Cardiac Pacemakers, Inc.

Last updated
Cardiac Pacemakers, Inc.
Company typePublic (NYSE:  BSX)
S&P 500 Component
Industry Medical equipment
Founded1971
Headquarters Saint Paul, Minnesota, U.S.
Products Medical devices
Services Medical technology

Cardiac Pacemakers, Inc. (CPI), doing business as Guidant Cardiac Rhythm Management, manufactured implantable cardiac rhythm management devices, such as pacemakers and defibrillators. It sold microprocessor-controlled insulin pumps and equipment to regulate heart rhythm. It developed therapies to treat irregular heartbeat. The company was founded in 1971 and is based in Saint Paul, Minnesota, and is presently a subsidiary of Boston Scientific. [1]

Contents

History

CPI was founded in February 1972 in Saint Paul, Minnesota. The first $50,000 capitalization for CPI was raised from a phone booth on the Minneapolis skyway system. [2] They began designing and testing their implantable cardiac pacemaker powered with a new longer-life lithium battery in 1971. The first heart patient to receive a CPI pacemaker emerged from surgery in June 1973. Within two years, the upstart company that challenged Medtronic had sold approximately 8,500 pacemakers. [3]

Medtronic at the time had 65% of the artificial pacemaker market. CPI was the first spin-off from Medtronic. It competition using the world's first lithium-powered pacemaker. Medtronic's market share plummeted to 35%. [4] [5]

Founding partners Anthony Adducci, Manny Villafaña, Jim Baustert, and Art Schwalm, were former Medtronic employees. Lawsuits ensued, all of which were settled out of court. [6]

Eli Lilly acquisition

Cardiac Pacemaker's microlyth pacemaker CPI Microlyth Pacemaker.jpg
Cardiac Pacemaker's microlyth pacemaker

The company sold 8,500 pacemakers, increasing sales from zero in 1972 to over $47 million.

In early 1978, CPI was concerned about a friendly takeover attempt. Despite impressive sales, the company's stock price had fluctuated wildly the year before, dropping from $33 to $11 per share. Some speculated that the stock was being sold short, while others attributed the price to the natural volatility of high-tech stock. As a one-product company, CPI was susceptible to changing market conditions, and its founders knew they needed to diversify. They considered two options: acquiring other medical device companies or being acquired themselves. They chose the latter.

Several companies expressed interest in acquiring CPI, including 3M, American Hospital Supply, Pfizer, and Johnson & Johnson. However, Eli Lilly and Company, one of the premier pharmaceutical companies in the United States, was the most enthusiastic suitor. "Lilly had the research expertise, highly compatible interests, and similar values," Anthony Adducci recalls. "At CPI, we haven't been able to dedicate the dollars and time necessary to develop new products beyond our staple lithium-powered pacemaker. Lilly was a $2 billion company. We knew they had tremendous resources, especially in research and development." [6] Additionally, Eli Lilly and CPI were already interested in developing insulin pumps, and Lilly was working with cardiovascular drugs, a natural link to CPI's heart pacemaker business.

Before the final negotiations in late 1978, there were numerous flights between Minneapolis and Indianapolis for CPI principals and representatives of Piper, Jaffray & Hopwood's corporate finance department. Lilly, a pharmaceutical giant, and CPI, the upstart pacemaker company, sat down at a bargaining table at a motel in suburban Bloomington, Minnesota. CPI's negotiation team included Anthony Adducci, Art Schwalm, Tom King, and Hunt Greene.

In December 1978, the company was acquired by Eli Lilly and Company for $127 million. [7]

Lithium battery

Cardiac pacemaker's lithium battery-powered pacemaker, the world's first CPI Pacemaker.jpg
Cardiac pacemaker's lithium battery-powered pacemaker, the world's first
The company's lithium-iodine bipolar pulse generator CPI Bipolar Pulse Generator 04.jpg
The company's lithium-iodine bipolar pulse generator

CPI designed and manufactured the world's first pacemaker with a lithium anode and a lithium-iodide electrolyte solid-state battery. The pacemaker structure is enclosed in a hermetically sealed metallic enclosure, allowing electrode leads to pass in a sealed relationship. The surface of the casing is polished metal, with a zone through which the external electrode leads pass. [8]

The Lithium-iodide or lithium anode cells revolutionized the medical industry by increasing the pacemaker life from 1 year up to 11 years. It became the standard for pacemaker designs.

Related Research Articles

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An artificial cardiac pacemaker, commonly referred to as simply a pacemaker, is an implanted medical device that generates electrical pulses delivered by electrodes to one or more of the chambers of the heart. Each pulse causes the targeted chamber(s) to contract and pump blood, thus regulating the function of the electrical conduction system of the heart.

