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Medtronic

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Medtronic
Company typePublic (NYSE: MDT)
S&P 500 Component
IndustryMedical equipment
Founded1949
HeadquartersDublin, Ireland
(principal executive office)
Fridley, Minnesota
(operational headquarters)[1]
Key people
Omar Ishrak, Chairman & CEO
ProductsMedical devices
Revenue$28.005 Billion (with Covidien)
5,485,000,000 United States dollar (2022) Edit this on Wikidata
3,758,000,000 United States dollar (2022) Edit this on Wikidata
Number of employees
84,000 (March 2015)
Websitewww.medtronic.com

Medtronic is an Irish medical device company headquartered in Dublin, Ireland.[1][2][3][4] The operational headquarters is centered in Fridley, Minnesota, USA.[1][5] Medtronic is the world's largest standalone medical technology development company.[6]

In 2015, at the time of its acquisition of Covidien, Medtronic's market cap was about $100 billion while the market cap for CRHF, Ireland’s largest indigenous business, was $18.4 billion.[7] Medtronic operates in more than 140 countries.[1] The company employs over 80,000 people and has more than 53,000 patents.[8]

History

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

Medtronic was founded in 1949 in northeast Minneapolis by Earl Bakken and his brother-in-law Palmer Hermundslie as a medical equipment repair shop.[9]

Through their repair business, Bakken came to know Dr. C. Walton Lillehei, a doctor in the field of heart surgery then at the University of Minnesota Medical School. 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.[10] 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[11] 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.[12]

In 2005, 2008, and 2010 Medtronic failed to reach an agreement with PETA to improve animal welfare standards in the company’s laboratories in the United States and China after critics alleged that they were engaged in the unethical treatment of animals. In 2005, PETA attempted to stop five specific animal experiments which they deemed "crude and cruel". In 2008, PETA protested the outsourcing of animal testing to counties 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, a practice which PETA said had been halted by rival companies. In response Medtronic conducted a feasibility study to see whether banning the use of live animals was practical. This study concluded that it was not and Medtronic continues to use live animals for testing and training, but has said that they will look for alternatives in the future. In each case PETA was unsuccessful in reaching an agreement to reduce animal cruelty in Medtronic's research practices. As a result, PETA withdrew its shareholder resolution compelling the company to address animal welfare issues.[13][14]

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,[15] 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][16]

In June 2014, Medtronic announced its acquisition of Covidien, PLC of Ireland for $42.9 billion in cash and stock.[17] This was the largest acquisition in its history. Following the acquisition, Medtronic ceased to be a Minnesota-based company, moving its headquarters to low-tax Ireland, allowing it to avoid taxation on more than $14 billion held overseas.[4][18]

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[19]
(Acq 2010)

Osteotech Inc[20]
(Acq 2010)

ATS Medical[21]
(Acq 2010)

Krauth Cardiovascular[22]
(Acq 2010)

Fogazzi[22]
(Acq 2010)

Invatec[22]
(Acq 2010)

PEAK Surgical, Inc[23]
(Acq 2011)

Salient Surgical Technologies Inc[24]
(Acq 2011)

China Kanghui Holdings[25]
(Acq 2012)

NGC Medical[26]
(Acq 2014)

Sapiens Steering Brain Stimulation
(Acq 2014)[27]

TYRX Inc
(Acq 2014)[28]

Covidien

Sapheon Inc[29]
(Acq 2014)

Reverse Medical Corporation[30]
(Acq 2014)

Given Imaging[31]
(Acq 2014)

Aspect Medical Systems

Somanetics Corp[32]
(Acq 2010)

ev3 Inc[33]
(Acq 2010)

CV Ingenuity[34]
(Acq 2012)

BÂRRX[35]
(Acq 2012)

Newport Medical Instruments[36]
(Acq 2012)

superDimension[37]
(Acq 2012)

Oridion Systems[38]
(Acq 2012)

VNUS Medical Technologies

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

Advanced Uro-Solutions[39]
(Acq 2015)

Diabeter[40]
(Acq 2015)

CardioInsight Technologies[41]
(Acq 2015)

Aptus Endosystems[42]
(Acq 2015)

RF Surgical Systems[43]
(Acq 2015)

Medina Medical[44]
(Acq 2015)

Lazarus Effect[45]
(Acq 2015)

Business units

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

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.[46] Medtronic and Vitatron pacemakers are interrogated and programmed by Medtronic Carelink Model 2090 Programmer for Medtronic and Vitatron Devices, using separate interfaces.[47]

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.[48]

Spinal and biologics

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.[49]

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.[50]

