Medtronic

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Medtronic plc
Public (NYSEMDT)
S&P 500 Component
Industry Medical equipment
Founded 1949
Headquarters Dublin, Ireland (principal executive office) Fridley, Minnesota (operational headquarters)[1]
Key people
Omar Ishrak, Chairman & CEO
Products Medical devices
Revenue $28.005 Billion (with Covidien)
Number of employees
84,000 (March 2015)
Slogan "Alleviating Pain • Restoring Health • Extending Life"
Website www.medtronic.com

Medtronic plc is an Irish[2][3][4] company with its principal executive office[5] in Ireland and operational headquarters in suburban Minneapolis, Minnesota[6][7] and is the world's third largest [8] medical device company. In 2015, at the time of its acquisition of Covidien, Medtronic's market cap was about $100 billion while the market cap for CRH, Ireland’s largest indigenous business, was $18.4 billion.[9]

Medtronic operates in more than 140 countries.[10] The company employs over 85,000 people and has more than 53,000 patents.[11]

History[edit]

Medtronic Operational Headquarters in Fridley, Minnesota, a suburb of Minneapolis

Medtronic was founded in 1949 in a garage in northeast Minneapolis by Earl Bakken and his brother-in-law Palmer Hermundslie as a medical equipment repair shop. They originally wanted to sell basketball pumps due to a shortage in the Midwest in the 20th century. Bakken began as a graduate student in electrical engineering at the University of Minnesota before he gave up his studies to focus on Medtronic.

Through their repair business, Bakken came to know Dr. C. Walton Lillehei, a pioneer in the field of heart surgery then at the University of Minnesota Medical School. Lillehei was frustrated with the pacemakers of the day, which were quite large, applied electrical current externally requiring higher voltages, and had to be plugged into a wall outlet to operate. The deficiencies of such pacemakers were made painfully obvious following a power outage over Halloween in 1957 which affected large sections of Minnesota and western Wisconsin.[12] As a direct result of this blackout, a pacemaker-dependent pediatric patient of Lillehei died. The next day, Lillehei spoke with Bakken about developing some form of battery-powered pacemaker. Stemming from this need, Bakken modified a design for a transistorized metronome to create the first battery-powered external artificial pacemaker.

Medtronic's old headquarters in St. Anthony

The company expanded through the 1950s, mostly selling equipment built by other companies, but also developing some custom devices. Bakken built a small transistorized pacemaker that could be strapped to the body and powered by batteries. Work into this new field continued, producing an implantable pacemaker in 1960. It built a headquarters in the Minneapolis suburb of St. Anthony in 1960[13] and moved to Fridley in the 1970s. Medtronic's main competitors in the cardiac rhythm field include Boston Scientific and St. Jude Medical. In 1998, Medtronic acquired Physio-Control for $538 million.[14]

The company remains focused on the mission originally written by co-founder Bakken in the early 1960s.[citation needed] The first sentence of the six-paragraph mission statement reads:

In 2008, Medtronic reached an agreement with PETA to improve animal welfare standards in the company’s laboratories in the United States and China. In return, PETA agreed to withdraw its shareholder resolution compelling the company to address animal welfare issues. Subsequent discussions between PETA and Medtronic led the company to adopt a policy prohibiting the use of animals for the training of medical device sales staff wherever that would be feasible.[16] [17][18]

After 2008 and the global financial crisis, Medtronic stock value dropped dramatically. Despite sales and margin well above the average of most industries, with steady revenue growth since 2008 and a gross margin above 60%, Medtronic initiated a series of restructurings, in 2008, 2009, 2010, and 2011, including Physio-Control's spin-off for $487 million,[19] and the stock price now approaches pre-recession values.

In May 2014, Medtronic agreed to pay over $1 billion to settle patent litigation with Edwards lifesciences after years of protracted legal battles.[clarification needed][20]

In June 2014, Medtronic announced its acquisition of Covidien, PLC of Ireland for $42.9 billion in cash and stock.[21] Following the acquisition, Medtronic ceased to be a Minnesota-based company, officially renamed Medtronic PLC and headquartered in low-tax Ireland.[22]

Business units[edit]

Medtronic is composed of six main business units which develop and manufacture devices and therapies to treat more than 30 chronic diseases, including heart failure, Parkinson's disease, urinary incontinence, Down's syndrome, obesity, chronic pain, spinal disorders, and diabetes

Cardiac rhythm disease management[edit]

The cardiac rhythm disease management (CRDM) is the oldest and largest of Medtronic's business units. Its work in heart rhythm therapies dates back to 1957, when co-founder Earl Bakken developed the first wearable heart pacemaker to treat abnormally slow heart rates. Since then, CRDM has expanded its expertise in electrical stimulation to treat other cardiac rhythm diseases. CRDM has also made an effort to address overall disease management by adding diagnostic and monitoring capabilities to many of its devices. An independently operating Dutch pacemaker manufacturer Vitatron, acquired by Medtronic in 1986, is now a European subsidiary of the Medtronic CRDM unit.[23] Medtronic and Vitatron pacemakers are interrogated and programmed by Medtronic Carelink Model 2090 Programmer for Medtronic and Vitatron Devices, using separate interfaces.[24]

