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Medtronic Public Limited Company
Company typePublic
NYSE: MDT
S&P 100 Component
S&P 500 Component
IndustryMedical equipment
Founded1949; 75 years ago (1949)
HeadquartersDublin, Ireland
(principal executive office)
Fridley, Minnesota
(operational headquarters)[1]
Key people
Omar Ishrak, Chairman and CEO
ProductsMedical devices
RevenueIncrease US$ 28.83 billion (2015) <
Increase US$5.29 billion (2015) [2]
Increase US$ 3.24 billion (2015)
Total assetsDecrease US$ 99.64 billion (2015)
Total equityDecrease US$ 52.06 billion (2015)
Number of employees
98 000 (2015)[2]
Websitewww.medtronic.com

Medtronic Public Limited Company is a medical device company. Its headquarters are in Dublin, Ireland.[1][3][4][5] Its operational headquarters are in Fridley, Minnesota.[1][6] Medtronic is the world's largest standalone[clarification needed] medical technology development company.[7]

In 2015, at the time of its acquisition of Covidien, its market capitalisation was about $100 billion.[8] Medtronic operates in more than 140 countries.[1] It employs over 85,000 people and has more than 53,000 patents.[9]

History

Early history

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

Medtronic was founded in 1949 in northeastern Minneapolis by Earl Bakken and his brother-in-law, Palmer Hermundslie, as a medical equipment repair shop.[10]

Through his repair business, Bakken came to know C. Walton Lillehei, a doctor of heart surgery at the University of Minnesota Medical School. The deficiencies of the pacemakers of the day were made painfully obvious following a power outage over Halloween in 1957, which affected large sections of Minnesota and western Wisconsin.[11] A pacemaker-dependent paediatric patient of Lillehei died because of the blackout. The next day, Lillehei spoke with Bakken about developing some form of battery-powered pacemaker. Bakken modified a design for a transistorised metronome and created the first battery-powered external artificial pacemaker.

Medtronic's old headquarters in St. Anthony, Minnesota

The company expanded through the 1950s, mostly selling equipment built by other companies but also developing some custom-made devices. Bakken built a small pacemaker that could be strapped to the body and powered by batteries. Work in the new field later produced an implantable pacemaker in 1960. The company built headquarters in the Minneapolis suburb of St. Anthony, Minnesota, in 1960[12] and the company 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.[13]

Animal rights

In 2005, 2008, and 2010 PETA threatened to submit a shareholder resolution to improve animal welfare standards in the company. In 2005, PETA attempted to stop five specific animal experiments that it deemed "crude and cruel". In 2008, PETA protested the outsourcing of animal testing to countries with lax animal welfare laws, such as China. In 2010, PETA attempted to stop Medtronic's reported use of live animals in testing and training. In response, Medtronic conducted a feasibility study that found that banning the use of live animals was impractical. Medtronic continues to use live animals for testing and training but has said that it will look for alternatives in the future. In each case, PETA withdrew its shareholder resolution after talks with Medtronic's leadership.[14][15]

Recent history

After 2008 and the global financial crisis, its stock value dropped dramatically. Despite sales and gross margins 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.[16] Its 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][17]

In June 2014, Medtronic announced its acquisition, the largest in its history, of Covidien, plc of Ireland, for $42.9 billion in cash and stock.[18] Following the acquisition, Medtronic ceased to be a Minnesota-based company. It moved its headquarters to low-tax Ireland, allowing it to avoid taxation on more than $14 billion held overseas.[5][19]

In February 2016, the company announced that it would acquire Bellco from private equity firm Charme Capital Partners.[20]

In June 2016, the company announced its acquisition of HeartWare International Inc. for $1.1 billion.[21] Recently hacked on June 20th 2017 by the Russians

Acquisition history

The following is an illustration of the company's major mergers, acquisitions and historical predecessors:

Medtronic plc
Medtronic

Medtronic
(Founded 1949)

Ardian Inc[22]
(Acq 2010)

Osteotech Inc[23]
(Acq 2010)

ATS Medical[24]
(Acq 2010)

Krauth Cardiovascular[25]
(Acq 2010)

Fogazzi[25]
(Acq 2010)

Invatec[25]
(Acq 2010)

PEAK Surgical, Inc[26]
(Acq 2011)

Salient Surgical Technologies Inc[27]
(Acq 2011)

China Kanghui Holdings[28]
(Acq 2012)

NGC Medical[29]
(Acq 2014)

Sapiens Steering Brain Stimulation
(Acq 2014)[30]

TYRX Inc
(Acq 2014)[31]

Covidien

Sapheon Inc[32]
(Acq 2014)

