Edwards Lifesciences Corp. is “fully prepared” to introduce its less-invasive replacement heart valve and anticipates a Food and Drug Administration approval for U.S. sales “any day,” according to Chief Executive Mike Mussallem.
The Irvine-based device maker expects more: It’s projecting between $150 million and $250 million in domestic sales for the first 12 months after the launch of its Edwards Sapien transcatheter heart valve.
The mid-range of that projection would bring an increase of about 12% from an expected $1.7 billion in revenue this year.
Edwards executives “really do believe that there aren’t any outstanding questions at this point,” Mussallem said in Edwards’ third-quarter earnings call last week. “We believe all issues have been resolved.”
The Edwards Sapien is already on the market in Europe. An FDA approval anytime in coming months would give it a lead here on what is seen as one of the biggest advancements in replacement heart valves in recent years.
Competitors such as Minneapolis-based Medtronic Inc. are considered by industry observers to be a few years away from an approval for sales here.
New Market
Transcatheters are expected to open up the market for patients who are too sick to have traditional valves implanted via open-heart surgery. They “will allow (it) to reach many inoperable patients in the U.S.” suffering from severe aortic stenosis, or a narrowing of the arteries, Mussallem said.
He also outlined some of his company’s preparations for Edwards Sapien during the recent earnings call.
A training program to educate clinical teams in the U.S. on the use of the new valve has been developed.
Teams of doctors “will undergo comprehensive trainings, which include lectures, case studies and hands-on simulator experience,” Mussallem said. “Then, they will perform their first procedures overseen by experienced proctors.”
Edwards’ launch plans and its revenue projection include a price increase on the new heart valve. Edwards said it plans to bump the list price up from $30,000, which had been used in talks with analysts. The company had not provided a specific price as of last week.
· Headquarters: Irvine
· Business: medical devices
· Founded: 2000
· Ticker symbol: EW (NYSE)
· Market value: about $7.9 billion
· Notable: expects approval on new heart value “any day”
“There are obviously going to be opportunities for discounts for people who do higher volumes,” Mussallem said.
The expression of confidence of an FDA approval follows a report that briefly clouded the outlook for Edwards Sapien.
The company recently refuted a suggestion that an FDA decision could be delayed until next year.
The possibility of a delay, raised in a report by analyst Larry Biegelsen of Wells Fargo Securities in New York, appeared to drag Edwards’ shares down by about 5% on Oct. 17, to a market value of about $7.9 billion.
Biegelsen’s report said that Jeffrey Borer, a cardiologist on an FDA review panel, publicly stated at a Chicago medical meeting that Sapien wouldn’t be approved until April 2012. Borer was one of nine panel members who unanimously recommended that the FDA approve Sapien in July.
The FDA generally follows the recommendations of its outside advisory panels.
Recent Shake
The report still seemed to shake investors, and shares sagged despite Biegelsen’s notation that “We believe Dr. Borer was just speculating and we remain confident that Sapien will be approved shortly.”
Mussallem’s comments on the earnings call several days later seemed to have prompted a reversal, taking Edwards’ shares back up to a market value of about $8.3 billion.
An approval for the Sapien would follow a solid third quarter for Edwards. It posted a profit of $51.6 million, including charges. That was up 7.5% from $48 million a year earlier.
Wall Street had expected a profit of $46.4 million.
Excluding charges, Edwards posted a profit of $45.2 million, which was below analysts’ projections.
Edwards’ revenue rose 18% to $412.7 million from a year earlier. That topped analyst estimates of $405 million.
Transcatheter heart valves, including sales of the Edwards Sapien in Europe, helped drive the revenue increase.
Transcatheter sales grew to $82.6 million in the quarter, up 69% over the same period a year earlier.
Full-Year Forecast
Edwards also offered a forecast for the current quarter and for 2011.
The company indicated it could see a profit of $67.8 million to $73.8 million this quarter. Sales are seen at $430 million to $470 million.
Analysts expect a fourth-quarter profit of $73.8 million on sales of $459.2 million.
For 2011, Edwards could see a profit of $234.4 million to $240.4 million. The company said sales should come in at $1.68 billion to $1.72 billion.
Wall Street expects full-year revenue of $1.7 billion for Edwards.
The company plans to update its commercialization plans for Edwards Sapien during its annual investor conference, which is scheduled for early December in New York.
