A conservative forecast for 2014 sent shares of Edwards Lifesciences (NYSE:EW) down more than 5% yesterday and kept them flat today, as the medical device company said it expects more competition next year for its flagship Sapien replacement heart valve.
At its annual investor conference yesterday, Edwards said it expects worldwide sales for the Sapien transcatheter aortic heart implant to be between $700 million and $820 million, a good $20 million shy of expectations on Wall Street. Adjusted earnings per share are slated to be $3.00-$3.10, Edwards said.
“While patient demand for our Sapien transcatheter valve therapy remains strong worldwide, Edwards will face new competition in the U.S. and Europe early in 2014. With the uncertain timing of these competitive entries, as well as the regulatory approvals of our own next-generation technologies, we are providing a wide range of forecasted THV sales,” chairman & CEO Michael Mussallem said in prepared remarks.
Edwards said adjusted EPS are pegged at “a wide range” around the $3.00 mark, on total sales of $2.05 billion to $2.25 billion.
The news sent EW shares down 5.4% to a $62.73 close yesterday. The stock was trading at $62.17 apiece today, down 0.9% as of about 2:20 p.m.
Medtronic is expected to win U.S. approval for its CoreValve device for extreme-risk patients early next year, with a nod for high-risk patients perhaps following later in 2014.
In October, Boston Scientific’s Lotus valve won CE Mark approval in the European Union and went on the market in Germany the next month. St. Jude’s Portico device is also on the market across the pond, having won CE Mark approval back in November 2012.
Leerink Swann analyst Danielle Antalffy said the 2014 guidance sets Edwards up to be able to deliver on its promises.
“While guidance is clearly disappointing – particularly on [transcatheter heart valves] and EPS – we believe EW has now set significantly more achievable goals that better position the company to deliver at least in-line results,” Antalffy wrote yesterday in a note to investors. “We continue to believe the longer-term market opportunity is large and highly underpenetrated. Not only are there many potential patients still not receiving therapy, but the patients receiving [TAVI] are not cannibalizing the surgical valve opportunity based on the European experience – pointing to a potentially still sizeable opportunity in the U.S.”