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Americans are getting older and fatter - and that will bring huge opportunities for healthcare companies in the years to come.

According to the Administration on Ageing, a division of the Department of Health & Human Services, the number of people aged 65 or older will rise from 39.6 million in 2009 (the latest year for which data is available), or about one in every eight Americans, to about 72.1 million in 2030, or one in five.

Obesity is also increasing. A study published last year, led by Dr. Eric Finkelstein of the Duke Global Health Institute, predicts a 33% increase in obesity and a 130% increase in severe obesity in America by 2030.

One sector that is guaranteed to grow as a result of these trends is healthcare and in particular heart treatments.

Research by the American Heart Association finds that, by 2030, 40.5% of the US population is likely to have some form of cardio vascular disease (CVD).

"Between 2010 and 2030, real total direct medical costs of CVD are projected to triple, from $272.5bn to $818.1bn," it says.

One major beneficiary from all these sick hearts is likely to be Edwards Lifesciences Corporation (NYSE:EW), a global leader in the production of heart valves and blood circulation monitoring devices.

The company dates back to 1958 when Miles Edwards partnered with Dr Albert Starr to develop the world's first replacement heart valve. This was a catalyst for developing many life-saving and enhancing technologies that have transformed patient care.

Now, more than 50 years later, Edwards is a global company with a presence in around 100 countries, employing 7,800 around the world, and a market capitalisation of US$7.5bn.

A number of setbacks means Edwards' share price has declined significantly over the past year, offering significant upside potential to investors if these can be overcome.

In its latest result, for its first quarter to March, the company reported sales that rose 8.2% to $496.7m, and an earnings per share growth of 35.8% to 72c.

For 2013, Edwards projects revenues in the range of $2bn - $2.1bn, however this is down from a previously guided range of $2.1bn - $2.2bn.

The company also revised adjusted EPS in the range of $3.00 - $3.10 from the previously guided adjusted EPS of $3.21 - $3.31.

This weakness is blamed on poor performance in both the surgical heart valve and critical care segments which posted sales declines in the first quarter.

Although its transcatheter heart valve (THV) segment recorded 40% growth, this was below market expectations.

Edwards also faced other challenges in the form of low utilization rates, inventory problems in China and the unfavorable macroeconomic environment in Europe.

The news of the earnings downgrade caused the company share price to plummet 22%, giving a total decline in share price of 37% since early October.

There are reasons to believe the shares have been oversold.

At present, a third of company revenues come from a heart device called Sapien, which is designed to replace diseased aortic valves through a less complicated procedure than open-heart surgery.

Late this year, the California-based business expects to start human trials of a transcatheter device designed to treat mitral valve regurgitation.

Chairman and CEO Michael Musallem describes this new market as a big opportunity for Edwards.

In May, he backed up his words by buying more than 70,000 shares in the company on the open market at $71.14 a share.

A week later, Edwards released data from a European post-approval study of its Sapien XT transcatheter aortic heart valve, which showed one-year survival rates of valve users are similar to those with open-heart valve replacement.

Edwards' quarterly sales of transcatheter valves rose 40% to $169.7m compared with the US$121.5m in the same quarter of 2012. That figure should continue to grow provided the company receives further regulatory approvals for various surgical methods and patient profiles.

However, the buzzards of competition are circling. Among them. Medtronics (NYSE:MDT) has its CoreValve device, something Edwards has tried to fend off in the courts, so far unsuccessfully, claiming patent infringements. In addition, the Boston Scientific Corporation (NYSE:BSX) and its Lotus Valve is also expected to claim a slice of the TAVR pie.

Furthermore, Edwards faces other challenges.

The United States regulatory authorities are slow in giving approval to cardiac devices, even though heart disease remains America's number one killer.

Approval delays from the US Food and Drug Administration (FDA) body are said to be costing Edwards and its rivals hundreds of millions of dollars in potential sales, while they are expected to pay extra taxes to fund healthcare reforms.

Only Edwards' original Sapien device has US approval - which it gained in 2011, four years after Europe and elsewhere. Such devices cost $32,000 a patient and generated US sales of $200m in their first year, suggesting the four year lag behind Europe cost Edwards $800m.

More recently, Edwards received a letter from FDA following an inspection of its manufacturing premises, with it saying Edwards would not gain premarket approval from the FDA for devices under scrutiny until the company resolves underlying issues with quality control systems at its Cardiac Surgery Systems subsidiary in Utah.

That's the bad news and there's plenty of it. However, it is likely that all the negatives are priced into the EW share price and many of the issues are likely to be resolved within the current financial year.

That leaves plenty of upside for investors who get in now at a distressed price and wait for some good news.

Despite lowered earnings expectations, consensus earnings estimates for the year to December 2013 show a gain of 23% to $3.05 per share and a further 13% gain to $3.46 in 2014. Based on likely earnings over the next 12 months of $3.25, the shares are trading at a forward earnings multiple of 21, well under its long-term average of 27.

Its earnings have been variable, but investors are protected by the company's moderate gearing (shareholders' funds represent 67% of the company's total assets) and its net operating cash flows, which have more than doubled in the past four years to $374m.

The shares have finished taking a battering and the price recently hit a 52-week low and recovered by more than 10%. This suggests a change in sentiment for the stock and presents an opportunity for investors to get in at a moderate price and potentially see a substantial recovery.

Source: Older, Fatter Americans Will Enrich Edwards Lifesciences Corp