(Adds CEO comments from conference call)
By Susan Kelly
Oct 28 Edwards Lifesciences Corp on
Monday reported higher-than-expected quarterly earnings, but
investors were disappointed with the pace of U.S. sales of its
newest artificial heart valves, sending its shares down more
than 4 percent.
U.S. sales of those valves, which are implanted in a
less-invasive procedure than traditional open-heart surgery,
were $86 million in the third quarter, up about 56 percent from
a year ago, but a little short of what investors were expecting.
Edwards was first on the U.S. market with the alternative
approach to heart valve replacement when it introduced its
Sapien transcatheter device in late 2011. The valves are
threaded into place through an artery via a catheter.
But adoption of the product has been slower than expected
due to the weak economy, time involved in training doctors on
the procedure, and concerns about the cost of the technology.
Analysts asked on a conference call whether sales of
transcatheter valves might be reaching a plateau.
"We still have a young procedure that we believe is getting
considerably better on a consistent basis," Edwards Chief
Executive Officer Michael Mussallem said on the call, "so we
think that's really what will provide the underlying lift for
continued growth next year."
The implants have demonstrated high success rates, with
about 15,000 U.S. patients receiving Edwards' transcatheter
valves over the past two years, he said.
Edwards, based in Irvine, California, said its third-quarter
net income rose to $77 million, or 68 cents per share, from $69
million, or 58 cents per share, a year earlier.
Analysts on average had expected a profit of 66 cents per
share, according to Thomson Reuters I/B/E/S.
Overall sales, which include surgically implanted heart
valves, rose 11 percent to $496 million. Sales of transcatheter
heart valves alone climbed 39 percent to $172 million, boosted
by strong growth in Europe.
"While we view these results as good, we believe
expectations heading into the quarter were relatively high," BMO
Capital Markets analyst Joanne Wuensch said in a note to
Edwards confirmed its full-year outlook for earnings of
$3.00 to $3.10 per share, excluding special items, on sales of
$2.0 billion to $2.1 billion.
The company said the full-year forecast assumed U.S. sales
of its transcatheter heart valves would be at the low end of its
previous expectations of $350 million to $400 million.
Edwards said it still expected mid-2014 U.S. approval for
its next-generation Sapien XT transcatheter valve.
Shares of Edwards were down 4.3 percent at $73.75 in midday
(Reporting by Susan Kelly in Chicago; Editing by Lisa Von Ahn
and Maureen Bavdek)