Revenues soar for Medtronic's Santa Rosa division

Medtronic’s Santa Rosa-based vascular business returned to double-digit growth in the second quarter, with global sales up 20 percent over the past year, the medical device maker said Tuesday.

Most of the division’s revenue came from outside the United States, where Medtronic is a leader in treating artery disease.

“We had a very solid performance in Europe, in part driven by the endovascular and cardiovascular business,” Medtronic CEO Bill Hawkins told Wall Street analysts Tuesday.

The vascular unit also gained from the launch of Medtronic’s Endeavor drug-coated stent in Japan, which generated more than $30 million in sales during the quarter ended Oct. 30.

Stents are tiny mesh tubes implanted in patients’ arteries to keep blood flowing after they’ve been cleared of fatty deposits. The drug coating keeps arteries from re-clogging.

Medtronic now has more than 20 percent of the worldwide market for coronary stents, the company said Tuesday.

Vascular sales hit a record $490 million in the second quarter, up from $410 million for the same period a year ago. The business posted $471 million in revenue during this year’s first quarter.

Endovascular products — including stent grafts for treating aortic aneurysms — saw 28 percent sales growth last quarter.

“It’s one of the fastest-growing businesses at the company,” said spokesman Joe McGrath.

Medtronic felt the impact of the economic downturn earlier this year as patients put off costly surgeries and hospitals ordered fewer medical devices.

The Minneapolis-based company took steps to control costs, cutting more than 1,500 positions, including 300 in Santa Rosa. Medtronic now has about 840 employees in Santa Rosa, where it develops stent and stent graft technology.

Lower operating costs and higher sales — particularly outside the U.S. — pushed Medtronic’s quarterly profit to $868 million, up 59 percent from last year’s second quarter.

Overall, the company generated $3.8 billion in sales during the quarter, up about 8 percent above the same period last year.

Medtronic’s largest business, implantable heart devices, grew 3 percent to $1.3 billion, surprising analysts who predicted sluggish sales. The company also also makes diabetes, surgical, spinal and physio-control products.

The pre-market report exceeded analyst forecasts, sending Medtronic shares rising 6 percent to $42.73 when the stock market opened Tuesday.

Shares closed at $43.25, up 7 percent on the New York Stock Exchange.

Medtronic said it expects companywide revenue to grow 5 to 8 percent for the rest of the year.