The Irvine-based heart valve maker (NYSE: EW), which has the highest market cap among public companies in Orange County, said it generated quarterly net sales of $1.2 billion, an increase of 8% compared to the same period a year ago. Analysts expected $1.16 billion on average.
“We recognize that there are many people still struggling with the pandemic around the world, yet as we anniversary the start of the pandemic, I’m encouraged by the signs of recovery,” Chief Executive Mike Mussallem said in a statement.
“Structural heart procedures increased as we progressed through the winter months, and our sales growth this quarter was better than expected.”
Edwards last week reiterated its 2021 sales guidance in the range of $4.9 billion to $5.3 billion.
Shares in Edwards hit an all-time high last week after the earnings announcement, pushing the company’s market cap past $60 billion.
Growth Drivers
Edwards’ largest and smallest business units saw notable developments in the first quarter of 2021.
Its transcatheter aortic valve replacement (TAVR) unit sales increased 7% to $792 million, representing over 65% of total sales. The unit alone beat consensus estimates by about $20 million to $30 million, SVB Leerink analyst Danielle Antalffy said in a report.
The company received approvals for a U.S. pivotal trial for TAVR in moderate aortic stenosis patients, and TAVR approval in Japan for patients at low surgical risk this quarter, Mussallem noted on the company’s earnings call.
Edwards continues to believe TAVR will grow to a global opportunity in excess of $7 billion by 2024.
Likewise, the company reported positive milestones for its smallest unit—the transcatheter mitral and tricuspid therapies (TMTT) unit—which operates in a market sector that is expected to achieve a global opportunity of $3 billion by 2025.
The company celebrated the first patients being treated with its EVOQUE Eos transcatheter mitral replacement system and initiated TRISCEND II U.S. pivotal trial for transcatheter tricuspid replacement, Mussallem said.
Just as Edwards continues to push on with clinical trials, it is also aggressively pursuing R&D efforts, which are expected to equate to about 17% to 18% of net sales in 2021, according to Chief Financial Officer Scott Ullem.
Cautious Outlook?
Though Mussallem noted “choppy” procedure volumes in late January into February, he expressed confidence that the business would be operating in a more normalized environment in the second half of 2021.
Edwards “sounded more bullish on procedure volume trends than they’ve sounded in a while,” analyst Antalffy said.
Antalffy added Edwards’ guidance appears “increasingly conservative” due to “typical conservatism and management hesitancy to call recent trends sustainable given COVID cases remain high in certain pockets of the world (and the country) and vaccinations rollouts are slower in certain regions.”
Ultimately, Edwards is “well-positioned to retain its global market-leading position, supplemented by expansion into other geographies to drive potential upside in both 2021 and beyond,” she said.
