Jan 29, 2001
Guidant to Focus Heart Failure Efforts on Cardiac Resynchronization Therapy

Opts not to Acquire Impulse Dynamics Technology; Will Recognize Charge in Fourth Quarter of 2000

Indianapolis, IN and St. Paul, MN - Guidant Corporation (NYSE and PCX: GDT), a world leader in medical technology, today announced that it will focus its heart failure research and development efforts on cardiac resynchronization therapy and will not exercise its option to acquire exclusive rights to certain Impulse Dynamics, N.V. experimental heart therapies. Under the agreement with Impulse Dynamics, Guidant investigated this new heart failure therapy during an exclusive option period. In its year 2000 fourth quarter results, Guidant will take a charge relating to the unexercised option totaling approximately $127 million, including expenses. As a result of the decision not to exercise the option, Guidant will not incur the $300 million additional purchase price or any future payments relating to the technology.

"Guidant is increasingly encouraged by our progress in our research and development in cardiac resynchronization therapy for the treatment of heart failure," commented Fred McCoy, president, Guidant Cardiac Rhythm Management Group. "As the leader in the search for medical technology solutions for heart failure, we conducted a thorough review of the Impulse Dynamics technology. As is true with many of the research endeavors we undertake in the ongoing pursuit of medical breakthroughs, we have learned much from our review. That said, we have decided not to pursue further investigation of this technology. Our growing knowledge of the technology that will effectively treat heart failure convinces us that focusing on our cardiac resynchronization therapy holds extraordinary promise in combating this devastating condition," McCoy added.

Products using Guidant's cardiac resynchronization therapy are currently market released in Europe and are under clinical evaluation in the United States. In Europe, Guidant has completed the CONTAK Registry, a post-market surveillance study of 1,000 heart failure patients. The CONTAK Registry collected data about the performance of Guidant's CONTAK CD(tm) device, the CONTAK TR(tm) device and the EASYTRAK(tm) coronary venous lead system for heart failure. Results from this registry were separately announced on Jan. 26.

The registry data showed that heart failure patients using Guidant's cardiac resynchronization technology had marked improvement in their heart failure condition. Patient status was evaluated in terms of the New York Heart Association (NYHA) classification system, which measures the severity of heart disease in terms of symptoms experienced during exercise. NYHA classes range from Class I, in which patients have no symptoms with activity, to Class IV, in which patients experience serious symptoms at rest.

In the CONTAK Registry, 60 percent of the Guidant patients improved at least one NYHA functional class at six-month follow-up examination. Ninety-eight percent of patients showed improved or stable NYHA Class scores at six months.

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. For persons over the age of 65, heart failure is the number one cause of hospitalization and the number one cause of death.