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.[51]

Cardiovascular

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

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

Diabetes

Medtronic Diabetes is the diabetes management manufacturing and sales division of Medtronic, based in Northridge, California.[52] The original company, Minimed Technologies, was founded in the early 1980s by Alfred Mann and spun off from Pacesetter Systems in order to design a practical insulin pump for lifelong wear.[53] 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%.[54] In the early 2000s Medtronic purchased Minimed to form Medtronic Minimed.[55]

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 1,400 new jobs would be created to staff the 150,000-square-foot (14,000 m2) facility.[56]

Surgical technologies

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

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.[57]

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.[58]

See also

References

  1. ^ a b c d "Locations". medtronic.com.
  2. ^ "Form S-4". sec.gov.
  3. ^ Medtronic. "Press Release". medtronic.com.
  4. ^ a b "Medtronic-Covidien Merger Approved By Irish High Court". Twin Cities Business. 26 January 2015.
  5. ^ Press release: Medtronic Completes Acquisition of Covidien 26 January 2015
  6. ^ "Top 40 Medical Device Companies". 14 December 2012.
  7. ^ "Medtronic becomes Ireland's largest business". 27 January 2015.
  8. ^ Medtronic. "Facts and Statistics - Medtronic". medtronic.com.
  9. ^ "Our History". Medtronic. Retrieved 13 August 2015.
  10. ^ Lorna Benson (31 October 2007). "Halloween blackout of '57 spurs creation of portable pacemaker". publicradio.org.
  11. ^ Sam Black, Old Medtronic headquarters is sold to Islamic group, Minneapolis / St. Paul Business Journal, 6 September 2012, accessed 14 March 2013.
  12. ^ "Medtronic to Acquire Physio-Control". Los Angeles Times. 30 June 1998.
  13. ^ Moore, Janet (8 July 2008). "Medtronic, PETA agree on care of test animals". Star Tribune. Retrieved 10 February 2015.
  14. ^ Sarvestani, Arezu (19 May 2014). "Animals in labs: PETA's long history with the medtech industry". Mass Device. Retrieved 10 February 2015.
  15. ^ "Physio-Control Breaks Away From Medtronic, Via $487M Acquisition by Bain Capital". Xconomy.
  16. ^ "Medtronic To Pay Over $1Billion To Settle Patent Litigation With Edwards Lifesciences". Forbes. 20 May 2014.
  17. ^ "Medtronic acquires Covidien". Bloomberg. 16 June 2014.
  18. ^ Cortez, Michelle; Welch, David (16 June 2014). "Medtronic to Buy Device Maker Covidien for $42.9 Billion". Bloomberg. Retrieved 13 August 2015.
  19. ^ Medtronic. "Press Release". medtronic.com.
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  45. ^ http://www.fiercemedicaldevices.com/story/medtronic-buy-stent-retriever-cover-startup-lazarus-effect-100m/2015-09-28
  46. ^ Manning, John (20 July 1997). "Vitatron, medtronic integrate sales force".
  47. ^ "MEDTRONIC CARELINK ® PROGRAMMER" (PDF). Medtronic. Retrieved 24 April 2013.
  48. ^ Burton, Thomas M. (4 February 2010). "Hospitals Dispute Medtronic Data on Wires". Wall Street Journal. pp. D6. {{cite news}}: |access-date= requires |url= (help)
  49. ^ Joshua Freed (27 July 2007). "Medtronic to acquire Kyphon". USA Today. Associated Press.
  50. ^ "Medtronic unit will pay $75 million to settle whistleblower Medicare fraud case" Phillips & Cohen LLP Press Release. 22 May 2008.
  51. ^ "Bitter Pill: Why medical bills are killing us" Time, 28 February 2013
  52. ^ Gregory J. Wilcox for the LA Daily News. 11 June 2015 Medtronic Diabetes laying off more than 400 at Northridge site
  53. ^ Karen Robinson-Jacobs for the LA Times. 1 June 2001 After Sale, MiniMed Founder Returns to the Start-Up Lab
  54. ^ 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.
  55. ^ Karen Robinson-Jacobs for the LA Times. 31 May 2001 Medtronic to Buy MiniMed and Affiliate
  56. ^ "Medtronic Announces San Antonio as Home of New Diabetes Facility". Medtronic. 11 May 2009. Retrieved 11 May 2009.
  57. ^ JORDAN ROBERTSON - AP Technology Writer (25 August 2011). "Insulin pump maker identified after hacking talk - Yahoo! News". News.yahoo.com. Retrieved 24 April 2013.
  58. ^ 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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