Edwards Lifesciences Corp. has broken out sales numbers for its less-invasive replacement heart valves for the first time, revealing how much they’re pumping up results for the Irvine-based medical device maker.
Sales of the Edwards Sapien heart valve came in at $121.5 million in the first quarter, a 67% hike from a year earlier.
Domestic sales of the Sapien—which got Food and Drug Administration approval for sales in the U.S. late last year—totaled $41 million in the first quarter. The rest of its sales came from Europe, where it’s been on the market since late 2007.
“This quarter was highlighted by an impressive first quarter of Sapien commercialization in the United States,” said Michael Mussallem, Edwards’ chief executive, on the company’s quarterly earnings call.
Edwards has been marketing the Sapien, which is inserted via catheter, at select hospitals around the U.S., including Hoag Memorial Hospital Presbyterian in Newport Beach. Hoag recently unveiled a surgical suite that can handle transcatheter valves such as the Sapien as well as other heart procedures.
60 Hospitals
Edwards has trained 60 hospitals on how to implant Sapien so far. Mussallem said the company expects to train doctors at 150 to 200 centers before the end of the year.
Some analysts have expressed concerns that Sapien sales in the U.S. would be hampered by the lack of a national Medicare reimbursement policy for the device. Regional Medicare offices are looking at reimbursement on a case-by-case basis for the Sapien, which costs about $30,000.
Edwards expects that the Centers for Medicare and Medicaid Services will have a national coverage decision in coming weeks.
“Reimbursement uncertainty has caused some centers to postpone their training and others to delay procedures,” Mussallem said. “However, physician and hospital interest in our Sapien program remains very high.”
Edwards surpassed expectations on Sapien in the first quarter because it did more business with high-volume surgery centers, said Raj Denhoy, an analyst with Stamford, Conn.-based brokerage Jefferies & Co.
Edwards has said it believes the sales potential of the Sapien will grow after a scheduled FDA panel on another use for Sapien and “our approaching national coverage decision,” Mussallem said.
That panel is scheduled to consider whether Sapien can be implanted in an additional high-risk group of patients on June 13.
“We had assumed an earlier panel date, and while we’re disappointed by this one-quarter delay, we are working constructively with the FDA,” Mussallem said.
Edwards remains “confident that the advisory panel will acknowledge the trial results clearly demonstrate the benefits” of the two approaches for delivering Sapien “as less-invasive treatment options for high-risk surgical patients,” he said.
The company, however, cut its full-year profit outlook based on the delay.
Edwards indicated it could see a full-year profit of $304.4 million to $316.2 million for 2012, compared with Wall Street estimates of $315.1 million.
The company said it now expects full-year sales at the low end of its original estimate of $1.95 billion to $2.05 billion.
Analysts project Edwards’ 2012 sales to come in at $1.95 billion.
Edwards could see a profit of $75.5 million to $80.2 million, excluding items, for the current quarter. Wall Street expects Edwards’ profit to come in at $70.8 million.
Edwards said it expected second-quarter sales of $470 million to $500 million, compared to analysts’ projection of $487.1 million.
Edwards posted a profit of $63.9 million in the first quarter, unchanged from a year earlier and surpassing analysts’ consensus estimates of $56.6 million. Its profit was $65.1 million including special items.
Quarterly revenue grew 14% to $459.2 million, compared to analysts’ projection of $449.5 million.
Investors sent Edwards’ shares up 12% on April 25 on the improved results and its outlook.
“There were so many worries heading into the quarter that the first-quarter [results] and pulling the band-aid off of guidance should provide relief for the stock,” said Joanne Wuensch, an analyst who follows Edwards for New York-based BMO Capital Markets, in a research note.
Wuensch wrote that Edwards’ stock should continue to rise if Medicare makes a favorable final coverage decision on Sapien and other issues are addressed.
