Edwards sees sales growth over 10 percent

Michael Mussallem, chairman and chief executive officer of Edwards Lifesciences Corporation, speaks at the Reuters Health Summit in New York, November11, 2009.

NEW YORK (Reuters) - Edwards Lifesciences Corp's (EW.N) sales growth will likely top 10 percent in 2010, driven by robust demand for its heart valves, critical-care products and cardiac surgery systems, CEO Michael Mussallem said on Wednesday.

"We are tracking above the 10 percent rate ... and would expect that to continue," Mussallem said at the Reuters Health Summit in New York. "I do not think Wall Street will be disappointed."

The forecast excludes the impact of foreign exchange and divestitures.

Mussallem said he expects Edwards' profit margins to continue to improve, rising by a half to a full percentage point next year, in line with recent trends.

The company pioneered a technique for replacing aortic valves through a catheter, avoiding the need for open-heart surgery. The product, known as the transcatheter valve, has increased its market share in Europe in recent quarters, Mussallem said. He expects the launch of the next-generation product to take more market share next year.

The product is not yet approved for use in the United States.

Edwards' only competitor in the transcatheter valve market was acquired earlier this year by Medtronic Inc (MDT.N). Medtronic competes in the European market and is at least a year behind Edwards in getting transcatheter valves approved in the United States.

Mussallem said launching the product in the U.S. market will significantly accelerate sales growth because patients are eager for an alternative to open-heart surgery.

"When (transcatheter aortic valves are) approved for Americans, then there will be a real step-up for growth rates. I think it will be very substantial. It really will be an inflection point," he said.

Transcatheter valves could be available in the United States in the second half of 2011, assuming the company's application to sell the product gets through the U.S. Food and Drug Administration in a timely fashion, he said.

Edwards will use data from its clinical trial, dubbed PARTNER, to support its FDA application. Results from that study will likely be unveiled at a major medical meeting, said Mussallem, who is also chairman of the Advanced Medical Technology Association, or AdvaMed, which represents the device industry.

While Edwards is not expected to feel a major impact from healthcare reform, the industry is bracing for change.

The device industry sees positives and negatives resulting from U.S. healthcare reform, which is expected to expand insurance coverage to more Americans but also focus on wringing costs from the system.

The industry is willing to do its part to help pay for reform but hopes the final price tag will be less than the proposed $40 billion over 10 years, said Mussallem.

"There's no doubt that this will have an effect on every company's bottom line," he said.

Mussallem said he expects price pressure to accelerate for most medical devices and products, partly due to reform. But he does not expect reform to affect Edwards' sales since most patients who get heart valves are elderly and are already covered under Medicare.

He said the company has made investments in research to develop products to replace diseased mitral valves, which would compete with Abbott Laboratories Inc's (ABT.N) recently acquired valve product.

Mussallem added that Edwards has cash to make acquisitions to augment research programs in structural heart disease and would make a buy if it identified the right asset.

(Reporting by Debra Sherman and Susan Kelly, editing by Gerald E. McCormick and John Wallace)