Guidant Stent Found to Infringe Medinol Patent

Last September, Boston Scientific Corp. (Natick, MA) ended a 10-year contentious relationship with Israeli stent manufacturer Medinol Ltd. (Tel Aviv, Israel) after paying $750 million to settle a long-standing patent dispute. But now, with its acquisition of Guidant Corp. (Indianapolis) a near certainty, Boston Scientific finds itself embroiled with Medinol yet again.

In late February, a federal court in the southern district of New York ruled that a coronary stent manufactured by Guidant infringes on a Medinol patent. Although many industry analysts say Medinol’s case is not particularly strong, patent infringement cases in the coronary stent sector have historically been protracted, costly struggles.

If Medinol’s claim holds up, the company is expected to seek royalty payments representing as much as 20% of all infringing stent sales. Neither Guidant nor Medinol issued a public comment on the dispute, but Paul Donovan, Boston Scientific’s senior vice president for corporate communications said, “We intend to fight this vigorously.”

The dispute with Medinol is yet another fire on Boston Scientific’s doorstep as it scrambles to gain shareholder and regulatory approval to close the Guidant deal while moving to resolve its manufacturing quality issues with FDA.

The Federal Trade Commission and the European Commission have received all the required documentation concerning the details of the proposed merger, and a positive ruling from both authorities is expected before the end of the month. Boston Scientific and Guidant shareholders will vote on the merger on March 31.

In related interventional cardiovascular device news, Boston Scientific presented the final module of the premarket approval application for its next-generation Liberté stent to FDA. Approval is expected in the fourth quarter of this year, but not until the company resolves its manufacturing quality issues with the regulatory agency.

Additionally, Guidant announced the first human clinical trials of what the company describes as a “fully bioabsorbable” drug-eluting coronary stent. The everolimus-coated device will be evaluated for the treatment of coronary artery disease in the Absorb clinical trial, which will enroll up to 60 patients in Belgium, Denmark, France, The Netherlands, New Zealand, and Poland.

Guidant's Capek: A bioabsorbable alternative.

According to John M. Capek, PhD, president of Guidant’s vascular intervention unit, “This study will lay the foundation for our continued work toward offering a valuable alternative to current drug-eluting stent implants that reside permanently in the treated coronary artery.” The stent in the study is designed and manufactured by Bioabsorbable Vascular Solutions, a Guidant subsidiary.

In the cardiac rhythm management sector, Boston Scientific named the members of the team that will be tasked with absorbing Guidant and building back its market share, which experienced significant erosion during 2005 due to product malfunctions and the recall of nearly 300,000 devices. Members include Mark Bartell, Guidant’s president of U.S. sales operations; Fred Colen, Boston Scientific’s chief technology officer; and William McConnell, Guidant’s chief information officer. The team will report directly to James Tobin, Boston Scientific president and CEO. Fred McCoy, president of Guidant’s cardiac rhythm device division, announced his decision to retire.

The $27 billion merger of Boston Scientific and Guidant is now expected to close the week of April 3. Boston Scientific has hinted that it might rebrand Guidant, although it has given no indication as to what Guidant’s name will be in the new company structure.

© 2006 Canon Communications LLC

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