Edwards Lifesciences Corp., which credited its Perimount Magna heart valve as a key factor behind its second-quarter growth, just launched the newest Magna version, a mitral replacement heart valve, in Europe.
Edwards also has asked the Food and Drug Administration for approval to sell the Perimount Magna mitral valve in the U.S. The device maker said it expects to start selling the valve, which is made from cow tissue, here next year.
Sales of Edwards’ Perimount Magna aortic valve and other newer, more expensive devices have driven growth at the company.
Edwards’ second-quarter sales were up 10% from a year earlier to $258 million. Profit for the quarter, excluding charges, was $32.3 million, up 22%.
Perimount Magna, which the company bills as longer lasting and holding several advantages for heart surgeons, drove a 10% gain in heart valve sales in 2004, according to Chief Executive Michael Mussallem.
“We expect to see our heart valve business again grow in excess of 10% in 2005,” he said.
After some Wall Street calls for diversification earlier in Edwards’ five years since breaking off from Baxter International Corp., the company has stayed the course with its heart valve business.
“We don’t have any intention of going beyond our areas of focus,” Mussallem said.
Quality Drama
The recent fight between Quality Systems Inc. and a major shareholder over compensation and corporate governance was a heated one, both on paper and in person.
At the Irvine-based company’s annual meeting late last month, there was plenty of cross talking between Quality management and Ahmed Hussein, an Egyptian businessman who owns some 18% of the company.
“This is not a beauty contest,” Hussein said before laying out a case for a dissident directorial slate that he led against a group headed by Sheldon Razin, Quality’s chairman, cofounder and other dominant shareholder.
Hussein mainly focused on his argument that stock option packages for Quality managers and directors approved by the current board in the past year are excessive in light of Quality’s size,the company had $89 million in revenue for the 12-month period ended March 31.
“If you pay (directors) half a million dollars, there goes the core of their independence,” Hussein said. Later, during a discussion of a proposed stock option plan, Hussein called the proposal “outrageous.”
By contrast, Vincent Love, a Quality director running on management’s slate, focused on the credentials and background of his candidates.
He praised Chief Executive Louis Silverman as “the driving force” behind Quality’s performance.
Quality’s shares have doubled this year and the company counts a market value of $910 million. The company makes software for doctors and dentists to run their practices.
“There is a lot to be said,” Love said, but he referred attendees to the company’s proxy statement.
Quality management argues that their company’s compensation has been lean and that corporate government principles set in place by Hussein when he became a Quality director in 1999 are too harsh.
Also, Hussein and Silverman traded a few barbs prior to opening the floor for any shareholder who wanted to vote in person.
Hussein kicked the jockeying off by saying Quality’s decision to reduce the size of its board earlier this year changes “my ability to elect” directors.
“That’s out of order,” Silverman replied.
“I challenge the company,” Hussein said.
“That’s off-topic,” Silverman said, before asking if ballots were distributed to shareholders.
Silverman adjourned the meeting after learning that the election inspector hasn’t concluded tabulating the ballots.
Results still weren’t known late last week. See OCBJ.com for updates.
Spectrum Elects Director
Spectrum Pharmaceuticals Inc., the Irvine-based cancer drug developer, added Richard Fulmer, a drug marketing and business development executive, to a new seat on its board.
Fulmer’s career includes 24 years at Pfizer Inc.
While at Pfizer, Fulmer played a role in launching Diflucan, an anti-fungal drug, Zoloft, a popular antidepressant, and Cardura, which is used to treat benign prostate hypertrophy.
He holds a master’s of business administration from George Washington University and started his career as a senior financial analyst with Ford Motor Co.
Spectrum’s action came some three months after Xmark Funds of Stamford, Conn., which now owns less than 5% of Spectrum, publicized a letter about concerns it had with the drug developer, including the reduction of its board of directors at that time from seven to five members.
“We have determined that our company now needs leadership from an individual with a marketing and licensing expertise,” said Rajesh Shrotriya, Spectrum’s chief executive, in a release.
Xmark earlier urged other Spectrum shareholders to vote down a company-backed directorial slate.
Shareholders rebuffed the call and elected management’s slate.
