(Reuters) - LivaNova Plc (LIVN.O) said on Wednesday it would stop developing its minimally-invasive mitral heart valve device and restructure its heart valve unit after years of declining sales.
The company is racing with firms such as Medtronic Plc (MDT.N) to launch the first transcatheter mitral valve replacement (TMVR) device that can help patients avoid traditional open-heart surgeries through the use of a catheter or tube to replace the valve.
The soonest a replacement program will hit the market is at least five years, Jefferies analyst Raj Denhoy said in a client note.
“Faced with that reality, a crowded landscape, and a $20 million annual development spend that likely increases over time— the decision to shutter the program is not surprising.”
The UK-based company said the restructuring of its heart valve business, which brought in nearly $130 million in 2018 sales or about 11% of total revenue, could impact about 150 employees in three of its plants and would also eliminate operational overlap.
LivaNova, which has about 4,000 employees, said the closure of its Minneapolis plant would be effective at the end of the year.
The company expects to record a non-cash impairment charge of about $135 million, the current book-value of its intangible TMVR assets, in the fourth quarter.
LivaNova said it would also incur employee severance costs in the fourth quarter and the first half of 2020.
Reporting by Manas Mishra and Manojna Maddipatla in Bengaluru; Editing by Anil D'Silva and Sriraj Kalluvila