"Huge, Unmet Needs" of Heart Patients Drive Medical Device M&A

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Heart disease is the No. 1 killer in the world. Heart disease and strokes kill more than 786,000 Americans annually, according to the American Heart Association. That figure is larger than the population of several states, including North Dakota and Wyoming. Innovations in medical devices are giving heart disease patients more options, and strategic buyers are snatching up device makers.

There are “huge unmet needs” among patients of heart disease, Edwards Lifesciences CEO Michael Mussallem told investors. “As well as they’re treated today, there’s so much more opportunity.”

Irvine, California-based Edwards Lifesciences Corp. (NYSE: EW) is buying Valtech Cardio Ltd. for up to $690 million to expand its services in heart valve repair and replacement.  Valtech, located in Or Yehuda, Israel, is known for developing the Cardioband System used to treat and repair heart valves by inserting a catheter into a vein that reaches the heart. Cardioband has been approved for sales in Europe but not in the U.S. “The opportunity to go in into directly affect the annulus is one that we think is powerful therapy and will be important in the future,” added Mussallem. The annulus is a ringlike structure that supports the heart valve’s leaflets. The leaflet is part of a heart valve designed to open in the direction of bloodflow and close to prevent backflow. Some of Edwards Lifesciences products include catheters, pressure monitoring systems and surgical heart valves. The company estimates that the transcatheter market will surpass $5 billion by 2021.

Edwards Lifesciences’ competitors have also been making acquisitions in the heart treatment space. For example, Dublin-based Medtronic plc (NYSE: MDT) bought HeartWare International Inc. for about $1.1 billion. HeartWare, located in Framingham, Massachussetts, manufactures miniaturized implantable heart pumps for patients who suffer from advanced heart failure.

Teleflex Inc. (NYSE: TFX), based in Wayne, Pennsylvania, is adding Vascular Solutions Inc. (Nasdaq: VASC) for approximately $1 billion. Minneapolis-based Vascular Solutions makes catheters that are designed to improve vascular procedures.M&A among heart device makers is poised to rise, as patients continue to seek better treatments.  

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