How Boston Scientific (sort of) became ‘Minnesota Scientific’

In a wide manufacturing room with white walls and low ceilings, Boston Scientific employees combine components into finished consoles holding the brains of its medical devices, with automated tests collecting thousands of data points for quality control.

The consoles that power the company’s blockbuster AFib treatment Farapulse start in this room as a metal frame. Workers clad in gray smocks resisting static electricity precisely add hundreds of parts like wire harnesses, circuit boards and plastic exterior pieces with Farapulse logos.

“It looks, like, five times more complicated than your best high-end stereo,” said Joe Fitzgerald, who runs the company’s $8 billion cardiology arm.

This key space isn’t in Boston, but rather in Arden Hills, Minn. Boston Scientific, one of the world’s largest medical device makers, makes none of its products in its namesake city.

It does make a lot of them in Minnesota, though, including its industry-leading Watchman and Farapulse systems. All eight of the company’s divisions do business in the North Star State, and about a fifth of its products are made here.

Boston Scientific has approximately doubled its Minnesota workforce in the last 15 years to about 10,000. It has become the largest employer in both Maple Grove and Arden Hills. And it’s not done expanding.

The Maple Grove City Council recently advanced a planned expansion, with the first phase including a 52,000-square-foot facility costing $139.4 million to build more than 500,000 Watchman devices annually, according to city documents. The company expects to create 440 new full-time equivalent jobs by 2030 with an anticipated average hourly wage of $47.50, filings with the city say.

Employees often joke, “It should be called Minnesota Scientific because of the growth and the strength and the capabilities that we have there,” chief executive Mike Mahoney said in a recent interview.

It’s not just about headcount. Two recent blockbuster devices — the stroke-fighting Watchman implant and the Farapulse ablation console — are products of Minnesota talent and at the core of Boston Scientific’s turnaround strategy.

Understanding Boston Scientific’s large and growing presence in Minnesota starts with cardiology. Minnesota has a long history of heart-related medical device development, and Boston Scientific houses its cardiology division at locations all within a short commute from where Earl Bakken invented his battery-powered pacemaker in the late 1950s and founded Medtronic.

Farapulse, a system that is used to ablate heart tissue and cut the risk of atrial fibrillation and stroke, has grown into one of Boston Scientific’s “Minnesota capabilities,” Mahoney said. It started as an independent company and now receives boosts from internal development here. The same’s true of the company’s Watchman device, a heart plug to prevent stroke-causing blood clots.

“It’s the most important product we have,” Mahoney said of Farapulse.

In the CEO’s more than 12 years with the company, he has steered the emphasis away from lower-growth products like stents to high-growth technologies used to treat complex issues. To achieve this growth, he has doubled-down on the company’s investments in strategic venture capital moves, mergers and acquisition and internal research and development.

Boston Scientific planted its first seeds in Minnesota in 1994, with its $850 million acquisition of SciMed, which made catheters used primarily to reopen clogged heart arteries.

SciMed had about 1,400 employees at the time, and was headquartered just off Weaver Road at 1 SciMed Place — the address of Boston Scientific’s Maple Grove operation today.

Longtime Maple Grove Mayor Mark Steffenson said Boston Scientific’s entering the community felt exciting for the most part.

But uncertainty would soon loom, following Boston Scientific’s next Minnesota deal, a disastrous $27 billion acquisition of Arden Hills pacemaker company Guidant in 2006.

After outbidding Johnson & Johnson, Boston spent years addressing Guidant’s legal problems stemming from recalls while resolving billions in debt. Quarterly losses ranged from $250 million to $1 billion following the deal, and the local workforce fell from roughly 6,500 to about 5,000 between 2007 and 2010.

Steffenson wondered at the time if the troubles pointed to a potential acquisition that would affect the company’s Maple Grove operations. “Are they going to continue to really operate here or not?” he remembered wondering.

Mahoney, a former Johnson & Johnson executive, stepped into Boston’s CEO role in 2012 with a mandate to boost the company’s revenue.

The following year, it returned to annual revenue growth.

The company eventually went from two to four buildings in Maple Grove, Steffenson said, and the employee population there grew from about 1,000 to 4,000. In Arden Hills, its real estate ballooned as it expanded a training center and research facilities, purchased and converted a pet food plant, and built a facility for making pacemaker batteries, said Arden Hills mayor David Grant.

Executive Vice President for Global Operations Brad Sorenson said about 20% of the company’s operations are now located in Minnesota, with a focus on the critical and complicated parts of products such as the console for the Farapulse system.

Growing in Minnesota hasn’t been a difficult decision, Mahoney said, as it’s one of the largest medtech ecosystems in the world.

“We are growing, and we’re winning in the market through our innovation — through our people,” he said.

Mahoney boasted about Minnesota’s engineering talent, which largely flows from big Midwest universities like the University of Minnesota. As the company has returned to growth, it has become easier to attract employees, he said.

“When companies are doing well and you have a really good culture — which we do — people want to be a part of it,” Mahoney said.

Investing in Farapulse basically started as an idea on a napkin, Fitzgerald said.

“I don’t think it was presented at a bar,” he said, “but it might have been a football game.”

Mahoney developed a strategy to pursue growth though a mix of venture capital, mergers and acquisitions and internal R&D. The Boston Globe reported that Boston Scientific created a system to set aside a tenth of its revenue for research and development and spend much of its profits on new deals.

Investing in small medtech companies is risky, Mahoney said, as they don’t always succeed. That wasn’t the case for Farapulse, which was in part a product of Boston Scientific’s venture capital arm, Mahoney said.

“We’re willing to place bets — maybe more so than most — because that’s where oftentimes you see more disruptive innovation in the startups,” Mahoney said.

Boston Scientific started investing in Farapulse in 2014. By 2021, it had amassed a 27% stake in the company and pulled the trigger. It paid $295 million for the remaining stake to acquire the company, with another $92 million awarded upon achievements and additional revenue-based payments for three years.

It’s now a leader in the multibillion dollar race to treat AFib with pulsed field ablation. The system treated more than 200,000 patients over the course of a year, pulling in more than $1 billion. It was the company’s fiscal cornerstone in a year when it reported adjusted profits of $3.7 billion.

The product sits in Boston Scientific’s cardiology division, which is largely based in Minnesota. Mahoney said he could’ve expanded the division in California or Boston. Instead, he has kept franchises like Watchman here because of the “engineering, resources, and capabilities and work ethic of the teams in Minnesota.”

Fitzgerald said cardiology makes up about 55% of the company. More than roughly 75% of the division is Minnesota.

Watchman has always been in the state. Its small parachute-shaped device prevents blood clots from forming in the heart’s left atrial appendage. The company acquired its maker, Plymouth-based Atritech, in 2011 for $100 million up front. After four additional years of development and testing, and three votes from Food and Drug Administration advisory panels, it secured FDA approval in 2015.

The product is a testament to the Minnesota-made engineering, he said. It’s difficult to manufacture and required lots of clinical work. Today it drives more than $1.5 billion in annual revenue.

Fitzgerald hopes to move into Boston Scientific’s new $170 million, 400,000-square-foot Maple Grove facility by Thanksgiving. The campus will hold training spaces as well as research and development facilities. Maple Grove contributed $6.4 million in tax increment financing to the project.

The company’s workforce grew by about 82% in the U.S. between 2014 and 2024, and roughly by 50% in Minnesota overall.

The chief executive keeps his office at the world headquarters in Marlborough, Mass., but he swings by the Twin Cities about once per month:

“Thankfully, we have amazing leaders there, so they don’t need me every day.”

Minnesota Star Tribune reporter Sarah Ritter contributed to this report.