Jun 26, 2003
Guidant's Everolimus Eluting Stent Clinical Data Triggers Milestone Payment

Financial Guidance Updated Based on Strong Sales Companywide; Quarterly Dividend to be Paid June 30

INDIANAPOLIS - Guidant Corporation (NYSE: GDT) today announced that the company has made a $10 million milestone payment to Biosensors based on the six-month clinical data of the first everolimus-eluting stent trial, FUTURE I. The milestone is based on final adjudication of the six-month MACE (Major Adverse Cardiac Events) rate being equal to or less than the metallic stent in the control arm. Preliminary results of the six-month clinical data were presented at the Paris Course on Revascularization in May. The payment will be accounted for as in-process research and development (IPRD).
Financial Guidance

Guidant also announced today that continued sales strength across all business areas will allow the company to meet or exceed the upper end of previously stated second quarter sales guidance. This increase in revenue guidance is despite the discontinuance of sales from its ANCURE® ENDOGRAFT® System, which will be separately reported as discontinued operations. Previously, the company had established a range of $860-$900 million in sales for the second quarter.

Earnings per share for the quarter will be negatively affected by the previously announced special items including the discontinuance of the ANCURE ENDOGRAFT System and the previously announced litigation settlements, as well as the everolimus eluting stent IPRD milestone noted above. These special items could amount up to $1.00 per share, yielding a net loss for the quarter of up to $0.45 per share as reported under generally accepted accounting principles. Excluding these items, earnings per share should meet or exceed the top of the previously stated range of $0.50 to $0.55 per share, as adjusted.
Second Quarter Dividend Payment

On June 30, 2003, Guidant will pay a second quarter dividend of $0.08 per share on outstanding common stock to shareholders of record as of June 16, 2003. The dividend payment was declared on February 18, 2003, by Guidant''s board of directors.

Guidant Corporation pioneers lifesaving technology, giving an opportunity for better life today to millions of cardiac and vascular patients worldwide. The company, driven by a strong entrepreneurial culture of 11,000 employees, develops, manufactures and markets a broad array of products and services that enable less invasive care for some of life''s most threatening medical conditions. For more information visit www.guidant.com.

Guidant provides guidance on an adjusted basis because Guidant's management believes that the presentation provides useful information to investors. Among other things, it may assist investors in evaluating the company's operations period over period - which is also the basis on which it generally is most reasonable to forecast results. This measure may exclude such items as business development activities, strategic developments and significant litigation. Business development activities can include in-process research and development resulting from entry into new agreements or attainment of performance milestones. Each of these items may be highly variable, difficult to predict, and of a size that sometimes has substantial impact on the company's reported operations for a period. Generally, prospective quantification of them is not reasonable. Management uses this measure internally for planning, forecasting and evaluating the performance of the business, including allocating resources and to evaluating results relative to employee performance compensation targets. Investors should consider non-GAAP measures in addition to, not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP.

This release includes forward-looking statements concerning financial guidance, business prospects, and other product developments. The statements are based on assumptions about many important factors, including general business conditions; market trends and competition, including sales growth rates for defibrillator and pacemaker systems and company stent sales trends in light of the likely near-term competitive introduction of drug eluting stents; satisfactory clinical and regulatory progress; economic conditions, including exchange rates; litigation developments and the factors listed on exhibit 99.1 to Guidant''s 10-K. As such, they involve risks that could cause actual results to differ materially. The company does not undertake to update its forward-looking statements.