Edwards Lifesciences, a developer of heart valves and hemodynamic monitoring, has posted a strong second quarter, showing an increase in sales and net income over the previous year's second quarter.
The Irvine, Calif.-based company reported net income for the quarter, which ended June 30, of $67.8 million, compared with net income of $58.1 million, for the same period in 2011. Second quarter net sales also increased 11.8 percent to $482 million compared with the same period last year.
"We reported strong sales growth this quarter driven by the continued success of our U.S. transcatheter heart valve launch," said Michael A. Mussallem, Edwards’ chairman and CEO.
For the second quarter, the company reported surgical heart valve therapy product group sales of $200.5 million, which included $28.7 million of cardiac surgery systems sales. Overall, sales declined 2.3 percent from the second quarter last year.
Sales of transcatheter heart valves (THVs) were $145.8 million for the quarter, 71 percent growth over the second quarter last year. These results were driven by the U.S. launch of the Sapien valve, with sales of $61.4 million. Outside the U.S., sales growth was 5.8 percent
"Given the strong second quarter performance of Sapien, we now expect $240 to $260 million of U.S. sales in 2012," Mussallem said. "For the full year, we now expect global THV sales in the range of $550 to $600 million."
Critical Care product group sales were $135.7 million for the quarter, including vascular sales of $12.5 million. Critical care sales were $123.2 million, a decline of 3.5 percent. Growth of advanced technology disposable products was offset by lower sales of hardware in the U.S. and a reduction of distributor inventory in China, according to the company.
Domestic and international sales for the second quarter were $207 million and $275 million, respectively.
In terms of costs, the selling, general and administrative expenses were $182.4 million for the quarter, or 37.8 percent of sales, compared with $163.2 million in the same period last year. Edwards said that the increase was "driven primarily" by U.S. THV launch-related investments.
Research and development for the quarter grew 14 percent to $74 million, or 15.4 percent of sales. This increase was primarily the result of investment in the PARTNER II Trial, and new product development efforts in the company's transcatheter valve programs, the company said. Total debt at June 30 was $185.1 million.
"Given our updated projections and the recent movement in foreign exchange rates, we now expect full year sales of $1.9 billion to $1.97 billion, which represents an underlying growth rate of approximately 20 percent," Mussallem added. "For the third quarter 2012, we project total sales of $465 million to $485 million."