Rank: #22 (Last year: #21) $5.44 Billion
Prior Fiscal: $5.01 Billion
Percentage Change: +8.6%
R&D Expenditure: $1.05B
Best FY24 Quarter: Q1 $1.59B
Latest Quarter: Q1 $1.41B
No. of Employees: 16,000
Global Headquarters: Irvine, Calif.

The timing couldn’t have been better—or worse.

Better for all humankind, but worse (relatively speaking) for one particular human.

Pertinent background: In 1958, inventor/retired engineer Miles Lowell Edwards wanted to build an artificial heart. But he couldn’t do it alone—he lacked medical expertise (his competence was in pump design).

Edwards’ search for a suitable partner ultimately led him to Albert Starr, a cardiac surgeon who at the time was establishing the first open-heart surgery program at the University of Oregon Medical School. Edwards pitched his prosthetic heart idea to Starr, who agreed to collaborate but recommended narrowing the project’s scope.

“I started medical school in Oregon and Lowell Edwards came to visit me about the first year I was there and wanted to build an artificial heart,” the late Dr. Starr said during a 2011 interview. “I told him we didn’t even have valves at that time. If we were going to build a heart, we’d need to at least start out with some valves. So let’s do the project, but one valve at a time, and then when we have all the valves done, we can go to the heart.”

Edwards agreed, and over the next two years, manufactured a series of heart valves for Dr. Starr to test. In September 1960—just two years after their initial meeting—Dr. Starr successfully inserted a “ball-in-cage” prosthetic heart valve into a patient’s severely diseased mitral valve.

The success of that first heart valve implant marked the beginning of a new era—and new market—for cardiac valve disease treatment. For more than three decades, the Starr-Edwards valve stood as the gold standard in the field.

Edwards’ revolutionary vision and Dr. Starr’s medical expertise laid the foundation for advancements in both mechanical and tissue-based heart valves. Those advancements continue today through the namesake company Edwards founded nearly 70 years ago in Santa Ana, Calif.

With a 16,000-strong workforce and a $44.68 billion market cap (July 2025), Edwards Lifesciences has established itself as a top competitor in the global structural heart market. The company bolstered its position in the sector last year through a sequence of strategic moves, including five key acquisitions and the $4.2 billion divestiture of its Critical Care product group to BD.

The June 2024 sale expands BD’s smart connected care solutions offering, adding hemodynamic monitoring products that currently are used in more than 10,000 hospitals worldwide for cardiovascular conditions. Critical Care generated more than $900 million in 2023 revenue for Edwards.

The Critical Care sale kicked off a summer of deal-making for Edwards. About a month after the divestiture (in mid-July), the company brought three mitral valve developers and a heart failure management solutions provider under its wing.

Edwards shelled out $1.5 billion for JenaValve Technology, Endotronix, and Innovalve Bio Medical Ltd. JenaValve expands Edwards’ structural heart portfolio with a transcatheter valve for aortic regurgitation, while Endotronix contributes an implantable pulmonary artery pressure sensor for heart failure management.

FROM THE TOP: “As we enter our first full year as a company solely focused on structural heart disease, we are stronger than ever before with significant growth drivers in TAVR and TMTT and emerging opportunities in other areas of structural heart. With this, I am more optimistic than ever about the tremendous opportunities in front of us.”

—Bernard J. Zovighian, CEO

Similarly, Innovalve augments Edwards’ transcatheter aortic valve replacement (TAVR) capabilities with its minimally invasive cathaterization-based device for moderate-severe and severe mitral regurgitation treatment. Edwards first invested in Innovalve Bio Medical eight years ago as it was spun out of Sheba Medical Center in Tel Aviv. 

“In 2024, we invested significantly in both internal R&D and external early-stage acquisitions to advance novel therapies that benefit patients, physicians, and others…” CEO Bernard J. Zovighian told shareholders in a letter within Edwards’ latest annual report. “We made strategic decisions that have shaped both the Edwards of today and the Edwards of the future.”

The future Edwards likely will be shaped by two other deals made by the Edwards of today (or, technically, yesterday): the purchases of a French implant manufacturer subsidiary and a TAVR system from Singapore-based Genesis MedTech.

Edwards paid €5 million for an exclusive option to buy Kephalios, a wholly owned subsidiary of Affluent Medical SA that has developed a balloon-adjustable ring for mitral re- gurgitation treatment. The option is based on clinical study outcomes; Affluent will continue to exclusively manage the ring’s development during the option’s lifetime.

In addition to the Kephalios acquisition, Edwards picked up an equity stake in Affluent and bought the global, non-exclusive license of the company’s IP for its biomimetic cardiac mitral valve replacement technology, restricted to open-heart surgery. The €5 million license purchase could include future royalties on all potentially commercialized products using the licensed patents. Affluent retains full patent rights for transcatheter valves, including its Epygon mitral valve.

“We look forward to welcoming Edwards as a shareholder in our company,” Affluent Medical CEO Sébastien Ladet said in a news release announcing the deal. “Edwards’ global market presence and commercial infrastructure holds the potential for our product Kalios to help doctors and their patients worldwide, while creating a strong partnership for Kalios and surgical mitral valves using our technology. Affluent will continue to develop its transcatheter mitral valve Epygon and its urinary incontinence artificial sphincter Artus.”

The Genesis MedTech deal was structured much like the Affluent agreement—Edwards purchased Genesis subsidiary JC Medical Inc. and its J-Valve System, a TAVR solution for severe aortic regurgitation. Genesis, however, retains the exclusive right to develop, manufacture, and commercialize the J-Valve System in greater China.

Genesis MedTech completed patient enrollment in July 2023 to study the J-Valve transfemoral system (J-Valve TF) in China for aortic regurgitation treatment and concluded the one-year follow up in 2024.

“J-VALVE has unique advantages in treating aortic valve regurgitation.” Genesis MedTech Group Chairman/CEO Warren Wang stated. “We hope J-Valve can expand its global impact, enabling more patients to benefit from this innovative product. We will continue strengthening our focus on developing innovative products and explore better medical solutions to benefit more patients worldwide.”

Besides the JC Medical purchase, Edwards made a $25 million equity investment in Genesis MedTech to support the company’s product and market development efforts. 

“We strengthened our technology portfolio with targeted acquisitions to help address the significant unmet needs of patients impacted by structural heart failure and AR [aortic regurgitation],” Zovighian noted in the annual report. “As the pioneers in valve innovation, we are well-positioned to lead this next frontier of aortic valve disease treatment. We’ve developed a strong, diverse product portfolio, with category- leading technologies.”

That portfolio diversity expanded last winter with the U.S. Food and Drug Administration approval of Edwards’ Evoque tricuspid valve replacement system—the first transcatheter therapy to gain such authorization for tricuspid regurgitation treatment—followed by the springtime launch of the SAPIEN 3 Ultra RESILIA valve.

The latter product helped boost Transcatheter Aortic Valve Replacement product revenue 5.8% last year (to $4.1 billion), Edwards’ 2024 annual report data show. SAPIEN 3 Ultra RESILIA demand was particularly strong in the United States, Europe, and Japan.

Fiscal 2024 sales were also robust in Edwards’ two other product groups. Surgical Structural Heart proceeds climbed 5.2% to $981.3 million, driven by higher sales of the INSPIRIS RESILIA aortic valve in the United States and Europe, the KONECT RESILIA tissue valved conduit in the United States, and the MITRIS RESILIA valve in the United States.

Transcatheter Mitral and Tricuspid Therapies revenue surged 78.2% to $352.1 million, thanks to higher sales of the PASCAL transcatheter edge-to-edge system and the continued launch of the EVOQUE tricuspid valve replacement system in the United States and Europe.

“Edwards is revolutionizing care for millions with mitral and tricuspid valve diseases through our portfolio of therapies, including PASCAL and EVOQUE,” Zovighian remarked in the annual report. “We remain committed to transformative product innovation, robust clinical evidence, and comprehensive support for excellent patient outcomes. Our diversified strategy in structural heart positions us for sustainable, long-term growth.”

Edwards’ short-term prospects are solid, too: Fiscal 2024 sales rose 8.5% to $5.44 billion and gross profit climbed 7.2% to $4.32 billion. Net income ballooned 14.4% to $1.39 billion, and basic earnings per share swelled 15.8% to $2.34.

$6.00 Billion
Prior Fiscal: $5.38 Billion
Percentage Change: +11.6%
R&D Expenditure: $1.07B
Best FY23 Quarter: Q4 $1.53B
Latest Quarter: Q1 $1.60B
No. of Employees: 19,800

While M&A has been so prolific within the medical device manufacturing industry, it’s only natural to have many firms also “go on a diet.” That is, after making an acquisition, an organization may find components or businesses that don’t align well with the firm’s ultimate vision for its future. As such, divestitures and spinouts have seemed to increase alongside the acquisition activity. In 2023, Edwards was the latest entity to announce a “diet plan.”

In December 2023, the firm announced its plan to spin out its Critical Care business to stand alone as a company focused on patient monitoring solutions. This would leave the parent Edwards to specifically target structural heart disease as the condition upon which it would dedicate its attention.

The Critical Care business was credited with being responsible for approximately 16% of Edward’s overall annual revenue. Growth projections anticipated single-digit expansion for the unit and sales were expected to be about $900 million to $1 billion in 2024. The new entity would be led by Katie Szyman who was serving as the corporate VP of critical care—a position she held since 2015.

“We are proud of the Critical Care team, its rich legacy of pioneering innovation and the contributions they have made to our company, and we look forward to an even stronger future for Critical Care,” said Edwards CEO, Bernard Zovighian, during its annual investor conference in December.

Plans don’t always go as anticipated, however. In June 2024, Edwards declared it would sell the Critical Care business to BD instead of moving forward with the intended spin-out. The all-cash transaction, valued at $4.2 billion, keeps Szyman as the head of the unit, which would remain in Irvine, Calif.

As part of the announcement regarding the deal, Edwards indicated the cash infusion would be used to fund strategic growth investments.

“Edwards’ underlying rationale for separating Critical Care remains the same: we are laser-focused on pursuing a strategy centered on structural heart disease,” said Zovighian.

