Press release·02/28/2025 22:46:48

Overview of Edwards Lifesciences

Edwards Lifesciences is the global leader in patient-focused medical innovations for structural heart disease. The company conducts operations worldwide and is managed in four geographical regions: United States, Europe, Japan, and Rest of World. Edwards’ products are categorized into three main groups: Transcatheter Aortic Valve Replacement (TAVR), Transcatheter Mitral and Tricuspid Therapies (TMTT), and Surgical Structural Heart.

In 2024, Edwards completed the sale of its Critical Care product group to Becton, Dickinson and Company for $4.2 billion. The company also committed to a plan to sell a non-core product group in 2025. These divestitures will allow Edwards to focus on its core business of implantable medical innovations for structural heart disease.

Financial Highlights and Market Update

Edwards reported net sales of $5.4 billion in 2024, an increase of 8.6% over 2023. This growth was driven by strong sales of the company’s TAVR and TMTT products. Gross profit also increased, but gross profit as a percentage of sales decreased slightly due to the impact of foreign currency exchange rate fluctuations.

Net income and diluted earnings per share increased in 2024, primarily due to the higher sales and a one-time charge in 2023 related to an intellectual property agreement.

The medical technology industry remains highly competitive, and Edwards is committed to developing new innovations and defending its intellectual property. In 2024, the company invested 19% of net sales in research and development. Key developments included receiving FDA approval for the EVOQUE tricuspid valve replacement system, launching the EDWARDS SAPIEN 3 Ultra RESILIA valve in Europe, and completing enrollment in several clinical trials.

Geographical and Product Performance

Net sales in the United States increased 8.8% in 2024, while net sales outside the U.S. grew 8.3%. The strongest growth was in Europe, which saw a 12.0% increase. Japan experienced a 3.1% decline.

Looking at product performance, TAVR sales grew 5.8%, driven by higher sales of the EDWARDS SAPIEN platform, particularly the EDWARDS SAPIEN 3 Ultra RESILIA valve. TMTT sales increased 78.2%, fueled by growth in the PASCAL transcatheter repair system and the launch of the EVOQUE tricuspid valve replacement. Surgical Structural Heart sales rose 5.2%, led by higher sales of the INSPIRIS RESILIA aortic valve and the MITRIS RESILIA valve.

Profitability and Expenses

Gross profit increased in 2024 due to the higher sales, but gross profit margin declined slightly to 75.1% from 75.7% in 2023. This was primarily due to the impact of foreign currency exchange rate fluctuations.

Selling, general, and administrative (SG&A) expenses increased, driven by higher field-based personnel costs, costs associated with recent business combinations, and professional services expenses. Research and development (R&D) expenses also rose, as Edwards continued to invest in its aortic transcatheter valve innovations and clinical trial activity.

The company incurred $40.4 million in expenses related to intellectual property litigation and tax litigation in 2024, down from $203.5 million in 2023. In 2023, Edwards had recorded charges related to an intellectual property agreement with Medtronic.

Edwards recognized a gain of $26.2 million in 2023 from changes in the fair value of contingent consideration liabilities. In 2024, the company recorded $32.9 million in restructuring charges and separation costs, primarily related to a global workforce realignment.

Tax Matters

Edwards’ effective tax rate decreased from 11.1% in 2023 to 9.8% in 2024, primarily due to an increase in tax benefits from foreign earnings taxed at lower rates and favorable global income tax audit settlements. The company continues to have significant tax credits and uncertain tax positions, particularly related to transfer pricing matters with the IRS.

The IRS has proposed substantial increases to Edwards’ U.S. taxable income for 2015-2017, which could result in additional tax expense of approximately $269 million. Edwards plans to vigorously contest this through the judicial process, and believes the amounts previously accrued are appropriate. Similar material tax disputes may arise for the 2018-2024 tax years.

Edwards also faces potential tax liabilities related to assessments from the Israel Tax Authority and the implementation of the OECD’s Pillar Two global minimum tax rules, which could have a material impact on the company’s financial statements in the future.

Liquidity and Capital Resources

Edwards’ sources of cash include cash and investments, cash from operations, and available credit facilities. The company believes these sources are sufficient to fund its current and long-term requirements.

As of the end of 2024, Edwards had $3.3 billion in cash and investments held in the U.S. and $658.4 million held internationally. The company repatriated $2.0 billion of foreign earnings during the year and asserts that $555.2 million of foreign earnings remain permanently reinvested.

Edwards has a $750 million revolving credit facility and $600 million in senior notes outstanding. The company also repurchased $1.2 billion of its common stock in 2024 under its share repurchase program.

In 2024, Edwards completed several acquisitions totaling $1.1 billion, net of cash received. The company also received $3.9 billion in proceeds from the sale of its Critical Care product group.

Outlook and Conclusion

Edwards Lifesciences is the global leader in innovative medical technologies for structural heart disease. The company’s strong financial performance in 2024, driven by growth in its TAVR and TMTT product lines, demonstrates its ability to capitalize on the significant market opportunities in this space.

While Edwards faces some headwinds, such as foreign currency impacts, tax uncertainties, and competitive pressures, the company’s commitment to R&D, clinical evidence generation, and strategic acquisitions position it well for continued success. The divestiture of its Critical Care business will allow Edwards to focus on its core structural heart innovations and pursue new opportunities in heart failure management.

Overall, Edwards Lifesciences appears to be a financially strong and innovative medical technology leader, well-positioned to drive growth and shareholder value in the years ahead.