Edwards Lifesciences Commits to Fair Competition Amid Regulatory Scrutiny, Analyst Upgrades Stock

The European Commission conducted a surprise inspection at Edwards Lifesciences Corp's EW facility within a European Union member state due to suspicions of potential market power abuse, possibly infringing upon the EU's antitrust regulations. 

Edwards Lifesciences, a player in the global production of medical equipment for structural heart ailments, expressed its steadfast dedication to promoting fair and competitive practices in the industry.

"Edwards Lifesciences is cooperating with the European Commission regarding its inspection in relation to EU competition law," the company said in a statement to Reuters.

With the scrutiny undergoing, Oppenheimer upgraded Edwards Lifesciences' stock to Outperform from Perform with a price target of $90.

The analyst notes an attractive risk-reward profile at these levels. 

Concerns regarding GLP-1 (weight loss drugs) in relation to structural heart issues seem unfounded, especially in the short to medium term. 

Instead, investors should focus on potential setbacks involving SGLT-2 inhibitors and medications like Entresto that could slow down patient referrals.

Edwards has a substantial opportunity worth over $6 billion in the Transcatheter Tricuspid Valve Replacement (TTVR) sector, with EVOQUE providing a significant advantage as a pioneering product.

Anticipated interim results from TRISCEND-II are just a month away. 

The upgraded outlook is based on the assumption of positive findings in TRISCEND-II, which could pave the way for EVOQUE to obtain CE mark clearance by the end of 2023 and PMA approval by the end of 2024, serving as crucial catalysts for the company's growth.

Price Action: EW shares are up 0.83% at $70.04 on the last check Tuesday.