Cardiac Pacemakers, Inc.(CPI),
doing business as
A trade name, trading name, or business name, is a pseudonym used by companies that do not operate under their registered company name. The term for this type of alternative name is a "fictitious" business name. Registering the fictitious name w ...
Guidant Cardiac Rhythm Management, manufactured implantable cardiac rhythm management devices, such as
pacemaker
An artificial cardiac pacemaker (or artificial pacemaker, so as not to be confused with the natural cardiac pacemaker) or pacemaker is a medical device that generates electrical impulses delivered by electrodes to the chambers of the heart eith ...
s and
defibrillator
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 (often called a ''coun ...
s. 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 St. Paul, Minnesota. Cardiac Pacemakers, Inc. is a subsidiary of
Boston Scientific Corporation
Boston Scientific Corporation ("BSC"), incorporated in Delaware, is a biomedical/biotechnology engineering firm and multinational manufacturer of medical devices used in interventional medical specialties, including interventional radiology, in ...
.
Early history
CPI was founded in February 1972 in St. Paul, Minnesota. The first $50,000 capitalization for CPI was raised from a phone booth on the Minneapolis skyway system. 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.
Medtronic
Medtronic plc is an American medical device company. The company's operational and executive headquarters are in Minneapolis, Minnesota, and its legal headquarters are in Ireland due to its acquisition of Irish-based Covidien in 2015. While it ...
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%.
Founding partners
Anthony Adducci,
Manny Villafaña, Jim Baustert, and Art Schwalm, were former Medtronic employees. Lawsuits ensued, all settled out of court.
Acquisition
![CPI Microlyth Pacemaker](https://upload.wikimedia.org/wikipedia/commons/9/95/CPI_Microlyth_Pacemaker.jpg)
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
Pfizer Inc. ( ) is an American multinational pharmaceutical and biotechnology corporation headquartered on 42nd Street in Manhattan, New York City. The company was established in 1849 in New York by two German entrepreneurs, Charles Pfizer ...
, and
Johnson & Johnson
Johnson & Johnson (J&J) is an American multinational corporation founded in 1886 that develops medical devices, pharmaceuticals, and consumer packaged goods. Its common stock is a component of the Dow Jones Industrial Average and the company i ...
. However, Eli Lilly, one of America's premier pharmaceutical companies, 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."
[Fiedler T: Straight from the heart. Minnesota Business Journal, Feb 1985, p p 24-35] 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. Finally, both sides sat down at the bargaining table at a motel in suburban Bloomington, Minnesota – Lilly, the pharmaceutical giant, and CPI, the upstart pacemaker company. CPI's negotiation team included Anthony Adducci, Art Schwalm, Tom King, and Hunt Greene.
The company sold 8,500 pacemakers increasing sales from zero in 1972 to over $47 million. In December 1978, it was acquired by
Eli Lilly and Company
Eli Lilly and Company is an American pharmaceutical company headquartered in Indianapolis, Indiana, with offices in 18 countries. Its products are sold in approximately 125 countries. The company was founded in 1876 by, and named after, Colonel ...
for $127 million.
Lithium battery
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.
![CPI Bipolar Pulse Generator 04](https://upload.wikimedia.org/wikipedia/commons/3/37/CPI_Bipolar_Pulse_Generator_04.jpg)
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.
References
{{Authority control
Implants (medicine)
Embedded systems
American inventions
Cardiac electrophysiology
Biomedical engineering