Heart valves are a hot field in cardiology these days.
One of its
pioneers is Edwards Lifesciences of the US, whose leading heart-valve product
became part of its offering as a result of the acquisition of Israeli company
PVT in 2004 for $155 million. PVT was founded by Stanton Rowe, Stanley
Rabinovich, Dr. Martin Leon and Dr. Alain Cribier, under the aegis of Medica
In the light of the success of that acquisition, it is
understandable why Edwards continues to be involved in the Israeli market. The
company still maintains a development center in Israel based on PVT. The center
employs 40 researchers working on Edwards’s newest technologies.
only did we succeed in keeping many of the workers who were originally at PVT,
but we have even doubled the workforce since the acquisition,” Edwards CEO
Michael Mussallem told Globes in an interview.
“We’re happy with the
group, which manages to preserve the true spirit of a start-up, unlike most of
Edwards’s other departments. The Israeli team is no longer working on the heart
valve originally developed by PVT, but on our most innovative and advanced
developments, such as we still cannot even disclose.”
Mussallem is in
Israel this week until Wednesday to attend the ILSI-Biomed
Globes: Do you plan to add to your Israeli activity an
R&D group for later stages, or a production group? Mussallem: “Probably not.
We want to preserve the character of the group. But we are looking for more
acquisitions and collaborations in Israel.”
On that score, Edwards signed
a deal this year with Israeli company CollPlant, which develops products based
on human collagen produced from plants. As part of the deal, the companies are
carrying out a pilot for developing a collagen-based component for heart valves.
If it succeeds, the product will be integrated into Edwards products in a deal
that could be in the tens of millions of dollars.
selective; we mostly don’t do deals at such early stages,” Mussallem says. “But
in this case, we were impressed both by CollPlant’s technology and by their
Edwards has a market cap of $10 billion, annual sales of $1.4b.,
of which $206m. derive from the product developed at PVT, a valve inserted in a
minimally invasive procedure. This compares with $110m. the previous year, a
rise of 87 percent. Edwards made a profit of $218m. last year, and it has about
The vision of the future that Mussallem sketches is one that
any patient would be prepared to adopt.
“I believe in innovation,” he
says. “In my opinion, we will look back in another few decades and declare that
in 2011 we were primitive in the way we carried out medical procedures.
Traditional surgery will steadily move towards minimally invasive approaches. In
intensive care, monitoring will improve, and the interface between monitoring
devices and the doctor will become simpler.”
Today, Mussallem says, there
are advanced technologies that exist only in developed countries. Something else
that will drive the industry will be bringing these technologies to developing
countries that are starting to spend more money on them, he says.
take advantage of this trend, you have to understand the special problems of the
various countries,” Mussallem says. “Not all patients are the same, neither
culturally nor physically, not in their health systems and also not in the
sources of finance and marketing channels.
The emphasis for success in
these countries is on...
investing in the marketing people and the
doctors. This is the key to adopting technology.”
A finite number of
companies to buy The valve originally from PVT is currently sold only outside
the US, mainly in Europe and Asia. It is still not approved in the US market,
where it is undergoing a long regulatory procedure with the US Food and Drug
Administration. Edwards is currently carrying out a huge trial, which should be
the last before the product reaches the US market.
“The trial is made up of two groups,” he says. “The first is
of patients that cannot be operated on at all, and there we have already
obtained good results. The second group is of patients that can be operated on
but chose our procedure. We should receive the results from this group within a
few weeks, and we estimate that the approval could come sometime from October
What are the advantages of the product? “It makes it possible
to operate on patients for whom there was no other answer, and therefore it’s
popular. We have competitors in noninvasive valves, and our market share
vis-à-vis them grew this year. But most of our growth derives from growth of the
market itself. In the US the process took time, but even though we have blazed
the trail for our competitors, we still have a two-year lead, in my
Analysts covering the company are concerned about the trial
results, which showed that the product carried a risk of stroke. However, new
data published by the company show that this risk is not necessarily higher than
“There are still complications, and we won’t sleep until we
have solved them,” Mussallem says. “The new products that we are developing
create a lower incidence of embolisms. And we have recently acquired a company
called Embrella, which has developed a device for protection against embolisms,
in order to integrate it with our products.”
In Israel, too, there are
companies that deal in protection against embolisms, such as SMT and Gardia
“We are monitoring these two companies, and we don’t rule out
another acquisition in this area,” Mussallem says. “But we bought Embrella
recently, and at the moment we are fairly satisfied.”
What are your
guidelines for acquisitions? “The success of a medical device depends a great
deal on insurance companies and governments. We have to have proof in the field:
data that show that the product is worthwhile clinically and
Potential buyers like us know that we will have to
demonstrate this to the market, and so we require as much data as possible from
the start-ups that we examine.
“Edwards is a focused company, and there’s
a finite number of companies that we can buy. Therefore, we are prepared to make
deals at a slightly earlier stage and with less of a track record, unlike
companies that are larger and more diversified than we are. They generally even
want to see approval from the regulators and the start of sales before they will
make a deal. We won’t always wait until the approval stage, but we would like to
see results on human beings.
“We can also support such a trial, but
that’s a risk for us, and so there will usually be a price for it at a later
stage, such as a right of first refusal that we will demand.”