Edwards Lifesciences (NYSE:EW) topped the consensus forecast for its 4th-quarter earnings per share, but a delay in its replacement mitral valve program and lower-than-expected earnings guidance for 2014 sent the medical device company’s stock down slightly on Wall Street.
Edwards, which specializes in replacement heart valves, reported profits of $75.8 million, or 68¢ per share, on sales of $536.0 million during the 3 months ended Dec. 31, 2013, representing a 16.8% profit slide on 5.0% sales growth. Adjusted to exclude 1-time items, earnings per share were 91¢, well ahead of the 83¢ outlook on The Street.
Full-year profits rose 33.6% to $391.7 million, or $3.44 per share, on sales of $2.05 billion, for top-line growth of 7.7% in 2013.
"During 2013 we launched important new products, reported strong clinical data and made significant progress on several key development milestones that position us very well for sustainable future growth. Most importantly, even more patients are benefitting from our life-saving technologies than ever before," chairman & CEO Michael Mussallem said in prepared remarks. "Double-digit industry growth of transcatheter valve procedures in Europe, even after 6 years of commercial availability, validates our belief in the existence of a large group of untreated patients just now seeking treatment. We are also pleased with how our THV rollout is progressing in Japan and continue to believe the opportunity there is attractive. In the U.S., clinical sales were strong once again, driven primarily by the rapid enrollment of the Sapien 3 high-risk arm of the Partner II Trial. And, by year end, 290 sites in the U.S. were offering Sapien to their patients and maintaining high procedural success rates."
Mussallem said Edwards expects to post adjusted EPS in "a wide range around $3," on sales of $2.05 billion to $2.25 billion; The Street is looking for adjusted EPS of $3.07 on sales of $2.16 billion. First-quarter adjusted EPS are pegged at between 61¢ and 71¢ on sales of $$500 million to $550 million, compared with consensus expectations for EPS of 71¢ on sales of $525.6 million.
"We are disappointed that our first-in-human experience has not yet begun, as we are just now receiving the necessary regulatory approval to proceed. This has been the sole cause for delay and we expect to begin shortly," Mussallem added.
Asked about Neovasc’s announcement yesterday of the launch of its 1st-in-human mitral valve trial in Canada, Mussallem told analysts during a conference call that Edwards chose to run its pivotal trial "in places that have rigorous regulatory processes."
"Our compliments to them if they really do have some early success here. We chose to do our first in human in places that have rigorous regulatory processes and we got some questions related to the preclinical data, but we believe we’ve answered all the questions and really do believe that we’re going to begin shortly. So, we feel good about this. This is a big opportunity and we’re anxious to get started to find out just exactly where we stand. I think the competitive landscape there is 1 that will unfold probably pretty deliberately over time. I think it’s pretty tough to make a call where anybody is competitively at this stage of the game," he said. "We’re beautifully positioned but it is really hard to put timelines on it at this stage of the game. We really don’t have our first in human experience underneath our belt. And until we see what that looks like, we’re just not going to know what kind of timeline. You could think optimistically that if everything is perfect then you just keep going right to CE Mark, but you very easily could be in a redesign as well and we just don’t know the answers to those questions yet."
EW shares closed down 1.5% yesterday, at $64.17 apiece. The stock was up 0.1% to $64.26 per share as of about 11:10 a.m. today.