Edwards Lifesciences Completes Sale of Critical Care

Rhea-AI Summary

Edwards Lifesciences (NYSE: EW) has completed the sale of its Critical Care product group to BD (Becton, Dickinson and Company) for $4.2 billion in cash. The company plans to use the proceeds for strategic initiatives, including acquisitions and share repurchases. CEO Bernard Zovighian emphasized the company's sharpened focus on structural heart innovation, highlighting growth opportunities in TAVR, TMTT, and surgical leadership.

Edwards also announced an additional $1.5 billion authorization for share repurchase. The company has already initiated a $500 million Accelerated Share Repurchase agreement and previously repurchased $500 million of common stock. After this $1 billion share repurchase, Edwards will have $1.4 billion remaining for future repurchases.

Positive

• Completed sale of Critical Care product group for $4.2 billion in cash
• Board authorized additional $1.5 billion for share repurchase
• Initiated $500 million Accelerated Share Repurchase agreement
• Previously repurchased $500 million of common stock
• Sharpened focus on structural heart innovation with growth opportunities in TAVR and TMTT

Negative

• None.

Insights

Financial Analyst

The sale of Edwards Lifesciences' Critical Care division for $4.2 billion is a strategic move that significantly impacts the company's financial position and future focus. This cash infusion provides substantial resources for Edwards to reinvest in its core structural heart business and return value to shareholders.

The announced $1.5 billion share repurchase authorization, combined with the recent $1 billion in repurchases, signals strong confidence in the company's future prospects. This aggressive buyback strategy could potentially boost earnings per share and stock price in the short term.

However, investors should closely monitor how effectively Edwards deploys the remaining proceeds from the sale to drive growth in its TAVR and TMTT segments, as these will be important for long-term value creation.

Medical Research Analyst

Edwards' decision to divest its Critical Care division marks a pivotal shift in the company's strategic direction. By focusing exclusively on structural heart innovations, Edwards is positioning itself at the forefront of a rapidly evolving field with significant growth potential.

The emphasis on expanding TAVR (Transcatheter Aortic Valve Replacement) opportunities is particularly noteworthy. With an aging global population and increasing prevalence of aortic stenosis, TAVR represents a substantial market. Additionally, the company's commitment to TMTT (Transcatheter Mitral and Tricuspid Therapies) could open up new avenues for treating previously underserved patient populations.

Investors should watch for upcoming clinical trial results and regulatory approvals in these areas, as they will be key drivers of Edwards' future success in the structural heart space.

Market Research Analyst

The sale of Edwards' Critical Care division to BD (Becton, Dickinson and Company) is a win-win situation for both companies. For Edwards, it allows a laser focus on high-growth structural heart technologies, while BD gains a strong foothold in the critical care market.

This transaction reflects a broader trend in the medical device industry towards specialization and focus on core competencies. Edwards' strategy aligns with market demands for innovative solutions in structural heart diseases, an area with significant unmet needs and growth potential.

The company's plans to expand into aortic regurgitation and non-valvular structural heart disease therapies suggest a comprehensive approach to capturing market share in the structural heart space. Investors should monitor Edwards' progress in these new areas, as successful expansion could significantly boost the company's long-term growth prospects.

Company announces $1 billion share repurchase

IRVINE, Calif.--(BUSINESS WIRE)-- Edwards Lifesciences (NYSE: EW) has successfully completed the sale of its Critical Care product group to BD (Becton, Dickinson and Company) (NYSE: BDX) for $4.2 billion in an all-cash transaction. The net proceeds from the sale will be used to fund strategic initiatives including the previously announced acquisitions and share repurchases.

“Critical Care has made significant contributions to our company and has a long history of innovation. We are grateful to the team for their commitment to improving patient outcomes globally,” said Bernard Zovighian, Edwards’ CEO. “The sale of Critical Care reflects our sharpened focus as a structural heart innovator. Within our existing business, TAVR has significant opportunities to grow and improve how AS patients are treated, TMTT’s contribution to Edwards’ growth is just getting started, and we continue to expand our surgical leadership. In addition, our focus will support patients in need of therapies to treat aortic regurgitation and non-valvular structural heart disease through implantable technologies.”

