Perfectly in line with its expectations,
Edwards Lifesciences Corporation
) recently acquired the European CE mark approval for its latest
transcatheter aortic valve, Sapien 3. The company is now
initiating the commercial launch of the product in this
Amid attempts to thrive in a fiercely competitive
TranscatheterHeart Valves (THV) global market and the recent
earlier-than-expected U.S. Food and Drug Administration (FDA)
) less-invasive heart valve - CoreValve, this news indeed comes
as a respite for Edwards.
The Sapien 3 valve is the only commercial transcatheter heart
valve that can be delivered through a low-profile 14 French
expandable sheath (eSheath) with its clinical experience showing
low rate of complications. This new generation valve can be
implanted through multiple approaches such as transfemoral,
transapical and transaortic.
Over the past few quarters, austerity measures across Europe
have affected the overseas financial results of Edwards.
Nevertheless, the company has managed to perform well with
impressive THV sales in this region on the back of greater
adoption. This product launch should add some further
upside to the company's business in this region.
Late last year, Edwards received reimbursement for Sapien XT
in Japan (effective Oct 1, 2013). Moreover, the company
received regulatory approval for Sapien in Australia and Sapien
XT in Canada.We are also encouraged with the company's strong
pipeline updates. Edwards is at present working toward the FDA
approval for Sapien XT with a NovaFlex delivery system by
mid-2014. The company has also completed enrollment in Cohort A,
the surgical arm of the PARTNER II trial.
Edwards expects THV technology adoption to ramp up in Japan in
the near future and contribute meaningfully to sales beginning
2014. The company also continues to expect global THV underlying
sales growth of 25% to 30% in the coming quarters.
However, we are wary about the earlier-than-expected FDA
approval of Medtronic's CoreValve. This go-ahead will expedite
the launch of CoreValve in the U.S. market - the only U.S. rival
of the company's significant revenue generating product Sapien.
CoreValve - whose market price is expected to remain on par with
that of Sapien - might bring down Edwards' revenue growth rate
significantly by weakening its dominance in the U.S market.
Although Edwards is optimistic about the expected approval of
the company's next generation Sapien XT valve in the first half
of 2014, this long time lag between the CoreValve and Sapien XT
launches may help Medtronic gain traction in the THV market.
The stock currently carries a Zacks Rank #5 (Strong Sell).
While we choose to avoid Edwards at present, better-ranked
medical product stocks worth considering include
). Both these stocks hold a Zacks Rank #2 (Buy).
COVIDIEN PLC (COV): Free Stock Analysis
EDWARDS LIFESCI (EW): Free Stock Analysis
MEDTRONIC (MDT): Free Stock Analysis Report
STRYKER CORP (SYK): Free Stock Analysis
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