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The Advisory Panel of the US Food and Drug Administration (‘FDA’) will review Edwards Lifesciences’ ( EW - Analyst Report ) Sapien transcatheter heart valve (‘THV’) on June 13, 2012. The Panel will review the device for the treatment of patients with severe, symptomatic aortic stenosis who are at high risk of surgery (Cohort A). Sapien had received FDA approval for the treatment of certain inoperable patients in November last year.
Last month, Edwards presented positive long-term data from Cohort A of the PARTNER trial at a conference in Chicago. The study evaluated patients at high risk of surgery who were either treated with surgical aortic valve replacement or with Sapien THV.
Cohort A of the PARTNER trial studied 699 patients with severe, symptomatic aortic stenosis deemed at high risk for traditional open-heart surgery between May 2007 and September 2009. Data from the study revealed that the mortality rate in patients treated with either of the procedures were almost the same. Consequently, the authors of the study were in favor of using transcatheter aortic valve replacement (‘TAVR’) as an alternative to surgery in selected high-risk patients with aortic stenosis.
Edwards can also breathe a sigh of relief as the follow-up data from the PARTNER trial showed that difference in the risk of stroke between TAVR and surgery patients were not significant. This is noteworthy as earlier results had raised concerns that TAVR was responsible for increased early and, possibly, late strokes.
During 2012, Edwards expects to record THV sales of $560–$630 million, including $200–$260 million of sales in the US ($30–$40 million in the first quarter). The positive long-term data presented recently might go in the company’s favor during the Panel’s discussion. This is crucial as the company’s THV sales guidance assumes approval for the high-risk patient population by June 2012.
The development of the Sapien portfolio holds immense potential for Edwards as it provides surgeons the option to eliminate the possibility of open heart procedures. While the company has the first mover advantage in the US with its launch of Sapien in November 2011, the scenario in Europe is competitive with the presence of Medtronic ( MDT - Analyst Report ) and some other players. Although economic uncertainty in Europe (Greece, Italy and Spain) adversely affected Edwards’ THV sales during the last reported quarter, the situation is expected to improve gradually.
We have a Neutral recommendation for Edwards. The stock retains a Zacks #3 Rank (Hold) in the short term.
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