Edwards Lifesciences Corp.’s next generation of less-invasive heart valves is making its domestic debut, providing a boost that has extended a monthslong rally for shares of the Irvine-based heart valve maker.
The Food and Drug Administration recently approved Edwards Sapien XT, a second-generation replacement heart valve. The approval covers high-risk and previously inoperable patients who suffer from severe symptomatic aortic stenosis, or a narrowing of the body’s main artery.
Edwards Sapien XT has some differences from the original Edwards Sapien valve, including its ability to be compressed tighter so that small delivery catheters are usable with it.
“This approval provides greater options for U.S. patients who can benefit from the substantial enhancements in this proven platform,” said Larry Wood, Edwards’ corporate vice president, transcatheter heart valves.
Wood added that the Sapien line of valves has been used to treat more than 70,000 patients globally, the majority of those receiving Sapien XT.
The regulatory approval for the Sapien XT has helped the device maker’s shares continue a steady rise, up by nearly 30% since the start of the year to a recent market value of about $9 billion.
Sapien XT has been sold in Europe since 2010 and in Japan since last year.
Its domestic arrival was heralded by some on Wall Street.
Analyst Antalffy
In a note issued after the approval, Leerink Partners analyst Danielle Antalffy referred to Sapien XT as “an underappreciated asset that should help [Edwards] maintain market share” in the transcatheter heart valve space.
“That appears to be proving out in Europe with the ongoing Sapien 3 rollout,” Antalffy added.
Sapien 3 received European regulatory approval in January, and Edwards has been introducing it through selected heart hospitals.
Transcatheter heart valves accounted for $189.2 million, or 36% of Edwards’ first-quarter sales of $522.4 million. Transcatheter sales were up 11% from the year-ago quarter.
In a client note published after the FDA’s decision, Sean Lavin of New York-based BTIG LLC called Sapien XT’s approval “very important,” and he made a particular mention of the timing: “While this may be a bit later than investors had hoped for, it did occur in [the current quarter] and should put to rest questions about when approval would be coming and what the issue might be.”
“We have long felt that Sapien had become non-competitive with [Medtronic] CoreValve (see Health column, page 46) and we see this XT approval as a significant event in helping [Edwards] to slow erosion of U.S. market share,” Lavin said.
Review Panel
Lavin’s report referenced investor worries about whether the FDA would choose to put Sapien XT before a review panel—an event that could have added another three months to a year to the device’s approval timeline.
He wrote that the approval “eliminates the possibility of a panel and more significant share erosion that might have occurred had XT remained on the sideline.”
The FDA decided to approve Sapien XT after it looked at clinical trial data and data from several heart registries, said Dr. Jeffrey Shuren, who directs the agency’s Center for Devices and Radiological Health, in a post on the FDA Voice, its official blog.
Regulators approved the device “despite observing certain quality system violations during a recent inspection at the Edwards manufacturing facility where the Sapien XT delivery systems and accessories are made,” Shuren said.
Rare FDA Move
FDA took a rarely used regulatory action called a “variance” that allows deviation from quality system requirements to grant approval for Sapien XT, he said.
Variances are “employed only in special situations of public health need,” Shuren said, adding that it was used for two reasons—one being the need for the new valve.
“And second, Edwards Lifesciences presented us with an appropriate variance plan for addressing its manufacturing problems—including specific controls to permit safe use of the Sapien XT while corrections are under way,” he wrote.
Edwards got into less-invasive heart valves over a decade ago when it paid $125 million for a New Jersey-based company, Percutaneous Valve Technologies Inc. That led to the creation of the original Sapien valve, which received FDA approval at the end of 2011.
