Resilience and growth in the heart of healthcare: why Pella invests in medical devices

In a world defined by macroeconomic uncertainty and shifting geopolitical realities, Pella continues to find opportunity in an industry that’s both essential and enduring: healthcare. More specifically, medical device companies have become a core area of interest, thanks to their blend of resilience, innovation, and long-term structural growth.

These companies sit at the intersection of two powerful global trends, an ageing population and increasing access to healthcare in emerging markets. With high margins, deep regulatory barriers, and limited competition, the medical device sector offers not just stability but an attractive growth runway. Unlike pharmaceutical companies, whose revenues are often sensitive to pricing and patent cliffs, medical device firms typically grow through volume. And because many of their products are reimbursed by governments or insurers, demand remains relatively steady through economic cycles.

One company that exemplifies these strengths, and remains a high-conviction holding for Pella, is Edwards Lifesciences.

A Pioneer in Heart Valve Innovation

Edwards Lifesciences is the global leader in surgical and transcatheter heart valve therapies, a field it helped invent. The company’s flagship innovation, Transcatheter Aortic Valve Replacement (TAVR), allows doctors to replace a patient’s heart valve without open-heart surgery. This minimally invasive procedure has revolutionised care for patients with severe aortic stenosis which is a potentially fatal narrowing of the aortic valve, offering quicker recovery and better outcomes.

Edwards hasn't stopped there. It’s expanding its footprint into new frontiers with breakthrough therapies that target mitral and tricuspid regurgitation, two conditions where heart valves fail to close properly, causing blood to leak backward. Through systems like PASCAL Precision, EVOQUE, and the newly approved SAPIEN M3, the company is building a best-in-class portfolio of repair and replacement solutions that are transforming the treatment landscape.

Why does Pella like Edwards Lifesciences?

Pella looks for businesses with enduring competitive advantages, strong financials, and large addressable markets and Edwards Lifesciences ticks every box.

It’s a clear leader in TAVR with the SAPIEN 3 system, but just as importantly, it’s dominating the early-stage market for mitral and tricuspid therapies, areas still vastly underpenetrated. It spends aggressively on R&D to defend and extend its technological edge and consistently delivers industry-leading margins.

What makes Edwards Lifesciences interesting now?

Edwards has recently gone through a tougher patch. Growth in TAVR slowed from double-digit rates to mid-single digits, weighed down by hospital staffing shortages, the emergence of new heart therapies, and rising competition. But expectations have now been reset, and crucially, to a more achievable level.

And while TAVR remains the cornerstone of Edwards' business, its next phase of growth is likely to be powered by the mitral and tricuspid therapies, which are scaling quickly and already exceeding expectations.

While TAVR has historically been the growth engine for Edwards Lifesciences, the mitral and tricuspid business has grown rapidly off a small base and continues to exceed high expectations. With the SAPIEN M3 recently obtaining the CE Mark in Europe, Edwards Lifesciences is the first and only company with a full suite of repair and replacement products to treat mitral and tricuspid regurgitation.