Either through divestiture or spin-out, Edwards was surrendering the $928 million the Critical Care unit took in during its 2023 fiscal. This reflected an 8.5% gain over the previous year. The increase was primarily attributed to higher demand in the U.S. for the business’ enhanced surgical recovery products and pressure monitoring products. The high single-digit percentage rise was the lowest when compared to the other units, which are all focused on structural heart.

Leading the pack in terms of revenue and elevating 10.3% was Transcatheter Aortic Valve Replacement (TAVR), which ended the period with $3.88 billion. The TAVR unit experienced an increase in sales of the SAPIEN platform (primarily the SAPIEN 3 Ultra RESILIA valve in the U.S. and Japan). The SAPIEN 3 Ultra valve also enjoyed increased attention in Europe and Rest of World.

The rapidly growing Transcatheter Mitral and Tricuspid Therapies (70.1% explosion year-over-year) contributed $197.6 million to the company’s coffers. This substantial growth was credited primarily to the launch of the PASCAL system in the U.S. and its continued adoption in Europe.

Surgical Structural Heart finished just shy of $1 billion in revenue as it experienced an elevation of 11.9% in sales for 2023. Edwards pointed to sales of the INSPIRIS RESILIA aortic valve in the U.S. and Europe, and the MITRIS RESILIA valve in the U.S. as the main reasons for the rise.

To maintain the high degree of growth the company experienced in 2023, it pushed ahead with a variety of product moves to maintain its standing as a leader in the structural heart marketplace. Two such actions were particularly noteworthy.

The EVOQUE tricuspid valve replacement system gained a CE mark for the transcatheter treatment of eligible patients with tricuspid regurgitation. The system is comprised of a nitinol self-expanding frame, intra-annular sealing skirt, and tissue leaflets made from the same bovine pericardial tissue as the company’s other heart valves. Edwards produces the valve in three sizes, all delivered through a low-profile transfemoral 28F system.

Another CE mark was provided to the MITRIS RESILIA valve, a tissue valve replacement specifically designed for the heart’s mitral position. According to Edwards, the technology preserves and protects the tissue, allowing the valve to potentially last longer than conventional bioprosthetic valves.

Other relevant product information shared throughout the year included:

• • SAPIEN 3 Ultra RESILIA valve launched in Japan

• • CE mark for SAPIEN 3 Ultra RESILIA valve

• • Japanese approval for PASCAL Precision to treat patients with degenerative mitral regurgitation

• • Enrollment completed for the ENCIRCLE Trial for the SAPIEN M3 transfemoral mitral replacement therapy

• • FDA approval for a SAPIEN M3 continued access program

• • Restarted enrollment in the ALLIANCE Trial, which focuses on the SAPIEN X4 TAVR technology

• • Enrollment completed for the PROGRESS Trial, which is studying the treatment of moderate aortic stenosis patients

• • Enrollment completed for the TRISCEND II Trial, focused on the EVOQUE replacement system

While Edwards has enjoyed much success serving the structural heart care space, it will need to do so moving forward without its leader of more than 20 years. Taking over the reins in 2000, Michael A. Mussallem told the Edwards board he would be retiring from the role at the age of 70 in 2023.

“It has been a special honor and privilege to lead our team at Edwards Lifesciences for more than 20 years in their immense contributions to helping and advancing care for millions of patients around the world. I am particularly proud of the ‘patients-first’ culture that is embodied by our employees and the commitment to innovation and excellence that our global teams demonstrate. Our success to date is a testament to our talented executive leadership and passionate global team, and we are well-positioned for an even brighter future,” Mussallem said in the 2022 announcement of the C-suite change.

The move paved the way for Bernard Zovighian to become the new chief. He had been serving as corporate vice president and general manager for the Transcatheter Mitral and Tricuspid Therapies (TMTT) business at the time of the notification. Zovighian joined the organization in 2015 as vice president and general manager of Surgical Structural Heart. Before Edwards, he held positions at J&J for almost 20 years.

The transition also shifted the responsibilities of others leading the firm. Larry Wood, corporate vice president and general manager of Edwards’ TAVR business, would also oversee Surgical Structural Heart. Meanwhile, Daveen Chopra moved from heading Surgical Structural Heart to overseeing TMTT.

Unfortunately, while Edwards celebrated much success in 2023, not all news was positive. Perhaps, most notable among the unfavorable information about the company was an issue regarding EU antitrust regulators who had raided a company facility in September. The reason for the action, according to a Reuters report, seemed to stem from “concerns that it may have abused its market power in breach of the bloc’s antitrust rules.”

Edwards issued a brief statement regarding the incident at the time that stated, “Edwards Lifesciences is cooperating with the European Commission regarding its inspection in relation to EU competition law. We have an unwavering commitment to healthy, fair competition; when innovative companies like ours compete, patients benefit. We remain confident in our business practices and will not be commenting further at this time.”

In a different matter, Edwards was involved in a lawsuit as the defendant that related back to its 2016 acquisition of Valtech for $690 million. Valtech investors accused Edwards of shelving the purchased firm’s technology—Cardioband—which they state competed with Edwards’ Pascal valve repair system. The plaintiffs claimed they were duped into deferring up to $350 million of the sale price. Since the technology was shelved, certain targets were not met. As a result of the premature nature of the lawsuit (i.e., the 10-year window for the targets was still open), a judge dismissed the case, but would allow it to continue at a later date following the “Earn-Out” period.

$5.38 Billion
Prior Fiscal: $5.23 Billion
Percentage Change: +2.87%
R&D Expenditure: $945.2 Million
Best FY21 Quarter: Q4 $1.35 Billion
Latest Quarter: Q1 $1.46 Billion
No. of Employees: 17,300

Sarah Sue Morbitzer and her new friend Valerie have been inseparable since the day they met.

The pair is so close, in fact, that it’s often difficult to distinguish between them: Both like the same sport. Both share the same dreams. Both exude confidence yet maintain their modesty and approachability. And neither wallows in self-pity.

Sarah Sue and Valerie first bonded several years ago during Morbitzer’s freshman year at the Ohio State University. Having achieved her dream of making the Buckeyes women’s volleyball roster, Morbitzer began summer workouts with the 15-member team in 2020 but had trouble completing the workout regimen. “I just thought I was a freshman, out of shape and just not acclimated yet,” Sarah Sue recalled in a video posted to the Big Ten Network last summer. “I had shortness of breath, a very tight chest…I just could not complete all the reps…”

Sarah Sue’s inability to keep up with teammates, however,  had little to do with her acclimation to university sports. It was her heart—specifically, a leaky valve—that was the issue. Morbitzer needed a new valve.

The diagnosis was not surprising to Sarah Sue, considering she underwent open heart surgery as a 4-month-old to build the wall between two cardiac chambers (ventricles) and repair two valves. The renovations were necessary to correct Tetralogy of Fallot, a rare birth defect (affecting one in 2,518 infants) that causes oxygen-poor blood to flow from the heart to the rest of the body. The defect is usually diagnosed soon after birth and can only be corrected through surgery.

Sarah Sue had two options: She could undergo traditional open-heart surgery (invasive, long recovery period) or receive a transcatheter pulmonary valve replacement (considerably less invasive, short recovery). Not surprisingly, Morbitzer chose the latter solution.

“I was just like, kind of sitting patiently, sitting quietly in the corner, I was like, ‘why are we even talking about this? This is happening now,’” Sarah Sue said. “I got this valve—transcatheter—so not open-heart surgery”

Morbitzer underwent transcatheter pulmonary valve replacement (TPVR) surgery in December 2020 and played in her first volleyball match for the Buckeyes just one month later (Ohio State beat Maryland, 3-2).

“It’s definitely hard at times, knowing that I’m a little different than everybody. Everyone obviously loves and supports me but it’s definitely hard sometimes,” Sarah Sue noted. “My new valve that I had inserted, her name is Valerie. We gave her a name, just to have some fun with it.”

More than some fun, actually—Valerie has been a steady source of amusement amongst Sarah Sue’s teammates in the past two-and-a-half years. “We’ll just come up to her, or we’re running, we’re running practice or anything like that and we’re like, ‘How’s Val doing? How’s Sarah Sue doing?’” Mac Podraza, a former Buckeyes setter, told Big Ten Network. “And then it’s always, ‘How’s Val doing?’ because we just want to check up on her [Morbitzer] and make sure that every part of her is doing well.”

Sarah Sue is doing very well these days, thank you. After two successful volleyball seasons, she earned an athletic scholarship at Ohio State University, and is set to begin her senior year there this fall. Morbitzer intends to enroll in medical school after she graduates to pursue a career in pediatric cardiology.

With Valerie by her (in)side, of course.

Though she is affectionately known as Valerie to Morbitzer and the Buckeyes women’s volleyball team, the official birth name of Sarah Sue’s new valve is Edwards SAPIEN 3 Transcatheter Pulmonary Valve (TPV) System with Alterra Adaptive Prestent. Approved by the U.S. Food and Drug Administration (FDA) in August 2020, the system combines Edwards Lifesciences’ SAPIEN 3 valve and the Alterra adaptive prestent to expand transcatheter therapy options for congenital heart valve disease patients. Irvine, Calif.-based Edwards designed Alterra to compensate for size and morphology variations of the right ventricular outflow tract in order to provide a stable landing zone for the SAPIEN 3 valve.

The SAPIEN 3 TPV System with Alterra Adaptive Prestent is one of the newest iterations of Edwards Lifesciences’ best-selling SAPIEN valve, which first won FDA approval in 2011.

The company’s SAPIEN 3 platform experienced a slight tweak last fall with the FDA approval and limited launch of a new pericardial bovine valve with anti-calcification technology. The SAPIEN 3 Ultra RESILIA valve combines Edwards Lifesciences’ existing SAPIEN 3 Ultra transcatheter aortic heart valve and its RESILIA tissue technology to create a dry storage-enabled product with improved durability.

That enhanced durability was facilitated by Edwards’ RESILIA tissue—bovine pericardial matter treated with anti-calcification technology (i.e., the elimination of free aldehydes). A preclinical juvenile sheep model study showed a 72% reduction in calcium content after eight months in RESILIA-treated valves compared to controls.

