Edwards Lifesciences Acquires Overseas Rights to Chinese TAVR Innovator J-VALVE® in Landmark Deal

In the past two months, Edwards Lifesciences, the global leader in heart valves, has been making significant moves in the cardiovascular field.

Following the announcement last month of an 8.7 billion acquisition of two cardiovascular innovation companies, recently,Genesis Medical Technology Group (hereinafter referred to as Genesis) announced that it will sell its overseas subsidiary, JC Medical, Inc., to Edwards Lifesciences.

According to the transfer agreement, the transaction includes the J-VALVE Transcatheter Aortic Valve Replacement (TAVR) System.^®Intellectual property and commercial rights. Edwards Lifesciences agrees to pay an undisclosed upfront payment, as well as potential sales-based contingent milestone payments.

In addition, Edwards Lifesciences has also completedApproximately 180 million RMB for GenesisAn equity investment equivalent to a certain amount in USD, the funds will be used to support Genesis' product and market development.

This strategic investment in Genesis by Edwards Lifesciences signifies the research and development capabilities and operational growth model of China-produced products represented by Genesis.Recognized by industry international giants.

As the global leader in the valve field, Edwards has consistently led innovations in valve treatment methods. The acquisition of overseas rights for J-valve TF this time isChina's Valve Product First License-out,Represents a major breakthrough in China's valve innovation technology.

Until now, no Chinese valve has ever been favored by overseas giants, since Chinese valve companies are good at License-in but not at License-out. Even the top three TAVR giants have all purchased innovative valve technologies from overseas. AndGenesis, as a representative of China-produced innovative technology, breaking this situation, and looking forward to more and more valve products gaining the favor of overseas giants in the future.

At the same time, this transaction is alsoStrong Alliance Between Domestic and OverseasA typical example.

Genesis, as an emerging medical technology company in China, focuses on three major disease areas: minimally invasive surgery, vascular intervention, and structural heart disease.The core of this transfer transaction – J-VALVE® – boasts globally leading technology and worldwide independent intellectual property rights.It has obtained the FDA "Breakthrough Device Designation" and can treat both aortic regurgitation and stenosis simultaneously.

For Genesis, receiving strategic investment from Edwards Lifesciences, will continue to hold the exclusive rights to develop, manufacture, and sell the J-VALVE® valve in China, while also maximizing the promotion of this innovative product overseas to expand its global influence.

In addition, in April this year, Genesis announced the completion of its Series C financing round, raising hundreds of millions of RMB. The institutions participating in the investment included Xidian Venture Capital, Wuxi Binhu State Investment, and a well-known U.S. medical device industry player. Looking back now, this U.S. industry participant might very well be Edwards Lifesciences Corporation.

And for the acquirer, Edwards Lifesciences Corporation, J-VALVE® valve belongs to the TAVR field, which is not only Edwards Lifesciences' "forte," but also in the current fiercely competitive TAVR market, the advantages of Edwards' products are gradually being overtaken by newcomers.

Especially in the Chinese market, the price of Edwards' TAVR products is nearly 40% higher than those made in China, which does not align with the current demand for price reduction and cost control in Chinese hospitals.This acquisition of a major core technology in China's TARV field is undoubtedly the most efficient way to enhance the core competitiveness of its own products and quickly capture the market.

Notably, this is already Edwards' fifth acquisition in less than two months, such intensive M&A activities are rare in the entire industry.

As a global leader in the field of valve technology, Edwards has long been driving the innovation trend in treatment methods within this field. However, Edwards is currently facing unprecedented and severe challenges in the transcatheter aortic valve replacement (TAVR) sector.

On the one hand, it comes fromThe Strong Competitive Pressure from Johnson & Johnson and MedtronicMaking it appear overwhelmed; on one hand, the TAVR market growth has stagnated, directly reflecting in the significant shrinkage of Edwards Lifesciences' market value, which has halved compared to its peak period, indicating a worrying situation.

Since entering 2024, the overall revenue growth of Edwards Lifesciences has slowed. In the recently released Edwards Lifesciences' Q2 2024 earnings report, its sales decreased by 13.1% compared to the first quarter.

Data shows that the company's stock price fell by 14.3% to $74.50. According to data from the London Stock Exchange, its reported revenue was $1.39 billion, below Wall Street analysts' expectations of $1.65 billion.

This is related to its TAVR business.Bernard Zovighian, Chief Executive Officer of Edwards Lifesciences, also statedThe lower-than-expected growth of TAVR is the reason for this decline in sales.

To consolidate its leading position in the cardiovascular field and achieve profit growth, Edwards Lifesciences must seek new competitive advantages in the market. After reorganizing and adjusting its own business, Edwards has chosen to fully focus on the high-margin valve business.

The first step is to make a painful decision, selling off the critical care business, in order tofor up to $4.2 billion (equivalent to 30.4 billion yuan) to BD Medical,In exchange for the return of funds, striving for survival and development in adversity.

After securing this crucial funding, Edwards swiftly transitioned into an aggressive expansion mode, with the primary goal of strengthening its position in the anti-reflux TAVR treatment field.

Last month, Edwards announced$300 Million AcquisitionMitral Valve Replacement Innovation Company Innovalve, to strengthen its mitral valve replacement product pipeline, with the acquisition expected to be completed by the end of 2024. Subsequently, it was announced that a significant investment would be made.$1.2 billion(Approximately RMB 8.6 billion)AcquisitionJenaValve Technology and Endotronix, to expand the structural heart product portfolio.

These two investments have significantly strengthened Edwards' market layout in the transcatheter mitral valve repair field, not only consolidating its advantage in repair technology but also laying a solid foundation for the expansion of its replacement product line.

