Device Trouble Trips Guidant

Guidant's (GDT Quote) shares continued to trade lower Monday following a recall of certain implanted defibrillators, and at least one analyst said the medical-devices maker could now be looking at a lower takeover price from Johnson & Johnson (JNJ Quote).

On Monday, Guidant shares were down $1.51, or 2%, to $70.95. The company said Friday that 50,000 of its implantable cardiac defibrillators in service could be subject to defects that have led to 45 malfunctions. The company has warned doctors worldwide about possible problems with some of the devices. Two patients with defibrillators covered by the notification have died.

After Guidant disclosed the problems with the devices, Johnson & Johnson said it "continues to work toward a third quarter 2005 close of the acquisition of Guidant Corporation. Nonetheless, the events reported by Guidant are serious matters, and Johnson & Johnson is engaged in discussions with Guidant to help the company understand the issues." ...