RESILIA’s longevity provides Edwards with a unique selling point for its SAPIEN valves as it competes with Medtronic for TAVR market share. The SAPIEN 3 Ultra valve, however, is just one of several products that incorporate Edwards’ anti-calcification technology. RESILIA also found its way into a valve replacement specifically designed for the heart’s mitral position.

The MITRIS RESILIA valve, which received FDA approval in late March 2022, has a saddle-shaped sewing cuff that mimics the mitral valve’s asymmetric shape. It also features a low-profile frame that helps avoid obstruction of the left ventricular outflow tract by stent posts and is visible under fluoroscopy, to facilitate potential future transcatheter interventions for patients.

The MITRIS RESILIA valve also is approved in Japan, Canada, and other countries worldwide. Earlier this year, Edwards began enrolling patients in a clinical study that will determine the durability of RESILIA tissue in the mitral position.

“Mitral valve disease is prevalent, and the patients impacted experience the disease in variable ways,” Daveen Chopra, corporate vice president, Surgical Structural Heart at Edwards, said upon the MITRIS RESILIA’s FDA approval. “It was important to design the MITRIS RESILIA valve to perform like the native mitral valve, handling the highest pressures in the heart and offering sustained hemodynamic performance, so surgeons and patients can have confidence in this new therapy option.”

Surgeons and patients quickly gained that confidence, according to Edwards’ 2022 annual report. The document identifies the quick adoption of both MITRIS RESILIA and the Edwards SAPIEN 3 Ultra RESILIA valve as a contributing factor to higher company sales last year. Total revenue grew 2.87% to $5.38 billion, with most of the proceeds (58.2%) generated in the United States. Gross profit swelled 8% to $4.3 billion, while operating income climbed 3% to $1.75 billion and net income rose 1.2% to $1.52 billion. Earnings per share increased 2% to $2.46.

“Our 2022 adjusted earnings per share grew 12 percent.  Our results fell short of our expectations and were primarily impacted by hospital staffing shortages around the globe, and foreign currency rates that moved significantly during the year,” former Chairman and CEO Michael A. Mussallem said in his final shareholder letter (he retired in May 2023, handing the reigns to Bernard Zovighian, the former corporate vice president and general manager of Edwards’ Transcatheter Mitral and Tricuspid Therapies business).

“While many companies in our industry try to grow through diversification and acquisitions,” Mussallem said, “we have stayed committed to organic growth through innovation in structural heart and critical care.”

Innovations like the PASCAL Precision transcatheter valve repair system, which received the CE mark last August for treating mitral and tricuspid regurgitation (MR and TR), and FDA approval in September 2022 for treating degenerative mitral regurgitation. Utilized through a single delivery system, the PASCAL Precision device is designed to enable precise navigation and implant delivery. The system includes PASCAL and PASCAL Ace implants, which feature independent grasping, atraumatic clasp and closure, and implant versatility including the ability to elongate and navigate complex anatomy.

The PASCAL Precision system was largely responsible for the 35.1% sales spike in Edwards’ Transcatheter Mitral and Tricuspid Therapies (TMTT) product group last year. Though this group comprises the smallest percentage of total company revenue (2.1%) it posted the largest year-over-year increase, expanding proceeds to $116.1 million.

In mitral replacement, Edwards continued to treat patients in FY22 through the ENCIRCLE trial for SAPIEN M3 and completed enrollment in the MISCEND early feasibility study for EVOQUE Eos. The company also made progress in enrolling patients in the TRISCEND II trial for the EVOQUE replacement system, and the CLASP IITR trial with the PASCAL repair system in patients with symptomatic, severe tricuspid regurgitation.

The sales growth in Edwards’ TMTT product group far outpaced its brethren. Case in point: The Transcatheter Aortic Valve Replacement (TAVR) group, which posted the second-highest revenue gain, boosted proceeds only 2.8% to $3.51 billion (a 32.3% difference, for those keeping score). The increase primarily was driven by higher sales of the Edwards SAPIEN 3 Ultra valve in the United States, Europe and Rest of World, the SAPIEN 3 Ultra RESILIA valve in the United States, and the SAPIEN 3 in Japan. Growth was offset, however, by foreign currency exchange rate fluctuations, which decreased net sales outside the United States by $140.2 million, due primarily to weakening of the Euro and Japanese yen against the U.S. dollar.

Edwards continued to advance its EARLY TAVR trial last year, studying the treatment of severe aortic stenosis patients before symptoms develop, as well as its PROGRESS trial, studying moderate aortic stenosis patients. During Q2, the company began treating patients in the ALLIANCE trial, which is analyzing its next-generation TAVR technology, SAPIEN X4.

Critical Care product sales gains followed closely behind TAVR’s increases with a 2.4% augmentation driven by robust demand for capital products, primarily Edwards’ HemoSphere monitoring platform in the United States and Japan; higher U.S. sales of pressure monitoring products; and strong U.S. demand for enhanced surgical recovery devices. Like TAVR, though, Critical Care sacrificed some growth to fluctuating foreign exchange rates, losing $39.5 million to a weak Euro and Japanese yen.

The Surgical Heart Valve Therapy product group was the least profitable last year, as revenue remained relatively flat. Its meager $4 million increase (to $893.1 million, a 0.4% year-over-year change) was largely attributable to strong U.S. and European adoption of the INSPIRIS RESILIA aortic valve, and U.S. uptake of the MITRIS RESILIA valve. Not surprisingly, fluctuating foreign exchange rates hampered net sales outside the United States by $46.5 million.

$5.23 Billion
Prior Fiscal: $4.39 Billion
Percentage Change: +19.3%
R&D Expenditure: $903M
Best FY21 Quarter: Q2 $1.38B
Latest Quarter: Q1 $1.34B
No. of Employees: 15,700

Edwards Lifesciences’ 2021 annual report introduces a man named Jim who enjoys the outdoors through hiking, swimming, cycling, and skiing. In 2020, he started to notice that he was experiencing shortness of breath and limited exercise capacity when he was engaging in such activities.

“Just climbing a flight of stairs was starting to bother me,” he explained. “My first attempt of a winter ascent of Mt. Washington fell short.”

As a result of the COVID-19 pandemic, his cardiology checkup was cancelled and other appointments delayed (a common tale for too many). He was ultimately diagnosed with severe aortic stenosis and recommended to reduce his active lifestyle. A heart team finally determined he was qualified for a transcatheter aortic valve replacement (TAVR).

He received the SAPIEN 3 valve on Dec. 17, 2020, and after only a few days, felt like he “got his life back.” A week after the one-night stay in a hospital for the procedure, he was back to his normal routine, activities included, with no restrictions.

TAVR is the primary focus for Edwards Lifesciences, with the division accounting for much more than half of all of the firm’s sales. In fiscal 2021, it represented a $3.42 billion contribution, which was a 19.8% gain over the previous year. As was the case for so many medical device firms, the increase resulted from the return of more elective procedures as the conditions created by the COVID-19 pandemic eased.

In December, the organization gained another regulatory approval for its SAPIEN 3 Transcatheter Pulmonary Valve (TPV) technology. This one was specifically tied to the use of the transcatheter valve with the Alterra adaptive prestent for patients with severe pulmonary regurgitation. The Alterra prestent compensates for variations in size and morphology of the right ventricular outflow tract to provide a stable landing zone for the SAPIEN 3 valve.

The company also sought to shore up clinical evidence supporting its technology. News was provided on a number of trials where the effectiveness of TAVR was further verified.

One such report involved new data from the COMMENCE clinical trial that demonstrated Edwards’ bioprosthetic surgical aortic valve with the company’s novel RESILIA tissue platform showed favorable safety and hemodynamic performance through a median of five years follow-up.

Another presented the results of a real-world study comparing outcomes for patients with bicuspid aortic stenosis who were treated with SAPIEN 3 and SAPIEN 3 Ultra Transcatheter Aortic Valve Replacement and at low risk of death from surgery. The data showed excellent outcomes at one year, with low rates of death and stroke, and no significant differences in the primary outcomes compared with the overall cohort, or those with tricuspid aortic valve disease.

Edwards’ Transcatheter Mitral and Tricuspid Therapies unit doubled in revenue for the fiscal year 2021 as compared to the previous period. Specifically, the business grew 105.5% to finish at $86 million. The firm again pointed to the return of more procedures following the relaxing of COVID-19 restrictions and limitations.

For this business, Edwards also shared results of clinical trials that furthered the clinical evidence supporting the technology. The 30-day outcomes from the TRISCEND study of the transfemoral EVOQUE tricuspid valve replacement system demonstrated technical feasibility and an acceptable safety profile, along with improvements in tricuspid regurgitation (TR) as well as symptoms in patients with clinically significant TR. At six months, the following findings were reported:

• • Significant reduction in TR severity, with 100% of patients with none/trace or mild TR in 43 patients with paired echocardiographic data available

• • Significantly improved functional and quality-of-life outcomes, including 89% of patients in NYHA Class I or II, and a 27-point increase in KCCQ score over baseline

• • High survival rate of 96%, and freedom from heart failure hospitalization of 94%

The results of other clinical trials were provided as well. Two-year outcomes from the CLASP study of the PASCAL system for mitral valve repair demonstrated a sustained high rate of survival at 80%, as well as 87% clinical events committee adjudicated freedom from heart failure rehospitalization and an 85% reduction in annualized heart failure hospitalization rates. The six-month outcomes presented from the CLASP TR early feasibility study of the PASCAL system for tricuspid valve repair demonstrated favorable safety and significant TR reduction. Finally, the results at 30 days from the TriBAND post-market clinical follow-up study of the Cardioband tricuspid valve reconstruction system demonstrated high device success of 97%, and low all-cause mortality of 1.6%.

The organization’s other two divisions, Surgical Heart Valve Therapy and Critical Care, both saw positive gains for the same reasons as the previous two—return of elective procedures within hospitals. Surgical Heart Valve Therapy blossomed 16.7% to contribute $889 million to the company’s coffers. Critical Care saw similar growth, with a percentage gain of 15.1. That figure translated to a fiscal year 2021 total of $835 million.

