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 fictitious business name. Registering the fictitious name with ...

Guidant Cardiac Rhythm Management, manufactured implantable cardiac rhythm management devices, such as

pacemaker A pacemaker, also known as an artificial cardiac 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 co ...

s and

defibrillator Defibrillation is a treatment for life-threatening cardiac arrhythmias, specifically ventricular fibrillation (V-Fib) and non-perfusing ventricular tachycardia (V-Tach). Defibrillation delivers a dose of electric current (often called a ''count ...

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

Saint Paul, Minnesota Saint Paul (often abbreviated St. Paul) is the List of capitals in the United States, capital city of the U.S. state of Minnesota and the county seat of Ramsey County, Minnesota, Ramsey County. As of the 2020 United States census, 2020 census, ...

, and is presently a subsidiary of

Boston Scientific Boston Scientific Corporation (BSC), headquartered in Marlborough, Massachusetts and incorporated in Delaware, is an American biotechnology and biomedical engineering firm and multinational manufacturer of medical devices used in interventional ...

History

CPI was founded in February 1972 in

. The first $50,000 capitalization for CPI was raised from a phone booth on the

Minneapolis Minneapolis is a city in Hennepin County, Minnesota, United States, and its county seat. With a population of 429,954 as of the 2020 United States census, 2020 census, it is the state's List of cities in Minnesota, most populous city. Locat ...

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-Irish medical device company. The company's legal and executive headquarters are in Republic of Ireland, Ireland, while its operational headquarters are in Minneapolis, Minneapolis, Minnesota. Medtronic rebased to I ...

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 Anthony J. Adducci (August 14, 1937 – September 19, 2006) 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-powe ...

Manny Villafaña Manny Villafaña (born 1940 in New York City), 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 awa ...

, Jim Baustert, and Art Schwalm, were former Medtronic employees. Lawsuits ensued, all of which were settled out of court.

Eli Lilly acquisition

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 Pfizer Inc. ( ) is an American Multinational corporation, multinational Pharmaceutical industry, pharmaceutical and biotechnology corporation headquartered at The Spiral (New York City), The Spiral in Manhattan, New York City. Founded in 184 ...

, and

Johnson & Johnson Johnson & Johnson (J&J) is an American multinational pharmaceutical, biotechnology, and medical technologies corporation headquartered in New Brunswick, New Jersey, and publicly traded on the New York Stock Exchange. Its common stock is a c ...

. However,

Eli Lilly and Company Eli Lilly and Company, Trade name, doing business as Lilly, is an American multinational Medication, pharmaceutical company headquartered in Indianapolis, Indiana, with offices in 18 countries. Its products are sold in approximately 125 count ...

, 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."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 Insulin (, from Latin ''insula'', 'island') is a peptide hormone produced by beta cells of the pancreatic islets encoded in humans by the insulin (''INS)'' gene. It is the main Anabolism, anabolic hormone of the body. It regulates the metabol ...

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 Indianapolis ( ), colloquially known as Indy, is the List of capitals in the United States, capital and List of municipalities in Indiana, most populous city of the U.S. state of Indiana and the county seat of Marion County, Indiana, Marion ...

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 Bloomington is a city in Hennepin County, Minnesota, United States. It is located on the north bank of the Minnesota River above its confluence with the Mississippi River, south of downtown Minneapolis and just south of the Interstate 494/Inter ...

. 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.

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. 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 American inventions Biomedical engineering Cardiac electrophysiology Eli Lilly and Company Embedded systems Implants (medicine)