Edwards '12 Looks Good with Sapien - Analyst Blog
December 13 2011 - 9:30AM
Zacks
Banking on the launch of the Sapien
transcatheter heart (“THV”) valve in US in November and other
product developments, Edwards Lifesciences (EW)
expects to record robust growth going ahead. The company discussed
its current strategies and issued guidance for 2012 at the recently
held Investor Conference.
Sales are expected to record 18−22%
underlying growth to reach $1.95−$2.05 billion with adjusted EPS of
$2.70−$2.80, in line with the Zacks Consensus Estimate. While the
company expects to record free cash flow of $240−$260 million,
based on a strong cash balance, R&D investment would increase
by 14%. Edwards expects THV sales of $560-$630 million in 2012,
representing underlying growth of 70%-90%, with $200-$260 million
of sales generated in the US.
The year 2012 is going to be
significant for Edwards. The company reiterated its expectation for
US approval of Sapien (Cohort A) for high-risk patients in
mid-2012. Besides, progress is being made in the Partner II trial
that is studying the Sapien XT valve in an expanded patient
population. While enrollment in Cohort B of this trial should be
over in January 2012, US approval is expected in 2014. Moreover,
enrollment is ongoing in Partner II Cohort A, which is studying
patients with a lower risk profile than those enrolled in the
Partner trial.
Edwards has planned further expansion of its THV portfolio to
strengthen its position. Developments are currently ongoing for
Sapien 3, a lower profile balloon expandable valve that further
reduces paravalvular leak and Centera valve, a low profile,
repositionable self-expanding valve, both of which will be
delivered through 14-French eSheath delivery systems. European
trials are expected to commence in 2012.
According to Edwards’ estimates,
approximately 500,000 people in US suffer from severe aortic
stenosis with half of them having conditions that make them the
targeted patient population. At present, about one-third of this
population gets treated, which means there is a substantial market
yet untapped.
In Europe, Edwards operates in a
highly competitive environment with the strong presence of
CoreValve from Medtronic (MDT). Moreover,
Boston Scientific (BSX) and St Jude
Medical (STJ) are working to enter the THV market with
their respective Lotus and Portico valves.
We currently have a Neutral
recommendation on Edwards, which corresponds to a Zacks #3 Rank
(Hold) in the short term.
BOSTON SCIENTIF (BSX): Free Stock Analysis Report
EDWARDS LIFESCI (EW): Free Stock Analysis Report
ST JUDE MEDICAL (STJ): Free Stock Analysis Report
Zacks Investment Research
SJM (NYSE:STJ)
Historical Stock Chart
From May 2024 to Jun 2024
SJM (NYSE:STJ)
Historical Stock Chart
From Jun 2023 to Jun 2024