This excerpt taken from the BSX 8-K filed Jan 10, 2006.
Boston Scientific to Share Rights to Guidants Drug-Eluting Stent Portfolio
Natick, MA (January 8, 2006) Boston Scientific Corporation (NYSE: BSX) announced today that it has executed a binding definitive agreement with Abbott (NYSE: ABT) under which Abbott will purchase Guidant Corporations (NYSE: GDT) vascular intervention and endovascular businesses, assuming completion of Boston Scientifics proposed acquisition of Guidant (announced in a separate Boston Scientific press release issued today).
As part of this agreement, Boston Scientific will share rights to Guidants drug-eluting stent (DES) portfolio with Abbott, providing Boston Scientific a second DES platform.
Boston Scientific had announced its intention to divest Guidants vascular intervention and endovascular businesses and to share rights to Guidants DES portfolio in its initial proposal to acquire Guidant on December 5, 2005. Boston Scientific believes that the execution of its agreement with Abbott will enable the Company to rapidly secure antitrust approval of the acquisition of Guidant.
Under the terms of the agreement with Abbott, Guidants vascular intervention and endovascular businesses will be purchased by Abbott for a total consideration of $4.3 billion. This amount includes an upfront payment of $3.8 billion in cash on or around the closing of Boston Scientifics acquisition of Guidant, a payment of $250 million upon U.S. Food and Drug Administration (FDA) approval of an everolimus-based DES product, and an additional payment of $250 million upon a similar approval in Japan. These contingent payments are due if the requisite approvals are received anytime within 10 years of closing this transaction.
In addition to receiving the $3.8 billion in initial purchase price at or around the closing of the Guidant transaction, Abbott has agreed to provide to Boston Scientific a $700 million loan in the form of a five-year subordinated note bearing interest at 5.25 percent. Accordingly, Boston Scientific will receive $4.5 billion in cash from Abbott on or around the closing date of the Guidant transaction.
Boston Scientific and Abbott have agreed that Abbott will supply Boston Scientific, on a private label basis, with Guidant DES products. This interim supply agreement will facilitate a transitioning of the shared DES rights to Boston Scientific. These rights include rights to intellectual property and technology transfers, sharing of regulatory and clinical trial assets and the rights to independently iterate, manufacture and commercialize DES technology. Drug-eluting stents sold by Abbott will be separately branded, priced and marketed.
The transaction is subject to a limited number of closing conditions, including receipt of the required regulatory approvals.
Our agreement with Abbott to divest Guidants vascular intervention and endovascular businesses demonstrates our commitment to address potential antitrust issues raised by our proposed acquisition of Guidant, and should enable us to complete the acquisition of Guidant quickly, said Jim Tobin, President and Chief Executive Officer of Boston Scientific. In addition, sharing rights to Guidants DES portfolio will enable Boston Scientific to offer both paclitaxel-eluting and everolimus-eluting stents to interventional cardiologists and their patients.