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Recently, Edwards Lifesciences Corporation (EW - Analyst Report) revealed positive data from the latest post-hoc analysis of Edwards Sapien valve from The Partner Trial at the ESC Congress 2013 in Amsterdam.

Per the findings, high surgical risk diabetic patients who suffer from aortic stenosis faced 35% lower relative all-cause mortality after a year of transcatheter aortic valve replacement (TAVR) treatment instead of surgical aortic valve replacement (AVR).

Edwards gained the regulatory approval for use of Sapien valve to treat inoperable patients from the U.S. Food and Drug Administration (FDA) in November 2011. The company won the approval for high-risk surgical patients in October 2012.

The PARTNER trial, the foremost randomized, controlled clinical trial, is evaluating Edwards’ transcatheter aortic heart valve in both operable but high-risk (Cohort A) and inoperable (Cohort B) patients with severe aortic stenosis in the U.S. The enrolled diabetic patients were treated as high-risk cohort of the trial. The mortality rate for diabetics who received TAVR treatment was 18% compared with 27.5% for those who received the AVR treatment.

Moreover, diabetic patients who received TAVR treatment recorded brisk recovery and improvement in quality of life. These patients also witnessed lower possibility of renal failure in a year.

While clinical investigators of The Partner Trial view the analysis as hypothesis generation as opposed to hypothesis validation, the trial data demonstrates high probability that TAVR will turn out to be a favored treatment for acute aortic stenosis diabetic patients but at high surgical risk.

TAVR as the preferred treatment for high-risk diabetic patients who suffer from aortic stenosis should expand Edwards’ addressable market. Given the exponential rise in incidence of diabetes, the uptake of Edwards’ Sapien valves in the U.S. for diabetic patients who suffer from aortic stenosis is likely to accelerate U.S. Sapien sales.

Notably, TAVR is one of the most promising clinical opportunities in the cardiac device space. We also believe that Sapien valves and its slimmer version Sapien XT (yet to be commercialized in the U.S.) offer exciting long-term revenue opportunities. Further, the market opportunity is likely to grow significantly on the back of demographic trends and increasing awareness.

However, Edwards’ dominance in the TAVR space is likely to face challenges as other players in the cardiac device space are slowly but steadily progressing well with their TAVR devices. The company’s gains from its leadership position might come to naught in the future following approval of a competitor’s product.

Currently, the stock carries a Zacks Rank #3 (Hold). Other players who are picking up pace in the space to cater to the TAVR market in the U.S. like Medtronic Inc. (MDT - Analyst Report) and St. Jude Medical (STJ - Analyst Report) also carry Zacks Rank #3. On the other hand, Boston Scientific Corporation (BSX - Analyst Report), which is progressing well with its TAVR trial, carries a Zacks Rank #2 (Buy).

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