Edwards also announced today that its Board of Directors authorized an additional $1.5 billion for share repurchase. The Company recently entered into a $500 million Accelerated Share Repurchase agreement, and previously in August repurchased $500 million of common stock through a 10b5-1 agreement and open market repurchases. Following this $1 billion share repurchase, Edwards has $1.4 billion in remaining authorization for additional future share repurchases.

As previously announced, Edwards is scheduled to speak at the Wells Fargo Healthcare Conference on Sept. 5 at 10:15 a.m. ET. During this presentation, Edwards plans to discuss its strategy and outlook. A live webcast of the presentation will be available on the Edwards investor relations website at http://ir.edwards.com/, with an archived version accessible later the same day.

About Edwards Lifesciences

Edwards Lifesciences is the leading global structural heart innovation company, driven by a passion to improve patient lives. Through breakthrough technologies, world-class evidence and partnerships with clinicians and healthcare stakeholders, our employees are inspired by our patient-focused culture to deliver life-changing innovations to those who need them most. Discover more at www.edwards.com and follow us on LinkedIn, Facebook, Instagram and YouTube.

This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend the forward-looking statements contained in this Proxy Statement to be covered by the safe harbor provisions of such Acts. These forward-looking statements can sometimes be identified by the use of forward-looking words, such as “may,” “might,” “believe,” “will,” “expect,” “project,” “estimate,” “should,” “anticipate,” “plan,” “goal,” “continue,” “seek,” “intend,” “optimistic,” “aspire,” “confident” and other forms of these words and include, but are not limited to, statements made by Mr. Zovighian and statements regarding our expected financial outcomes, focus on technology and impact, strategy, and dedication to innovation following the sale of critical care; anticipated execution of and benefits resulting from our share repurchases; anticipated discussion topics and content to be presented at the Wells Fargo Conference; other objectives and expectations; and other statements that are not historical facts. Forward-looking statements are based on estimates and assumptions made by management of the company and are believed to be reasonable, though they are inherently uncertain and difficult to predict. Our forward-looking statements speak only as of the date on which they are made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of the statement. Investors are cautioned not to unduly rely on such forward-looking statements.

Forward-looking statements involve risks and uncertainties that could cause results to differ materially from those expressed or implied by the forward-looking statements based on a number of factors as detailed in the company's filings with the Securities and Exchange Commission. These filings, along with important safety information about our products, may be found at Edwards.com.

Edwards, Edwards Lifesciences, and the stylized E logo are trademarks of the Edwards Lifesciences Corporation. All other trademarks are the property of the respective owners.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240903401885/en/

Media Contact: Amy Hytowitz, 949-250-4009

Investor Contact: Mark Wilterding, 949-250-6826

Source: Edwards Lifesciences Corporation

FAQ

How much did Edwards Lifesciences (EW) sell its Critical Care product group for?

Edwards Lifesciences (EW) sold its Critical Care product group to BD (Becton, Dickinson and Company) for $4.2 billion in an all-cash transaction.

What is Edwards Lifesciences (EW) planning to do with the proceeds from the Critical Care sale?

Edwards Lifesciences (EW) plans to use the net proceeds from the Critical Care sale to fund strategic initiatives, including previously announced acquisitions and share repurchases.

How much has Edwards Lifesciences (EW) authorized for share repurchases?

Edwards Lifesciences (EW) has authorized an additional $1.5 billion for share repurchase, with $1.4 billion remaining after the current $1 billion repurchase program.

What are the key focus areas for Edwards Lifesciences (EW) after selling Critical Care?

After selling Critical Care, Edwards Lifesciences (EW) is focusing on structural heart innovation, including growth opportunities in TAVR, TMTT, surgical leadership, and therapies for aortic regurgitation and non-valvular structural heart disease.