<span class="mw-page-title-main">Defibrillation</span> Treatment for life-threatening cardiac arrhythmias

Defibrillation is a treatment for life-threatening cardiac arrhythmias, specifically ventricular fibrillation (V-Fib) and non-perfusing ventricular tachycardia (V-Tach). A defibrillator delivers a dose of electric current to the heart. Although not fully understood, this process depolarizes a large amount of the heart muscle, ending the arrhythmia. Subsequently, the body's natural pacemaker in the sinoatrial node of the heart is able to re-establish normal sinus rhythm. A heart which is in asystole (flatline) cannot be restarted by a defibrillator; it would be treated only by cardiopulmonary resuscitation (CPR) and medication, and then by cardioversion or defibrillation if it converts into a shockable rhythm.

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<span class="mw-page-title-main">Medtronic</span> Irish tax-registered medical device company

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Guidant Corporation, part of Boston Scientific and Abbott Labs, designs and manufactures artificial cardiac pacemakers, implantable cardioverter-defibrillators, stents, and other cardiovascular medical products. Their company headquarters is located in Indianapolis, Indiana. Their main competitors are Medtronic, St. Jude Medical, and Johnson and Johnson.

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<span class="mw-page-title-main">Anthony Adducci</span> Inventor and entrepreneur

Anthony J. Adducci was a pioneer of the medical device industry in Minnesota. He is best known for co-founding Cardiac Pacemakers, Inc., the company that manufactured the world's first lithium battery-powered artificial pacemaker. The lithium-iodide cell revolutionized the medical industry and is now the standard cell for pacemakers.

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Transcutaneous pacing (TCP), also called external pacing, is a temporary means of pacing a patient's heart during a medical emergency. It should not be confused with defibrillation using a manual or automatic defibrillator, though some newer defibrillators can do both, and pads and an electrical stimulus to the heart are used in transcutaneous pacing and defibrillation. Transcutaneous pacing is accomplished by delivering pulses of electric current through the patient's chest, which stimulates the heart to contract.

Pacesetter Systems Inc. was a biotechnology company founded by Alfred E. Mann in 1965. The company manufactured various implantable medical devices invented by Robert Fischell and the rest of the team at the Johns Hopkins University Applied Physics Laboratory. Those inventions included the first commercial rechargeable implantable pacemaker, which was one of the first pacemakers to use radio waves for telemetry, and the implantable insulin pump. The insulin pump business was spun off into MiniMed in 1983 and then acquired by Medtronic in 2001. Pacesetter Systems Inc. was purchased by Siemens and then St. Jude Medical in 1994.

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Morton Maimon Mower was an American cardiologist specializing in electrophysiology and the co-inventor of the automatic implantable cardioverter defibrillator. He served in several professional capacities at Sinai Hospital and Cardiac Pacemakers Inc. In 1996, he became the chairman and chief executive officer of Mower Research Associates. He was inducted into the National Inventors Hall of Fame in 2002 for the development of the automatic implantable cardioverter defibrillator with Michel Mirowski in the 1970s. He continued his research in the biomechanical engineering laboratories at Johns Hopkins University.

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Manny Villafaña, a child of Puerto Rican immigrants, he attended Cardinal Hayes High School in the Bronx. He began his medical career in 1964 at medical-device exporter Picker International. In 1967, he was hired away from Picker by Earl Bakken, CEO of Medtronic to become their first international sales administrator.

References

  1. "Cardiac Pacemakers Inc - Company Profile and News". Archived from the original on October 11, 2014.
  2. St. Anthony N: Ingenuity and integrity mark Medtronic co-founder. Minneapolis Star and Tribune, Feb 11, 1985, pp M1-3
  3. Implantable pacemaker : High Technology Entrepreneurship and Strategy. February 2002; by Prof. Ron Adner
  4. Mundale S: Blessed are the pacemakers. Corporate Report Minnesota, Nov 1981, pp 63-70
  5. Jeffrey, Kirk (April 2003). Machines in Our Hearts: The Cardiac Pacemaker, the Implantable Defibrillator, and American Health Care. ISBN   9780801876165.
  6. 1 2 Fiedler T: Straight from the heart. Minnesota Business Journal, Feb 1985, p p 24-35
  7. Ticker Tape Tales. Piper, Jaffray & Hopwood. 1985. pp. 194–196.
  8. "Metal-enclosed cardiac pacer with solid-state power source". US3822707 A.