Speaking of Critical Care, the unit announced its Acumen Hypotension Prediction Index (HPI) software with the Acumen IQ finger cuff received FDA clearance in June. The noninvasive solution unlocks Acumen HPI software and uses machine learning to alert clinicians of the likelihood a patient is trending toward hypotension, or low blood pressure. Previously, Acumen HPI software was only available for patients using an invasive arterial line.

In August, Edwards Lifesciences established a Social Impact Investment Fund in order to expand access to capital in underserved communities. The $100 million fund was created as a new portfolio of investments aimed at the advancement of racial equity through economic development, especially in predominantly black and underserved communities in the United States.

“Events in 2020 prompted reflection on how we could expand Edwards’ active community engagement to provide even more support for our employees and communities, particularly as it relates to social equity and justice,” said Scott Ullem, CFO. “We believe that increasing the availability of capital in underserved areas can contribute to a virtuous cycle of job creation, wealth-building, and other new opportunities for economic development, while also providing a return to investors.”

$4.39 Billion
Prior Fiscal: $4.35 Billion
Percentage Change: +1%
No. of Employees: 14,900 (total)

2020 wasn’t a smooth ride for Edwards Lifesciences. While the company faced COVID-19 pandemic challenges, including elective surgeries being paused and determining how to best keep employees safe while still supplying medical technologies, the firm was involved in spats with device makers.

One such challenge involved a patent dispute with Abbott over intellectual property related to mitral valve repair devices. It was Edwards’ stance the IP should be deemed unpatentable. The Patent Trial and Appeal Board rejected Edwards’ claims, which are tied to an Abbott acquisition, Evalve—the original manufacturer of the MitraClip. The decision was one in a string of legal challenges made by Edwards against Abbott’s device.

A few months later, Edwards’ Pascal transcatheter mitral valve repair (TMVR) device was barred from sale in the U.K. Further, a judge for the High Court of England and Wales determined the Pascal device infringed on two Abbott patents for its MitraClip. Although Edwards argued the devices were dissimilar enough, the court only allowed the device to be indicated for patients who were not a match for the MitraClip.

Finally, in July 2020, the two organizations agreed to settle litigation involving all patent disputes related to transcatheter mitral and tricuspid repair products. Per the agreement, all pending cases and appeals in courts and patent offices worldwide would be dismissed. In addition, no new litigation over patent disputes of the specific technologies would occur for 10 years. Also, any injunctions that were currently still in effect would be lifted.

While details of the settlement were confidential, multiple online news reports detailing the arrangement cite an Edwards filing as a source of additional information (since removed). In the filing, Edwards allegedly agreed to pay $368 million upfront to settle the disputes, and about $100 million in royalties through mid-2024.

Later in the year, Medtronic issued its own challenge in the form of a study to compare its Evolut TAVR platform to Edwards’ SAPIEN valve in small annulus patients. Specifically, the SMART post-market trial aimed to compare valve safety and performance of the self-expanding Medtronic Evolut PRO and PRO+TAVR Systems against the balloon-expandable SAPIEN 3 and SAPIEN 3 Ultra Transcatheter Heart Valves manufactured by Edwards.

According to Medtronic, the study would enroll roughly 700 patients worldwide. It would evaluate valve performance in patients with small annuli and candidates for TAV-in-SAV procedures (transcatheter valve implanted inside of a failed surgical valve), which combined represent over 40 percent of the TAVR market. The trial was slated to begin in April 2021; it has a primary completion date of May 2023 and study completion date of May 2028.

Regardless of the challenges, Edwards Lifesciences still enjoyed a positive year from a revenue standpoint. Considering the stoppage put on elective surgeries during the COVID-19 pandemic, Edwards’ 1 percent growth over the prior fiscal was positive. The firm ended with $4.39 billion in net sales compared to $4.35 billion the previous year.

Within its four product groups, Transcatheter Aortic Valve Replacement led in revenue generation. The segment grew by 4.4 percent year over year, finishing 2020 at $2.86 billion versus $2.74 billion in 2019.

The primary reason for the increase, according to Edwards, were SAPIEN 3 Ultra System sales in both the U.S. and Europe. Sales weren’t what they could have been in a “normal” year due to COVID and the suspension of elective procedures. Further, the firm even paused proctoring of the Ultra System in Q1 2020 in centers where personnel weren’t trained on the product. Proctoring resumed during the second quarter of the year.

For the product group Transcatheter Mitral and Tricuspid Therapies, tremendous growth was seen in 2020. Exploding from $28.2 million to $41.8 million, the 48.5 percent increase was primarily due to sale of the PASCAL transcatheter valve repair system in Europe, where it gained its CE mark in 2019.

Unfortunately, the other two product categories went in the opposite direction. Surgical Heart Valve Therapy fell 9.5 percent to land at $762 million from $842 million. Edwards points to decreased sales of aortic tissue valves due to COVID-19 as the primary reason for the loss. The decline was offset slightly by increased sales of the INSPIRIS RESILIA aortic valve and the KONECT aortic valved conduit, primarily in the U.S., but it was not enough to absorb the deficit created.

Critical Care was only down 2 percent, seeing sales go from $740 million in 2019 to $725 million in 2020. Again, COVID-19 was attributed as the reason.

Regardless of the challenges Edwards may have faced in 2020, the organization still kept a view of future growth opportunities. As such, it celebrated several positive product announcements during the fiscal.

The SAPIEN 3 transcatheter heart valve gained Chinese regulatory approval to treat of patients suffering from severe, symptomatic aortic stenosis (AS) at high risk for or unable to undergo open-heart surgery.

“Now, in China, patients diagnosed with severe AS have the option of a shorter procedure with excellent clinical outcomes, including a more rapid recovery than open-heart surgery,” said Prof. Junbo Ge, M.D., academician of the Chinese Academy of Sciences, chairman, Shanghai Institute of Cardiovascular Diseases and director, Department of Cardiology, Zhongshan Hospital, Fudan University.

The approval for high-risk and extreme-risk patients in China was supported by the China SAPIEN 3 study, which complements a highly robust set of clinical outcomes from three randomized controlled PARTNER studies, along with excellent real-world results.

In Europe, the PASCAL Transcatheter Valve Repair System was approved for tricuspid repair. The CE mark was gained specifically for treating patients with tricuspid regurgitation.

The PASCAL system is indicated in Europe for percutaneous tricuspid valve reconstruction through leaflet repair by tissue approximation. The clasps and paddles gently grasp the leaflets to facilitate coaptation, while the spacer is designed to fill the regurgitant orifice area and prevent backflow. The clasps can be operated independently to facilitate optimized leaflet capture and the implant can be elongated to a narrow profile, allowing for safe maneuvering in dense chordal anatomy.

The firm’s KONECT RESILIA aortic valved conduit, the first ready-to-implant solution for bio-Bentall procedures—a complex surgery that involves replacement of a patient’s aortic valve, aortic root, and the ascending aorta—gained FDA approval in July. The device’s RESILIA tissue incorporates integrity-preservation technology that may help improve valve durability. The RESILIA tissue technology also allows devices to be stored under dry packaging conditions.

Health Canada approved the expanded use of Edwards’ SAPIEN 3 and SAPIEN 3 Ultra transcatheter heart valves for the transfemoral treatment of patients diagnosed with severe symptomatic aortic stenosis who are at low risk for open-heart surgery. Edwards said the SAPIEN 3 valves are the first transcatheter aortic valve implantation (TAVI) systems to gain this indication in Canada.

$4.34 Billion
Prior Fiscal: $3.72 Billion
Percentage Change: +16.6%
No. of Employees: 13,900

The Edwards family is quite prolific.

There are thousands, maybe hundreds of thousands of them scattered throughout the world with possibly up to two million or more altogether, but nobody really knows for sure.

Folks lost count a long time ago.

They go by ordinary names like Fred, Cindi, Gary, Thomas, John, and Andrea, as well as more exotic ones like Shizue and Malea. They hail from places near and far, from the asphalt jungles of Manhattan, Melbourne, and Mumbai, to the secluded suburbs of Washington, Winnipeg, and Warsaw. Each family member is unique, embodying the traits that differentiate them from their kin, yet they all share a common, unbreakable bond.

“It’s a family,” Marvin Keyser explains matter-of-factly. “You guys are part of my life, and I’m part of their life.”

“Instant family,” adds Gary Truhn.

Instant indeed: Keyser and Truhn are kindred spirits, linked not by blood but by the implantable technology keeping their once-feeble cardiac valves in check. The innovation, developed by Irvine, Calif.-based Edwards Lifesciences Corporation, has given rise to an extended clan of recovered patients, each connected by the shared experience of a life-threatening health scare.

Keyser and Truhn shared their heart valve war stories with each other and dozens of their unofficial relatives last spring during an annual meet-and-greet hosted by Edwards Lifesciences. Dubbed the “Patient Experience,” the event is basically an educational opportunity for both company leaders and heart valve recipients, as it gives the former group insight into potential product and/or process improvements, and the latter bunch the opportunity to meet their broken-hearted brethren as well as the cardiac implant artisans.

“Patients are our North Star. They remind us why we do what we do,” Edwards Chairman/CEO Michael A. Mussallem said in a LinkedIn interview published last April. “The people we bring to attend The Patient Experience range in age from 10 to 91. We talk to them in large groups, small groups, one-on-one. They tell us stories about symptoms that scared them, treatment journeys that were full of ups and downs, and then a return to doing things they love to do. We have learned through talking with patients that, even though we’re living in a time of great medical breakthroughs, patients are still underserved. Listening closely to what they have to say is a way to serve them better.”

“Every event we’ve had has led to changes in our operations,” he continued in the post. “For example, patients have told us that transcatheter aortic valve replacement, which is a less-invasive heart valve replacement, is not being made accessible to enough people. This means that we need to work harder to provide more support for the organizations that are focused on removing barriers to care for patients. Many patients, particularly older people, are willing to tolerate substantial risks in exchange for the benefits of a treatment that improves their quality of life and ability to return to a normal life quickly. As a result, we are prioritizing developing products that ensure they address what is most important to the patient.”

