UPDATE 3-Edwards targets 2008 growth, will sell LifeStent

(Rewrites throughout; adds investor conference, analyst comment, byline; updates stock price)

By Debra Sherman

CHICAGO Dec 7 (Reuters) - Edwards Lifesciences Corp. (EW.N) said on Friday that it would sell a peripheral business so it can focus on cardiovascular technologies, and it laid out bullish financial targets for 2008.

Shares of the world's biggest manufacturer of heart valve replacements rose as much as 4 percent, but gains were capped after it said U.S. approval of its Sapien aortic valve would probably be delayed until 2011 to allow more time to enroll patients in a key clinical trial.

The company said it would sell certain assets of its LifeStent peripheral vascular product line to C.R. Bard Inc (BCR.N) for $140 million. It expects the deal to close in January, pending regulatory approval.

Edwards has been losing share in the heart valve market to St. Jude Medical Inc. (STJ.N) over the past year and has been spending heavily to pioneer a new noninvasive technique of implanting aortic valves, known as transcatheter or percutaneous valve replacement.

The Irvine, California-based company, whose main products are aimed at treating advanced cardiovascular disease, said it was targeting 2008 earnings-per-share growth at 11 percent to 14 percent, excluding special items.

According to Reuters Estimates, analysts on average were expecting an increase of 11 percent.

Edwards forecast sales of $1.16 billion to $1.21 billion next year, compared with the analysts' average forecast of $1.15 billion.

Edwards, spun off from Baxter International (BAX.N) in 2000, said it expected to generate underlying heart valve therapy sales growth of 8 percent to 10 percent in 2008.

CARDIOVASCULAR EMPHASIS

Chief Executive Michael Mussallem said Edwards had decided to sell LifeStent products, used in diseased vessels distant from the heart, so that it could invest more in opportunities in the cardiovascular market.

"We will always out-invest our competitors," he said during an investor conference in New York, which was Webcast.

Edwards forecast sales of its Sapien valve, which is implanted noninvasively using a catheter, to top $20 million in 2008. The product was approved in Europe earlier this year.

The company said U.S. approval of Sapien would probably be delayed due to a modification in its clinical trial that will require more time to enroll patients.

Edwards said it was working with the U.S. Food and Drug Administration to modify the trial to incorporate its Ascendra transapical delivery system and increase the sample size to better ensure the goals of the trial are met.

The company said it had received European approval on Thursday to sell Ascendra, which allows implantation of the valve through a catheter between the ribs.

Edwards is using the Sapien valve to advance the so-called transcatheter technique, which eliminates the need for open-heart surgery, providing a treatment for high-risk patients who might otherwise have few options.

But some believe expectations are too high.

"Essentially, the company is giving up on an expected earnings growth driver in LifeStent in order to maintain near-term earnings growth," Morgan Stanley analyst Glenn Reicin wrote in a research note.

Reicin said the sale made the company even more dependent on transcatheter valves, which he did not believe were "ready for prime time."

Edwards shares were up 64 cents, or 1.3 percent, at $48.56 on the New York Stock Exchange after rising as high as $49.85 earlier in the session. (Reporting by Debra Sherman; Editing by Lisa Von Ahn)