Edwards Q3 income dips due to increased spending

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Edwards Lifesciences, a developer of heart valves and hemodynamic monitoring, has reported an increase in net sales, but decrease in net income, due to greater spending in the third quarter of 2010, which ended Sept. 30.

The Irvine, Calif.-based company said its net income was $48 million, compared with a net income of $73.5 million for the same period in 2009. However, its overall third quarter net sales increased 7.1 percent to $348.9 million in the year-over-year period.

For the 2010 third quarter, the company reported heart valve therapy sales of $200.6 million, representing 15.2 percent growth over last year. Specifically, transcatheter heart valve sales were $48.8 million, an 85 percent increase over the third quarter of 2009.

"Our surgical heart valve sales grew 3.4 percent on an underlying basis and we continued to see strong global adoption of our newer products," said Michael A. Mussallem, Edwards’ chairman and CEO. "Sales were flat in a challenging U.S. environment, while outside the U.S., we gained share."

Its cardiac surgery systems sales increased to $23.7 million in the 2010 third quarter—a 1.4 percent increase over the prior year third quarter. Edwards also said its vascular sales were $13.6 million, a 1.5 percent decline from $15.1 million in the same quarter last year, due to the divestiture of the LifeStent product line.

Selling, general and administrative expenses were $133 million for the quarter, or 38.1 percent of sales, compared to $126.1 million in the prior year's third quarter. The company said the increase was led by transcatheter heart valve sales and marketing expenses, partially offset by foreign exchange.

Research and development expenses for the quarter were $52.7 million, or 15.1 percent of sales, an increase of $8 million over the 2009 third quarter, which Edwards said resulted from additional investments in all major product lines, particularly in the transcatheter heart valve program.

"Based on improved foreign exchange rates and our positive outlook, we are raising our full year sales guidance to between $1.43 and $1.45 billion,” said Mussallem.