St Jude Medical Inc. Case Study

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St Jude Medical, Inc. Acquisition of AGA Medical Holdings, Inc. AGA Medical Holdings, Inc. AGA Medical Holdings, Inc. develops and manufactures cardiovascular medical devices to treat congenital heart and peripheral vascular diseases. AGA Medical is a global innovator and manufacture of comprehensive medical devices that treat the structural heart defects and vascular abnormalities through minimal invasive transcatheter treatments. The products manufacture by AGA Medical is sold under the brand name AMPLATZER in over 112 countries through a network of distributors and direct sales. The company started by Dr. Kurt Amplatz, an Austrian radiologist and medical device inventor with the invention of the AMPLATZER Septal Occluder. The medical device …show more content…

AGA Medical received CE marking in 1999 for the Septal Occluder, which received wide adoption in the Europe, and generating $25 million in sales. In 2002, the FDA approved the Septal Occluder allowing sales to grow to over $62 million. Conflict within the organization affected the business and organization structure of the company. Co-investors and partners, Franck Gougeon, Michael Afremov, and Curtis Amplatz became in disagreement with each other over ethnic and personal differences prompting litigation for the firing of Afremov. In 2003, a judge ordered the partners to come to unanimous decisions for conducting business at AGA Medical but Gougeon and Amplatz violated the order prompting a court appointed counsel to mediate meetings for the partners. Meetings for the three partners were conducted in hotel meeting rooms with multiple attorneys present to represent each party’s interest. The litigation ensued for months with discussion of who would be eligible to buy each other shares of the company. The parties came to an agreement for Gougeon and Helms to buy out Afremov for approximately $300 million, with funds being provided by a private equity firm Welsh Carson Anderson & Stowe. The initial legislation between ownership of AGA Medical was the start of legal issues the company when sustained before being acquired by St Jude …show more content…

siting patent infringement for US 6,306,141; US 5,067,957; and US 5,190,546 (Coe, 2009). Jervis patents, so-called by Medtronic, uses self-expanding medical deice to restrain metal alloy to expand into an original shape that is used to treat damaged or diseases heart valves with a less invasive transcatheter heart valve procedure. The Occluder and vascular plug product line by AGA Medical infringed the Jervis patent, which was decided by a jury in the Federal district court in San Francisco. The jury awarded Medtronic $57 million in past damages and 11 percent royalty for future US sales of the AGA Medical device that infringe the product through 2018 (Medtronic, Inc., 2009). In March of 2010, AGA Medical had agreed to pay Medtronic, Inc. $35 million to resolve the patent infringement which is less than the jury awarded and will occur over four years (Coe, 2010). The United States Department of Justice, DOJ, announced charges against AGA Medical for foreign corruption and bribery of Government officials in People’s Republic of China. AGA Medical authorized a Chinese Distributor to negotiate the sale price, hiring and firing of employees, and approve sales practices in the foreign country which primary customers were hospital owned and operated by the Chinese government. The evidence of a kickback was shown to reflect up to 25% of sales was being promised and paid to the

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