Feb 24, 2004
Guidant Gains Immediate Access to Drug Eluting Stent Market

Agreement with Cordis, a Johnson & Johnson Company, Strengthens Guidant''s Broad Product Portfolio; Live Webcast Available Today at 9:00 AM EST

Indianapolis, Ind. - Guidant Corporation (NYSE: GDT), a world leader in the treatment of cardiac and vascular disease, today announced that the company has entered into an agreement with Cordis Corporation, a Johnson & Johnson company, to co-promote Cordis'' CYPHER(tm) Sirolimus-eluting Coronary Stent. The agreement grants Guidant immediate entry into the U.S. drug eluting stent market, which is expected to grow to more than $3 billion by year-end. In addition, Guidant will assist Cordis in the development of a CYPHER Stent that utilizes Guidant''s MULTI-LINK VISION® Stent Delivery System.

"This partnership leverages Guidant''s broad capability and Cordis'' innovative position in this important market," said Ronald W. Dollens, president and CEO, Guidant Corporation. "We believe this strategic agreement will provide significant benefits to both organizations by building upon the strengths of both companies'' sales, marketing and product development resources."

"We are enthusiastic about expanding our product offering with a drug eluting stent that has consistently demonstrated exceptional clinical results. In four years of clinical use in over half a million patients, the CYPHER Stent has proven to be safe and effective. The combination of our market-leading metallic stent - the MULTI-LINK VISION® Coronary Stent System - and an expansive product portfolio will allow Guidant to provide a full range of proven interventional therapies to physicians and patients," said Dana G. Mead, Jr., president, Guidant Vascular Intervention.

Under the terms of the agreement:

• Guidant''s sales and marketing resources, along with Cordis'', will promote the CYPHER Stent in the United States, with an option to pursue a similar arrangement in Japan in the future.
• Guidant will assist Cordis in the immediate initiation of development and regulatory plans for a CYPHER Stent that utilizes Guidant''s MULTI-LINK VISION Stent Delivery System.
• Guidant grants Cordis the option to co-promote a fully bioabsorbable stent currently under development by Guidant.
• Both companies agree to license certain patents and to settle all outstanding patent disputes between the companies.

Cordis retains clinical, manufacturing and order fulfillment responsibilities for the CYPHER Stent in the United States. The companies will both market and sell the CYPHER Stent, with each company bearing its own marketing and sales costs. Cordis will continue to report CYPHER Stent sales as revenue. Guidant will receive commissions from Cordis, which will be reported as stent revenue. Commission terms were not disclosed.

"This agreement places the CYPHER Stent into the hands of what together constitutes the largest and best-trained interventional cardiology sales force in the United States," said Guy J. Lebeau, M.D., Johnson & Johnson Company group chairman. "Each company brings unique strengths and expertise that will provide immediate benefits to doctors and patients."

Guidant''s Drug Eluting Stent Program Remains on Track

Guidant''s drug eluting stent program, which utilizes the drug everolimus, will not be impacted by the agreement with Cordis. The company expects to launch its CHAMPION(tm) Everolimus Eluting Stent System in Europe in the first quarter of 2005 and in the United States in the first quarter of 2006, pending regulatory approvals. Guidant also continues to make progress in the development of its next-generation drug eluting stent products, which will be based on the cobalt chromium MULTI-LINK VISION Coronary Stent System.

"Guidant further benefits from this agreement by gaining a greater understanding of drug eluting stent technology and the market - knowledge that will serve us well as we continue to make real progress in the development of our own drug eluting stents," said Mead. "We are confident that utilizing everolimus and sirolimus, two compounds in the macrolide family that have shown the ability to significantly inhibit cell proliferation, is a sound and sustainable strategy."

CYPHER Stent Significantly Reduces Restenosis

Developed and manufactured by Cordis, the sirolimus eluting CYPHER Stent currently is available in more than 80 countries and has been used by doctors to treat more than 500,000 patients worldwide. In clinical trials, the CYPHER Stent has demonstrated significantly reduced clinical rates of restenosis (re-blockage in the arteries following stent implantation procedure). In March 2004 at the American College of Cardiology Scientific Sessions in New Orleans, Cordis will present four-year follow-up data for the CYPHER Stent. No other drug eluting stent has a comparable breadth of data over similar time periods demonstrating the capability of significantly reducing restenosis.

Financial Guidance

This transaction will not have a material impact on first quarter earnings per share and will provide incremental earnings per share to Guidant of $0.04 - $0.06 in 2004.

Guidant reiterated first quarter 2004 sales and earnings guidance of $900 - $940 million and $0.52 - $0.57 per share. The company also reiterated full-year 2004 sales and earnings guidance of $3.75 - $3.95 billion and $2.40 - $2.55 per share.

Related GAAP earnings per share for the first quarter and the full year are $0.45 - $0.50 and $2.33 - $2.48 and include the impact of IPRD charges related to Guidant''s previously announced acquisition of AFx, inc.

Guidant provides earnings per share guidance on an adjusted basis from continuing operations 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 (including purchased in-process research and development (IPRD) at acquisition or upon attainment of milestones), strategic developments (including restructurings and product line changes) and significant litigation. Special 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. Based on existing business development arrangements, the company anticipates that it may record charges to earnings in addition to the $0.07 per share for the previously reported acquisition of AFx, inc., of up to $0.20 - $0.25 per share ($65 - $80 million after tax) of IPRD special items in 2004 based primarily on the potential attainment of various milestones in the development of drug eluting stents during the year. The company continues to evaluate business development opportunities, which may generate additional IPRD charges in the balance of the year, and other special items may arise. Further, because the company provides guidance for continuing operations, guidance does not reflect matters classified as discontinued operations. As with guidance, the company provides historical net income and earnings per share on an adjusted basis. Management uses all of these measures internally for planning, forecasting and evaluating the performance of the business, including allocating resources and 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.

Webcast Information

Guidant will conduct a live webcast today, Tuesday, February 24, at 9:00 AM EST. Participants on the call will include Guidant President and CEO Ronald W. Dollens; Keith E. Brauer, vice president finance and CFO; and Dana G. Mead, Jr., president, Vascular Intervention. The live webcast of Guidant''s conference call will be accessible through Guidant''s website at www.guidant.com/webcast. The webcast will be archived for future on-demand replay.

System requirements for the webcast include Internet Explorer 5.0 (or higher) or Netscape Navigator 4.0 (or higher). Users also should have the most recent version of Windows Media Player, which can be downloaded for free at http://www.microsoft.com/windows/windowsmedia/en/download/. Users may experience varying levels of performance based on their connection speed, system capabilities and presence of a corporate firewall. To ensure a connection, users should go to the program five to 15 minutes before its start.

About Guidant Corporation

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 12,000 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.

Forward Looking Statements

This release includes forward-looking statements concerning financial guidance, business prospects, and progress with drug eluting stents (DES). 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 competitive product introductions; satisfactory clinical and regulatory progress, particularly with respect to clinical trials relating to DES; any business development activities, including acquisitions that may result in IPRD; economic conditions, including exchange rates; litigation developments and the factors listed on exhibit 99 to Guidant''s most recent 10-Q. As such, they involve risks that could cause actual results to differ materially. The company does not undertake to update its forward-looking statements.