One such product is the SAPIEN 3, Edwards’ premiere heart valve and fiscal bedrock. The device maintained its lead role last year in the company’s narrative as it won over clinicians and regulators in both the United States and Europe. March 2019 results of a 1,300-patient SAPIEN 3 trial (PARTNER 3) showed less disruption to heart rhythms and superiority to surgery in low-risk patients undergoing transcatheter aortic valve repair (TAVR). Moreover, the SAPIEN 3 valve showed a death and disabling stroke rate of 1 percent at one year vs. 2.9 percent for surgery.

ANALYST INSIGHTS: After a steady rise in share price and market cap over the last several years, Edwards’ growth hits a bit of a speed bump (COVID19). Look for them to continue their ascent as we enter 2021 and they continue to lead in the fast-growing transcatheter cardiovascular space through organic growth and further acquisitions of complementary technologies.

—Mark Bonifacio, President, BCS LLC

PARTNER 3’s positive study results convinced regulatory agencies on both sides of the Atlantic to open TAVR treatment to low-risk patients, beginning with the U.S. Food and Drug Administration (FDA) in August 2019 and then the European Union in November. The FDA authorization expands the use of the SAPIEN 3 and SAPIEN 3 Ultra transcatheter heart valve systems for severe, symptomatic aortic stenosis (AS) treatment in patients at low risk of open-heart surgery. The approval covers the SAPIEN 3 and SAPIEN 3 Ultra valves in all sizes.

Europe’s consent, on the other hand, applies only to the SAPIEN 3 valve. The device was the first transcatheter aortic valve implantation (TAVI) system in the EU to be sanctioned for AS treatment in low-risk open heart surgery patients. “Now, all patients in the U.S. and Europe with AS can be evaluated based on their individual needs, versus the previous approach of primarily looking at their surgical risk,” Mussallem noted in Edwards’ 2019 annual report.

U.S. and European regulators, however, were not alone in their acclaim for the SAPIEN 3’s clinical prowess. Edwards management was equally as impressed—to such a degree, in fact, that they decided last summer to discontinue the company’s self-expanding TAVI device, Centera. “While the Centera valve has demonstrated excellent clinical outcomes and is performing well for patients,” Mussallem said in July 2019, “the time and resources required to optimize deliverability and expand the indications to match the SAPIEN 3 valve are significant.”

The Centera valve’s untimely death followed an early July (2019) field safety notice that warned of difficulties tracking and manipulating the device through the aortic arch. The manipulation difficulties reportedly led to vascular injury in 1.5 percent of cases.

Though warranted, Edwards executives’ confidence in the SAPIEN 3 valve was shaken a bit by the July 2019 recall of the device’s Ultra delivery system amid reports of burst balloons during implantation. The complication, according to the company, made it difficult to retrieve the valve and remove the system from patients; it potentially could lead to vascular injury, bleeding, or surgical intervention. The FDA cited 17 injuries and one death at the time Edwards issued its Field Corrective Action (later upgraded to a Class I recall).

Despite the misstep, SAPIEN 3 still commanded overall company growth last year, helping propel a 16.6 percent sales surge ($4.34 billion total), a 17.7 percent jump in net income ($1.18 billion) and an 18.5 percent rise in adjusted EPS ($5.57). Gross profit increased 16.1 percent to $3.2 billion, driven by TAVR products (mainly SAPIEN 3), but growth was somewhat muted by a $73.1 million inventory write-off related to the TAVR portfolio (including the Centera valve discontinuation).

Growth was robust last year in each of Edwards’ four product categories, too: TAVR posted the highest gains, boosting revenue 19.7 percent to $2.73 billion. Higher SAPIEN 3 and SAPIEN 3 Ultra System sales mostly drove the increase, though further growth was stymied by fluctuating foreign exchange rates.

Transcatheter Mitral and Tricuspid Therapies (TMTT) revenue totaled $28.2 million on strong sales of Edwards’ PASCAL transcatheter valve repair system, which received CE mark approval in February 2019. Designed to reduce mitral regurgitation while respecting the native anatomy, the PASCAL system features contoured, broad paddles to maximize coaptation of the mitral leaflets and a central spacer that fills the regurgitant orifice area. The delivery system allows for independent leaflet capture and the ability to optimize leaflet position.

In an effort to expand indications for the PASCAL system, Edwards continued enrollment in its CLASP IID U.S. pivotal trial to study the device in primary, or degenerative, mitral valve disease. And last September, the company received FDA approval to study PASCAL in patients with symptomatic severe tricuspid regurgitation.

Outside the PASCAL universe, Edwards began enrolling patients in its CLASP IIF pivotal trial for patients with secondary, or functional, mitral valve disease. The company also obtained fourth-quarter (2019) approval to evaluate the safety and function of its EVOQUE tricuspid valve replacement system.

“We made meaningful strides this year [2019] in transcatheter mitral and tricuspid therapies, moving our portfolio of technologies forward to advance solutions for these patients, who have few good options,” Mussallem said in his shareholder letter within the annual report. “Commercialization of the PASCAL system has begun in Europe and, simultaneously, we are building the body of evidence to support the introduction of the system globally. We continue to gain confidence and expertise in mitral and tricuspid repair and replacement and have an engaged group of distinguished physician partners ready to tackle these complex diseases.”

Fiscal 2019 Surgical product sales climbed 10.5 percent to $841.7 million due mainly to strong demand in Europe, Japan, and the United States for aortic tissue vales (primarily, the INSPIRIS RESILIA aortic valve). Fluctuating foreign exchange rates, however, knocked $14.5 million off the final total.

Surgical revenue in 2020 likely will be aided by the fourth-quarter (2019) European regulatory approval of the HARPOON Beating Heart Mitral Valve Repair System. The device offers the potential for earlier treatment of degenerative mitral valve disease, with faster recovery and more consistent outcomes for surgical patients.

Critical Care proceeds rose 9.7 percent last year to $740.2 million, driven by strong U.S. sales of the company’s HemoSphere advanced monitoring platform and a $16.8 million contribution from its springtime acquisition target, CAS Medical Systems (CASMED), maker of non-invasive brain tissue oxygenation monitoring devices. The $100 million union was not completely unexpected, as Edwards developed a smart cable and software module to facilitate the connection between its HemoSphere monitoring platform and CASMED’s ForeSight sensor.

Edwards’ investment in the firm paid off in September when it won FDA clearance to integrate the ForeSight brain tissue oximetry sensors with the HemoSphere monitoring platform. The authorization allows anesthesiologists to monitor oxygen saturation in the brain during surgeries and correlate it with hemodynamic parameters in real-time.

“Understanding the relationship between the heart and the brain can provide valuable patient insights to support decision making during a surgical procedure,” Katie Szyman, corporate vice president of Critical Care at Edwards, said upon the ForeSight‘s FDA clearance. “With the addition of the ForeSight sensors to Edwards’ most modern platform, HemoSphere, we can offer clinicians a broad range of smart hemodynamic management solutions to help improve patient care.”

The ForeSight sensors rely on near-infrared spectroscopy to penetrate the scalp and measure oxygen content in the brain. The integration of the two platforms enables clinicians to predict drops in blood pressure, and allowing for timely intervention during procedures.

AT A GLANCE
$3.81 Billion
Prior Fiscal: $3.43 Billion
Percentage Change: +11.1%
No. of Employees: 12,800

The East Coast-West Coast rivalry is American legend. East Coast denizens claim their pizza, universities, and changing seasons reign supreme. West Coast dwellers retort their beaches, laid-back lifestyle, and health-conscious attitudes trump all. Usually, these disputes manifest in playful bantering and ribbing (“Enjoy your earthquakes!” “Oh yeah, well, have fun with your hurricanes!”). On a much less lighthearted tack, anyone following pop culture in the ’90s surely heard of the East Coast-West Coast hip-hop rivalry, which culminated in the infamous drive-by shooting deaths of East Coast rapper Tupac “2Pac” Shakur in September 1996 and Christopher “The Notorious B.I.G.” or “Biggie Smalls” Wallace six months later.

Though the hip-hop feud has long since subsided, life-saving technology became the focus of an East-West dispute a few years ago. The technology breeding all the contention was an innovative, minimally invasive form of cardiac surgery called transcatheter aortic valve replacement, or TAVR. Instead of a risky open-heart procedure, TAVR surgery installs a new aortic valve via a catheter threaded through an adequate blood vessel.

California TAVR pioneer Edwards Lifesciences and Massachusetts TAVR neophyte Boston Scientific began their clash over a German paravalvular sealing technology patent dispute in 2015. Since then, IP conflicts between the two peppered the news, with German, UK, and U.S. TAVR suits spanning 2016 and 2017. The courtroom skirmishes endured throughout 2018.

Edwards added one to the win column last March when the U.S. Patent and Trademark Office (USPTO) decided in its favor in an Inter Partes review of Boston Scientific’s patent 8,992,608 (the ‘608 patent), asserting that Boston Scientific’s claims against Edwards were invalid. The case began in 2016 at Boston Scientific’s behest. Edwards had subsequently asserted three of its own foundational TAVR patents against them, which this ruling did not affect. So, the trial continued.

Boston Scientific notched a win last October in the German courts. There, the District Court of Dusseldorf decided Edwards’ Sapien 3 Ultra device infringed a Boston Scientific subsidiary’s patent, and Boston Scientific had the right to enjoin Edwards from selling Sapien 3 in Germany. Edwards appealed the ruling, but it would not become an issue until the Sapien 3 Ultra won CE mark approval. Boston Scientific would then have to pay $11.5 million to enforce the ruling.

A federal jury made further decisions in the U.S. cases in December. The jury awarded $35 million in damages to Boston Scientific concerning the ‘608 patent, which Edwards expected not to pay due to the USPTO assertion earlier in the year. Edwards’ foundational U.S. Spenser patents were also found to be valid, but not infringed upon by Boston Scientific’s Lotus TAVR devices. At the time, Edwards planned to appeal. The litigation at that point involved multiple patents in several venues, and according to Edwards would “… likely yield court actions over an extended period of time.”

However, with the new year came a change of heart. On Jan. 15, Edwards and Boston Scientific agreed to settle all global disputes, dismissing all pending cases. Both parties agreed not to litigate patent claims concerning current portfolios of TAVR devices, certain mitral valve repair devices, and left atrial appendage closure devices. The price of peace was a one-time $180 million Edwards payment to Boston Scientific.

