Inside the heart valve making operations of $76B-valued Edwards Lifesciences

MEDICAL DEVICES: Expands Irvine campus; more to come

Edwards Lifesciences Corp. has bounced back nicely from the pandemic that slowed sales a year ago when patients and doctors postponed elective surgeries.

The Irvine-based maker of artificial heart valves and critical care monitoring technologies (NYSE: EW) reported second-quarter sales increased 49% to $1.4 billion, far exceeding the analyst average estimate of $1.25 billion.

“This quarter, we were pleased that more than 30,000 patients were treated globally with Sapien valves, an indication that more patients are benefiting from our life-changing technologies than ever before,” Chief Executive Mike Mussallem said July 29 discussing second-quarter results.

Edwards’ market cap has almost doubled in the past year to $76 billion, its highest valuation ever and making it the most valuable public company based in Orange County.

It’s also once again the biggest company on the Business Journal’s annual list of medical device makers, reporting 4,688 local employees, a 4.1% increase from a year ago (see list, page 20).

Success in Specialization

Edwards’ main manufacturing facilities are located on the company’s expansive campus along Red Hill Avenue in Irvine.

In August 2020, the company completed a 315,000-square-foot expansion comprising not only new laboratories but also a new entryway, full-service kitchen, outdoor conference center and office spaces.

Two new buildings under construction will be completed by the year’s end and will add another 150,000 square feet of space, Sarah Huoh, vice president of global communications at Edwards told the Business Journal.

Edwards, founded in 1958 and spun off by Baxter Healthcare Corp. in 2000, focuses on cardiovascular disease, the number one cause of death in the world.

Every Edwards heart valve is hand-crafted from bovine pericardial tissue and cobalt chromium and requires approximately 140 employees, 40 days of production, over 90 inspection points, and 680 stitches.

“Edwards has been focused on addressing the unmet needs of heart valve patients for more than 60 years,” Larry Wood, corporate vice president of the Transcatheter Aortic Valve Replacement (TAVR) unit, told the Business Journal. “This knowledge and passion drive our team around the world each day.”

Biggest Unit

Wood has led the TAVR unit since its inception in 2007. It’s now Edwards’ biggest division with $902 million in second-quarter sales.

Valves from this unit don’t require openheart surgeries and instead are inserted through a transcatheter.

Edwards’ second biggest unit, Surgical Structural Heart, makes valves for use in open heart surgeries; it reported second-quarter sales of $237.4 million.

Its Critical Care unit, which supplies monitoring equipment and sometimes competes with cross-town medical device maker Masimo Corp. (Nasdaq: MASI), reported sales of $215 million. Edwards’ newest group, Transcatheter Mitral and Tricuspid Therapies, had $22.1 million in sales.

The TAVR Factor

Since the TAVR received FDA approval in 2011 to treat severe aortic stenosis (SAS), it’s become the dominant form of aortic valve replacement in the U.S.

In the past decade, Edwards has seen its growth explode, with half a million TAVR procedures performed on patients in over 70 countries to date.

“Our team has stayed laser focused on

achieving the best outcomes for patients,” Wood said. “We know that if we do right by patients, everything else will fall into place.”

Wood has over 30 years of experience in the surgical heart valve therapy business at both Edwards and predecessor Baxter in positions including manufacturing management, regulatory affairs, and strategic marketing.

Baxter itself still has operations in Irvine where it employs an estimated 200 and is ranked No. 19 on the Business Journal’s annual list of medical device makers.

Looking Forward

Edwards’ Irvine headquarters is also its primary location for research and development, where last year, the company spent $761 million.

“Having manufacturing capabilities in close proximity to R&D is important in pilot product manufacturing—providing a tight feedback loop between R&D engineers and manufacturers that results in high quality transfers to the commercial manufacturing location,” Wood said.

Edwards is working on several clinical trials such as an impending early TAVR trial, which focuses on asymptomatic patients with severe aortic stenosis. Once the trial is complete, Woods believes it can potentially speed up the treatment process for patients.

“Rather than wait until patients are severe and damage is actually happening in their hearts, we think treating them earlier when they have moderate disease might be a way to treat patients more effectively,” Wood said.