Nov. 6, 2009 (PR Newswire) -- NATICK, Mass., Nov. 6 /PRNewswire-FirstCall/ -- Boston Scientific Corporation (NYSE: BSX) today announced that it has reached an agreement in principle with the U.S. Department of Justice (DOJ) related to product advisories issued by its Guidant subsidiary in 2005. The alleged conduct and product sales occurred prior to Boston Scientific's 2006 acquisition of Guidant.

Boston Scientific had previously disclosed an investigation by the U.S. Attorney's Office in Minneapolis into alleged violations of the Food, Drug, and Cosmetic Act by Guidant. Under the terms of the agreement, Guidant will plead to two misdemeanor charges related to failure to include information in reports to the U.S. Food and Drug Administration (FDA), and Boston Scientific will pay $296 million on behalf of Guidant.

U.S. Generally Accepted Accounting Principles (GAAP) require that this agreement be recorded in the third quarter, as it occurred after the October 19 release of the Company's third quarter financial results and before the filing of the Company's Quarterly Report on Form 10-Q. Accordingly, the Company has updated its financial results for the third quarter and nine months ended September 30, 2009, recording a third quarter charge of $294 million, on both a pre-tax and after-tax basis. This amount represents the $296 million charge associated with the agreement net of a $2 million reversal of a related accrual.

"We are pleased this investigation has been resolved," said Ray Elliott, President and Chief Executive Officer of Boston Scientific. "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."

The only products involved in the investigation were the VENTAK PRIZM(®) 2, the CONTAK RENEWAL(®) and the CONTAK RENEWAL 2 devices, which were the subjects of the 2005 product advisories.

The table below reconciles the Company's updated third quarter and year-to-date 2009 financial results to those previously reported. The adjustments in the table are also reflected in the Company's Form 10-Q, which will be filed later today.

Q3 2009 Results
------------------------------
Litigation-
Previously   Related      As
(in millions, except per share data)     Reported     Charge    Updated
------------------------------------     --------     ------    -------
Income (loss) before income taxes          $250       $(294)      $(44)
Net income (loss)                          $200       $(294)      $(94)

GAAP EPS                                  $0.13      $(0.19)    $(0.06)
Adjusted EPS                              $0.19                  $0.19

Q3 2009 YTD Results
------------------------------
Litigation-
Previously   Related      As
(in millions, except per share data)     Reported     Charge    Updated
------------------------------------     --------     ------    -------
Income before income taxes                 $333       $(294)       $39
Net income                                 $345       $(294)       $51

GAAP EPS                                  $0.23      $(0.20)     $0.03
Adjusted EPS                              $0.58                  $0.58

In addition, the Company has updated its full-year 2009 GAAP earnings per share guidance as a result of recording this charge. The Company now expects net income on a GAAP basis of $0.23 to $0.28 per share for the full year ending December 31, 2009. The Company continues to expect adjusted earnings -- excluding intangible asset impairment charges; acquisition-, divestiture-, and litigation-related net charges; restructuring and restructuring-related costs; discrete tax items; and amortization expense -- of between $0.75 and $0.79 per share. The table below reconciles the Company's updated full-year guidance to that previously reported.

2009 Full-year Guidance
------------------------------
Litigation-
Previously   Related      As
Reported     Charge    Updated
--------     ------    -------
GAAP EPS - low                            $0.43      $(0.20)     $0.23
GAAP EPS - high                           $0.48      $(0.20)     $0.28

Adjusted EPS - low                        $0.75                  $0.75
Adjusted EPS - high                       $0.79                  $0.79

Boston Scientific is a worldwide developer, manufacturer and marketer of medical devices whose products are used in a broad range of interventional medical specialties. For more information, please visit: www.bostonscientific.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Forward-looking statements may be identified by words like "anticipate," "expect," "project," "believe," "plan," "estimate," "intend" and similar words. These forward-looking statements are based on our beliefs, assumptions and estimates using information available to us at the time and are not intended to be guarantees of future events or performance. These forward-looking statements include, among other things, statements regarding financial performance, resolution of government proceedings, regulatory compliance and product performance. If our underlying assumptions turn out to be incorrect, or if certain risks or uncertainties materialize, actual results could vary materially from the expectations and projections expressed or implied by our forward-looking statements. These factors, in some cases, have affected and in the future (together with other factors) could affect our ability to implement our business strategy and may cause actual results to differ materially from those contemplated by the statements expressed in this press release. As a result, readers are cautioned not to place undue reliance on any of our forward-looking statements.

Factors that may cause such differences include, among other things: future economic, competitive, reimbursement and regulatory conditions; new product introductions; demographic trends; intellectual property; litigation; financial market conditions; and, future business decisions made by us and our competitors. All of these factors are difficult or impossible to predict accurately and many of them are beyond our control. For a further list and description of these and other important risks and uncertainties that may affect our future operations, see Part I, Item 1A - Risk Factors in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission, which we may update in Part II, Item 1A - Risk Factors in Quarterly Reports on Form 10-Q we have filed or will file hereafter. We disclaim any intention or obligation to publicly update or revise any forward-looking statements to reflect any change in our expectations or in events, conditions, or circumstances on which those expectations may be based, or that may affect the likelihood that actual results will differ from those contained in the forward-looking statements.