Prior Fiscal: $3.72 Billion
Percentage Change: +16.6%
No. of Employees: 13,900
Global Headquarters: Irvine, Calif.
Michael A. Mussallem, Chairman and CEO
Donald E. Bobo Jr., Corp. VP, Strategy & Corporate Development
Todd J. Brinton, M.D., F.A.C.C., Corp. VP, Advanced Technology, Chief Scientific Officer
Daveen Chopra, Corp. VP, Surgical Structural Heart
Jean-Luc Lemercier, Corp. VP, EMEA, Canada, and Latin America
John P. McGrath, Ph.D., Corp. VP, Quality, Regulatory, Clinical
Joseph Nuzzolese, Corp. VP, Global Supply Chain
Arnold A. Pinkston, Corp. VP, General Counsel
Katie M. Szyman, Corp. VP, Critical Care
Scott B. Ullem, Corp. VP, Chief Financial Officer
Huimin Wang, M.D., Corp. VP, Japan, Asia and Pacific
Larry L. Wood, Corp. VP, Transcatheter Aortic Valve Replacement
Bernard J. Zovighian, Corp. VP, Transcatheter Mitral and Tricuspid Therapies
The Edwards family is quite prolific.
There are thousands, maybe hundreds of thousands of them scattered throughout the world with possibly up to two million or more altogether, but nobody really knows for sure.
Folks lost count a long time ago.
They go by ordinary names like Fred, Cindi, Gary, Thomas, John, and Andrea, as well as more exotic ones like Shizue and Malea. They hail from places near and far, from the asphalt jungles of Manhattan, Melbourne, and Mumbai, to the secluded suburbs of Washington, Winnipeg, and Warsaw. Each family member is unique, embodying the traits that differentiate them from their kin, yet they all share a common, unbreakable bond.
“It’s a family,” Marvin Keyser explains matter-of-factly. “You guys are part of my life, and I’m part of their life.”
“Instant family,” adds Gary Truhn.
Instant indeed: Keyser and Truhn are kindred spirits, linked not by blood but by the implantable technology keeping their once-feeble cardiac valves in check. The innovation, developed by Irvine, Calif.-based Edwards Lifesciences Corporation, has given rise to an extended clan of recovered patients, each connected by the shared experience of a life-threatening health scare.
Keyser and Truhn shared their heart valve war stories with each other and dozens of their unofficial relatives last spring during an annual meet-and-greet hosted by Edwards Lifesciences. Dubbed the “Patient Experience,” the event is basically an educational opportunity for both company leaders and heart valve recipients, as it gives the former group insight into potential product and/or process improvements, and the latter bunch the opportunity to meet their broken-hearted brethren as well as the cardiac implant artisans.
“Patients are our North Star. They remind us why we do what we do,” Edwards Chairman/CEO Michael A. Mussallem said in a LinkedIn interview published last April. “The people we bring to attend The Patient Experience range in age from 10 to 91. We talk to them in large groups, small groups, one-on-one. They tell us stories about symptoms that scared them, treatment journeys that were full of ups and downs, and then a return to doing things they love to do. We have learned through talking with patients that, even though we’re living in a time of great medical breakthroughs, patients are still underserved. Listening closely to what they have to say is a way to serve them better.”
“Every event we’ve had has led to changes in our operations,” he continued in the post. “For example, patients have told us that transcatheter aortic valve replacement, which is a less-invasive heart valve replacement, is not being made accessible to enough people. This means that we need to work harder to provide more support for the organizations that are focused on removing barriers to care for patients. Many patients, particularly older people, are willing to tolerate substantial risks in exchange for the benefits of a treatment that improves their quality of life and ability to return to a normal life quickly. As a result, we are prioritizing developing products that ensure they address what is most important to the patient.”
One such product is the SAPIEN 3, Edwards’ premiere heart valve and fiscal bedrock. The device maintained its lead role last year in the company’s narrative as it won over clinicians and regulators in both the United States and Europe. March 2019 results of a 1,300-patient SAPIEN 3 trial (PARTNER 3) showed less disruption to heart rhythms and superiority to surgery in low-risk patients undergoing transcatheter aortic valve repair (TAVR). Moreover, the SAPIEN 3 valve showed a death and disabling stroke rate of 1 percent at one year vs. 2.9 percent for surgery.
ANALYST INSIGHTS: After a steady rise in share price and market cap over the last several years, Edwards’ growth hits a bit of a speed bump (COVID19). Look for them to continue their ascent as we enter 2021 and they continue to lead in the fast-growing transcatheter cardiovascular space through organic growth and further acquisitions of complementary technologies.
—Mark Bonifacio, President, BCS LLC
PARTNER 3’s positive study results convinced regulatory agencies on both sides of the Atlantic to open TAVR treatment to low-risk patients, beginning with the U.S. Food and Drug Administration (FDA) in August 2019 and then the European Union in November. The FDA authorization expands the use of the SAPIEN 3 and SAPIEN 3 Ultra transcatheter heart valve systems for severe, symptomatic aortic stenosis (AS) treatment in patients at low risk of open-heart surgery. The approval covers the SAPIEN 3 and SAPIEN 3 Ultra valves in all sizes.
Europe’s consent, on the other hand, applies only to the SAPIEN 3 valve. The device was the first transcatheter aortic valve implantation (TAVI) system in the EU to be sanctioned for AS treatment in low-risk open heart surgery patients. “Now, all patients in the U.S. and Europe with AS can be evaluated based on their individual needs, versus the previous approach of primarily looking at their surgical risk,” Mussallem noted in Edwards’ 2019 annual report.
