Our Story: Growth Spurt
By 1961, a garage and an apartment could no longer contain the growing company. Medtronic relocated its headquarters to a 15,000-square-foot facility in St. Anthony Village in Minneapolis. The new facility – which was 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.
The move to the St. Anthony facility in the 1960s was a big step for a company used to doing business
in a garage.
By 1962, the product line had grown to 21 devices, and annual sales had grown to $500,000. The profit picture, however, was not as bright. The move to the new facility, coupled with increased marketing expenses and investments in new product research, resulted in a net loss of $144,000 that year.
On the edge of bankruptcy, Medtronic refocused its fiscal efforts. Company leaders obtained a $100,000 bank loan, attracted money from a venture capitalist, and trimmed the size of its staff. It also dropped some less profitable products and focused on prosthetic and surgical electronic equipment. By 1963, the company was back on track financially, reporting a $73,000 profit on revenues of $985,000. It was a painful lesson, but reinforced the reality that technological innovation must be balanced with fiscal responsibility to be successful long term.
That year, Medtronic sold an average of 100 pacemakers per month, with about 20% of its total sales coming from outside the United States.
Minimally Invasive Philosophy Emerges
In 1966, Medtronic purchased the patents related to implantable pacemakers from Greatbatch and Chardack. Building on 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 manoeuvred through a vein to the heart without opening the chest or using general anaesthesia.
This delivery method was the springboard for developing similar less-invasive procedures for other therapies. We now deliver many of our products through veins, including heart valves, stent grafts, and balloon angioplasty,
In 1967, Medtronic introduced two "on-demand" pacemakers, designed to avoid competition between paced beats and the patient's own heartbeat. These models, one external and one implantable, sensed when the patient's heart was beating on its own and provided pacing only when necessary.
Medtronic's product line also included a paediatric pacemaker for infants and the Vein Eraser, which disintegrated varicose veins by applying a high-frequency electric current through a needle-like electrode.
Applying Our Expertise Beyond Hearts
The 1960s marked the start of Medtronic's expansion into what would eventually become one of the most diverse medical technology companies in the world. We transferred our expertise in electrical stimulation to treat other parts of the body.
We created a gastrointestinal pacemaker, and undertook several research projects aimed at relieving pain through stimulation to the spinal cord. These were exploratory projects, but important because they formed the foundation for expanded thinking about our technologies.
By 1968, annual sales had skyrocketed to more than $12 million, with the company reporting net income in excess of $1 million. The staff grew as well, from 36 in 1962 to 348, and so did the St. Anthony facility. One addition, which anticipated US Food and Drug Administration requirements, included a clean room for assembling implantable products. By installing a filtration system to purify the air, and controls to strictly regulate temperature and humidity, we significantly enhanced quality standards and increased production capacity.
Yet still more space was needed. By the end of the decade, Medtronic had moved its US manufacturing operations to the Rice Creek Plant in Fridley, Minnesota, a suburb of Minneapolis.