Jun 12, 2003
EndoVascular Technologies Enters into Settlement with U.S. Department of Justice

No Risk to Patients Implanted with ANCURE ENDOGRAFT System

INDIANAPOLIS - EndoVascular Technologies, Inc. (EVT), a subsidiary of Guidant Corporation, today announced that it has entered into a settlement agreement with the U.S. Department of Justice into matters relating to the company's ANCURE® ENDOGRAFT® System for the treatment of abdominal aortic aneurysms (AAA).

Under the terms of the agreement, EVT has agreed to make a payment of $43.4 million and an additional $49 million civil settlement to the government. EVT has also agreed to plead guilty to 10 felony counts, including nine for shipping misbranded products and one count of a former employee making false statements to the government. The expenses associated with this settlement were recorded in prior periods.

Following the company''s voluntary recall of the product in March 2001, EVT implemented thorough corrective actions to address certain regulatory compliance deficiencies. The product was reintroduced to the market following Food and Drug Administration approval in August 2001. The issues outlined in the plea agreement pertain only to the delivery system of the ANCURE device prior to the company''s voluntary recall, and do not relate to the ANCURE graft once it has been implanted. No patient with the ANCURE ENDOGRAFT implant is at risk as a result of this matter, and the implant continues to demonstrate excellent long-term clinical results. More than 18,000 patients worldwide have been implanted with the ANCURE ENDOGRAFT System.

While the settlement agreement includes a civil payment, the company remains in discussions with the Office of the Inspector General of the U.S. Department of Health and Human Services (HHS) concerning the nature and scope of any potential agreement.

The company will provide an update as to the future of its AAA business next week.