Edwards gains on strong Sapien 3 TAVR sales

Sapien 3 valve--Courtesy of Edwards Lifesciences

Edwards Lifesciences' ($EW) stock rose 7% on news of continued strong sales of its flagship Sapien 3 TAVR during its Q3 earnings call.

Transcatheter heart valve therapy sales grew 10.8% year over year to $296.1 million (or 29.4% when excluding unfavorable exchange rate fluctuations), meaning the device now accounts for nearly half of the company's revenue of $615.5 million, up 1.3% (up 13.6% at constant currencies).

"Our THV performance was driven by strong procedure growth and the ongoing Sapien 3 launch, which is on track, and clinicians are rapidly adopting our best-in-class technology," said Edwards CEO Michael Mussallem in a statement. "Based on our year-to-date results and the strong demand for Sapien 3, we now expect our underlying THV sales in 2015 to be at the high end of our previously estimated 25 to 35 percent growth rate."

The company recently announced FDA approval to use the Sapien franchise for valve-in-valve procedures, involving the replacement of a previous, failed aortic valve, putting the company on par with rival Medtronic ($MDT) and its CoreValve franchise.

That regulatory win will result in some incremental revenue gains, but investors were no doubt more excited by Mussallem's claim that "the growing body of compelling clinical outcomes gives us confidence that with expanded evidence, larger populations of patients suffering from aortic stenosis will be eligible for TAVR."

An expanded indication to include intermediate-risk patients would greatly expand the market size to the benefit of Edwards and market co-leader Medtronic, which are the only companies with FDA-approved TAVRs.

Edwards is aiming to repeat its transcatheter success in the mitral valve arena with the acquisition of CardiAQ for $350 million, which provoked increased M&A activity in the space from Medtronic and others.

Edwards said the purchase led to an increase in R&D spending, which was $101 million during the quarter, compared to $87.6 million a year ago.

Meanwhile, surgical heart valve therapy devices were $187.9 million, a decrease of 7.6% (but up 0.2% at constant currencies) due to Edward's exit from some nonstrategic devices. Critical care devices had sales of $131.5 million, a decrease of 3.8%, but up 5% at constant currencies.

- read the release

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