Edwards Lifesciences Corp.’s investment in Baltimore-based Harpoon Medical Inc.—announced this month, with an option to buy the startup—is the latest of several deals by the Irvine device maker over the past 12 months to bolster its portfolio of mitral heart valves.
It paid $350 million in July for Irvine-based CardiAQ Valve Technologies Inc., which makes the valves.
Harpoon’s product is used to repair them.
Edwards in December 2014 bought intellectual property related to mitral valve work.
Harpoon expects European approval in 2017 for its lone product, and Edwards said U.S. clinical trials for its CardiAQ-Edwards mitral valve will ramp up next year.
An Edwards spokesperson said the 2016 trials will proceed under the CardiAQ-Edwards name, while “future iterations will incorporate” mitral valve technology the company had already begun to develop under the name Fortis before buying CardiAQ.
The company announced its investment in Harpoon—specific terms were not disclosed—in conjunction with its annual investor conference Dec. 9.
The efforts on mitral valve disease are part of a wider growth area for Edwards, according to Donald Bobo Jr., corporate vice president of heart valve therapy, corporate strategy and corporate development.
“We think there are significant opportunities to innovate, and this has really stimulated us to invest,” he told investors.
Chief Executive Mike Mussallem said Edwards was “at the early stage of this” and noted “uncertainty” in the work, as well as “the potential for those technologies to have profound impact … so we’re aggressively investing.”
Device Tax Review
U.S. lawmakers last week were working to assemble and vote on a year-end tax-and-spending bill that was set to include a two-year moratorium on a medical device tax enacted in 2010 as part of the Affordable Care Act.
Device makers are taxed 2.3% of revenue under the assessment.
Some observers see a fair chance for a moratorium to win approval as part of the larger package of laws known as an omnibus bill. The move could stave off a veto by President Barack Obama, who had indicated his opposition to a moratorium on the device tax, which was part of his historic healthcare reform package.
A national medical device industry group said a member survey showed the tax would contribute to a payroll cut of about 39,000 over five years. The survey found that half of the respondents had also cut research and development budgets due to the tax.
The 35 largest medical device makers with operations or headquarters in Orange County employed 16,629 here as of mid-August, an increase of 316 positions, or 2%, and the seventh straight year of growth, according to Business Journal research.
Medical devices made by local firms include surgical instruments, catheters and heart valves.
Executive Confab
Irvine Marriott hosted the fifth annual OC gathering of medical device executives under the auspices of the Boston-based MassDevice newsletter.
Four “Device Talks” events are planned next year in medical device magnet areas of Orange County, Boston, Minneapolis and Raleigh-Durham, N.C.
MassDevice Publisher Brian Johnson said the aim is to bring together “people who move the needle,” generating “broad, free-flowing conversation to generate new ideas. Orange County is a huge market for us.”
This year’s event included Richard Thompson, chief executive of San Clemente-based ReShape Medical Inc., and Wilson Constantine, who was named chief executive of Nihon Koheden America in April. Nihon is a Tokyo-based company that has its North American headquarters in Irvine.
About 150 attended this year, Johnson said.
“It’s harder to build a medical device company these days,” Johnson said. “But this industry is incredibly resilient and continues to innovate in a challenging environment.”
Bits & Pieces
Huntington Beach-based market researcher Life Science Intelligence said in a report that the global gastrointestinal endoscopy market would grow at a 6% compound annual growth rate to $16 billion by 2020. … Aliso Viejo-based cloud-based analytics provider Predixion Software said it will work with Carolinas HealthCare System “to predict and prevent” hospital readmissions for chronic obstructive pulmonary disease. … Mission Viejo-based healthcare facility owner Ensign Group Inc. plans to split its stock 2-for-1 “on or about December 23” for shareholders of record as of Dec. 17.