Reverse Medical Corporation[33]
(Acq 2014)

Given Imaging[34]
(Acq 2014)

Aspect Medical Systems

Somanetics Corp[35]
(Acq 2010)

ev3 Inc[36]
(Acq 2010)

CV Ingenuity[37]
(Acq 2012)

BÂRRX[38]
(Acq 2012)

Newport Medical Instruments[39]
(Acq 2012)

superDimension[40]
(Acq 2012)

Oridion Systems[41]
(Acq 2012)

VNUS Medical Technologies

Covidien
(Formed 2007 from Tyco International
healthcare business spin off)

Advanced Uro-Solutions[42]
(Acq 2015)

Diabeter[43]
(Acq 2015)

CardioInsight Technologies[44]
(Acq 2015)

Aptus Endosystems[45]
(Acq 2015)

RF Surgical Systems[46]
(Acq 2015)

Medina Medical[47]
(Acq 2015)

Lazarus Effect[48]
(Acq 2015)

Bellco[49]
(Acq 2016)

HeartWare International Inc
(Acq 2016)

Business units

Medtronic has 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

Cardiac rhythm disease management is the oldest and largest of Medtronic's business units. Its work in heart rhythm therapies dates back to 1957, when Bakken developed the first wearable heart pacemaker to treat abnormally-slow heart rates. Since then, it has expanded its expertise in electrical stimulation to treat other cardiac rhythm diseases. It 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 unit.[50] Medtronic and Vitatron pacemakers are interrogated and programmed by Medtronic Carelink Model 2090 Programmer for Medtronic and Vitatron Devices; they use separate interfaces.[51]

In 2007, Medtronic recalled its Sprint Fidelis product, the flexible wires, or leads, which connect a defibrillator to the interior of the heart. The leads were found to be failing at an unacceptable rate, resulting in unnecessary shocks or no shocks when needed; either can be lethal. The scope of the problem continues to be a matter of research. Studies since the recall, disputed by Medtronic, suggest that the failure rate of already-implanted Sprint Fidelis leads is increasing exponentially. Medtronic's liability is limited by various court decisions.[52]

Spinal and biologics

Spinal and biologics is Medtronic's second-largest business. Medtronic is the world leader in spinal and musculoskeletal therapies. In 2007, Medtronic purchased Kyphon, a manufacturer and seller of spinal implants thst are necessary for procedures like kyphoplasty.[53]

In May 2008, Medtronic Spine agreed to pay the US government $75 million to settle a qui tam lawsuit after a whistleblower alleged 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, not an outpatient, procedure to make thousands of dollars more in profits per surgery.[54]

A "special report" by writer Steven Brill in Time showed that according to Medtronic's quarterly SEC filing of October 2012, the company had, on average, a 75.1% profit margin on its spine products and therapies.[55]

Cardiovascular

Medtronic's cardiovascular therapies span the major specialities 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

Neuromodulation is the second-oldest and third-largest department of Medtronic. Its products include neurostimulation systems and implantable drug delivery systems for chronic pain, common movement disorders and urologic and gastrointestinal disorders. It relies on innovative development methodologies to build cutting-edge medical technology devices, with embedded software. The department's revenues in 2014 amounted to $1.9 billion, or 11% of Medtronic’s total revenues.[56]

Diabetes

The diabetes management manufacturing and sales division of Medtronic is based in Northridge, California.[57] The original company, Minimed Technologies, was founded in the early 1980s by Alfred E. Mann and spun off from Pacesetter Systems to design a practical insulin pump for lifelong wear.[58] Most devices then were either too large or impossible to program and were extremely unreliable. The release of the lightweight, menu-driven MiniMed 500 series changed the landscape, and it 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 both more flashy and more elegant and to resemble a beeper. The friendliness of the device boosted adoption rate, and sales increased by 357%.[59] In the early 2000s, Medtronic purchased Minimed, to form Medtronic Minimed.[60]

On 11 May 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 1400 new jobs would be created to staff the 150,000-square-foot (14,000 m2) facility.[61]

In September 2016, the FDA approved a device, MiniMed 670G, which automatically pumps insulin to a diabetic patient's body on sensing its absence or reduction.[62]

Surgical technologies

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

The surgical technologies business group designed and manufactured products for the diagnosis and treatment of ear, nose and throat (ENT) diseases and cranial, spinal and neurologic conditions. It also encompassed a surgical navigation division to design "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 the products are used for minimally-invasive surgical procedures. In 2016, the business unit was dissolved, and each site folded into new business groups.

