Building Device Companies Large & Small: An Interview with Dave Chonette
Dave Chonette is among the device industry's pioneers, having helped build both large companies--notably, Edwards Lifesciences--and the venture-based innovation model for creating start-ups to provide a continuing source of new products. This interview is adapted from a presentation at the 2007 Phoenix Medical Device CEOs conference, at which Chonette received the group's Lifetime Achievement award.
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Over the past seven years, since its spin off from Baxter International, Edwards Lifesciences has built a cardiovascular business to challenge the industry giants. In this interview, CEO Mike Mussallem looks back over a 20-year career whose highlights include surviving the Baxter/American Hospital Supply merger and formulating Edwards' vision.
Having built a franchise serving cardiac surgeon, Edwards is looking to maintain its market leadership by both expanding into peripherals and embracing interventionalists.
More than two years after being spun-out as Baxter's cardiovascular group, Edwards Lifesciences is establishing its identity as an independent company. A large part of this initial process has focused on which product lines to retain, which to divest, and what new areas to get into. Edwards emerged in the unusual position of having market leadership positions in several product areas, most significantly heart valves. But slow growth in those markets is limiting the extent to which they can drive overall company growth. Edwards' new strategy is to focus on advanced--stage cardiovascular disease with its primary customers being cardiac surgeons. Resource-constrained following the spin-out, the company is relying on a strategy unusual for device companies--alliance, rather than acquisitions--to expand its product offerings. But as the treatment of cardiovascular disease continues to rely increasingly on interventional techniques, the challenge for Edwards is to build a sustainable, broad-based business around selling to cardiac surgeons.