Guidant Corporation was cheered yesterday after the US Food and Drug Administration gave the green light for its re-entry into the lucrative heart failure device market, potentially clearing the way for its $24.5 billion dollar merger into Johnson & Johnson [[26/05/05c]].
The company was badly hit earlier this year after it was forced to withdraw 50,000 of its defibrillators because of a short circuit defect [[21/06/05e]]. Although J&J stood by the deal [[21/06/05e]], this latest news will help alleviate any lurking investor fears of the deal collapsing, particularly after Guidant last month also warned of a defect affecting some of its pacemakers [[20/07/05j]].
Guidant now expects to resume the worldwide distribution of its defibrillators this week, and reach full product supply within the month. Its stock closed yesterday at $71.36, still some way off the $76 per share offered by J&J.