Company notifies doctors of ICD battery issue

By Susan Kelly

CHICAGO (Reuters) - Boston Scientific Corp. has notified doctors that some of its implantable heart defibrillators contain batteries that could deplete early, shortening the life span of the devices.

There have been no patient deaths or serious injuries associated with the battery voltage problem, the company said in a letter to doctors dated April 5 and posted on the Web site of its Guidant unit.

Accelerated battery depletion was found to have occurred in 19 of about 73,000 devices in the Vitality family of implantable cardioverter defibrillators (ICDs) that restore heart rhythms and Contak Renewal line of cardiac resynchronization therapy devices, the company's most sophisticated devices to treat heart failure.

Boston Scientific bought Guidant last year for $27 billion to acquire its portfolio of heart rhythm management devices. But high-profile recalls of some of the devices have depressed sales. More than 100,000 Guidant heart rhythm devices were recalled between 2005 and 2006.

Wall Street analysts said the latest safety advisory was yet another setback for a company that has fought to improve quality controls and regain market share after the series of recalls.

"Given the backdrop of slowing industry growth as a result of these advisories over the last couple of years, here's another notice that could make investors think the long-awaited turnaround in the ICD business is not at hand yet," said Piper Jaffray analyst Tim Nelson.

In its letter to doctors, Boston Scientific estimated that less than 2 percent of the devices identified are at risk for early battery depletion. The average ICD lasts five to seven years.

The letter provides guidelines for identifying which patients have devices with faulty batteries and recommends monitoring them every month instead of the usual every three months.

"Basically, you may get your device replaced a little bit earlier than normal," said Guidant spokeswoman Annette Ruzicka.

A spokeswoman for the U.S. Food and Drug Administration said the agency was assessing the latest advisory.

"FDA is aware of this and is monitoring the situation to ensure that the company's actions are adequate to protect the public. We will be posting information to our Web site soon," said FDA spokeswoman Heidi Rebello.

JP Morgan analyst Michael Weinstein said FDA would likely classify Boston Scientific's notification as a Class II recall.

"We view this latest field action as a modest setback to Boston's CRM franchise, which all of our checks and survey work suggests had regained some lost momentum and increased market share in recent months," Weinstein wrote in a note to clients.

Trading in the options on shares of Boston Scientific was heavier than normal on Monday, which analysts said may have been related to the safety advisory or positioning ahead of the company's earnings release later this month.

(Additional reporting by Susan Heavey in Washington and Doris Frankel in Chicago)