A federal judge has denied a motion to dismiss a breach-of-contract claim brought by Johnson & Johnson against Boston Scientific regarding the latter's acquisition last year of heart-device manufacturer Guidant. U.S. District Judge Gerard Lynch did, however, grant Boston Scientific's motion to dismiss claims that it was guilty of tortious interference as well as a claim against Guidant that it had acted in bad faith. He also granted a motion by co-defendant Abbott Laboratories, which had entered into a divestiture agreement with Boston Scientific concerning a Guidant unit, that it be dismissed from the suit. In April 2006, Boston Scientific beat out J&J and bought Guidant for $27 billion. Abbott bought Guidant's vascular and endovascular business for $4.1 billion, a sale that removed an antitrust threat from Boston Scientific's purchase of Guidant. J&J sued Boston Scientific and Abbott five months later, seeking at least $5.5 billion in damages, alleging that Guidant had leaked confidential information to Abbott. "We're pleased that the majority of the claims were dismissed," said Boston Scientific spokesman Paul Donovan. "We continue to believe the remaining claim is without merit." In related news, the American Society of Clinical Oncology has asked Medicare to lift regulations that block the use of anemia drugs made by Amgen and J&J. Amgen lost over a quarter of its value this year after its anemia treatments Aranesp and Epogen were linked to heart risks.
Sources: Reuters, Dow Jones, Bloomberg I, II
Commentary: Boston Scientific: A Buyout Waiting to Happen • Boston Scientific Settles Guidant Suits for Less Than Expected • Boston Scientific Fails to Have Punitive Charges Dismissed
Stocks/ETFs to watch: BSX, JNJ, ABT, AMGN. Competitors: MDT, STJ. ETFs: IHI
Earnings call transcript: Boston Scientific Q2 2007
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