Michael A. Mussallem, Chairman and CEO
Donald E. Bobo, Jr., Corporate VP, Strategy and Corporate Development
John P. McGrath, Ph.D., Corporate VP, Quality, Regulatory, Clinical
Stanton J. Rowe, Corporate VP, Advanced Technology and Chief Scientific Officer
Scott B. Ullem, Corporate VP, Chief Financial Officer
Katie M. Szyman, Corporate VP, Critical Care
Larry L. Wood, Corporate VP, Transcatheter Heart Valves
Bernard J. Zovighian, Corporate VP, Surgical Heart Valve Therapy
NUMBER OF EMPLOYEES: 9,800
GLOBAL HEADQUARTERS: Irvine, Calif.
Apparently, it’s not enough to simply provide lifesaving heart valve technologies to patients in need—if you can call that simple.
Removing the degree of separation of manufacturer to patients, on March 13, 2015, Edwards Lifesciences Corp. hosted its first annual “Patient Day,” which celebrated the longevity of patients alive today as a result of their heart valve products. The company invited about 50 patients to its Irvine, Calif. headquarters for a day of touring their heart valve manufacturing operations, connecting with other heart valve patients, and meeting the Edwards employees who made their specific device.
“Because you are a heart valve patient, your experience and voice are invaluable,” Edwards noted in its Patient Day invitation. “You’ve been there. You know what it feels like. You’ve gone through the process. Your insights can help us have an impact on the lives of future patients.”
The experience of meeting the teams that manufactured each patient’s specific device proved to be an emotional experience, similar to meeting the doctor responsible for a lifesaving surgery. “I met the team that sewed my heart valve and I said, ‘Can I hug you?’” recalled Susan Strong, recipient of an Edwards device. “I gave them all a hug and one lady was holding me tight and I was crying and she said, ‘I can feel your heart.’ It was amazing.” The company hosted its second annual Patient Day on Feb. 26, 2016, and plans to continue the tradition annually. Look out for 2017 registration toward the end of the year.
Financial Landscape, and an Important Acquisition
Continuing the company’s upward momentum from 2014, in fiscal 2015 (year ended Dec. 31) Edwards reported net sales of $2.49 billion, a 7.4 percent increase from FY14. The entirety of the company’s revenue growth was gained from domestic sales totaling $1.3 billion, which represented a 20.6 percent increase over 2014. In direct contrast to 2014, which showed growth in all international markets, 2015 brought a slight decline in net sales: down 3.6 percent, 4.6 percent, and 2.1 percent in the European, Japanese, and “Rest of World” markets respectively.
Edwards’ business is separated into three segments: Transcatheter Heart Therapy (THV), Surgical Heart Valve Therapy, and Critical Care. Its THV segment was the driving force behind the 2015 net sales boost, with $1.18 billion reported—an impressive 25.1 percent increase over fiscal 2014 (though not quite as significant as the previous year’s 33.3 percent increase). Primarily responsible for the growth are the launches of two new products in the United States: the SAPIEN 3 heart valve in July 2015, and the SAPIEN XT valve in June 2014. However, the European market’s revenue decrease slightly offset this; the SAPIEN 3’s launch there in January 2014 contributed to a decline in SAPIEN XT sales as customers converted.
The company’s $785 million net sales within its Surgical Heart Valve Therapy sector represented a 5 percent deficit from 2014. The higher sales of surgical heart valve products—headed by pericardial aortic tissue valves in Europe, Japan, and the United States—were not enough to completely offset the decreased net sales as a result of fluctuating foreign exchange rates. Likewise, the $528.4 million in Critical Care segment revenue fell 4.5 percent from 2014. As with the Surgical Heart Valve Therapy segment, increased sales of enhanced surgical recovery products in the United States, Europe, and Rest of World regions were not sufficient to offset lower sales resulting from weakening of the euro and yen against the dollar.
On July 3, 2015, Edwards entered into an agreement and merger plan to acquire CardiAQ Valve Technologies Inc., developer of a transcatheter mitral valve replacement system, for $350 million. The company integrated CardiAQ’s technology platform into its mitral heart valve program, strengthening its Transcatheter Heart therapy business segment.
“We believe the acquisition and integration of CardiAQ will advance our development of a transformational therapy for patients with mitral valve disease who aren’t well-served today,” Edwards’ Chairman and CEO Michael A. Mussallem said in a company press release. “While still early in the development of this therapy, the progress of the team of employees and clinicians working on our FORTIS mitral replacement system has reinforced our confidence in a catheter-based approach. We believe the experiences and technologies of FORTIS and CardiAQ are complementary and that this combination will enable important advancements for patients.”
