Guidant gets FDA nod for smaller pacemaker
Tuesday August 8, 1:50 pm Eastern Time
(UPDATE: Adds executive comments, updates stock activity)
By Kathy Fieweger
CHICAGO, Aug 8 (Reuters) - Cardiovascular device maker Guidant Corp. (NYSE:GDT - news) on Tuesday received approval from the U.S. Food and Drug Administration to sell a smaller dual-chamber heart pacemaker device called the PRIZM 2.
Guidant said it plans to launch the new implantable cardioverter defibrillator device, which is 20 percent smaller than its nearest competitor, in the fourth quarter. It hopes to capture more share of the $1.8 billion market for these devices.
Guidant's stock rallied sharply on the news, up 3-5/16 to 60 1/8 on the New York Stock Exchange. J.P. Morgan analyst Michael Weinstein attributed the gains to the earlier-than-expected approval from the FDA.
``We were assuming an October approval,'' he said.
Patients with too-fast heart rhythms experience palpitations, dizziness and fainting. Sudden cardiac death can result. Dual-chamber pacemakers have two leads to better determine where an abnormal heartbeat is originating. The defibrillator can then shock the rhythm back to normal.
The PRIZM 2 also lasts much longer, up to 5.6 years, Guidant executives said in a conference call. That is twice as long as competing devices.
``We expect VENTAK PRIZM 2 to build on the success of the VENTAK PRIZM system we launched in February this year,'' said Fred McCoy, president of Guidant's Cardiac Rhythm Management Group.
Guidant plans to implant the devices in 30 patients for 30 days and collect data on how they are faring. The first implant is targeted for this month.
``Meanwhile we're going to be building up launch quantities,'' McCoy said.
Daniel LeMaitre, analyst at Merrill Lynch Global Securities, said the approval was good news. Combined with potential fourth quarter approval of the Tetra coronary stent, sales of the PRIZM 2 could make for a ``pretty good'' fourth quarter for Indianapolis-based Guidant, he said.
Production schedules remain to be laid out, however. ``I don't think they're ready to rock 'n roll yet,'' LeMaitre said.
Shares in Minneapolis-based Medtronic Inc. (NYSE:MDT - news), which sells the market-leading, competing GEM II dual-chamber device, fell 13/16 to 55 on news of the Guidant approval.
LeMaitre said the PRIZM 2 will still be about 20 percent smaller than Medtronic's next-generation GEM III, giving it an edge.
The PRIZM 2 is implanted under the skin near the collarbone to continuously monitor a patient's heart rhythm and deliver therapy when needed. |
