CryoLife, Inc. CRY recently gained the CE Mark for its On-X Ascending Aortic Prosthesis (AAP) to treat dysfunctional native or prosthetic heart valves in the aortic position caused by the life-threatening ascending aortic aneurysm. This approval has allowed the company to restart its distribution in the European Union.
With associated aortic root diseases like ascending aortic aneurysm coexisting in nearly 10% of all aortic valve replacements, the latest is strategic for the company to strengthen its European foothold in the mechanical valve market.
On-X Heart Valve Business: A Glance
CryoLife’s On-X AAP is part of the company’s On-X Heart Valve portfolio. This portfolio includes both On-X Aortic Valve and ON-X Mitral Valve. Per the press release, the On-X Aortic Valve was the first prosthetic aortic heart valve to receive both FDA and CE Mark for labeling to permit use with a lower dosage of warfarin. This approval was based on the original PROACT trial outcome demonstrating greater than 60% reduction in bleeding events without increased risk of stroke.
The company’s On-X Mitral Valve, however, is currently in the process of getting regulatory go-aheads. It is completing enrolment in its PROACT (Lowered INR Mitral Arm) Prospective Randomized Clinical Trial, seeking a reduced warfarin indication.
This portfolio is particularly gaining huge market adoption contributing to the company’s top line significantly. In the fourth quarter, On-X revenues increased 18% on solid aortic valves sales, which were up 17%. Revenues in North America grew 5%, while sales outside the United States (OUS) markets climbed 45%.
With the addition of On-X AAP to the company’s portfolio, we expect this to inflate further. Meanwhile, Cryolife expects On-X revenue growth to remain in the high-single to low double-digits in the near term.
The company noted that since late 2016, its On-X AAP has been absent in the market. With the latest launch, coming with the best hemodynamics of any commercially-available valved conduit device, the company plans to resume selling the On-X AAP in the EU now.
Shares of CryoLife have appreciated 3.9% in the past year, as against the industry’s 8.2% decline.
Zacks Rank & Key Picks
CryoLife currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are ResMed Inc. RMD, Medtronic plc MDT and Hill-Rom Holdings, Inc. HRC.
ResMed has a projected long-term earnings growth rate of 12%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Medtronic’s long-term earnings growth rate is estimated at 7.4%. The company carries a Zacks Rank #2, at present.
Hill-Rom’s long-term earnings growth rate is projected at 11.1%. It holds a Zacks Rank of 2, currently.
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