Edwards Lifesciences Corp.’s effort to create a “catheterized revolution” in heart valve treatment has landed it new institutional analyst coverage.
New York-based Guggenheim Securities LLC analysts Chris Pasquale and Chris Hartstein initiated coverage of the Irvine replacement heart valve maker with a “neutral” rating.
Guggenheim referred to Edwards as “one of the great [medical technology] stories of the past decade, transforming the way valvular heart disease is treated in the process. And following impressive data at the [American College of Cardiology] conference in March, all indications are” that the transcatheter aortic valve replacement story “is still in its middle innings,” Pasquale and Hartstein wrote.
The analysts later said, however, that they believed optimism for Edwards “is already captured in the stock’s lofty valuation.”
Edwards’ shares are up 32% since the start of the year, with a recent market value of $22 billion, putting it near the top of publicly traded companies based in Orange County.
Pasquale and Hartstein also examined what they predict will drive the next wave of transcatheter growth: approval for patients at intermediate risk under open-heart surgery. They mentioned that data from a pair of trials presented at the American College of Cardiology conference demonstrated transcatheter aortic heart valve surgery may be superior to surgical valve replacement.
“We expect [Food and Drug Administration] approval for the intermediate risk indication later this year,” Pasquale and Hartstein noted in their report, saying that the “on-label population” of people who could get transcatheter valves would grow 50% upon regulatory clearance.
The analysts also mentioned potential downside risks for Edwards’ stock, including its pipeline.
“Edwards has opted to focus the majority of its attention and resources on the transcatheter valve opportunity rather than diversify its revenue base,” they said. “While this strategy has served the company well to date given the success of [transcatheter valve replacement], failure to develop new growth drivers over time could cause investors to question the sustainability of Edwards’ growth trajectory.”
They added that any setbacks for Edwards’ transcatheter mitral valve program, which was fueled last year by the acquisition of Irvine-based CardiAQ Valve Technologies Inc. in a deal that could eventually be worth more than $400 million, “would be viewed negatively.”
Motley Fool on Glaukos
Laguna Hills-based Glaukos Corp. should be poised to catch investors’ eyes, according to the Motley Fool investor website.
Glaukos, which went public last year, makes the iStent device for treating glaucoma.
Author Brian Feroldi noted that while its stock “hasn’t moved much since” the device maker became public—shares are down 7% since Glaukos’ initial public offering in June 2015, with a recent market value of $940 million—“what we’ve seen so far from this company has left me impressed and I think it could be on the verge of making a strong run from here.”
The article mentioned that glaucoma is the second leading cause of blindness, affecting more than 78 million people worldwide, and that iStent “appears to be a big hit with patients and providers.”
Glaukos posted first-quarter revenue growth of 57% to $23.1 million in the first quarter and swung to what Feroldi characterized as a “surprise profit” of $897,000 from a loss of $1.5 million a year earlier.
Feroldi later pointed out that he projects iStent to continue rapid growth, because Glaukos “spent the time to get payers on board.”
IStent is now reimbursable by “the majority of private payers and Medicare, too,” allowing the company to focus its attention on raising awareness of the device,” Feroldi said.
Bits & Pieces
Cost Mesa-based Lindora Inc. said it’s rebranding itself as “Lean for Life by Lindora Clinic” in order to place a stronger emphasis on its therapeutic lifestyle program for lasting weight control. The company also simultaneously introduced a program to help patients manage risk factors of developing Type 2 diabetes. … Orange-based KaVo Kerr Group and three of its dental imaging brands are hosting what they call “Dental 3D University” in October. The conference will be in Boston and look at the role of 3-D imaging in various dental areas, including endodontics and the reading of tooth scans. … Irvine-based Global Discovery Biosciences said it signed a distribution deal for its protein unstable lesion signature cardiac test with Cleveland-based Cleveland HeartLab Inc., a business that was spun out of the Cleveland Clinic. The partnership will enable the noninvasive blood test to be distributed to doctors in the United States. … Rancho Santa Margarita-based Integrated Endoscopy Inc. exhibited its nuvis device this month at the American Orthopaedic Society for Sports Medicine’s annual meeting in Colorado Springs.