This will hardly make a dent should Edwards’ epic run of double-digit sales growth continue into next year. The TAVR pioneer celebrated its 60th anniversary last year, amassing $3.81 billion in revenue and ballooning over 11 percent from 2017. The latest successful performance marks 11 straight years of double-digit growth for the company. Most of the income—55 percent—originated from domestic sales. European sales represented 24 percent of proceeds, the Japanese market drew 11 percent of earnings, and the “rest of world” markets garnered the remaining 10 percent.

ANALYST INSIGHTS: As the enviable leader in the TAVR market, it will be interesting to see what Edwards’ next move will be as Medtronic and Boston Scientific try to gain market share in this valuable rapidly growing global market space. On the heels of their Feb. 2019 ($100M) CASMED acquisition of non-invasive brain and tissue oxygenation monitoring technology, it appears M+A will continue to a part of the landscape in the coming years. Whether bolt-on technologies or adjacencies in mitral valve repair, Edwards will look to put some of its cash to work.

—Mark Bonifacio, Founder and President, Bonifacio Consulting Services

A surprise to no one, Edwards’ mainstay Transcatheter Heart Valve Therapy (THVT) portfolio took the lion’s share of sales last year. 2018’s $2.29 billion THVT proceeds claimed 61 percent of total revenue, outpacing company sales growth by rising 12.8 percent. The Sapien 3 valve’s strong therapy adoption, particularly in the U.S. and Japan, fueled the THVT segment’s success. As a U.S.-based company, fluctuations in foreign currency exchange rate also worked in Edwards’ favor. The Euro’s strengthening against the U.S. dollar was primarily responsible, increasing net sales by $20 million.

Centera, a self-expanding, repositionable, retrievable transcatheter heart valve delivered through a 14-French, motorized system, gained CE mark approval for high-risk, severe, symptomatic aortic stenosis patients last February. Though this usually correlates with a release in the EU, during May of last year’s EuroPCR Annual Meeting Edwards announced a temporary pause of Centera’s launch as the company sought to modify its delivery system. Leerink Partner analysts indicated that despite the expected return, “our checks indicate that EU physicians are resistant to the price premium EW is seeking for Centera, which dampened enthusiasm for adoption once the launch does resume.”

“For EW, both physicians we spoke with noted that Centera was too cost prohibitive and—despite the interventional cardiologist having been part of the trial—neither would adopt it at their centers,” Leerink analysts wrote in their letter to investors.

Edwards initiated a 1,000-patient U.S.-based pivotal trial for Centera last October to explore its use in medium-risk patients, which also included a bicuspid registry. The company also resumed Centera’s European commercial introduction at that time, after finishing the valve’s planned minor delivery system modifications.

The Sapien 3 Ultra TAVR system obtained CE mark approval last November. Sapien 3 Ultra includes 20, 23, and 26 mm valve sizes, each with a heightened outer skirt to prevent paravalvular leak. Sapien 3 Ultra’s delivery system incorporates a 14-French Axela expandable sheath with a novel “on balloon” design that removes the need for valve alignment during surgery. At the time, Edwards did not launch Sapien 3 Ultra in Germany due to its ongoing IP suit with Boston Scientific. However, its launch there is likely imminent due to this past January’s settlement. Sapien 3 Ultra won FDA approval a month later.

Last April the Cardioband Triscupid Valve Reconstruction System, which Edwards acquired from Valtech Cardio in 2017, was granted a CE mark as the first transcatheter therapy for tricuspid heart valve disease. Like TAVR, it is delivered transfemorally and can be positioned to a patient’s specific anatomy with real-time adjustment.

The Cardioband Tricuspid System features the same design and implant technique as the Cardioband Mitral System. However, last January Edwards recalled the anchors used in the Cardioband mitral valve repair device after a pair of reports claimed the device came loose from surrounding tissue. Edwards asserted a manufacturing tweak was the root of the issue in a letter posted to German regulators. The firm claimed the recalled anchors were not implicated in any deaths and posed no embolization risk, but recommended echocardiographical follow-up between three and six months post-implant for those treated outside of a clinical study protocol between July and December 2017.

Last June, the Centers for Medicare and Medicaid Services (CMS) opened the National Coverage Analysis (NCA) to reconsider TAVR’s 2012 National Coverage Determination. CMS accepted initial public comments through July 27, 2018, and Edwards noted to the press that CMS planned to complete the NCA within a year from then.

The Surgical Heart Valve Therapy (SHVT) business paled in comparison to THVT’s success, its $761.6 million total a 5.6 percent slip from the prior year’s total. U.S. sales return reserves related to Edwards’ conversion to a consignment inventory model for surgical valves was the primary driver for this drop. The Inspiris Resilia valve’s launch in Japan last September, however, may help to offset SHVT’s loss.

The Critical Care Segment’s $674.5 million in proceeds was a 12.2 percent bump from 2017. Domestic sales of the HemoSphere advanced monitoring platform, core hemodynamic products, and enhanced recovery products were mainly responsible for the increase. Foreign currency exchange rate fluctuations again prevailed here, boosting revenue by $5.1 million.

FDA de novo approval and subsequent launch of the Acumen Hypotension Prediction Index (HPI) took place last March. Designated by FDA as an “adjunctive predictive cardiovascular indicator,” Acumen HPI analyzes cardiovascular vital signs to predict future cardiovascular status or events. The HPI indicates the likelihood of a hypotensive event before it arises and alerts the clinician when the HPI exceeds an upper threshold. A secondary screen visually links blood pressure with hemodynamic flow parameters to help identify the root cause of the low blood pressure.

Edwards’ HemoSphere hemodynamic monitoring platform gained FDA clearance for the Acumen suite of intelligent decision-support last December. This nod added Acumen HPI software and the Acumen IQ minimally invasive sensor to the HemoSphere platform, linking pressure and flow parameters with predictive monitoring in one platform.

Last March, Edwards declared it would build a new manufacturing plant for transcatheter heart valve therapy delivery systems in the Mid-West of Ireland. The company hired about 60 people last year to work at the initial site, located in the Shannon Free Zone. Once operational, Edwards expects to employ approximately 600 people.

“This announcement by Edwards Lifesciences that it is establishing a new manufacturing facility in the Mid-West is terrific news for the region and for Ireland,” said Martin Shanahan, CEO of IDA Ireland, who is supporting the project. “The company’s arrival further enhances Ireland’s reputation as a preferred location for leading companies in the life sciences sector. Winning investment for regional locations is a key focus for IDA Ireland and this project is an excellent one to secure for this region.”

$3.4 Billion
NO. OF EMPLOYEES: 12,200

Even at 66 years of age, James Garrett led a very active lifestyle. His passion for rock climbing resulted in him being credited with more than 300 “first ascents,” pioneering climbing routes all over the world. In his travels as a flight nurse, he also witnessed many medical needs in developing countries. One that particularly interested him was the battle against cataracts. He began volunteering with the Himalayan Cataract Project where he mentors and works with local paramedical staff during high-volume cataract surgery campaigns to help restore sight to those with little access to eye care around the world.

On an average evening in 2017, while on the couch with his physician wife, all of that came to a sudden and frightening halt.

“I had my head and my ear against his chest,” said James’ wife, Franziska Garrett, M.D. She then sprang up suddenly and exclaimed that she heard a really loud murmur. She continued, “We knew we had to see a cardiologist right away. I was definitely shocked.”

The cardiologist noted James’ aortic valve was a congenitally malformed bicuspid valve, diagnosed him with aortic stenosis, and asked with urgency how soon could they schedule James for open-heart surgery.

As would be understandable, James wasn’t on board with the prospect of open-heart surgery.

Oddly fortunate, during one of his trips, James contracted a viral respiratory illness that created questions about the safety of performing an open-heart procedure on him. As a result, James Harkness, M.D., interventional cardiologist and Stephen Clayson, M.D., cardiothoracic surgeon, both of Intermountain Medical Center Heart Institute in Salt Lake City, Utah, began to explore other treatment options. TAVR (transcatheter aortic valve replacement) was selected as the best alternative for him. The Edwards SAPIEN 3 transcather heart valve was the specifically chosen solution.

As a result of the TAVR technique, physicians were able to perform the procedure with James under conscious sedation, meaning he would not be under general anesthesia, which was important given his respiratory condition.

A few weeks after placement of the replacement valve, James felt like “himself” again and his lungs were healing as well. He has continued his work in the fight against cataracts in regions around the world and he and his wife are very grateful to be able to do so.

Unfortunately, the health battle patients like James face requiring the placement of a TAVR device isn’t the only fight Edwards has been associated with involving the technology. In 2017, the company faced ongoing legal challenges regarding the validity of several patents in a dispute with Boston Scientific.

In March 2017, a U.K. patent court and a German patent court both issued initial decisions that stated one of Boston Scientific’s patents asserted against Edwards’ patent was invalid while another was deemed valid and infringed. A year later, the European Patent Office sided with Boston Scientific, along with several other opponents, in its dispute of Edwards Lifesciences’ European patent EP 2,399,550, which resulted in a revocation of the patent. This action harkened back to the German court decision, which found Boston Scientific infringed upon that patent. The patent dispute is ongoing.

Meanwhile, in the United States in March 2018, the U.S. Patent and Trademark Office decided in Edwards’ favor in an Inter Partes Review of Boston Scientific’s U.S. transcatheter heart valve patent, number 8,992,608. All claims of the ‘608 patent asserted against Edwards were determined to be invalid. Similar to the European case, the U.S. dispute is ongoing as well.

As can be observed in the anecdotal story involving James Garrett, TAVR represents a new, novel therapeutic approach to treat a damaged heart valve. As such, it’s no surprise to see medtech companies fight over the rights to the patents involved with the technology. It could result in a significant reward for the “winner” in licensing agreements and/or market share.

Certainly, Edwards is well aware of the potential of the technology. The company already saw an impressive 16 percent increase in 2017’s net sales ($3.4 billion) over 2016’s just-shy $3 billion total. Further, the company has enjoyed steady growth since at least 2013 when it posted $2 billion in sales, but noted in its 2017 annual report it has experienced 10 years of double-digit adjusted sales growth. With a focus on cardiovascular disease, the company approaches its treatment options for healthcare by way of three separate divisions—Transcatheter Heart Valve Therapy, Surgical Heart Valve Therapy, and Critical Care.

