UPDATE 2-Medtronic combines cardiac, vascular groups

* New organization designed to better target hospitals

* Medtronic could gain edge over rivals — analyst

* Medtronic shares up 0.4 percent

(Adds analyst comment, shares)

NEW YORK, April 7 (Reuters) – Medtronic Inc (MDT.N: Quote, Profile, Research) is
combining its large vascular and cardiac business groups into
one sales organization in the United States to better respond
to its hospital customers, the medical device maker said on

David Roberts, who has been Medtronic’s vice president of
sales for the cardiac rhythm disease management business, will
lead the new 2,700-person organization, which comes into
existence May 1.

The two current groups span 15 cardiovascular segments,
according to Medtronic. The move combines the company’s
vascular group that includes stents and heart valves, with the
one selling implantable pacemakers and defibrillators.

While the two business groups historically have focused
mainly on clinicians as primary decision makers, the new
strategy recognizes the importance of hospital administrators
in this role, Medtronic said in a statement announcing the new

A Medtronic spokesman said the reorganization was about
strategy, not cost-cutting, and would have a “minimal impact”
on jobs.

The reorganization gives Medtronic a competitive edge over
its two main rivals in the cardiovascular market, Boston
Scientific Corp (BSX.N: Quote, Profile, Research) and St. Jude Medical Inc (STJ.N: Quote, Profile, Research), said
Goldman Sachs analyst David Roman.

Medtronic has a greater breadth of products than Boston
Scientific, which announced a similar move last year, while St.
Jude lacks an interventional cardiology presence, Roman said in
a research note.

“We continue to see hospitals making an effort to
consolidate vendors and centralize purchasing decisions at the
service line level,” Roman said. “We think this could have been
a key determination in Medtronic’s sales force reorganization
as well as the move Boston Scientific made last year.”

Medtronic shares rose 0.4 percent to $39.60 in morning
trading on the New York Stock Exchange.

Medtronic, the world’s largest standalone medical device
company, is in the process of searching for a new chief
executive officer. The company announced in December that CEO
William Hawkins planned to retire by the end of April.
(Reporting by Lewis Krauskopf; Editing by Derek Caney and
Gerald E. McCormick)

UPDATE 2-Medtronic combines cardiac, vascular groups