Thursday, October 27, 2011

EW Reports Q3 Earning, SAPIEN valve close to approval

Edwards Lifesciences reported third quarter sales growth of 18.4% ($1.25 billion) from Q3 of last year. Sales were driven by an increased demand for their transcatheter heart valves, along with “sustained strength in clinical care.” Transcatheter heart valve sales for the quarter were reported at $82.6 Million, a 69.1% increase over 2010, making up the largest segment of YTD sales growth. Heart valve therapy sales amounted to $246.1 million, representing 22.7% growth over last year. Diluted EPS came in at .38 a share (compared with 0.43 in the prior year quarter), a penny short of analyst consensus, but in line with management guidance.

EW is currently awaiting FDA approval for SAPIEN, a new, non-invasive transcatheter heart valve implant that would give them a significant lead over their competitors. Management expects SAPIEN sales of $20-$25 Million within the first three months of launch, and $150 to $250 Million in it’s first year. Because of this heavy dependence on SAPIEN sales, EW stock has proven to be highly sensitive to speculation as evidenced by a 5% drop in price on 10/18/11 following rumor that FDA approval would be delayed by 9 months. Following release, EW’s stock rose 6.21% to $72.00 per share. Since then, the stock has climbed an additional 4% and is currently trading at $75.15.

- Chris Garcia, Junior Analyst
- Deven Gould, Healthcare Sector Head

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