The Transcatheter Heart Valve Therapy unit is helmed by two major products for Edwards, the SAPIEN XT and SAPIEN 3 transcatheter aortic heart valves and their respective delivery systems. The segment contributes a majority number to the company’s sales total, delivering 59 percent in 2017 (a significant increase compared to 47 percent just two years prior). That translates to just over $2 billion in 2017 net sales—an almost 25 percent increase over 2016, which had experienced a 38 percent rise over its prior year.

The next largest unit in net sales in 2017 was Surgical Heart Valve Therapy. This unit’s signature product is the Carpentier-Edwards PERIMOUNT pericardial valve platform, including the line of PERIMOUNT Magna Ease pericardial valves for aortic and mitral surgical valve replacement. Contributing $807 million in 2017, the segment enjoyed a 4.2 percent increase over the prior year, which was a welcome change for the company compared to its 2016 total when the unit’s sales shrank 1.3 percent from 2015.

Accounting for the remainder is Critical Care, comprised of hemodynamic monitoring systems used to measure a patient’s heart function and fluid status in surgical and intensive care settings. Edwards offers a selection of products for this space, including the minimally invasive FloTrac system and the noninvasive ClearSight system. It saw sales of $601 million in 2017, which was a bump up from 2016 by 7.3 percent.

Edward’s biggest market is the United States, where it achieved sales of more than 1.9 billion in fiscal 2017. Internationally, it took in $1.5 billion, with Europe ($831 million) and Japan ($350 million) reflecting the lion’s share of that total.

Not satisfied to rest on its laurels as it looks to the future, Edwards made two complementary acquisitions in 2017 to help ensure its growth remains positive. In the first month of its 2017 fiscal year, Edwards completed a previously announced purchase. In November 2016, the firm revealed it would be buying Valtech Cardio Ltd. for $340 million, with the potential for up to $350 million in pre-specified milestone driven payments over the next 10 years. The Israeli firm developed the Cardioband system, which is used for transcatheter repair of the mitral and tricuspid valves.

“We look forward to the Valtech team joining Edwards. We believe their knowledge, experience, and the Cardioband technology are valuable additions to Edwards,” Michael A. Mussallem, Edwards’ chairman and CEO, said in a news release declaring the close of the transaction. “This therapy has the potential to be a breakthrough structural heart therapy to help many patients in desperate need, and we look forward to gaining valuable insights from its commercial use in Europe.”

The device still awaits FDA clearance in the United States.

Bookending the fiscal year with the Valtech acquisition, Edwards announced the December 1 closing of its acquisition of Harpoon Medical on December 6. Harpoon’s focus was on the development of technology to enable beating-heart repair for degenerative mitral regurgitation. The purchase price was $100 million in cash at the close, with the potential for an additional $150 million if certain milestones are met within the following 10 years. According to Edwards, the system is designed to facilitate echo-guided repair of mitral valve regurgitation by stabilizing the prolapsed mitral valve leaflet to restore proper coaptation and valve function.

Regarding the acquisition of Harpoon, Bernard Zovighian, Edwards’ then corporate vice president of surgical heart valve therapy, said, “The unique beating-heart repair procedure for mitral valve patients complements Edwards’ comprehensive portfolio of treatments for structural heart disease, and reinforces our commitment to innovation in cardiac surgery.”

$3.0 Billion
NUMBER OF EMPLOYEES: 11,100

Any alternative treatment for an ailment requiring open-heart surgery is a welcome one. Though the procedure is relatively commonplace and carries much less risk than years past, it is still incredibly invasive and recovery is a long and arduous process.

At the American College of Cardiology’s (ACC) 65th Annual Scientific Session in April 2016, Edwards Lifesciences unveiled the results of a study that promised to reduce the amount of open heart surgeries for a condition typically requiring it. The PARTNER II trial’s data ascertained that for aortic stenosis (i.e., aortic valve narrowing due to calcium buildup) patients with an intermediate open-heart surgery risk, transcatheter aortic valve replacement (TAVR) with the Sapien 3 valve was superior to surgery with regard to mortality, stroke, and moderate to severe aortic regurgitation.

“Results from the PARTNER II trial presented at ACC should establish the Sapien 3 valve as the new benchmark for the treatment of intermediate-risk patients with severe, symptomatic aortic stenosis,” Vinod Thourani, M.D., co-director, Structural Heart and Valve Center of the Emory Heart and Vascular Center, chief of cardiothoracic surgery at Emory Hospital Midtown and professor of surgery, Division of Cardiothoracic Surgery, Department of Surgery, Emory University School of Medicine, said in a company press release. (Dr. Thourani was also the co-principal investigator of the Sapien 3 study.) He continued, saying “the size and rigor of this 3,000-patient PARTNER II trial provide powerful evidence in favor of this therapy for the treatment of patients with aortic stenosis.”

The announcement had a hearty economic benefit, as well. A few days after the trial data became public, Edwards shares ascended 17 percent, according to Fortune. The company’s stock closed at an all-time high of $103.03 that day. The Sapien 3 valve had already been approved for high-risk patients—that is, those unadvised to undergo open-heart surgery—with aortic valve stenosis. The PARTNER II trial was Edwards’ attempt to widen the market by winning a Sapien 3 label expansion for intermediate-risk patients.

In August, Sapien 3 was awarded its sought-after expanded indication by the U.S. Food and Drug Administration (FDA). Intermediate-risk aortic stenosis patients now had the far less invasive TAVR option to replace a long stint in the operating room. It was awarded CE mark certification for the expanded use in September.

“The Sapien 3 valve has set a new standard for performance and patient outcomes with aortic valve replacement,” Thourani announced in a company statement. “The clinical outcomes of 1.1 percent mortality and 1 percent disabling stroke at 30 days in this intermediate-risk population treated with the Sapien 3 valve are changing the paradigm of how we treat patients with aortic stenosis.”

ANALYST INSIGHTS: TAVR space, Edwards remains in a great place with a big lead and first movers advantage. How they maintain this and continue to innovate will determine whether they will continue to be a Wall St. sweetheart. 

—Mark Bonifacio, Founder & President, Bonifacio Consulting Services

Edwards’ Transcatheter Heart Valve Therapy (THVT) business is its most profitable, generating over half of Edwards’ $3 billion in fiscal year 2016 sales (ended Dec. 31). The global structural heart technology company achieved double-digit growth in both total sales (up 19 percent from 2015) and its THVT segment’s $1.6 billion in revenue (up a whopping 38 percent). The impressive bump is chiefly the result of the Sapien 3 valve’s launch across a number of regions—it was introduced to the United States in July 2015, and Japan in March 2016. And in January 2016, Sapien 3 was granted FDA approval for an investigational device exemption (IDE) study enrolling elderly severe, symptomatic aortic stenosis patients with low risk of mortality during surgical aortic valve replacement. The PARTNER III trial began in Q2 of 2016.

The THVT division was further bolstered by a March FDA-approved label expansion of the Sapien XT transcatheter heart valve for adult and pediatric patients requiring pulmonic valve replacement. The procedure was opened to both adult and pediatric patients suffering from either a narrowed pulmonary valve or moderate to severe pulmonary regurgitation as a result of congenital heart disease.

In November, Edwards acquired an entirely new product line in the THVT business with the $340 million purchase of Israel-based Valtech Cardio. Valtech’s Cardioband System is used for transcatheter repair of the mitral and tricuspid valves. It integrates a reconstruction implant (similar to a surgical annuloplasty mitral valve device), with the less invasive transcatheter approach. The system features segmental deployment that conforms to the patient’s annular geometry, addressing the requirements of patients with mitral valve regurgitation. Cardioband (also known as a transseptal mitral repair system) received CE mark approval in 2015, and is currently undergoing a trial initiated in late 2016 for the tricuspid application of a similar version, intended to reduce tricuspid regurgitation.

“As we continue to pursue multiple therapies to address the diverse needs of patients affected by heart valve disease, we saw an important opportunity to incorporate Valtech’s technologies into our comprehensive heart valve repair and replacement portfolio,” said Edwards chairman and CEO Michael Mussallem. “We recognize that physicians will likely need a toolbox of options to treat their patients most effectively. We are very pleased with the progress and future prospects of the multiple internal programs we have underway, and we believe the addition of Valtech’s team and mitral and tricuspid technologies will present even more opportunities to help patients.”

The acquisition of Valtech was finalized on Jan. 23, 2017.

ANALYST INSIGHTS: Competing with Medtronic in some of its core markets, Edwards has continued to surprise and impress with its continued revenue and earnings growth. It’s acquisition of Valtech Cardio emphasizes Edwards understands it needs to be aggressive in M&A to continue to grow in the long-term. The question is, “What’s next on its target list?”

—Dave Sheppard, Co-Founder and Principal, MedWorld Advisors

Edwards’ Surgical Heart Valve Therapy (SHVT) business did not fare nearly as well as THVT in 2016. SHVT sales dropped 5 percent to $775 million mainly due to lower U.S. aortic tissue valve sales as Sapien 3 revenue increased, and diminished international mitral valve sales resulting from supply constraints in Europe and the “Rest of World” region.

However, the SHVT division added new products to both the U.S. and European markets in 2016. The Intuity Elite rapid deployment valve won FDA approval in August for surgical aortic valve replacement. Intuity Elite was built on Edwards’ Perimount tissue valve platform and incorporates transcatheter heart valve designs, facilitating minimally invasive surgery and streamlining complex aortic valve replacements. The Inspiris Resilia aortic valve gained CE mark clearance in September 2016. The valve is built on Resilia tissue, which utilizes integrity preservation technology that protects tissue and provides anti-calcification properties with sustained hemodynamic performance.

The Critical Care division, which encompasses Edwards’ hemodynamic monitoring systems used to measure a patient’s heart function and fluid status in surgical and intensive care settings, rose 6 percent from the year prior with 2016 sales of $560 million. The gains were stimulated by strong global sales of enhanced surgical recovery products, higher Rest of World region revenues in core hemodynamic products, and expanded U.S. hardware sales.

