Edwards Lifesciences Stock Tumbles, Highlights Slowdown In TAVR Business

Edwards Lifesciences Corp EW reported Wednesday second-quarter adjusted EPS of 70 cents, beating the consensus of 69 cents.

The sales increased 7% (+8% on constant currency) to $1.632 billion, below the consensus of $1.653 billion.

The company reported Transcatheter Aortic Valve Replacement (TAVR) sales of $1 billion, which grew 5%, or 6% on a constant currency basis.

Edwards’ competitive position did not meaningfully change globally, although the company experienced some regional pressures, and pricing was maintained.

The company also agreed to acquire JenaValve Technology, a company focused on the transcatheter treatment of aortic regurgitation (AR).

Edwards anticipates FDA approval of the JenaValve Trilogy Heart Valve System in late 2025, which will represent the first approved therapy for patients suffering from AR.

Building on an investment made in 2016, the company exercised its option to acquire Endotronix, a heart failure (HF) management solutions provider.

Last month, Endotronix received FDA approval for Cordella, an implantable pulmonary artery pressure sensor allowing early, targeted therapeutic intervention. A CMS national coverage determination is expected in early 2025.

Edwards anticipates these investments will strengthen its leadership in structural heart offerings and represent long-term growth opportunities. Edwards expects minimal revenue contribution from these acquisitions in 2025.

The aggregate upfront purchase price is approximately $1.2 billion.

Guidance: Edwards Lifesciences anticipates second-half TAVR sales growth similar to the first-half year-over-year growth rate, or 5%-7% full-year growth versus previous guidance of 8 to 10%.

For Transcatheter Mitral and Tricuspid Therapies, the company increased 2024 sales guidance to the higher end of the previous $320 to $340 million range.

The company remains confident in full-year Surgical sales growth of 6 to 8%; it expects third-quarter sales of $1.56 billion-$1.64 billion versus a consensus of $1.65 billion.

The company expects EPS of $0.67-$0.71 versus a consensus of $0.69

William Blair notes that U.S. TAVR growth fell short of expectations, with mid-single-digit growth primarily due to hospital workflow pressures rather than competitive impacts. Recent approvals of mitral and tricuspid devices have constrained interventional procedure workflow in cath labs.

While a headwind for TAVR, analysts believe this is “validating the procedural demand within TMTT.”

William Blair maintains an Outperform rating.

The analyst adds, “While we acknowledge investor focus in the near term remains on TAVR growth, we continue to see the potential for rapid sales growth in this multi-billion dollar market that is low single-digits penetrated.”

Price Action: EW stock is down 28.7% at $62.11 at last check Thursday.

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