Boston Scientific to pay Johnson & Johnson

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BOSTON Scientific will pay $US600 million ($A767.31 million) to settle with drugmaker Johnson & Johnson over the medical device maker’s $US27 billion acquisition of Guidant Corp in 2006.

BOSTON Scientific on Tuesday said that Johnson & Johnson had wanted $US7 billion in damages but will dismiss its lawsuit. Under the settlement, Boston Scientific also won’t sue Johnson & Johnson over several stent products. Johnson & Johnson confirmed the terms of the settlement.

Boston Scientific shares rose $US1.65, or 11 per cent, to $US16.49 in aftermarket trading. Johnson & Johnson shares were unchanged at $US100.44. After Johnson & Johnson lost a bidding war for Guidant, it sued Boston Scientific and Abbott Laboratories, accusing them of interfering with a $US24 billion deal it had made for Guidant. Johnson & Johnson said Boston Scientific and Abbott induced Guidant to breach its agreement with the drugmaker. Guidant paid Johnson & Johnson $US705 million in return for backing out of the deal. To avoid antitrust problems, Boston Scientific had sold Guidant’s stent and vascular unit to Abbott for $US4.1 billion plus a $US900 million loan. A court dismissed Abbott Laboratories from the case in 2007. Johnson & Johnson and Boston Scientific made their final arguments at a trial in January, but the court had not returned a verdict. Guidant made stents, defibrillators, pacemakers and other medical devices. The deal hurt Boston Scientific’s balance sheet for years, as demand for heart-zapping implants fell after the sale was completed and Boston Scientific spent years dealing with lawsuits related to Guidant’s business. After the sale closed, the company posted losses every year until 2011. In 2013, Boston Scientific agreed to pay the government $US30 million to settle allegations that Guidant knowingly sold defective heart devices that were implanted in Medicare patients between 2002 and 2005.