Two Heart Valves to Rule Them All
Edwards’ SAPIEN transcatheter heart valves, which to date have been used to treat over 150,000 patients globally, are claimed by the company as “the most studied transcatheter heart valves in history.” Edwards’ revenue increase in fiscal 2015 can be essentially attributed to two momentous product launches in this portfolio: the SAPIEN 3 and SAPIEN XT transcatheter heart valves. SAPIEN 3 was launched in the United States in July 2015, and SAPIEN XT in June 2014.
SAPIEN XT was originally approved to treat high-risk and inoperable patients suffering from symptomatic aortic stenosis. In October 2015, the valve was cleared by the U.S. Food and Drug Administration (FDA) for use in aortic valve-in-valve procedures, designated as a minimally invasive treatment option for patients with a high risk for a successive open-heart surgery to replace their bioprosthetic valves. The 197-patient PARTNER II Valve-in-Valve study leading to this approval was a rousing success. “We were very pleased to see 100 percent survival at 30 days with the 100 high-risk patients treated with the SAPIEN XT valve-in-valve procedure in the continued access registry,” said Danny Dvir, M.D., interventional cardiologist at the Center for Heart Valve Innovation at St. Paul’s Hospital, Vancouver, who presented the data at the 2015 Transcatheter Cardiovascular Therapeutics symposium. SAPIEN XT continued to fortify net sales of Edwards’ THV products in 2015 everywhere but in the European market, where revenue experienced a decline due to continued customer conversion to the newer SAPIEN 3 valve.
That valve, according to Edwards, was the primary driver for net sales in its THV portfolio (and consequently, the company’s total revenue), in part resulting from an earlier-than-anticipated June 2015 FDA approval. SAPIEN 3 with the Commander Delivery System was approved to treat high-risk patients who suffer from severe, symptomatic aortic stenosis. The device’s approval was based on a 583-patient cohort of the PARTNER II trial. “ The SAPIEN 3 valve sets a new standard for transcatheter heart valve performance and patient outcomes,” noted Martin B. Leon, M.D., director of the Center for Interventional Vascular Therapy at NewYork-Presbyterian/Columbia University Medical Center and professor of medicine at the Columbia University College of Physicians and Surgeons. “We have seen some of the best results to date from the PARTNER II Trial in treating high-risk patients with the SAPIEN 3 valve. The PARTNER II study concluded that this new valve reduced several complications associated with the TAVR procedure such as paravalvular leakage and stroke, and represented a meaningful improvement over data from prior studies with earlier-generation devices.” SAPIEN 3 also gained FDA approval in January 2016 for an expanded indication study to enroll elderly patients with severe, asymptomatic aortic stenosis and a low mortality risk when undergoing surgical aortic valve replacement.
Keep Your Heart in the Right Place
At the 2015 Advanced Medical Technology Association (AdvaMed) conference, Mussallem spoke as an expert panelist on the path to rejuvenating medical device innovation in the United States. “The balanced ecosystem that has supported innovation in the U.S. has been eroded by an increasingly costly and cumbersome regulatory process, and risk-averse payment culture,” Mussallem declared toward the beginning of his speech.
As the first-annual Edwards “Patient Day” proved, the company believes strongly that considering patients, rather than dollars, ultimately drives progress. “We are the toolmakers for clinicians, working closely with them to develop technologies to address unmet patient needs,” Mussallem said. He contends the burdensome FDA regulatory process is still in need of some work, even with the initiatives the agency has already begun to put in place. Among the ideas Mussallem put forth included a “Breakthrough Technology” designation, which would clearly outline the specific features that qualify a device for preferential approval and reimbursement treatment, and allowing enhanced reviewer training and use of alternative sources to revitalize the “least burdensome standard” for regulatory review. He also noted that increased European trialing and product launch—the “new normal” due to the high cost and time of a U.S. trial—ultimately sets back patients and American jobs.
It wasn’t merely regulatory practice Mussallem criticized as a barrier—danger signs to the innovation ecosystem also include reduced investment, difficulties in achieving public and private insurance coverage for new devices and diagnostics, and shrinking public research infrastructure. And while the focus here was on the medical device market in general, Mussallem made sure to reprise the company mantra to put the patient experience first, because it is ultimately patients that drive progress. In speaking about patients who attended the company’s 2015 Patient Day, he stressed the importance of medical device makers keeping their hearts in the right place.
“These and the tens of thousands of other patients we have had an opportunity to help remind us daily that our work is personal, and it impacts people individually,” Mussallem said in the last seconds of his speech. “Each heart valve represents a patient and their family, who otherwise would miss out on both the extraordinary and precious ordinary experiences of their daily lives.”