MINIMED GETS MAJOR MONEY; WORLD'S BIGGEST PACEMAKER COMPANY TO PAY $30 MILLION FOR MINORITY STAKE.

Byline: Ben Sullivan Daily News Staff Writer

Medtronic Inc., the world's largest manufacturer of cardiac pacemakers, said Friday that it will pay $30 million for a minority stake in MiniMed Inc.

Under an agreement between the two companies, Minneapolis-based Medtronic already has bought the first $14 million worth of MiniMed shares at $60 each and will pay the remaining $16 million after a government-required waiting period.

The deal is seen as a major vote of confidence from an established medical devices giant to an upwardly mobile colleague.

``It is a mark of credibility,'' said Salomon Smith Barney analyst Melissa Wilmoth. ``It's a testament to Medtronic's confidence in MiniMed's growth prospects and technology.''

MiniMed specializes in diabetes-control devices, including a popular insulin infusion pump that eliminates the need for repeated daily injections. The company has seen its sales climb to roughly $100 million annually, and is considered the device maker best poised to profit from growing awareness and treatment of types 1 and 2 diabetes.

``This (insulin pump) market is only 6 (percent) to 7 percent penetrated in the U.S.,'' said Scott Wilkin, an analyst at Warburg Dillon Read in New York. ``There's a lot of legs left in it.''

Medtronic, which had $2.6 billion in fiscal 1998 sales, agreed earlier this month to buy Sofamor Danek Group Inc., the biggest maker of spinal implants, for $3.6 billion in stock. The deal still left Medtronic with about $1 billion in cash, ``and (their CEO) thought he'd get a better return on the money by investing in MiniMed than leaving it in the bank,'' Wilmoth said.

Medtronic will not receive a position on MiniMed's board of directors, she said.

MiniMed plans to use the cash infusion to fund construction of a new plant next to and partially on the California State University, Northridge, campus.

In addition to the CSUN project, MiniMed founder and Chairman Alfred Mann announced earlier this year that he was donating about $100 million each to the University of California, Los Angeles, and the University of Southern California for the construction of biotechnology research centers on those campuses.

Mann's new relationship with Medtronic is a change for the engineering entrepreneur. In the 1960s he founded his own pacemaker company, which competed directly with Medtronic.

That company, Pacesetter Inc., subsequently was sold and resold and is now owned by St. Jude Medical Inc. of St. Paul, Minn. It is the nation's second-largest pacemaker manufacturer, behind Medtronic.

MiniMed shares rose $4.75 Friday to close at $65.75.