Edwards Heart Valves Back On Center Stage At Heart Event

The market potential for catheter-delivered heart valves will come into focus this weekend when fresh data on Edwards Lifesciences Corp.'s (EW) devices take center stage at the American College of Cardiology's annual conference.

The event also will feature studies that could help determine whether newer heart stents from Boston Scientific Corp. (BSX) and Medtronic Inc. (MDT) reach the U.S., plus data on the cost-effectiveness of Edwards' transcatheter valves.

The Edwards-funded "Partner" study already delivered favorable results last year, showing patients with the company's Sapien-brand valves died at a much lower rate after a year than patients who received medical treatment but were too sick for regular valve surgery. The bigger batch of data Sunday will directly compare patients who either got Edwards' transcatheter valves or Edwards valves installed through traditional, open-heart surgery.

It will take more than a year of data to fully vet the new technology, but Edwards' study could still have a big impact.

"Depending on the results, this study could have substantial ramifications" for patients, said Ralph Brindis, ACC's current president, on a call with reporters. Brindis is a cardiologist with Kaiser Permanente in California.

Sunday's data features frail patients with calcified, poorly functioning aortic valves who are deemed high risks for surgery. If patients with less-invasive, transcatheter valves survive a year at the same rate as patients who had regular surgery, the data could indicate the newer valves have an audience beyond patients who are simply too sick for chest-cracking procedures.

Edwards' shares are up 72% over the past 12 months on anticipation for the fast-growing, emerging device market.

"Positive data would significantly expand the patient population, in our view, and support both approval of--and a broader label for--the Sapien valve in the United States," William Blair analyst Ben Andrew said.

The study will also have bearing for current Edwards valve competitor Medtronic, plus Boston Scientific Corp. (BSX), Johnson & Johnson (JNJ), St. Jude Medical Inc. (STJ) and other companies eying the market. Edwards and Medtronic split an international trascatheter-valve market worth about $400 million in sales last year, but analysts anticipate rapid growth to multi-billion-dollar size in coming years.

Edwards has the lead in seeking U.S. approval, which could come later this year based on an already filed Food and Drug Administration application pegged to the prior data. The company plans to file another application soon based on this new data. While the first application only covered a delivery system used to thread valves up from the groin, the new application will also cover a tool used to pass valves through an incision between the ribs.

Edwards expects to charge about $30,000 for Sapien valves in the U.S. Surgically implanted valves cost around $5,000 to $7,000.

Analysts broadly expect the study to meet its main goal of matching surgery's one-year mortality rate, but they will be closely scrutinizing the degree of success along with measures on strokes and other complications. An unexpectedly high stroke rate for valve-treated patients in the study's other arm raised eyebrows last year.

Madison Williams analyst Spencer Nam sees a "strong possibility" the new data will top Wall Street's expectations. RBC Capital Market's Glenn Novarro, on the other hand, cautioned stroke rates are "likely to cause a concern."

Elsewhere at ACC, Medtronic and Boston Scientific will have new data aimed at supporting U.S. applications for newer drug-coated stent offerings. The tiny artery scaffolds use medication to slow renarrowing and cost around $1,500 to $2,000 each, but have been under significant price pressure for several quarters amid tight competition.

For Boston Scientific, the "Platinum" study is aimed at getting the company's "Promus Element" stents approved in the U.S. in mid-2012. This is important because Boston Scientific will lose access then to an older version of Promus made by Abbott Laboratories (ABT). Getting the new, home-grown version in the U.S. will help Boston Scientific's profitability.

Fresh data from studies on Medtronic's "Resolute" stent, meantime, are aimed at helping get that device approved in the U.S. early next year. The company never gained major U.S. traction with an older stent called Endeavor, which has trailed stents from Abbott and Boston Scientific.

-By Jon Kamp, Dow Jones Newswires; 617-654-6728; jon.kamp@dowjones.com

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