Edwards Lifesciences to Sell Product Line to German Firm

Edwards Lifesciences Corp., the No. 1 maker of artificial heart valves, agreed on Tuesday to sell most of its unprofitable Bentley line to Germany’s Jostra for about $30 million and said it plans to take charges against earnings related to the sale and severance costs for 60 employees at its Irvine headquarters and in Puerto Rico.

Edwards, which was spun off by Baxter International Inc. earlier this year, said it will take a pretax charge of about $350 million in the second quarter and $10 million in the third. The company’s shares rose $1.06, or 4.6%, to close at $23.88 on the New York Stock Exchange.

The Bentley line of products that support hearts stopped during surgery is a distant third behind rivals Sorin Biomedica and Medtronic Inc. and losing ground. A new procedure that works while the heart is still beating decreased demand, said David Erickson, Edwards’ vice president of investor relations.

“The outlook was not getting any better,” Erickson said.

The Bentley line, which employs about 600, was acquired by Baxter from American Hospital Supply Co. in the mid-1980s.

Edwards will keep distribution rights for Bentley products in Japan and other countries outside the U.S. and Western Europe, where open-heart surgeries using cardiopulmonary products continue to grow, said Chief Executive Michael Mussallem.

The transaction is expected to close in September.

“I think this was a key trigger people were looking for,” said Merrill Lynch analyst Katherine Martinelli. She raised her 2001 earnings estimate from $1.05 to $1.25 after the company’s announcement.

Jostra, a maker of medical devices for open-heart surgery, will acquire Bentley’s oxygenators, blood reservoirs and filters. The German company will also be responsible for Edwards’ cardiopulmonary products manufacturing in Puerto Rico.