8-KOther Events

Edwards Lifesciences Corp 8-K Report (Dec 18, 2003)

Filed December 18, 2003For Securities:EW

Summary

Edwards Lifesciences Corporation (EW) announced significant strategic moves in December 2003. The company is exploring strategic alternatives for its Lifepath AAA Endovascular Graft System, signaling a potential divestiture or refocusing of resources. Simultaneously, Edwards has entered into a definitive agreement to acquire Percutaneous Valve Technologies, Inc. (PVT) for $125 million in cash, plus potential milestone payments up to $30 million. This acquisition aims to bolster Edwards' position in the rapidly developing field of minimally invasive heart valve replacement. The PVT acquisition is expected to have a material impact on Edwards' 2004 financial performance. The company anticipates an in-process R&D charge of $60 million to $90 million ($1.00 to $1.50 per share) in Q1 2004. Additionally, acquisition-related costs (excluding IPR&D) are estimated to dilute 2004 earnings per share by $0.10 to $0.15. Despite these charges, Edwards also provided an optimistic 2004 outlook, projecting sales between $915 to $940 million and net income growth of 13% to 15%. Investors should closely monitor the closing of the PVT acquisition and the actual R&D charges and dilution impacts.

Key Highlights

  • 1Edwards Lifesciences is exploring strategic alternatives for its Lifepath AAA Endovascular Graft System.
  • 2Definitive agreement to acquire privately held Percutaneous Valve Technologies, Inc. (PVT) for $125 million cash plus up to $30 million in milestone payments.
  • 3PVT is a leader in developing catheter-based (percutaneous) aortic heart valve replacement technology.
  • 4Transaction expected to close in the first quarter of 2004, subject to customary conditions.
  • 5Anticipates a significant in-process R&D charge of $60-$90 million ($1.00-$1.50 EPS dilution) related to the PVT acquisition.
  • 6Estimated additional dilution of $0.10-$0.15 per share from other acquisition-related costs in 2004.
  • 7Provided 2004 financial outlook with projected sales of $915-$940 million and 13-15% net income growth, notwithstanding acquisition impacts.

Frequently Asked Questions

The company announced it is exploring strategic alternatives for its Lifepath AAA Endovascular Graft System and has entered into a definitive agreement to acquire Percutaneous Valve Technologies, Inc. (PVT) for $125 million plus potential milestones. The PVT acquisition is focused on advancing minimally invasive heart valve replacement technology.

Edwards Lifesciences expects a substantial in-process R&D charge of $60 million to $90 million ($1.00 to $1.50 per share) in the first quarter of 2004. Additionally, other acquisition-related costs are estimated to dilute 2004 earnings per share by $0.10 to $0.15.

The transaction is anticipated to close in the first quarter of 2004, pending the satisfaction of customary closing conditions.

Edwards provided a 2004 outlook projecting sales in the range of $915 to $940 million and net income growth between 13% and 15%. This outlook is provided alongside the announced acquisition and its associated charges.