Mar 16, 2001
Guidant Voluntarily Halts Production and Sales of Endovascular Graft

Patients With Implanted Devices Not Affected by this Action

Indianapolis, IN and Menlo Park, CA - Guidant Corporation (NYSE and PCX: GDT) today announced it has voluntarily halted production and sales of its ANCURE® System. The ANCURE System is designed to provide a less invasive approach than conventional surgery for treating life threatening abdominal aortic aneurysms (AAA). This action was taken as a result of Guidant's identification of certain deficiencies in the company's ANCURE-related regulatory processes and communications with the U.S. Food and Drug Administration (FDA). These regulatory deficiencies were primarily related to the deployment system of the ANCURE product. "The FDA has been notified and a meeting has been scheduled to discuss these issues," said Ron Dollens, president and chief executive officer. "This review is a top priority and we will be doing everything we can to correct the deficiencies and their causes and to resume normal operations as soon as possible."

Patients who have received ANCURE ENDOGRAFT® implants to date are not affected by this action. The safety of the implanted product is supported by extensive positive long-term data. The problems are limited to the regulatory issues associated with the deployment system of the product. As a result, the company does not recommend that physicians take any actions with regard to implanted devices, other than to continue normal follow-up. Existing inventories of product in hospitals will be recalled. Guidant is working closely with the FDA to address all identified deficiencies in order to quickly resume production and availability of the ANCURE system.

Sales of the ANCURE system are approximately 3 percent to 4 percent of Guidant's sales and are a minor contributor to Guidant's overall earnings. The company expects to take a special charge to first quarter earnings of $12 million to $15 million to cover expenses associated with this recall. Excluding this charge, the company is still comfortable with first quarter consensus earnings estimates.

A global leader in the medical technology industry, Guidant provides innovative, minimally invasive and cost-effective products and services for the treatment of cardiac and vascular disease.

his release contains forward-looking statements about the company's future financial results and the company's prospects. This information is based upon management's current expectations, but 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-Q filed November 2000.