Dive Brief:
- Medtronic is moving forward with plans to close the former Epix Therapeutics facility in California and has issued a notice that the entire 59-person workforce will be laid off by September.
- After acquiring Epix for $316 million in 2019, Medtronic began considering moving production of its DiamondTemp catheter to a facility in Ireland. Medtronic told employees of its plans to close the Sunnyvale facility during in-person meetings last year.
- The execution of those plans comes as Medtronic consolidates the decentralized manufacturing and supply chain system that it has identified as a drag on the business.
Dive Insight:
Medtronic bought Epix for a catheter-based, temperature-controlled cardiac ablation system designed to treat patients with irregular heartbeats including atrial fibrillation. Two years after making the deal, Medtronic received U.S. Food and Drug Administration approval for the device.
To acquire DiamondTemp, Medtronic also had to take on Epix’s Sunnyvale facility and employees. Now, similar to 20 years ago when Medtronic bought PercuSurge and closed its Sunnyvale site, the company has decided to move on without Epix’s former facility and employees.
“As we assess our business, we need to make longer-term structural changes to ensure the sustainability of our organization. We previously announced plans to close this facility and after careful analysis and consideration, we have made the necessary decision to close the site in June 2023, therefore eliminating some positions,” company spokesperson Erika Winkels said in an emailed statement.
“Medtronic operates in a highly competitive environment and is continually taking actions to drive effectiveness and efficiencies to drive growth and position us for the future,” Winkels added.
Karen Parkhill, Medtronic’s chief financial officer, told investors in February that the company was focused on delivering “significant expense reductions” as it navigates “macro headwinds from foreign currency and inflation.” Medtronic subsequently combined its robotic-assisted surgery technology and older surgical devices into a single operating unit.
