Irvine-based heart-valve maker Edwards Lifesciences Corp. is setting out cautious expectations for 2012 after a busy 2011.
Edwards issued first-quarter profit and revenue guidance last week below Wall Street consensus. Its full-year guidance was in line with current expectations.
Edwards could see a profit of $55.5 million to $57.9 million in the current quarter, while Street consensus has been $65 million. The company said quarterly sales should reach $440 million to $460 million in the first quarter; analyst forecasts average $466.9 million.
Edwards could see annual profit of $318.9 million to $330.7 million, excluding certain charges, while Street consensus has it at $328.3 million. The company said it expects full-year sales of $1.95 billion to $2.05 billion, which compares with analyst forecasts averaging $2.01 billion.
Edwards posted a fourth-quarter profit of $73.2 million excluding certain charges, up 13% from a year ago and beating analysts’ consensus projections of $69.7 million.
Edwards’ profit came in at $63.1 million with items, down slightly from 2010’s fourth quarter.
Quarterly Revenue
Quarterly revenue totaled $430.2 million, up 10% from a year ago but below Wall Street’s estimate of $446.9 million.
Transcatheter heart valve sales grew 43% to $93.2 million. Of that total, $17.1 million came from the U.S., as Edwards launched its Edwards Sapien valve late last year after receiving Food and Drug Administration approval.
Edwards’ shares got a boost last week on positive test results for Sapien.
The company’s stock closed up 6% to a market value of about $9.5 billion on Jan. 31, after results from a clinical trial showed reduced mortality rates in patients with severe aortic stenosis, a narrowing of the body’s primary artery.
• Headquarters: Irvine
• Business: heart valves; critical care products
• Founded: 1999
• Ticker symbol: EW (NYSE)
• Market value: about $9.2 billion
• Notable: expects a profit of $55.5 million to $57.9 million in current quarter
Improved Mortality Rates
Edwards said mortality results were improved when patients in a non-randomized, continued access protocol of the clinical trial had Sapien implanted through the ribs. Sapien already has been approved for surgeries in which the valve is inserted through the femoral artery of patients who aren’t open-heart surgery candidates.
Awaiting Approval
Edwards is awaiting regulatory approval of Sapien for patients at high risk for standard surgery. Approval would cover an approach in which a surgeon pierces a patient’s ribs to put the valve directly in place.
A FDA panel is expected to examine results from that portion of the trial this spring, Reuters reported.
“I think the Street will come away from it increasingly optimistic in Edwards’ ability to get transapical past an FDA panel,” J.P. Morgan Chase & Co. analyst Michael Weinstein told Reuters.
“Bottom Line”
“The bottom line is the data clear the way for full Partner A approval later this year, in our view,” Goldman Sachs & Co. analyst David Roman wrote in a client note.
Strokes were also lowest among Sapien patients who received the device after the original study—something that should ease doctor and investor concerns, Jason Mills, an analyst with Canaccord Adams Inc. in San Francisco, told Bloomberg.
He added that the results show doctors are doing a better job selecting patients with damaged aortic valves who will benefit from Sapien and have improved their ability to implant the devices. Mills said the results “exceeded our expectations by a considerable margin, in every category.”
