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Edwards Lifesciences Capitalizes on Valve Replacement Market

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Aug. 31 2016, Updated 5:04 p.m. ET

Edwards Lifesciences market position in TAVR market

Edwards Lifesciences (EW) is the largest player in the TAVR (transcatheter aortic valve replacement) market. The company’s THV (transcatheter heart valve) Therapy segment contributed approximately 55% to the company’s total sales in 2Q16. The segment reported stellar YoY (year-over-year) growth of around 48% in 2Q16. The United States sales witnessed strong growth of around 66%, whereas the international sales growth was around 23% on a YoY basis. 

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Edwards Lifesciences’ Sapien TAVR valves are the leading TAVR products with close competition from Medtronic’s (MDT) CoreValve. Boston Scientific’s (BSX) Lotus Valve system and St. Jude Medical’s (STJ) Portico are TAVR products that are currently under trial. The Vanguard Growth ETF (VUG) invests approximately 0.27% of its total holdings in Edwards Lifesciences.

FDA approval of extended use of Sapien products

Until recently, Edwards Lifesciences’ Sapien 3 and Sapien XT devices were recently approved to be used for high-risk patients only. On August 18, 2016, Edwards Lifesciences announced FDA approval for the extended use of its Sapien 3 THVs by intermediate risk patients. The intermediate risk patient population constitutes around 35%–40% of the total population base, whereas only 10%–15% of the total market consists of high-risk patients. Thus the extended use approval presents significant growth opportunities to Edwards Lifesciences in the TAVR market. Moreover, the fact that the company has the only TAVR device approved for use in intermediate risk patients will make it indispensable for hospitals using TAVR products for the treatment of heart patients. Thus, this device is expected to contribute significantly to the company’s revenue growth.

Medtronic’s CoreValve TAVR is also undergoing trial to evaluate its use by intermediate-risk patients. The company expects to see results of the trial in 2017. Thus, Edwards Lifesciences has no potential competitor in this market segment at least until next year.

Next, let’s discuss the recent FDA approval of Edwards Lifesciences’ Intuity Elite heart valve.

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