Medtech titan Edwards Lifesciences (NYSE:EW) is poised for a "wild year" ahead in 2014, and the company is looking to move hard and fast in maintaining its leadership in the transcatheter aortic valve implantation market.
Edwards is expecting to face new TAVI competitors in the U.S. and overseas, and the device maker is ready to defend its territory with a strong offense, chairman & CEO Michael Mussallem told an audience today at the J.P. Morgan Healthcare conference in San Francisco.
"Our intention is to very aggressively respond to that competition," Mussallem said. "It’s a critical time to be meeting force with force."
One of the company’s strategies involves replacing older generations of the Sapien TAVI system which are already on the shelves with brand new XT and S models with no up-charge.
"We will take a platform like Sapien XT and the new S and allow our sales force to replace the Sapien that’s in the marketplace, take back the Sapien valves and put the XTs in at a comparable price," Mussallem said. "And the same thing in Europe, take the Sapien XTs off the shelf and put the Sapien 3s on the shelf at the same price. Typically we would up-charge, but we think this is a critical year of competition."
Edwards has taken many steps to defend its lead in the U.S. market and its share overseas. The device maker has been embroiled for years in a patent infringement tussle with rival Medtronic (NYSE:MDT), through which Edwards has sought injunctions preventing Medtronic’s CoreValve system from reaching the market.
The Edwards/Medtronic TAVI patent battle has gone through several levels of courts and nearly made it to the Supreme Court, but was bounced back to a federal court which is poised to close the book on the lawsuit, Edwards said.
"It’s essentially just upside for us," Mussallem said. "It could go a couple ways, but the most likely case is some kind of damages, and whether that’s lost profits, which we certainly argued, or some kind of royalties, which Medtronic has argued, we’ll see how they come out on that."
"The other thing that’s always a possibility is an inunction," Mussallem added. "We believe that an injunction is appropriate. Since Medtronic came out in October with the news that they were going to come to the U.S. market even sooner than I think was discussed in the past, we also filed a request for a preliminary injunction to say that we’d be harmed if they came."
The 2 companies have been battling over TAVI technology for a long time, but in July a German court ruled that Medtronic’s CoreValve TAVI infringes an Edwards Lifesciences patent, forcing Medtronic to cede the German market to Edwards and its Sapien valve. But in August the European Patent Office issued a preliminary, non-binding ruling that the Edwards patent at the center of the dispute in Germany is invalid. Medtronic resumed its German CoreValve sales in November.
