The Pace Picks Up
New Projects Undertaken
A Worldwide Team

The Pace Picks Up

The move to the St. Anthony facility in the 1960s was a big step for a company used to doing business in garages and apartments.

By 1961, a garage and an apartment could no longer contain the growing company. That spring Medtronic relocated its headquarters to a 15,000-square-foot facility in St. Anthony Village in Minneapolis. The new facility - destined to be expanded to 105,000 square feet before the end of the decade - included offices, a manufacturing area, a prototype lab, a library, and an auditorium for sales training and technical seminars.

By 1962 the product line had grown to 21 devices and sales had jumped from $180,000 in 1960 to more than $500,000. The profit picture, however, was not as bright. The move to the new facility, increased marketing expenses, and heavy spending in new product research all combined to send losses from $16,000 in 1960 to $144,000 in 1962.

On the edge of bankruptcy, Medtronic battled back by obtaining a $100,000 bank installment promissory note, attracting money from a venture capitalist, and trimming the size of its staff. It also dropped some of its less profitable products in favor of emphasizing the development of prosthetic and surgical electronic equipment. By 1963 the company was back on track financially and reporting a $73,000 profit on revenues of $985,000. That year, Medtronic sold an average of 100 pacemakers per month, with about 20 percent of its total sales coming from foreign markets.

New Projects Undertaken

In 1966 Medtronic purchased the patents related to implantable pacemakers from Greatbatch and Chardack. Building upon the innovation and success of those early products, Medtronic experienced rapid technological growth in its pacing business throughout the decade.

For instance, in the mid-1960s, Medtronic introduced its first transvenous pacing system; it used pacing leads that could be maneuvered through a vein to the heart without opening the chest or using general anesthesia. In 1967, Medtronic introduced two "demand" pacemakers, designed to avoid competition between the pacemaker's artificial beats and the patient's own heartbeats. These models, one external and one implantable, sensed when the patient's heart was beating on its own and provided pacing "on demand" only when necessary.

Medtronic's product line also included the Vein Eraser, which disintegrated varicose veins by applying a high-frequency electric current through a needle-like electrode; the Peri-Start, a gastrointestinal pacemaker; and a pediatric pacemaker for infants.

Several research projects aimed at relieving non-cardiac related pain were undertaken during the 1960s, forming the basis for Medtronic's neurological program. One project, done in conjunction with Case Western Reserve University, focused on electrical stimulation of the dorsal column of the spinal cord to suppress pain. It led in 1969 to the first implant of the dorsal column stimulator and brain stimulator device.

By 1968 overall sales had skyrocketed to more than $12 million, with the company reporting a net income in excess of $1 million. The staff grew as well - from 36 in 1962 to 348 six years later - and so did the St. Anthony facility. One addition, which anticipated U.S. Food and Drug Administration requirements, included a clean room for assembling implantable products. Installing a filtration system to purify the air and controls to strictly regulate temperature and humidity enabled Medtronic to significantly enhance quality standards and increase production capacity.

Yet still more space was needed. By the end of the decade, Medtronic had moved its U.S. manufacturing operations to the Rice Creek Plant in Fridley, Minnesota, a suburb of Minneapolis.

A Worldwide Team

The Medtronic facility in Kerkrade featured state-of-the-art clean room facilities.

Sales outside the United States accounted for about one-third of Medtronic's output, and the European market represented the large majority of those sales. To better service the European market, Medtronic opened a service center at Amsterdam's Schiphol Airport in 1967. Staffed round-the-clock, the Schiphol Depot provided physicians with technical information, repaired and tested equipment and devices, and supplied Picker representatives with sales aids.

The competition was intense because foreign competitors could provide units in the European countries at prices far below Medtronic's. To remain a force in the European market - and to have ready access to the African and Middle Eastern markets -the company established an international division and built its second major manufacturing facility in Kerkrade, The Netherlands.

In 1968, to gain direct control of its international operations and shape a single marketing identity, Medtronic purchased the firm that had been its sales agent in Canada. Two years later, the company chose not to renew its contract with Picker International Corporation. At the same time, Medtronic began to acquire the firms that had been its major distributors in the United States, thus building a direct sales force to market products around the world.