Boston Scientific agrees to $296m Guidant settlement

Boston Scientific Corp., the Natick medical device maker, said it has reached an agreement in principle with the US Justice Department under which it will pay $296 million to settle allegations that its Guidant subsidiary had violated the Food, Drug, and Cosmetic Act.

Boston Scientific, which had previously disclosed the investigation of Guidant by the US attorney’s office in Minneapolis, noted in a press release that Guidant's alleged misconduct occurred before Boston Scientific bought Guidant in 2006.

As a result of the settlement, Boston Scientific said it has updated its third-quarter results, recording a third-quarter charge of $294 million, and revised its guidance.

Boston Scientific said it is now reporting a third-quarter loss of $94 million versus a previously reported net income of $200 million.

The company said it now expects net income on a GAAP basis of 23 to 28 cents per share for the full year ending Dec. 31. Its previous guidance was in the range of 43 to 48 cents a share.

In addition, the terms of the agreement call for Guidant to plead to two misdemeanor charges related to failure to include information in reports to the US Food and Drug Administration, Boston Scientific said.

Boston Scientific president and chief executive Ray Elliott said in a statement: "We are pleased this investigation has been resolved. Guidant and its employees acted in good faith and believed they complied with applicable laws and regulations. We elected to resolve this matter so we could put it behind us and devote our full energies and resources to developing our innovative technologies."

Guidant makes defibrillators. Boston Scientific paid $27 billion to buy Guidant. (Globe Staff)