Edwards: Will a Biotech Deal Strategy Work For a Device Company?

More than two years after being spun-out as Baxter's cardiovascular group, Edwards Lifesciences is establishing its identity as an independent company. A large part of this initial process has focused on which product lines to retain, which to divest, and what new areas to get into. Edwards emerged in the unusual position of having market leadership positions in several product areas, most significantly heart valves. But slow growth in those markets is limiting the extent to which they can drive overall company growth. Edwards' new strategy is to focus on advanced--stage cardiovascular disease with its primary customers being cardiac surgeons. Resource-constrained following the spin-out, the company is relying on a strategy unusual for device companies--alliance, rather than acquisitions--to expand its product offerings. But as the treatment of cardiovascular disease continues to rely increasingly on interventional techniques, the challenge for Edwards is to build a sustainable, broad-based business around selling to cardiac surgeons.