 billion, after Guidant started facing product-quality problems.
The terms of the agreement between the two companies included the clause that Guidant will not seek higher offers. However, Guidant, as per the agreement, could entertain an unsolicited offer.
Johnson & Johnson, which was still interested in adding Guidant into the company’s portfolio, raised its offer two times, only to lose out to Boston Scientific, which bought out the company for $27 billion.
Boston Scientific appeased antitrust regulators by stating that it will divest Guidant's vascular business, which was bought out by Abbott Laboratories(NYSE:ABT). Johnson & Johnson claimed that Abbott would not have gone on to declare its intent to purchase the business without having access to financial information; therefore, Guidant violated the clause in the merger agreement by seeking a higher offer.
Investors believe that Johnson & Johnson dodged a bullet through its inability to acquire Guidant, as evident from the fact that Boston Scientific was not able to reap any benefits from the acquisition. Boston Scientific has suffered due to a huge debt load and strong competition in the market. The economic downturn that followed the acquisition didn’t help either; the company's stock, which was changing hands for mid-to-late $20 apiece in the months prior to the finalization of the deal, hit $15 apiece after the deal was sealed.
The news of the settlement, however, was received well by the market; Boston Scientific shares were up 10.24% to $16.36 in extended trading Tuesday.
“This case was about playing by the rules and today’s $600 million settlement, which was reached after all of the evidence was presented at trial and before the court rendered its decision, reflects how important it is for parties involved in merger agreements to fully live up to their obligations,” stated Ernie Knewitz, a spokesman for Johnson & Johnson.
Including $705 million breakup fee that Guidant previously paid, he added: “Johnson & Johnson has now received total payments of $1.305 billion in regard to this matter.”
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Boston Sci Pays J&J $600M To Settle Guidant Merger Suit
| Law360
By Daniel Siegal
Boston Scientific Corp. announced Tuesday it would pay Johnson & Johnson $600 million to settle claims that acquisition target Guidant Corp. breached a contract by scuttling a proposed $21.5 billion merger with J&J, the deal coming before a judge could rule in the case’s concluded bench trial.
Boston Scientific’s announcement said it would pay the $600 million in exchange for J&J dismissing its breach of contract suit against Guidant without Guidant admitting liability. Tim Pratt, Boston Scientific general counsel, said in a statement that the company was happy to resolve the case, which last month concluded a bench trial.
"We feel this settlement is in the best interests of the company and its shareholders," Pratt said. "We are pleased to end this longstanding litigation between Guidant and Johnson & Johnson, and to continue focusing on delivering innovative products and solutions to physicians and patients."
On Tuesday, Ernie E. Knewitz, J&J’s vice president of media relations, said in a statement that the company had achieved its goals with the settlement, and noted that including a $705 million breakup fee Guidant previously paid, J&J has now received $1.305 billion in connection with the failed merger.
“This case was about playing by the rules, and today’s $600 million settlement, which was reached after all of the evidence was presented at trial and before the court rendered its decision, reflects how important it is for parties involved in merger agreements to fully live up to their obligations,” he said.
J&J filed suit in 2006, contending it suffered more than $7 billion in damages after its proposed merger with Guidant fell apart. Boston Scientific ultimately purchased Guidant for $27 billion, and Guidant's heart stent business was sold to Abbott Laboratories to satisfy antitrust concerns. J&J argued the only way Boston Scientific prevailed was through Guidant’s leaking of confidential information to Abbott, in violation of the pending merger agreement with J&J.
A key sticking point in the case was a conference call between Boston Scientific and market analysts Jan. 9, 2006, one day after the company submitted its offer to Guidant. During the call, Boston Scientific Chief Financial Officer Larry Best said the company had partially inspected Guidant’s vascular business but that Abbott “had the opportunity to do a much deeper dive on due diligence.”
J&J claimed the statement made it suspicious that Guidant had provided Abbott with confidential information in violation of a nondisclosure pact.
Guidant contended that it didn’t breach the merger agreement with J&J, because Abbott was a key part of Boston Scientific’s counteroffer and was acting in a representative capacity.
In late January, the parties concluded their bench trial before U.S. District Judge Richard Sullivan, who said on Jan. 21 that a ruling would be forthcoming.
But before that ruling could be issued, the parties resolved the matter, under which Boston Scientifc has also agreed not to bring patent infringement claims against J&J in relation to its S.M.A.R.T. stent products, according to Tuesday’s announcement.
Johnson & Johnson is represented by Harold P. Weinberger, John P. Coffey, Joel M. Taylor, Jennifer Diana and Michelle Ben-David of Kramer Levin Naftalis & Frankel LLP.
Guidant is represented by Stuart J. Baskin, Daniel Laguardia and John Gueli of Shearman & Sterling LLP and David Boies II and William Ohlemeyer of Boies Schiller & Flexner LLP.
The case is Johnson & Johnson v. Guidant Corp. et al., case number 1:06-cv-07685, in the U.S. District Court for the Southern District of New York.
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