But Edwards did not rest easy, fully aware that competitors like Medtronic were hot on its heels and could pose new threats at any time. To secure its leading position in the AR TAVR market, Edwards adopted a more aggressive strategy, directly targeting the best-performing AR TAVR products on the market, including acquiring the J-valve product technology from Genesis.

This move aims to prevent potential risks and avoid allowing this highly promising product to fall into the hands of competitors, which could deliver a fatal blow to Edwards' already precarious market position. After all, for Edwards, which heavily relies on its TAVR business, any single failure could be an unbearable loss.

In fact, in the fiercely competitive cardiovascular sector, the betting and competition on innovative technologies have never stopped. Edwards Lifesciences is just one example of "striving to stay ahead" in the heart valve field.Johnson & Johnson, Medtronic, Boston ScientificThe expansion actions of giants in the cardiovascular field have never stopped.

The most notable among this year's series of multi-billion-dollar acquisitions isJohnson & Johnson Acquires for $13.1 Billion in All-Cash DealShockwave, the global pioneer in Coronary Intravascular Lithotripsy (IVL), has set the highest acquisition record of the year to expand its business in coronary artery disease and peripheral artery disease.

According to Johnson & Johnson's management during the conference call, "Johnson & Johnson is making a strong push into the cardiovascular device business. In a field with significant unmet needs, we have a tremendous opportunity to gain a premium for differentiated innovation." Electrophysiology was the only segment in Johnson & Johnson's device sector that achieved double-digit growth in the second quarter of 2024. The remarkable growth was largely driven by the company’s recent acquisitions.

It is worth mentioning that,BocoIt is also one of the companies with the most obvious expansion strategies in recent years. In its rapid expansion, cardiology is an important part. In June this year, it announced...Approximately $1.16 Billion to Acquire Silk Road MedicalThe tcar platform developed by Silk Road Medical represents a significant advancement in the field of vascular medicine. The addition of this clinically differentiated technology to Boston Scientific's vascular product portfolio demonstrates its ongoing commitment to meaningful innovation.

Attracted by the booming cardiovascular sector, leading medical device companies are vigorously expanding their investments in new technologies and products.

Turning our focus back to the domestic market, as the most mature sector in the valve field, China's TAVR valve market is also a fiercely competitive arena.

According to Frost & Sullivan data, the number of TAVR procedures in China is expected to reach 109,500 by 2030, with a compound annual growth rate (CAGR) of 36.6% from 2021 to 2030. The CAGR of TAVR procedures in China is higher than the global average during the same period.

Although the global market for transcatheter interventional valves is dominated by giants such as Edwards Lifesciences, Medtronic, and Boston Scientific, the Chinese market has also given rise to a group of companies represented by Genesis.China-Made TAVR Innovation Power, and has made breakthrough progress:

The continuous innovation of TAVR technology and products has further driven the prosperity of the market, but it has also intensified the level of competition. Although the commercialization of TAVR in China is not as severe as in the international market, it is still full of challenges.

Since the listing of the "Three Musketeers" of TAVR: Qiming, Peijia, and XintongLoss, Suspension of Trading, allowing the industry consensus on the TAVR track to gradually shift: from a golden runway with unlimited potential to a long-lasting endurance race.

For international giants like Edwards, Medtronic, and Abbott overseas, they have already accumulated significant clinical advantages. In the future, they will continue to lead in technological innovation and provide more clinical data to create TAVR clinical value.

And if domestically produced TAVR wants to accelerate its development, it is not just about price, but alsoProduct Innovation and Corporate LayoutA group of domestically produced enterprises have begun to seek breakthroughs and changes in their business strategy adjustments.

Since the beginning of this year, deeply trapped in the dilemma of corporate profits,Venus Medtech, accelerating the layout of overseas markets. Currently, VenusP-Valve, the transcatheter pulmonary valve replacement system developed by Qiming Medical, has been successively approved for marketing in Canada, Australia, Israel, Singapore, and other countries, advancing its globalization strategy. To date, the global sales volume of this product has exceeded 1,000 cases, covering more than a hundred overseas centers.

And in the TAVR track, it has taken the lead in realizing profit gains.Baren MedicalIn 2023, the company achieved operating revenue of 370.6383 million yuan, representing a year-on-year increase of 25.57%, a performance that is impressive.

This is due to its full coverage of the industrial chain. In addition to深耕the cardiac valve field, Balloon Medical has always held a relatively conservative attitude towards the short-term market explosion prospects in the cardiac valve field. Instead, it constantly seeks a second growth curve to drive the overall performance growth.

Collaborate with leading companies in the industry to gain broader space for commercial resources and financial support.Similar to the commercial development path of Genesis, there are also leading companies in the peripheral intervention field.Cordis。

Last YearCordisAt a price of $523 million (approximately RMB 3.65 billion)Sale of up to 65% of shares to Boston ScientificThe addition of Boston Scientific will undoubtedly provide strong capital support and also expand the promotion process of CRYO's products in the global market.

A gentleman hides his weapons and waits for the right moment to act. Core innovative technology is the weapon. Whether it’s Edwards’ acquisition or Genesis' sale, both are enhancing their core technologies and seeking the right opportunity to achieve a breakthrough in corporate strategy.

For Chinese companies, Genesis sold its core technology to Edwards Lifesciences throughJointly DevelopedA breakthrough in commercialization strategy provides another direction for domestically produced medical device companies in terms of business strategy.And facing fierce and relatively matureTAVRMarket, Post-AcquisitionWhat breakthroughs and changes Genesis will achieve in the future also need to be verified by the market and time.