New heart valve helps sales, profit

Edwards Lifesciences, the largest maker of artificial heart valves, said profit climbed 14%, beating analysts’ estimates, on sales of a new valve that can be installed without open-heart surgery.

Second-quarter net income rose to $39.7 million, or 67 cents a share, from $34.9 million, or 57 cents, a year earlier, the Irvine-based company said. Adjusted earnings beat the 64-cents estimate of analysts surveyed by Bloomberg.

Revenue from Edwards’ valves and medical monitoring equipment rose 20% to $327.6 million. That included better than expected sales for Sapien, a $30,000 valve that can be threaded into place through the circulatory system, avoiding the need for chest-cracking open heart surgery. Johnson & Johnson and Medtronic Inc. said last month they would enter the minimally invasive valve business, fueling speculation by analysts and investors that Edwards could be acquired.

The earnings report, especially Sapien sales, “looks pretty good,” said Joshua Zable, an analyst with Natixis Bleichroeder Inc. in New York. Despite increased competition, Edwards “didn’t bleed as much share as they should have,” he said. “Sapien’s a big part of it, because valves are much more profitable than their other businesses.”

The company raised its 2008 adjusted earnings forecast to $2.50 to $2.58, from $2.45 to $2.53. For the second time in three months, it raised its sales forecast for the new valve, called Sapien, predicting $45 million to $50 million in sales for the full year. In April, Edwards forecast $35 million in Sapien sales. The device isn’t expected to win U.S. approval until 2011, Edwards has said.

Shares of Edwards rose 10 cents to $65.25 before the earnings news. The shares gained 42% this year.