In 2007, Medtronic recalled its Sprint Fidelis product, consisting of the flexible wires, or leads, which connect a defibrillator to the interior of the heart. The Sprint Fidelis leads were found to be failing at an unacceptable rate, resulting in unnecessary shocks or a failure to administer a shock when needed; either can be lethal. The scope of this problem continues to be a matter of research. Studies since the recall, disputed by Medtronic, suggest the failure rate of already-implanted Sprint Fidelis leads is increasing exponentially. Medtronic liability in this matter is limited by various court decisions.[25]

Spinal and biologics[edit]

Spinal and Biologics is Medtronic's second largest business, and Medtronic is the world leader in spinal and musculoskeletal therapies. In 2007, Medtronic purchased Kyphon, a manufacturer and seller of spinal implants necessary for procedures like kyphoplasty.[26]

In May 2008, Medtronic Spine agreed to pay the U.S. government $75 million to settle a qui tam (whistleblower) lawsuit alleging that Medtronic committed Medicare fraud. The company was charged with illegally convincing healthcare providers to offer kyphoplasty, a spinal fracture repair surgery, as an inpatient rather than outpatient procedure, thereby making thousands more in profits per surgery.[27]

A "special report" by writer Steven Brill in Time showed that, according to Medtronic's quarterly SEC filing of October 2012, the company has on average a 75,1% profit margin on its spine products and therapies.[28]

Cardiovascular[edit]

Medtronic's therapies in this business span the major specialties of interventional cardiology, cardiac surgery, and vascular surgery. The products are used to reduce the potentially debilitating effects of coronary, aortic, and structural heart disease.

Neuromodulation[edit]

Products include neurostimulation systems and implantable drug delivery systems for chronic pain, common movement disorders, and urologic and gastrointestinal disorders.

Diabetes[edit]

Medtronic Diabetes is the diabetes management manufacturing and sales division of Medtronic, based in Northridge, California.[29] The original company, Minimed Technologies, was founded in the early 1980s and spun off from Pacesetter Systems in order to design a practical insulin pump for lifelong wear. Most devices at the time were either too large or impossible to program and extremely unreliable. The release of the lightweight, menu-driven MiniMed 500 series changed the landscape, and was a major factor in bringing insulin pump usage to the mainstream. In 1996, the minimed was redesigned by the innovation consulting RKS Design to look more flashy, more elegant, and resemble a beeper; the friendliness of the device boosted adoption rate and sales increased by 357%.[30] In the early 2000s Medtronic purchased Minimed to form Medtronic Minimed.[31]

Current models consist of the MiniMed Paradigm 523/723 and Paradigm Real-time Revel system[32] and Guardian Real-time system.[33] It is the first insulin pump which integrates continuous blood glucose monitoring, allowing patients to see in real time their glucose level. As well as insulin pumps, Medtronic Diabetes also makes Continuous Blood Glucose Monitoring Systems (CGMS) for use as stand alone systems or integrated into its Minimed Paradigm 523/723 series pumps. The company also makes and/or markets a large range of accessories and components for its insulin pump and CGMS products.

As of March 2007 the MiniMed name has begun to be absorbed into the parent company, Medtronic. Medtronic has kept the MiniMed name to brand their insulin pumps, for example the MiniMed Paradigm 722. As Medtronic frequently uses Medtronic Diabetes as the name for the division, it is unclear to the extent the division will be integrated into Medtronic. Although Medtronic MiniMed has its own website, and many products and marketing material still bear its name, the brand is being phased out.

On May 11, 2009, Medtronic announced it had chosen San Antonio, Texas, for the location of its new Diabetes Therapy Management and Education Center. The company announced that it expected 1,400 new jobs would be created to staff the 150,000-square-foot (14,000 m2) facility.[34]

Surgical technologies[edit]

O-arm Surgical Imaging System. Federal Center of Neurosurgery in Tyumen, 2013

The Surgical Technologies business designs and manufactures products for the diagnosis and treatment of ear, nose, and throat (ENT) diseases and cranial, spinal, and neurologic conditions. It also encompasses a surgical navigation division that designs "StealthStation" systems, software and instruments for Computer Assisted Surgery (CAS) and a special intraoperative X-ray imaging system known as the O-arm Imaging System. Many of these products are used for minimally invasive surgical procedures.

