|Edwards Lifesciences CEO Michael Mussallem|
Edwards Lifesciences ($EW) has watched its share price tank about 19% since late last month, and now the company is plotting a $750 million stock buyback to reaffirm investor confidence, with CEO Michael Mussallem pitching in $5 million of his own.
Back in April, Edwards slashed its full-year revenue forecast by about 5%, citing sluggish demand for transcatheter heart valves and sending its shares into a tailspin, from $82.81 on April 23 to a $67.34 close price Monday.
Edwards’ board has approved a new $750 million buyback, which comes on the heels of a $500 million repurchase program launched in 2011. The company has about $140 million left from that effort and plans to use it this quarter.
Mussallem’s $5 million will buy newly issued shares of common stock, the CEO said, adding to the 322,952 shares he already owns.
“The board of directors’ authorization of the new share repurchase program reaffirms our belief in Edwards’ long-term growth potential and provides us with an opportunity to continue returning value to shareholders,” Mussallem said in a statement. “On an individual basis, I’m making this increased investment in Edwards to demonstrate my confidence in the future growth of the company and its continuing ability to aggressively develop innovative products and extend its leadership positions.”
Edwards is expecting 2013 sales of up to $2.1 billion, down from its earlier best-case projection of $2.2 billion. The reduction is due largely to tempered expectations for the company’s flagship Sapien heart valve, which was initially tabbed for growth of up to 45% on the year, a number since whittled to 30% growth and $750 million in sales.
Back in October, Edwards plunged on the Street when its third-quarter revenue came in well below expectations, with shares falling 18% to $88.07, its worst one-day drop since 2000. Edwards’ stock price has slipped about 48% since Oct. 4’s all-time high of $109.75.