U.S. and European regulators, however, were not alone in their acclaim for the SAPIEN 3’s clinical prowess. Edwards management was equally as impressed—to such a degree, in fact, that they decided last summer to discontinue the company’s self-expanding TAVI device, Centera. “While the Centera valve has demonstrated excellent clinical outcomes and is performing well for patients,” Mussallem said in July 2019, “the time and resources required to optimize deliverability and expand the indications to match the SAPIEN 3 valve are significant.”
The Centera valve’s untimely death followed an early July (2019) field safety notice that warned of difficulties tracking and manipulating the device through the aortic arch. The manipulation difficulties reportedly led to vascular injury in 1.5 percent of cases.
Though warranted, Edwards executives’ confidence in the SAPIEN 3 valve was shaken a bit by the July 2019 recall of the device’s Ultra delivery system amid reports of burst balloons during implantation. The complication, according to the company, made it difficult to retrieve the valve and remove the system from patients; it potentially could lead to vascular injury, bleeding, or surgical intervention. The FDA cited 17 injuries and one death at the time Edwards issued its Field Corrective Action (later upgraded to a Class I recall).
Despite the misstep, SAPIEN 3 still commanded overall company growth last year, helping propel a 16.6 percent sales surge ($4.34 billion total), a 17.7 percent jump in net income ($1.18 billion) and an 18.5 percent rise in adjusted EPS ($5.57). Gross profit increased 16.1 percent to $3.2 billion, driven by TAVR products (mainly SAPIEN 3), but growth was somewhat muted by a $73.1 million inventory write-off related to the TAVR portfolio (including the Centera valve discontinuation).
Growth was robust last year in each of Edwards’ four product categories, too: TAVR posted the highest gains, boosting revenue 19.7 percent to $2.73 billion. Higher SAPIEN 3 and SAPIEN 3 Ultra System sales mostly drove the increase, though further growth was stymied by fluctuating foreign exchange rates.
Transcatheter Mitral and Tricuspid Therapies (TMTT) revenue totaled $28.2 million on strong sales of Edwards’ PASCAL transcatheter valve repair system, which received CE mark approval in February 2019. Designed to reduce mitral regurgitation while respecting the native anatomy, the PASCAL system features contoured, broad paddles to maximize coaptation of the mitral leaflets and a central spacer that fills the regurgitant orifice area. The delivery system allows for independent leaflet capture and the ability to optimize leaflet position.
In an effort to expand indications for the PASCAL system, Edwards continued enrollment in its CLASP IID U.S. pivotal trial to study the device in primary, or degenerative, mitral valve disease. And last September, the company received FDA approval to study PASCAL in patients with symptomatic severe tricuspid regurgitation.
Outside the PASCAL universe, Edwards began enrolling patients in its CLASP IIF pivotal trial for patients with secondary, or functional, mitral valve disease. The company also obtained fourth-quarter (2019) approval to evaluate the safety and function of its EVOQUE tricuspid valve replacement system.
“We made meaningful strides this year  in transcatheter mitral and tricuspid therapies, moving our portfolio of technologies forward to advance solutions for these patients, who have few good options,” Mussallem said in his shareholder letter within the annual report. “Commercialization of the PASCAL system has begun in Europe and, simultaneously, we are building the body of evidence to support the introduction of the system globally. We continue to gain confidence and expertise in mitral and tricuspid repair and replacement and have an engaged group of distinguished physician partners ready to tackle these complex diseases.”
Fiscal 2019 Surgical product sales climbed 10.5 percent to $841.7 million due mainly to strong demand in Europe, Japan, and the United States for aortic tissue vales (primarily, the INSPIRIS RESILIA aortic valve). Fluctuating foreign exchange rates, however, knocked $14.5 million off the final total.
Surgical revenue in 2020 likely will be aided by the fourth-quarter (2019) European regulatory approval of the HARPOON Beating Heart Mitral Valve Repair System. The device offers the potential for earlier treatment of degenerative mitral valve disease, with faster recovery and more consistent outcomes for surgical patients.
Critical Care proceeds rose 9.7 percent last year to $740.2 million, driven by strong U.S. sales of the company’s HemoSphere advanced monitoring platform and a $16.8 million contribution from its springtime acquisition target, CAS Medical Systems (CASMED), maker of non-invasive brain tissue oxygenation monitoring devices. The $100 million union was not completely unexpected, as Edwards developed a smart cable and software module to facilitate the connection between its HemoSphere monitoring platform and CASMED’s ForeSight sensor.
Edwards’ investment in the firm paid off in September when it won FDA clearance to integrate the ForeSight brain tissue oximetry sensors with the HemoSphere monitoring platform. The authorization allows anesthesiologists to monitor oxygen saturation in the brain during surgeries and correlate it with hemodynamic parameters in real-time.
“Understanding the relationship between the heart and the brain can provide valuable patient insights to support decision making during a surgical procedure,” Katie Szyman, corporate vice president of Critical Care at Edwards, said upon the ForeSight‘s FDA clearance. “With the addition of the ForeSight sensors to Edwards’ most modern platform, HemoSphere, we can offer clinicians a broad range of smart hemodynamic management solutions to help improve patient care.”
The ForeSight sensors rely on near-infrared spectroscopy to penetrate the scalp and measure oxygen content in the brain. The integration of the two platforms enables clinicians to predict drops in blood pressure, and allowing for timely intervention during procedures.