RSSEdwards Lifesciences Corp. said its 4Q16 revenue will come in at the low end of its $750 million to $790 million guidance range, but strong developments in the company's product pipeline will give it a solid foundation long term. During its annual analyst day, the Irvine, Calif.-based company emphasized that the transcatheter aortic valve replacement (TAVR) market would be at the heart of its plans for the coming year. Analysts seemed to walk away from the event with a highly favorable perspective of the company's general direction.
"While the initial reaction to the 4Q16 guidance will likely be negative, we are highly confident that the strong 2017 guidance and robust pipeline update will be the main takeaways from the meeting," said Larry Biegelsen, an analyst with Wells Fargo Securities.
Edwards said the TAVR opportunity is expected to exceed $5 billion by 2021 with significant opportunity beyond.
The company was the first to market with a TAVR device in the U.S. when it gained FDA approval for the Sapien valve about five years ago. So far its only rival in the U.S. TAVR market is Dublin-based, Medtronic plc , with its Corevalve technology (See Medical Device Daily, Nov. 4, 2011 and Jan. 21, 2014.)
Even with a significant lead time in the market, Edwards has not rested on its laurels and has constantly been trying to seek out additional indications for Sapien.
EARLY TAVR INTERESTING BUT 'NOT A LAY-UP'
During the analyst day, Edwards shared its plan to expand TAVR therapy into asymptomatic patients with severe aortic stenosis (AS). Historically, management of asymptomatic patients with severe AS has been challenging for the medical community. Many of the patients are asymptomatic for years despite having high velocity through the valve. In addition, about half of patients with severe AS report no symptoms at the time of diagnosis.
The company is addressing these patients through its EARLY TAVR trial, which is still pending FDA submission and approval. Edwards revealed some details about the trial including screening criteria with patients ages 65 and older, negative stress test results. Patients will also be randomized 1:1 to TAVR vs. clinical surveillance with clinical and echo follow-up at 30 days (for TAVR only) and at one, two, three and five years. In terms of proposed primary endpoints, the company aims to prove superiority, two-year composite of all-cause death, all stroke, and unplanned cardiovascular hospitalization.
Analyst reactions to treating the asymptomatic patient population were mixed. While most expressed a favorable take on the potential new indication, others questioned how attainable it might be, noting that regulatory approvals could prove difficult.
"We find this new potential indication very interesting, but also wonder if it will be successful," said BITG's Sean Lavin.
If the company's Sapien 3 valve demonstrates mortality and stroke under 1 percent within the first 30 days of implant, Lavin said, treatment may well be beneficial. But, the analyst pointed out, the indication might be a tough sell to patients, making the point that "treatment would likely reduce risk, but also accelerate when an event could occur if one were to occur."
Lavin said he looks forward to seeing how the trial plays out, as it could greatly increase the potential market, but noted that "it is definitely not a lay-up."
Joshua Jennings, an analyst with Cowen and Co., offered a more optimistic opinion of EARLY TAVR.
"The long TAVR growth tale, including the eventual approval for the low-risk indication and the move into Asymptomatic severe AS patients, along with the transcatheter mitral replacement/repair opportunity, supports the sustainable double-digit revenue growth thesis for the foreseeable future," Jennings said.
MITRAL VALVE HOLDS PROMISE
Edwards also has potential for tremendous growth in the transcatheter mitral valve repair (TMVR) market. Late last month, Edwards moved forward with its push in TMVR, when it said it would acquire Or Yehuda, Israel-based, Valtech Cardio Ltd. for $340 million, with the potential for $350 million in additional milestone payments. The acquisition gives Edwards access to Cardioband, a transcatheter ring technology and sets the company firmly against Abbott Park, Ill.-based Abbott Laboratories' Mitraclip device. (See Medical Device Daily, Nov. 29, 2016.)
Edwards has not given any guidance on when Cardioband could receive FDA approval. The company said revenue contributions from Cardioband sales in 2017 could be between $10 million and $15 million – amounts that Biegelsen said could be conservative.
"We found Edward's mitral valve therapies update to be very encouraging," Biegelsen said.
Edwards also said the first patients have already been treated with its new Pascal TMVR system and that plans are underway to initiate a CE mark study in 2017. In addition, the company said it will highlight the early promising patient experience treating tricuspid regurgitation with its Forma tricuspid spacer, and expects a CE mark for that product in 2018.
The TMVR market has been brimming with activity over the past few years. In July 2015, Abbott reported plans to pay $225 million for the equity of Roseville, Minn.-based Tendyne Holdings Inc. that it did not already own at the time, making the total deal worth $250 million plus potential regulatory-based milestone payments. The company closed on that deal in September 2015. (See Medical Device Daily, July 31, 2015.)
In a separate deal, Abbott said it had invested in mitral valve repair company Cephea Valve Technologies Inc., of Santa Cruz, Calif., with an option to buy. Financial terms of the Cephea transaction were not disclosed. In late August, Medtronic jumped into the TMVR pool and agreed to pay up to $458 million to acquire Redwood City, Calif.-based Twelve Inc. (See Medical Device Daily, Aug. 26, 2015.)