Edwards Pours Its Heart into Its Core Business

Loyal readers may recall that Irvine, Calif.-based structural heart giant Edwards Lifesciences dramatically altered its business in early June by selling its Critical Care business to BD (Becton Dickinson) for $4.2 billion in cash. This news came six months after the company proclaimed a plan to spin off the business by the end of the year.

The business, which Edwards said invented the hemodynamic monitoring category, generated over $900 million in sales in 2023. Shedding the company meant one thing: Pursuing a strategy totally focused on its core structural heart disease business, which includes surgical and transcatheter devices to treat aortic, mitral, and tricuspid valve disease.

A month later, Edwards signed several agreements worth €15 million with French clinical-stage company Affluent Medical covering its Kalios adjustable mitral annulus and mitral valve technology. The Kalios mitral valve annuloplasty device can be percutaneously adjusted to treat residual and recurrent mitral insufficiency any time after implantation, repeatedly, and on a beating heart.

As part of the payment to Affluent, Edwards has an exclusive option to acquire Kephalios, the Affluent subsidiary that supports Kalios. Another payment ensured global, non-exclusive licensing of Affluent’s intellectual property for biomimetic cardiac mitral valve replacement technology. The remaining payment secured Edwards an equity stake in Affluent, making Edwards a 9.21% shareholder in the company.

A few days later, Edwards revealed it had exercised its option to acquire Innovalve Bio Medical, an early-stage transcatheter mitral valve replacement (TMVR) company. Edwards had initially invested in Innovalve in 2017 and cited promising early clinical experience with its TMVR program as a reason it had exercised the option to acquire.

“Building on our learnings of the complexity of mitral disease, we know there is a need for a differentiated range of therapies for these patients,” Edwards’ transcatheter mitral and tricuspid (TMTT) corporate VP Daveen Chopra said. “Edwards’ SAPIEN M3 remains on track to become the first approved transfemoral TMVR system in Europe by the end of 2025. We believe the Innovalve technologies, paired with Edwards’ deep mitral expertise, will enable a TMVR platform that will expand the treatable population.”

A week later, Edwards announced two more investments that totaled about $1.2 billion—an agreement to acquire JenaValve, and another to exercise the option to acquire Endotronix.

JenaValve is a pioneer in transcatheter treatment for aortic regurgitation (AR). The company released positive results from its U.S. pivotal trial for treatment of symptomatic, severe AR in high-risk patients late last year. Edwards said it expects U.S. Food and Drug Administration (FDA) approval for JenaValve’s Trilogy heart valve system in late 2025. It will represent the first approved therapy for patients suffering from AR.

Endotronix is a developer of heart failure (HF) management solutions. The deal expanded Edwards’ portfolio into a new therapeutic area—many structural heart patients also suffer from HF with limited options. In June 2024, Endotronix earned FDA approval for its Cordella implantable pulmonary artery pressure sensor. Cordella allows early, targeted intervention and a CMS national coverage determination is anticipated in early 2025.

“…we are confident in the moves we have made to reshape our portfolio of technologies to focus specifically on structural heart,” Edwards corporate VP and CFO Scott Ullem said in the company’s Q2 2024 earnings call. “The sale of Critical Care provides extra management bandwidth, as well as additional liquidity to fund external growth investments. At the same time, our original vision for TMTT is becoming a reality and the early-stage investments we made in companies like JenaValve and Endotronix position us to acquire high-quality and high potential businesses with talented employees.”

And continue to acquire it did. August saw Genesis MedTech selling its JC Medical company to Edwards. This includes the intellectual property and commercial rights for the J-Valve transcatheter aortic valve replacement (TAVR) to treat severe aortic regurgitation.

The J-Valve transfemoral system (J-Valve TF) earned breakthrough status from the FDA in August 2023. Enrollment for its U.S. early feasibility study was finished in February 2024 and JC Medical earned FDA approval to begin J-Valve TF’s pivotal clinical trial in the first half of this year.

Edwards also made a $25 million equity investment in Genesis MedTech to support its product and market development efforts. In the Q2 earnings call, Ullem was asked whether the proceeds from Critical Care would be used for share buybacks or further M&A.

“…we’re always interested in buying back stock. We’re always looking for buying opportunities,” he said. “But the first call on cash hasn’t changed one bit, which is we’re [sic] going to continue to invest in the company. We’re going to continue to invest in the capacity that we need to support the growth of the company. We’ll certainly be looking at other external investments.”

Given that an external investment in JC Medical and J-Valve was made a few weeks after this call, it should be interesting to see what other structural heart technologies Edwards pursues now that the sale of Critical Care is completed.

Stay tuned.