Edwards Lifesciences has its heart in the right place. Named for the co-inventor of the first artificial heart valve, Miles "Lowell" Edwards, its main products are still heart valve devices, including valves made from animal tissue and annuloplasty rings that repair damaged valves. The company also makes monitoring systems that measure heart function during surgery; various types of cannulae (surgical tubes used for drainage, delivery, or filtration); and embolectomy catheters that remove blood clots from peripheral arteries. Edwards Lifesciences markets its products worldwide.
Edwards Lifesciences sells its products in roughly 100 countries worldwide, with key operations in Australia, Canada, China, Japan, the US, and numerous countries in Europe. The company makes most of its sales in the US, Europe, and Japan.
Edwards Lifesciences' products fall into four main categories: heart valve therapy products including valve and valve repair items, which account for more than half of sales; critical care products, including monitoring systems and central venous catheters; vascular devices, such as embolectomy catheters used to treat peripheral vascular disease; and cardiac surgery systems, including disposable items used in cardiac and other major surgeries.
Sales and Marketing
Edwards Lifesciences markets its products around the globe through a direct sales force and distributors. The company's clients include hospitals, doctors, and other health care providers.
Despite challenges in the medical device market due to health reform and economic factors, Edwards Lifesciences has managed to steadily increase revenues and profits over the years by providing innovative products that are essential to modern cardiovascular procedures. (Such products are typically not subject to negative spending or coverage decisions by consumers or insurers.) Revenues increased 16% in 2011 to some $1.7 billion due to increased product sales in the heart valve (21%), critical care (12%), and cardiac surgery system (7%) segments. Net income also increased by nearly 9% that year to about $237 million.
Much of the firm's growth can be attributed to a key aspect of its business strategy: The development of new and next-generation medical devices. Over the past few years Edwards Lifesciences has increased its R&D spending. The company invested about 15% of net sales in R&D during 2011 (up from 14% in 2010), with a special focus on the high-growth field of minimally-invasive devices, which aim to treat and monitor patients in a less traumatic way. In its core heart valve therapy segment, it is focused on the development of next-generation transcatheter heart valves (designed to provide less invasive surgical options) and pericardial tissue valves (for aortic and mitrial valve replacement), as well as enhanced tissue processing technologies. Recent launches include the 2011 FDA approval of the Edwards SAPIEN transcatheter heart valve, as well as the introduction of the Carpentier-Edwards Physio Tricuspid annuloplasty ring in both the US and European markets during 2011.
In the critical care segment, product launches include the late 2010 introduction of its EV1000 clinical platform in Europe; the product was also launched in the US in 2011. The EV1000 clinical platform is used with other monitoring products to measures a patient's volumetric hemodynamic parameters (cardiovascular performance, heart pressure, and oxygen saturation) using integrated sensors and catheters during and after surgical procedures. The firm is also developing minimally invasive automated glucose monitoring systems. Within the third-largest segment, cardiac surgery systems, Edwards Lifesciences is investing in minimally invasive devices such as the IntraClude aortic occlusion device introduced in 2011. Acquisitions can also serve as an effective way for the company to feed its pipeline.
Alongside its growth measures, the company has also chosen to downsize product segments that have been slow to grow. For instance it discontinued two of its vascular product lines, the artificial graft implants and the LifeStent non-coronary stent offerings, during 2011 and 2009.
Mergers and Acquisitions
In 2011 Edwards Lifesciences expanded its pipeline by purchasing Embrella Cardiovascular for $43 million. The acquisition gave Edwards Lifesciences a development-stage device designed to keep blood flowing to the brain during transcatheter heart valve procedures. The acquisition provides a novel new technology to support its minimally invasive heart valve development efforts.
In 2012 the company moved to expand further by acquiring BMEYE, a Dutch maker of hemodynamic monitoring systems, for some €32 million ($42 million). The purchase expanded Edwards Lifesciences' offerings for the clinical market by providing an option that helps reduce complications and reduce the length of patients' hospital stays.
Edwards Lifesciences' roots can be traced back to about 1960 when the invention of the artificial heart helped spawn a company that was then called Edwards Laboratories. The company was spun off from former parent Baxter International in 2000. – less