In a race with Medtronic
Yesterday, Guidant said that a regulatory filing for marketing approval of its Champion stainless steel stent could be delayed up to six months due to "issues" that may result in "manufacturing process modifications and/or stent design changes." As a result, the stock fell 12% to $53.71 yesterday.
While still investigating the issues at hand, the cardiovascular device maker ( an Industry Focus 2002 selection) said that if the problems required only a manufacturing process change, then the company could still file for U.S. marketing approval in June. However, a change in stent design would push that date back six months. Guidant plans to provide an update to investors on Champion in four to five weeks.
This morning, Guidant did reiterate second-quarter earnings guidance of $0.54 to $0.60 per share as well as full-year earnings of $2.40 to $2.55 per share. So, the delay apparently won't come with any significant short-run cash costs.
But the issue here is opportunity cost. Competitor Johnson & Johnson
The longer Guidant is left out, the more money the company is leaving on the table. In the meantime, J&J and Boston Scientific only win bigger -- reflected in yesterday's 11% jump in Boston Scientific.
For more on stents, check out the Guidant and Johnson & Johnson discussion boards.
Fool contributor Jeff Hwang owns none of the companies mentioned above.