Of late, the flow of good news for medical device marker
Edwards Lifesciences Corporation
) remains uninterrupted. After winning a patent infringement case
over medical devices major
) in Germany, Edwards disclosed that the injunction against
Medtronic's transcatheter heart valves has gone into effect on
Aug 26, 2013.
On Jul 12, the German District Court of Mannheim declared that
Medtronic's CoreValve and CoreValve Evolut systems infringe
Edwards' Spenser patent for transcatheter heart valve technology.
This ruling forced Medtronic to recall and discontinue the sale
of the products in Germany.
The news is a material upside for Edwards as Medtronic's
CoreValve is a close competitor for the company in Europe.
Moreover, Edwards' Spenser patent EP2 055 266 B1 is effective
through 2022. The injunction of a major competitive product in
the German market for almost a decade presents an opportunity for
vast market proliferation for Edwards.
However, on humanitarian ground, Edwards has allowed exceptions
to the injunction ruling in patient cases where its Sapien XT
valve is not indicated. This will ensure accessible transcatheter
therapy for all affected patients in Germany, subject to
Medtronic's cooperation. Furthermore, the company will not seek
indemnity for such cases in the country. According to findings,
such compassionate cases are estimated to roughly come to 40 on a
According to the company, over 80% of the transcatheter valve
centers in Germany utilize Edwards Sapien XT valve at present.
Additionally, Edwards is working to increase adoption rate for
Sapien XT valve at all German centers where physicians do not
have experience with Edwards' valve.
Round-the-world updates on Sapien XT
Last week, Edwards gained approval of Japan's Central Social
Insurance Medical Council (Chuikyo) to provide reimbursement for
the Edwards Sapien XT transcatheter aortic heart valve in the
country. The reimbursement in Japan will be effective from Oct 1,
2013. Earlier, in June, the company won the regulatory clearance
for the Sapien XT valve in Japan. Edwards plans to begin the
complete launch of the product following the reimbursement
While Sapien XT is still under regulatory review in the U.S., it
is the leading transcatheter aortic heart valve in the European
market. Positive data from post-approval studies across Europe
continues to demonstrate the clinical competency of the Sapien XT
valve. Meanwhile, the company continues to enroll patients in the
intermediate risk cohort (Cohort A) of The Partner II Trial in
the U.S. The enrollment is expected to complete in October.
With submission of Cohort B clinical results from The Partner II
Trial for the U.S. Food and Drug Administration (FDA) pre-market
approval in late April, Edwards envisages the U.S. approval to
come through in mid-2014.
Medtronic faces the heat
In the most recent quarter, Medtronic witnessed strong CoreValve
transcatheter aortic heart valve sales in the international
market. This led the upside in its Structural Heart business.
Furthermore, sales of CoreValve in Germany were encouraging.
During the first-quarter earnings call, management at Medtronic
asserted that the injunction against CoreValve in Germany is a
major setback and will hurt sales in the region.
As per management, the CoreValve along with renal denervation
system for treatment resistant hypertension and Admiral
drug-eluting balloon (already available across Europe) are
meaningful growth drivers with a significant impact on fiscal
2015 outlook for Medtronic. The launch of CoreValve in the U.S.
is expected in the first half of fiscal 2015.
It is seen that the launch of Edwards Sapien XT in the U.S. is
almost neck to neck with that of Medtronic's CoreValve.
Meanwhile, notwithstanding the macroeconomic climate, Europe
presents a large and growing market for the valves. Further, the
market opportunity is likely to grow significantly on the back of
demographic trends and increasing awareness.
Currently, both Edwards and Medtronic carry a Zacks Rank #3
(Hold). On the other hand, its peer
St. Jude Medical
), carrying a Zacks Rank #2 (Buy) is worth considering. Another
Zacks Rank #2 medical stock is
LeMaitre Vascular, Inc.
EDWARDS LIFESCI (EW): Free Stock Analysis
LEMAITRE VASCLR (LMAT): Free Stock Analysis
MEDTRONIC (MDT): Free Stock Analysis Report
ST JUDE MEDICAL (STJ): Free Stock Analysis
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