jeff.swiatek@indystar.com

Guidant Corp. admitted Friday that flaws in its heart defibrillators were more widespread than previously divulged and issued a recall for 50,000 of the devices.

The recall, worked out with the Food and Drug Administration, affects units made as recently as last year and raises new questions about the future of Guidant's proposed acquisition by Johnson & Johnson.

At least two patients have died -- one more than previously acknowledged by the company -- and the implantable device failed in 43 other patients because of the problems linked to the recall, the Indianapolis medical device maker said.

Flaws in two of the defibrillator lines can lead them to short-circuit when they are supposed to deliver a life-saving shock.

The FDA is continuing to look at the situation to determine whether Guidant properly disclosed the problems.

The voluntary recall, which leaves it up to doctors whether to replace the devices, reveals problems more far-reaching than Guidant disclosed last month in a letter sent to U.S. doctors about a defect in its Ventak Prizm 2 defibrillators made before 2002.

That problem caused one patient death, in March of this year, the company said last month.

But Guidant's recall notice indicates the flaw persisted in another line of defibrillators, the Contak Renewal. A patient with a Contak defibrillator died May 30 because of the short-circuit problem, and 14 other Contak devices failed because of it, the company said. Guidant didn't disclose any information about the patient who died.

"I am not in a position to comment further," Guidant spokesman Steven Tragash said.

The recall includes:

• 17,000 Prizm 2 units, including 13,900 in the United States.

• 11,900 Contak Renewal devices built on or before Aug. 26, 2004, including 6,700 in the United States.

• 21,000 Ventak Prizm AVT, Vitality AVT and Renewal AVT devices, including 18,000 in the United States.

The AVT group of defibrillators, which have atrial therapy capabilities, may contain a flaw because of a software memory error, which so far has caused two device failures, Guidant said. Neither failure led to patient injury, the company said.

Guidant is one of the world's three largest sellers of heart defibrillators and pacemakers, which help correct the heartbeats of patients with weak or erratically beating hearts.

Its defibrillator and pacemaker business is based in St. Paul, Minn., where many of the devices also are made.

Guidant President Ronald W. Dollens said in a statement: "We will work with physicians as they decide how best to treat their patients. Patient safety is paramount and our highest priority."

Only a portion of the 50,000 patients with the recalled units will likely choose to replace them, which will limit the cost of the recall to Guidant, said Phil Nalbone, a medical technology analyst for RBC Capital Markets investment firm in San Francisco.

The flaws in the devices are rare, amounting to well under 1 percent of units sold, Guidant said.

The failure rate "is well under what we have come to expect from sophisticated devices of this nature," Nalbone said.

He predicted the cost of the recall to Guidant would run in the tens of millions of dollars. That amount is "certainly nothing onerous, given Guidant's cash balances," he said. Guidant listed $1.5 billion cash on hand at the end of 2004.

"This creates a lot of angst for patients and their families . . . but at the end of the day, I think it will be a very manageable financial issue for Guidant," Nalbone said.

Guidant did not discuss the recall's potential cost.

The recall notice comes after "intensive discussions" FDA officials have had with Guidant since learning about the Prizm 2 flaw last month, said FDA spokeswoman Julie Zawisza.

During those discussions, the FDA started asking whether the Prizm 2 flaw might happen in other defibrillator lines, she said.

"The answer was, 'Yes, it did,' " she said. During those discussions, Guidant told the FDA of a second patient death, she said.

"We really felt we had to get that information out to the public" about the flaw in the Contak Renewal defibrillators, she said.

She said "there's still a lot to be discussed and worked out" with Guidant, including "what the company reported (to the FDA), and when, and was that all done properly."

Guidant has said it reported all device failure incidents to the FDA as required by law.

Guidant has run afoul of FDA reporting regulations in the past.

In June 2003, the device maker pleaded guilty in federal court to 10 felony charges involving hiding from the FDA thousands of reports of medical problems with an abdominal aortic graft product.

The Justice Department fined Guidant $92 million for those violations and required the company to adhere to a "corporate integrity agreement" that included a code of conduct and a training program for employees in reporting device malfunctions to the FDA.

The FDA's Zawisza said she didn't know whether Guidant has lived up to that integrity agreement.

The Minneapolis Star Tribune newspaper reported Thursday that the U.S. Department of Health and Human Services is looking into whether Guidant adhered to the integrity agreement in handling the defibrillator problems.

The British Medicines and Healthcare Products Regulatory Agency also "is making inquiries with Guidant about the . . . defibrillator problem and its significance to U.K. patients," agency spokesman Stephen Hallworth said in an e-mail.

Hallworth said Guidant didn't notify the British regulatory agency of the redesign of the Prizm 2 in 2002 to correct the flaw, nor did the company tell the agency about failures that prompted the manufacturing changes.

Johnson & Johnson reaffirmed on Friday its intention to close the $25 billion takeover of Guidant in the third quarter of this year. But the New Jersey health products giant added that "the events raised by Guidant are serious matters, and Johnson & Johnson is engaged in discussions with Guidant to help the company understand the issues."

Nalbone, the industry analyst, said, "It does look as if Johnson & Johnson has been taken somewhat by surprise" by the recall. But "it is not a deal-breaker."

Guidant's stock price fell $1.20 a share Friday to $72.46. Johnson & Johnson shares rose 26 cents to $66.56

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