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Edwards Pursues Bigger Heart Market

Edwards Lifesciences Corp. wants to move its popular less-invasive replacement heart valves into a wider range of heart disease treatment after further padding its portfolio of mitral heart valves last month with the latest in a string of deals.

It’s also looking at new valves and wider usage of its current transcatheter valves, said Larry Wood, the Irvine-based company’s vice president of transcatheter heart valves. The valves are currently used primarily to treat aortic stenosis, or a narrowing of the body’s main artery.

“While we look at those opportunities in aortic stenosis, we also look for ways we can [use] our platform for treating other diseases and other opportunities,” Wood said during a presentation at Edwards’ recent investor day at its headquarters.

Edwards’ Sapien 3 and Sapien XT, along with the Centera aortic valve and a pair of yet to be named next-generation valves, are under consideration for the expansions. They would be used to treat potential heart failure and serve as replacements for pulmonary valve defects discovered at birth.

Wood said the company is scheduled to start a clinical trial this year for patients at low risk for complications from traditional open-heart surgery.

“We’ve seen a lot of growth and change in the treatment of aortic stenosis,” he said.

Edwards has also made inroads in developing transcatheter mitral valves, including its $400 million deal last year for CardiAQ Valve Technologies Inc., which was based in Irvine.

More Markets

Wood also mentioned more markets for transcatheter valves.

“Japan and the rest of the world provide significant growth opportunities over the next several years,” he said while pointing to a pie chart showing the company’s estimated global transcatheter heart valve sales.

Edwards has projected full-year transcatheter valve sales of $1.1 billion to $1.2 billion. It reports its fourth-quarter and 2015 results on Feb. 2.

Wood later said Edwards expects its global market opportunity for transcatheter heart valves to exceed $5 billion by 2021, conditioned on receiving approval for intermediate- and low-risk patients; untreated patients seeking therapy following positive outcomes; and expanded usage and the evolution of reimbursement combined with modest price erosion.

Edwards also anticipates European approval at year-end for the Sapien 3 Ultra Delivery system, which it says will streamline delivery of the valve.

Analyst Sean Lavin of New York-based BTIG Research LLC called Edwards’ transcatheter valve outlook “solid” in a research note and mentioned that its management is “incrementally bullish” around the low-risk patient opportunity, thanks to the clinical trial.

Lavin also mentioned that Edwards’ domestic share “should be fairly insulated for a while,” because he doesn’t expect Natick, Mass.-based competitor Boston Scientific Corp. to enter the U.S. transcatheter valve market until at least the second half of 2017.

Production Boost

Edwards will spend this year expanding and updating its infrastructure, including adding production capacity and investing in quality, said Chief Executive Michael Mussallem.

“We’re also driven by aspiration. We update our strategy on a regular basis,” he said in his opening remarks.

“Our focused innovation means we go after the tough things that are close to home. We think there are big needs there, and we can have a big impact.”

Edwards is “always willing to look at our portfolio and evaluate what is in it” to make sure it puts in “the maximum energy” to fulfill customers’ needs, according to the veteran chief executive.

“We focus on things that are tough. We don’t take on the easy problems at Edwards.”

Mussallem later indicated that Edwards is swimming against the tide when it comes to healthcare business models.

“At a time when it feels like much of healthcare is consolidating, we’re going in the opposite direction. We’re saying, ‘Nope, we’re focused, and we’re going to stay focused’ on structural heart disease.

Edwards executives discussed other parts of the business. They included Donald Bobo Jr., corporate vice president of heart valve therapy, corporate strategy and corporate development; Katie Szyman, the company’s new corporate vice president of critical care; and Scott Ullem, chief financial officer.

Dr. Vinod Thourani, chief of cardiothoracic surgery at Emory Hospital Midtown in Atlanta and a paid consultant of the device maker, before Wood’s presentation discussed the optimization of aortic stenosis treatment, emphasizing Sapien 3, which Edwards introduced last summer.

The investor event also included an evening educational session on structural heart disease.

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