Technology safety[edit]

Jay Radcliffe, an independent security researcher, presented a speech at the BlackHat 2011. He revealed a security vulnerability in the Medtronic brand insulin pump, allowing an attacker remote control of that pump. Medtronic responded by assuring users of the full safety of their devices.[35]

In 2008, a team of computer security researchers was able to take remote control of a Medtronic cardiac implant. The team, using an unused implant in a lab, was able to not only control the electrical shocks delivered by the defibrillator component, but also glean patient data from the device.[36]

See also[edit]

References[edit]

  1. ^ http://www.medtronic.com/about-us/company-profile/locations/index.htm?loc=MDTHomeRefresh_B_InPage_Footer_About1
  2. ^ http://www.sec.gov/Archives/edgar/data/1613103/000119312514267867/d741931ds4.htm
  3. ^ http://newsroom.medtronic.com/phoenix.zhtml?c=251324&p=irol-newsArticle&id=1973844
  4. ^ "Medtronic-Covidien Merger Approved By Irish High Court". Twin Cities Business. 2015-01-26. 
  5. ^ http://www.medtronic.com/about-us/company-profile/locations/index.htm?loc=MDTHomeRefresh_B_InPage_Footer_About1
  6. ^ Press release: Medtronic Completes Acquisition of Covidien January 26, 2015
  7. ^ http://www.medtronic.com/about-us/company-profile/locations/index.htm?loc=MDTHomeRefresh_B_InPage_Footer_About1
  8. ^ "Top 40 Medical Device Companies". 2012-12-14. 
  9. ^ "Medtronic becomes Ireland’s largest business". 2015-01-27. 
  10. ^ http://www.medtronic.com/about-us/company-profile/locations/index.htm?loc=MDTHomeRefresh_B_InPage_Footer_About1
  11. ^ http://www.medtronic.com/us-en/about-3/medtronic-plc-facts.html?cmpid=mdt_plc_2015_US_about_3_story_panel_featured_company_facts_cta_text_link_learn_more
  12. ^ MPR Story
  13. ^ Sam Black, Old Medtronic headquarters is sold to Islamic group, Minneapolis / St. Paul Business Journal, September 6, 2012, accessed March 14, 2013.
  14. ^ "Medtronic to Acquire Physio-Control". Los Angeles Times. 1998-06-30. 
  15. ^ accessed April 20, 2012
  16. ^ Moore, Janet (8 July 2008). "Medtronic, PETA agree on care of test animals". Star Tribune. Retrieved 10 February 2015. 
  17. ^ Sarvestani, Arezu (19 May 2014). "Animals in labs: PETA's long history with the medtech industry". Mass Device. Retrieved 10 February 2015. 
  18. ^ "Feasibility Assessment of Eliminating the Use of Animals for Training Purposes". Medtronic. 12 December 2014. Retrieved 10 February 2015. 
  19. ^ http://www.xconomy.com/seattle/2011/11/17/physio-control-breaks-away-from-medtronic-via-487m-acquisition-by-bain-capital/
  20. ^ "Medtronic To Pay Over $1Billion To Settle Patent Litigation With Edwards Lifesciences". Forbes. 2014-05-20. 
  21. ^ "Medtronic acquires Covidien". Bloomberg. 2014-06-16. 
  22. ^ "Medtronic-Covidien Merger Approved By Irish High Court". Twin Cities Business. 2015-01-26. 
  23. ^ Manning, John (1997-07-20). "Vitatron, medtronic integrate sales force". 
  24. ^ "MEDTRONIC CARELINK ® PROGRAMMER" (PDF). Medtronic. Retrieved 2013-04-24. 
  25. ^ Burton, Thomas M. (4 February 2010). "Hospitals Dispute Medtronic Data on Wires". Wall Street Journal. pp. D6. 
  26. ^ Joshua Freed (July 27, 2007). "Medtronic to acquire Kyphon". USA Today. Associated Press. 
  27. ^ "Medtronic unit will pay $75 million to settle whistleblower Medicare fraud case" Phillips & Cohen LLP Press Release. May 22, 2008.
  28. ^ "Bitter Pill: Why medical bills are killing us" Time, 28 February 2013
  29. ^ [1][dead link]
  30. ^ Pierson, John (1999-11-22). "Style And Substance: Why Design Matters Many small-business owners believe they can't afford good product design. Why some companies are rethinking that equation. - November 22, 1999". Money.cnn.com. Retrieved 2013-04-24. 
  31. ^ [2][dead link]
  32. ^ [3][dead link]
  33. ^ [4][dead link]
  34. ^ "Medtronic Announces San Antonio as Home of New Diabetes Facility". Medtronic. 2009-05-11. Retrieved 2009-05-11. 
  35. ^ JORDAN ROBERTSON - AP Technology Writer (2011-08-25). "Insulin pump maker identified after hacking talk - Yahoo! News". News.yahoo.com. Retrieved 2013-04-24. 
  36. ^ BARNABY J. FEDER (2008-03-12). "A Heart Device Is Found Vulnerable to Hacker Attacks". newyorktimes.com. Retrieved 2014-05-23. 

External links[edit]