Edwards Lifesciences: A Heart for Growth

Edwards Lifesciences Corporation (NYSE:EW) has sold its Critical Care business, which the author believes was done at a cheap price. The author thought that the company would focus on the heart post-sale, but instead, it acquired a company called Cerenova, which develops implantable cardiac devices. The author believes that Edwards is gradually winning their investment heart.

Edwards Lifesciences Corporation (NYSE:EW) has been a subject of interest for investors, with recent developments indicating a shift in the company's focus and strategy. The sale of its Critical Care business in July 2024 was seen as a strategic move to focus on heart-related technologies. However, the acquisition of Cerenova, a developer of implantable cardiac devices, has raised questions about the company's priorities.

The author of a recent article [1] believes that Edwards Lifesciences is gradually winning its investment heart. The company's focus on the heart, as indicated by the sale of its Critical Care business, was initially expected to be a key driver of growth. However, the acquisition of Cerenova suggests a broader focus on implantable cardiac devices, which could be seen as a strategic move to diversify its product portfolio.

The acquisition of Cerenova is not without its challenges. The Federal Trade Commission (FTC) has raised concerns about the potential impact on competition in the transcatheter aortic valve replacement (TAVR) market. The FTC's intention to block the acquisition [3] highlights the regulatory hurdles that Edwards Lifesciences may face in its quest to expand its product offerings.

Despite these challenges, the company's outlook remains positive. Edwards Lifesciences anticipates $7.6 billion in revenue and $1.8 billion in earnings by 2028, assuming a 10.0% annual revenue growth rate [2]. This forecast suggests that the company's long-term growth prospects remain intact, despite the near-term challenges posed by regulatory scrutiny.

Investors should also consider the clinical approvals and new policy-supported uses of Edwards' TAVR platform, which continue to be the principal driver of future revenue growth. The approval of the SAPIEN 3 TAVR system for asymptomatic severe aortic stenosis patients is a significant milestone [2].

In conclusion, while the recent developments at Edwards Lifesciences have raised questions about the company's focus and strategy, the long-term growth prospects remain promising. The company's ability to navigate regulatory hurdles and continue to innovate in the heart valve market will be key to winning over investors.

References:
[1] https://seekingalpha.com/article/4814619-edwards-lifesciences-gradually-winning-my-investment-heart
[2] https://simplywall.st/stocks/us/healthcare/nyse-ew/edwards-lifesciences/news/the-bull-case-for-edwards-lifesciences-ew-could-change-follo
[3] https://www.medicaldevice-network.com/analyst-comment/ftc-edwards-lifesciences-jenavalve-competitive-concerns/