Michael Mussallem capped off 2011 with a long-awaited milestone.
The chief executive of Irvine-based Edwards Lifesciences Corp. saw the result of many years of planning and development come to fruition with the U.S. approval of a new replacement heart valve that’s widely seen as an industry and medical breakthrough.
“2011 has turned out to be a very eventful and positive year for our company,” Mussallem told attendees at the company’s recent investor conference in New York.
Mussallem is the only chief executive Edwards has had since it was spun off from Chicago-based Baxter International Inc. in 2000. He has steered the device maker’s focus to heart valves and related products, including critical care devices.
FDA OK
Much of the company’s effort in 2011 was concentrated on the Edwards Sapien heart valve, which does not require major surgery for implantation. Edwards Sapien and similar products are considered one of the largest advances in heart valves in years. They’re seen as opening the market for patients who are too sick for open-heart surgery.
The Food and Drug Administration cleared Sapien for U.S. sales and implantation in patients with severe aortic stenosis—or a narrowing of an artery—at the beginning of No-vember.
Edwards got what became Sapien in late 2003, when it spent $125 million to buy New Jersey-based startup Percutaneous Valve Technologies Inc.
Sapien has been on the market in Europe since late 2007. Sales there accounted for $240.6 million through the first nine months of 2011. Edwards will release fourth-quarter and 2011 financial results in February.
The U.S. market holds the potential for more than $1 billion in annual sales, according to industry analysts.
Edwards worked on several fronts to get ready for U.S. sales.
The company set aside as much as $40 million to introduce Sapien domestically upon approval. The company also established guidelines for training doctors on use of the valve as it was awaiting word from the FDA on clinical trial results.
Sapien Review
In July, a FDA advisory panel unanimously recommended that the agency approve Sapien, though it also raised concerns about potential stroke threats in some patients. The FDA generally follows its panels’ recommendations.
Edwards saw its shares fall 5% in October on speculation that a FDA decision on Sapien could be delayed until 2012. Edwards disputed the pessimistic reports and emphasized that it expected regulatory approval of Sapien on schedule.
That proved correct.
“We believe we extended our leadership in transcatheter heart valves,” Mussallem said during Edwards’ annual investor conference last month. “We finally have our approval in the U.S.”
Mussallem said Edwards expects approval for a separate type of patient for Sapien implants in 2012.
Hoag Intro
Edwards is introducing Sapien at a select group of hospitals around the U.S., including Hoag Memorial Hospital Presbyterian in Newport Beach. Hoag has opened a specialized surgical suite to offer the valve to its patients.
Sapien, while growing, remains a small part of Edwards. The company has said that it expects full-year sales of $1.68 billion to $1.72 billion for 2011. It could see a 2011 profit of $234.4 million to $240.4 million.
Sapien is expected to bring in between $150 million and $250 million during its first 12 months on the U.S. market. The mid-range of that projection would mean an increase of about 12% in overall revenue.
Edwards “invested to extend our leadership in surgical heart valves,” Mussallem said “We’re pleased that there’s continued adoption of the premium price and premium products that we offer.”
Focus
Edwards’ focus on life-saving products generally fared better than those of other medical device makers, which saw their business hurt by downturns in elective procedures.
“The things that we do are not very discretionary,” Mussallem has said.
Mussallem also serves as an industry advocate. He is on the board of directors of La Jolla-based trade group California Healthcare Institute and is a former chairman of AdvaMed, a Washington, D.C.-based group for medical device makers.
He’s also a founding member of the Orange County Technology Action Network, otherwise known as Octane.