Technology safety

In 2011, Jay Radcliffe, an independent black hat security researcher, revealed a security vulnerability in a Medtronic insulin pump, allowing an attacker to take control of the pump. Medtronic responded by assuring users of the full safety of its devices.[63]

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 control the electrical shocks delivered by the defibrillator component and even glean patient data from the device.[64]

See also

References

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  2. ^ a b "Medtronic 10-K report 2015". Securities and Exchange Commission. Retrieved 6 November 2016.
  3. ^ "Form S-4". sec.gov.
  4. ^ Medtronic. "Press Release". medtronic.com.
  5. ^ a b "Medtronic-Covidien Merger Approved By Irish High Court". Twin Cities Business. 26 January 2015.
  6. ^ Press release: Medtronic Completes Acquisition of Covidien 26 January 2015
  7. ^ "Top 40 Medical Device Companies". 14 December 2012.
  8. ^ "Medtronic becomes Ireland's largest business". 27 January 2015.
  9. ^ Medtronic. "Facts and Statistics - Medtronic". medtronic.com.
  10. ^ "Our History". Medtronic. Retrieved 13 August 2015.
  11. ^ Lorna Benson (31 October 2007). "Halloween blackout of '57 spurs creation of portable pacemaker". publicradio.org.
  12. ^ Sam Black, Old Medtronic headquarters is sold to Islamic group, Minneapolis/St. Paul Business Journal, 6 September 2012, accessed 14 March 2013.
  13. ^ "Medtronic to Acquire Physio-Control". Los Angeles Times. 30 June 1998.
  14. ^ Moore, Janet (8 July 2008). "Medtronic, PETA agree on care of test animals". Star Tribune. Retrieved 10 February 2015.
  15. ^ Sarvestani, Arezu (19 May 2014). "Animals in labs: PETA's long history with the medtech industry". Mass Device. Retrieved 10 February 2015.
  16. ^ "Physio-Control Breaks Away From Medtronic, Via $487M Acquisition by Bain Capital". Xconomy.
  17. ^ "Medtronic To Pay Over $1Billion To Settle Patent Litigation With Edwards Lifesciences". Forbes. 20 May 2014.
  18. ^ "Medtronic acquires Covidien". Bloomberg. 16 June 2014.
  19. ^ Cortez, Michelle; Welch, David (16 June 2014). "Medtronic to Buy Device Maker Covidien for $42.9 Billion". Bloomberg. Retrieved 13 August 2015.
  20. ^ Lawrence, Stacy (1 February 2016). "Medtronic acquires Italian hemodialysis player as part of newly formed renal care biz". FierceMedicalDevices.com. FierceMarkets, a division of Questex, LLC. Retrieved 12 February 2016.
  21. ^ kristen_hallam, Michelle Cortez FayCortez Kristen Hallam. "Medtronic Adds Heart Devices in $1.1 Billion HeartWare Deal". Bloomberg.com. Retrieved 19 July 2016.
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  48. ^ http://www.fiercemedicaldevices.com/story/medtronic-buy-stent-retriever-cover-startup-lazarus-effect-100m/2015-09-28
  49. ^ http://www.fiercemedicaldevices.com/story/medtronic-acquires-italian-hemodialysis-player-part-newly-formed-renal-care/2016-02-01
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  54. ^ "Medtronic unit will pay $75 million to settle whistleblower Medicare fraud case" Phillips & Cohen LLP Press Release. 22 May 2008.
  55. ^ "Bitter Pill: Why medical bills are killing us" Time, 28 February 2013
  56. ^ Valerie Silverthorne (1 May 2016). "Sometimes the right ALM platform isn't the obvious one". searchsoftwarequality.techtarget.com. Retrieved 20 May 2016.
  57. ^ Gregory J. Wilcox for the LA Daily News. 11 June 2015 Medtronic Diabetes laying off more than 400 at Northridge site
  58. ^ Karen Robinson-Jacobs for the LA Times. 1 June 2001 After Sale, MiniMed Founder Returns to the Start-Up Lab
  59. ^ Pierson, John (22 November 1999). "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 24 April 2013.
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  61. ^ "Medtronic Announces San Antonio as Home of New Diabetes Facility". Medtronic. 11 May 2009. Retrieved 11 May 2009.
  62. ^ "Recently approved devices: The 670G System - P160017". FDA. 28 September 2016.
  63. ^ JORDAN ROBERTSON - AP Technology Writer (25 August 2011). "Insulin pump maker identified after hacking talk - Yahoo! News". News.yahoo.com. Retrieved 24 April 2013.
  64. ^ BARNABY J. FEDER (12 March 2008). "A Heart Device Is Found Vulnerable to Hacker Attacks". newyorktimes.com. Retrieved 23 May 2014.
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