UPDATE 4-Boston Sci to pay $296 mln to settle US probe

* Reaches agreement with U.S. DOJ over Guidant advisories

* To pay $296 million as part of deal

* Will record Q3 charge of $294 million

* Sees 2009 EPS of 75-79 cents, excluding items

* Shares rise 1.2 pct
(Adds HHS subpoena, background, analyst comment, updates stock
price)

By Debra Sherman

CHICAGO, Nov 6 (Reuters) - Boston Scientific Corp (BSX.N: Quote, Profile, Research)
will pay $296 million to settle a U.S. Department of Justice
investigation into product recalls issued by its Guidant
subsidiary, and will record a third-quarter charge of $294
million, the company said in a government filing.

In a separate filing, the company said it received a
subpoena from the U.S. Department of Health and Human Services,
Office of Inspector General, requesting certain information
relating to contributions made by cardiac rhythm management to
charities with ties to physicians or their families. The
company said it is working with the government to understand
the scope of the subpoena.

Under the terms of the DOJ settlement, Guidant will plead
to two misdemeanor charges related to failure to include
information in reports to the U.S. Food and Drug
Administration.

Boston Scientific, a maker of heart pacemakers, implantable
heart defibrillators, heart stents and other medical devices,
now expects 2009 net earnings of 23 cents to 28 cents per
share, or 75 cents to 79 cents per share, excluding items.

"I'm a little relieved that this is over," said Tim Nelson,
an analyst with FAF Advisors, whose fund does not own Boston
shares.

He said he sees limited downside for the shares, but does
not advise buying them either, even at current levels.

He noted losses may be limited in the near-term by talk on
Wall Street that the company is about to roll out a big
restructuring, including layoffs and the replacement of key
managers in its cardiac rhythm management business.

The company was not immediately available to comment.

On Thursday, Boston Scientific said in another filing that
William McConnell Jr, the company's senior vice president for
sales and marketing for its Cardiac Rhythm Management business,
would retire by the end of the year.

"At first glance, we don't believe these three events will
have a material impact on the company but it's too early to
draw a firm conclusion regarding the HHS subpoena given the
limited information available at this time," Wells Fargo
analyst Larry Biegelsen wrote in a research note.

"We believe the new CEO, Ray Elliott, is conducting a
strategic review of all businesses at Boston Scientific and we
think there is a good chance that the company will announce a
significant restructuring this quarter. Until we see the
details of any plan, it's premature to predict how the stock
will react," he added.

Earlier this week, Johnson & Johnson (JNJ.N: Quote, Profile, Research), which
competes with Boston Scientific in the cardiovascular and other
markets, announced plans to cut up to 7 percent of its
workforce.

"Everyone's doing it," added Nelson. "The reality is that
(product) pricing is more competitive, it's more expensive to
bring products to the market, it's harder to differentiate
products, and it only makes sense to look for ways to get costs
out of the system and prepare for an uncertain future."

Boston Scientific shares were up 10 cents or 1.2 percent at
$8.15 on the New York Stock Exchange at midday on Friday.
(Reporting by Debra Sherman; Editing by Derek Caney, Dave
Zimmerman and Matthew Lewis)