The Federal Trade Commission (FTC) on Wednesday moved to block medical device supplier Edwards Lifesciences Corp.'s (NYSE:EW) proposed acquisition of JenaValve Technology, Inc.
What Happened: "Edwards' attempt to buy the U.S. market for TAVR-AR devices would eliminate the head-to-head competition that has spurred innovation for lifesaving artificial heart valves," said Daniel Guarnera, Director of the FTC's Bureau of Competition.
The deal would limit patient access to lifesaving medical devices, the FTC argues.
So far, Edwards has agreed to acquire both JenaValve and JC Medical — the two companies competing to bring to market transcatheter aortic valve replacement devices. These devices treat a heart condition called aortic regurgitation (TAVR-AR devices).
Also Read: Edwards Lifesciences Stock: Likely To See Sluggish Price Action Through 2027
Why It Matters: Edwards closed its acquisition of JC Medical in July 2024. Its proposed $945 million acquisition of JenaValve would combine the only two companies with ongoing clinical trials in the U.S. for a TAVR-AR device.
The deal threatens to reduce competition in the TAVR-AR market. This would likely result in reduced innovation, diminished product quality, and potentially increased prices for consumers, according to the complaint.
More than 8 million Americans suffer from aortic regurgitation. That’s when the heart's aortic valve does not close properly, causing blood to backflow into the heart.
Surgical valve replacement via open-heart surgery is the only U.S. Food and Drug Administration (FDA)- approved procedure to treat aortic regurgitation. TAVR-AR devices offer a less invasive way to treat the condition.
JenaValve aims to become the first company to bring a TAVR-AR device, called Trilogy, to the U.S. commercial market.
FDA approval or commercialization of any other TAVR-AR device in the U.S. by another company, aside from Edwards and JenaValve, is not expected for the foreseeable future.
Direct head-to-head competition between Edwards, through its now-subsidiary JC Medical, and JenaValve has driven the two companies to accelerate the development of their TAVR-AR devices, the FTC's complaint alleges.
Ultimately, patients will benefit if JenaValve and Edwards continue directly competing and complete their separate TAVR-AR device clinical trials, product improvements, and commercialization plans.
The competition concerns caused by Edwards' dual acquisition strategy are predicated on Edwards owning both JenaValve and JC Medical simultaneously. Still, Edwards has elected to attempt to buy JenaValve while retaining its ownership of JC Medical.
What’s Next: Edwards intends to continue to pursue regulatory approval of the acquisition and estimates a final determination by the end of the first quarter of 2026.
So far, Edwards has not been willing to divest JC Medical to resolve the competition concerns associated with the proposed JenaValve acquisition, according to the complaint.
The FTC voted to authorize a temporary restraining order, and a preliminary injunction was 3-0.
On Wednesday, Edwards disagreed with the FTC's decision. Acquiring JenaValve will accelerate the availability, adoption, and continued innovation for AR treatment, the company stated.
In light of FTC's action, Edwards is revising its full-year 2025 financial guidance. There is no impact on revenue guidance of $5.90 billion-$6.10 billion.
The company is increasing its adjusted earnings guidance for fiscal 2025 to the high-end of $2.45-$2.55 per share. That’s up from the high-end of $2.40-$2.50.
There will be minimal impact on the company's third-quarter adjusted EPS guidance.
In July, the company increased its underlying growth rate guidance for TAVR to 6% to 7%. Its sales guidance range for TAVR is $4.3 billion to $4.5 billion.
Price Action: EW stock is up 0.23% at $78.11 at the last check on Friday.
Read Next:
Image: Shutterstock
