Michael Mussallem had a solid year in 2008.
The veteran chief executive of Edwards Lifesciences Corp., an Irvine medical device maker, started a big clinical trial for a new type of heart valve, sold off unneeded products and rolled out a few devices during the year.
Edwards also had the distinction of outperforming the Standard & Poor’s 500 index, ending the year up about 15% on a market value of $3 billion. The S & P; 500 was down 40% for the year.
The company’s performance earned Mussallem an honorable mention for the Business Journal’s businessperson of the year.
“I think Edwards did fabulously and I’m very proud of my team,” he said.
Longtime Leader
Mussallem is the only chief executive Edwards has known since its 2000 spinoff from Baxter International Inc. of suburban Chicago.
He steered the company’s focus to heart valves and related products such as the FloTrac catheter, which helped carry Edwards in 2008, according to Mussallem.
The company also got rid of some underperforming products.
Edwards sold its LifeStent device to treat diseased blood vessels to C.R. Bard Inc. of New Jersey for $140 million in late 2007.
“We got out of some areas that we thought we wouldn’t necessarily be great at,” Mussallem said. “We not only met our expectations, but we exceeded our expectations.”
The company made headway with its Sapien device, a type of replacement heart valve that doesn’t require major surgery.
Sapien, which is delivered via a catheter, was approved for use in Europe in late 2007 to good reviews.
In October, Edwards reported what it called positive results from two European studies on Sapien. One study found that patients had a 94% survival rate 30 days after receiving the valve. A second European study showed a 92% survival rate at 30 days and 90% at six months.
The results bode well for Edwards’ ongoing U.S. clinical trial. The company has an eye toward getting the valve approved by the Food and Drug Administration by 2011.
If regulators clear Sapien, Mussallem said it could become the technology of choice for high-risk patients who can’t undergo traditional open-heart valve replacement surgery.
“If there’s a standout for the year, it’s the progress that we made at transcatheter heart valves,” Mussallem said. “It went from, in many people’s minds, a dream to reality.”
Edwards expects Sapien to have more than $50 million in sales in Europe in 2008.
“We went into the year predicting that we would do more than $20 (million), and there were a few doubters on that,” Mussallem said.
Sapien still is a relatively small part of Edwards. For 2008, Edwards has said it expects full-year sales of $1.24 billion to $1.28 billion. Profits are seen as coming in at $141.7 million to $145.1 million.
The company’s life-saving devices fared better than those of many other medical device makers, which saw business hurt by a downturn in elective procedures last year.
“The things that we do are not very discretionary,” Mussallem said.
Most analysts are high on Edwards.
The European studies on Sapien managed to dispel concerns raised in the summer by JPMorgan Chase & Co.’s Michael Weinstein.
The analyst downgraded the company’s stock, saying Sapien could end up showing a higher than expected death rate and that a catheter insertion method through the ribs was unworkable.
Others are optimistic about the device.
“We continue to believe the Sapien opportunity is the most compelling story in cardiovascular medical devices,” said Larry Biegelsen, an analyst with Wachovia Corp.
Advocacy
Mussallem also continued his role as an industry advocate in 2008. He hosted Darrell Steinberg, now president pro tem of the California Senate, during a tour back in June.
He’s also on the executive committee of the California Healthcare Institute, a La Jolla trade group. He’s chairman of AdvaMed, a Washington, D.C., group for medical device makers. Mussallem’s also a founding member of the Orange County Technology Action Network.
“I’m a real believer in what our industry does,” Mussallem said.
Edwards also celebrated its 50th anniversary, dating back to when the first commercially available replacement heart valve was developed by retired engineer Miles “Lowell” Edwards and Albert Starr, a heart surgeon.
“We took the opportunity to celebrate our heritage,” Mussallem said.