An October 2016 CE mark approval of Edwards’ Acumen Hypotension Probability Indicator (HPI) added to the Critical Care portfolio. Part of the Edwards Acumen decision-support software suite with the minimally invasive FloTrac IQ sensor, the technology alerts clinicians to potential hypotension (abnormally low blood pressure) in surgical and critical care patients before it occurs. Acumen HPI underwent a targeted commercial release in Europe in 2016.

In May 2016, a federal jury in Boston returned a verdict in favor of CardiAQ (which Edwards acquired in 2015) in a lawsuit against a former service provider, Neovasc. The jury found Neovasc had breached the non-disclosure agreement between the parties, stole CardiAQ’s trade secrets, and violated its duty of honest performance to CardiAQ.

Neovasc had been hired by CardiAQ in 2009 to provide tissue processing and valve assembly services for its transcatheter mitral valve replacement (TMVR) program, which was covered under a non-disclosure agreement. While working for CardiAQ, Neovasc commenced its own TMVR program, failing to alert CardiAQ. After discovery of a Neovasc patent publication in 2011, CardiAQ began the litigation in 2014. In addition to the verdict, $70 million was awarded in damages to CardiAQ for trade secret misappropriation.

However, Edwards was embroiled in litigation of its own in 2016. In 2015, Boston Scientific Corp. claimed that Edwards’ Sapien 3 heart valve infringed on certain claims of a Boston Scientific German national patent related to paravalvular sealing technology. Another patent was added to the proceedings in February 2016, and a similar infringement action was filed in Paris in April. The complaints sought unspecified money damages and injunctive relief.

$2.5 Billion
NUMBER OF EMPLOYEES: 9,800

Apparently, it’s not enough to simply provide lifesaving heart valve technologies to patients in need—if you can call that simple.

Removing the degree of separation of manufacturer to patients, on March 13, 2015, Edwards Lifesciences Corp. hosted its first annual “Patient Day,” which celebrated the longevity of patients alive today as a result of their heart valve products. The company invited about 50 patients to its Irvine, Calif. headquarters for a day of touring their heart valve manufacturing operations, connecting with other heart valve patients, and meeting the Edwards employees who made their specific device.

“Because you are a heart valve patient, your experience and voice are invaluable,” Edwards noted in its Patient Day invitation. “You’ve been there. You know what it feels like. You’ve gone through the process. Your insights can help us have an impact on the lives of future patients.”

The experience of meeting the teams that manufactured each patient’s specific device proved to be an emotional experience, similar to meeting the doctor responsible for a lifesaving surgery. “I met the team that sewed my heart valve and I said, ‘Can I hug you?’” recalled Susan Strong, recipient of an Edwards device. “I gave them all a hug and one lady was holding me tight and I was crying and she said, ‘I can feel your heart.’ It was amazing.” The company hosted its second annual Patient Day on Feb. 26, 2016, and plans to continue the tradition annually. Look out for 2017 registration toward the end of the year.

Financial Landscape, and an Important Acquisition

Continuing the company’s upward momentum from 2014, in fiscal 2015 (year ended Dec. 31) Edwards reported net sales of $2.49 billion, a 7.4 percent increase from FY14. The entirety of the company’s revenue growth was gained from domestic sales totaling $1.3 billion, which represented a 20.6 percent increase over 2014. In direct contrast to 2014, which showed growth in all international markets, 2015 brought a slight decline in net sales: down 3.6 percent, 4.6 percent, and 2.1 percent in the European, Japanese, and “Rest of World” markets respectively.

Edwards’ business is separated into three segments: Transcatheter Heart Therapy (THV), Surgical Heart Valve Therapy, and Critical Care. Its THV segment was the driving force behind the 2015 net sales boost, with $1.18 billion reported—an impressive 25.1 percent increase over fiscal 2014 (though not quite as significant as the previous year’s 33.3 percent increase). Primarily responsible for the growth are the launches of two new products in the United States: the SAPIEN 3 heart valve in July 2015, and the SAPIEN XT valve in June 2014. However, the European market’s revenue decrease slightly offset this; the SAPIEN 3’s launch there in January 2014 contributed to a decline in SAPIEN XT sales as customers converted.

The company’s $785 million net sales within its Surgical Heart Valve Therapy sector represented a 5 percent deficit from 2014. The higher sales of surgical heart valve products—headed by pericardial aortic tissue valves in Europe, Japan, and the United States—were not enough to completely offset the decreased net sales as a result of fluctuating foreign exchange rates. Likewise, the $528.4 million in Critical Care segment revenue fell 4.5 percent from 2014. As with the Surgical Heart Valve Therapy segment, increased sales of enhanced surgical recovery products in the United States, Europe, and Rest of World regions were not sufficient to offset lower sales resulting from weakening of the euro and yen against the dollar.

On July 3, 2015, Edwards entered into an agreement and merger plan to acquire CardiAQ Valve Technologies Inc., developer of a transcatheter mitral valve replacement system, for $350 million. The company integrated CardiAQ’s technology platform into its mitral heart valve program, strengthening its Transcatheter Heart therapy business segment.

“We believe the acquisition and integration of CardiAQ will advance our development of a transformational therapy for patients with mitral valve disease who aren’t well-served today,”  Edwards’ Chairman and CEO Michael A. Mussallem said in a company press release. “While still early in the development of this therapy, the progress of the team of employees and clinicians working on our FORTIS mitral replacement system has reinforced our confidence in a catheter-based approach. We believe the experiences and technologies of FORTIS and CardiAQ are complementary and that this combination will enable important advancements for patients.”

Two Heart Valves to Rule Them All

Edwards’ SAPIEN transcatheter heart valves, which to date have been used to treat over 150,000 patients globally, are claimed by the company as “the most studied transcatheter heart valves in history.” Edwards’ revenue increase in fiscal 2015 can be essentially attributed to two momentous product launches in this portfolio: the SAPIEN 3 and SAPIEN XT transcatheter heart valves. SAPIEN 3 was launched in the United States in July 2015, and SAPIEN XT in June 2014.

SAPIEN XT was originally approved to treat high-risk and inoperable patients suffering from symptomatic aortic stenosis. In October 2015, the valve was cleared by the U.S. Food and Drug Administration (FDA) for use in aortic valve-in-valve procedures, designated as a minimally invasive treatment option for patients with a high risk for a successive open-heart surgery to replace their bioprosthetic valves. The 197-patient PARTNER II Valve-in-Valve study leading to this approval was a rousing success. “We were very pleased to see 100 percent survival at 30 days with the 100 high-risk patients treated with the SAPIEN XT valve-in-valve procedure in the continued access registry,” said Danny Dvir, M.D., interventional cardiologist at the Center for Heart Valve Innovation at St. Paul’s Hospital, Vancouver, who presented the data at the 2015 Transcatheter Cardiovascular Therapeutics symposium. SAPIEN XT continued to fortify net sales of Edwards’ THV products in 2015 everywhere but in the European market, where revenue experienced a decline due to continued customer conversion to the newer SAPIEN 3 valve.

That valve, according to Edwards, was the primary driver for net sales in its THV portfolio (and consequently, the company’s total revenue), in part resulting from an earlier-than-anticipated June 2015 FDA approval. SAPIEN 3 with the Commander Delivery System was approved to treat high-risk patients who suffer from severe, symptomatic aortic stenosis. The device’s approval was based on a 583-patient cohort of the PARTNER II trial. “ The SAPIEN 3 valve sets a new standard for transcatheter heart valve performance and patient outcomes,” noted Martin B. Leon, M.D., director of the Center for Interventional Vascular Therapy at NewYork-Presbyterian/Columbia University Medical Center and professor of medicine at the Columbia University College of Physicians and Surgeons. “We have seen some of the best results to date from the PARTNER II Trial in treating high-risk patients with the SAPIEN 3 valve. The PARTNER II study concluded that this new valve reduced several complications associated with the TAVR procedure such as paravalvular leakage and stroke, and represented a meaningful improvement over data from prior studies with earlier-generation devices.” SAPIEN 3 also gained FDA approval in January 2016 for an expanded indication study to enroll elderly patients with severe, asymptomatic aortic stenosis and a low mortality risk when undergoing surgical aortic valve replacement.

Keep Your Heart in the Right Place

At the 2015 Advanced Medical Technology Association (AdvaMed) conference, Mussallem spoke as an expert panelist on the path to rejuvenating medical device innovation in the United States. “The balanced ecosystem that has supported innovation in the U.S. has been eroded by an increasingly costly and cumbersome regulatory process, and risk-averse payment culture,” Mussallem declared toward the beginning of his speech.

As the first-annual Edwards “Patient Day” proved, the company believes strongly that considering patients, rather than dollars, ultimately drives progress. “We are the toolmakers for clinicians, working closely with them to develop technologies to address unmet patient needs,” Mussallem said. He contends the burdensome FDA regulatory process is still in need of some work, even with the initiatives the agency has already begun to put in place. Among the ideas Mussallem put forth included a “Breakthrough Technology” designation, which would clearly outline the specific features that qualify a device for preferential approval and reimbursement treatment, and allowing enhanced reviewer training and use of alternative sources to revitalize the “least burdensome standard” for regulatory review. He also noted that increased European trialing and product launch—the “new normal” due to the high cost and time of a U.S. trial—ultimately sets back patients and American jobs.

It wasn’t merely regulatory practice Mussallem criticized as a barrier—danger signs to the innovation ecosystem also include reduced investment, difficulties in achieving public and private insurance coverage for new devices and diagnostics, and shrinking public research infrastructure. And while the focus here was on the medical device market in general, Mussallem made sure to reprise the company mantra to put the patient experience first, because it is ultimately patients that drive progress. In speaking about patients who attended the company’s 2015 Patient Day, he stressed the importance of medical device makers keeping their hearts in the right place.

“These and the tens of thousands of other patients we have had an opportunity to help remind us daily that our work is personal, and it impacts people individually,” Mussallem said in the last seconds of his speech. “Each heart valve represents a patient and their family, who otherwise would miss out on both the extraordinary and precious ordinary experiences of their daily lives.”