(Reuters) – Edwards Lifesciences said on Thursday it would spin off its critical care unit at the end of 2024 to concentrate on its larger heart devices business.
Transcatheter aortic valve replacement (TAVR) device, the company’s lead product, has been facing rising competition from Abbott, Boston Scientific and Medtronic. The device is used to perform minimally invasive surgery for people with heart valve disease.
Edwards on Thursday forecast 2024 TAVR sales in the range of $4.0 billion to $4.3 billion, compared with analysts’ estimate of $4.23 billion.
The spinoff should help the company focus on its core efforts in structural heart products than devices with relatively less innovation, said J.P. Morgan analyst Robbie Marcus.
The company’s shares rose nearly 2% in morning trading.
The move will help target expanded opportunities for its heart devices, as well as invest in new technologies, the company said.
Katie Szyman, vice president of critical care unit, will be the chief executive officer of the new company upon completion of the transaction.
The critical care unit accounted for nearly 16% of total sales in 2022.
This is the latest spinoff in the medical device industry. Larger rival Medtronic last year announced plans to spin off two of its smaller businesses.
Meanwhile, Edwards expects 2024 adjusted profit per share to be in the range of $2.70 to $2.80, compared to analysts’ average estimate of $2.80, according to LSEG data.
The forecast was not very surprising, J.P. Morgan’s Marcus said.
(Reporting by Mariam Sunny in Bengaluru; Editing by Arun Koyyur)
