Irvine’s Edwards Lifesciences Bullish on the Eve of IPO

Shares of Edwards Lifesciences Corp., an Irvine developer of cardiovascular products, are scheduled to begin trading officially Monday amid a bullish earnings outlook.

The new company, which is being shed by Baxter International Inc. in Deerfield, Ill., will compete against Boston Scientific Corp., Guidant Corp. and Medtronic Inc. in providing products to treat cardiovascular disorders, a market Edwards estimates at $100 billion a year. Edwards had $809 million in revenue last year, excluding some sales in Japan.

“It is very competitive, but cardiovascular disease is the No. 1 killer and the No. 1 medical expense,” Edwards Chief Executive Mike Mussallem said. He said the new company, which logged net income of $41 million last year, should be able to boost earnings as much as 20% this year.

Edwards seeks to take advantage of the aging populations in the United States and Europe and the increasing affluence of countries in emerging markets.

“There are a lot of demographics driving this market,” he said.

Edwards focuses on products and services for heart surgery, critical care, vascular products and services and said it is the worldwide leader in both tissue replacement heart valves and heart valve repair products.

Edwards is an investor in companies such as Sangamo BioSciences Inc., which is involved in the burgeoning field of developing gene therapies for the treatment or prevention of disease.

Baxter shareholders will receive one share of Edwards for every five shares of Baxter they own.

In 1996, Baxter similarly spun off medical supply distributor and manufacturer Allegiance Corp., which was later acquired by Cardinal Health Inc.

Baxter shares rose $1.19 to $62.69 on the New York Stock Exchange. Edwards shares, which will also trade on the New York Stock Exchange, have begun trading at $14.50 to $16.50 on a “when-issued” basis, a category for shares that have been authorized but not yet issued.