Surgical Heart Valve Therapy segment
Edwards Lifesciences (EW) expects its Surgical Heart Valve Therapy segment to report revenues of $780.0 million–$810.0 million in 2017. Based on a healthy demand in the first half of 2017, the company has updated its estimate for the underlying sales growth rate for surgical heart valves to 3.0%–4.0%, despite stiff competition due to the rapid adoption of transcatheter aortic valve replacement (or TAVR) therapy.
The above diagram shows the major headwinds and key growth drivers for Edwards Lifesciences’ Surgical Heart Valve Therapy segment in 2016 and 2017. Edwards Lifesciences is currently a leader in the $1.8 billion surgical aortic valve replacement space, ahead of other companies such as Abbott Laboratories (ABT), Medtronic (MDT), and Boston Scientific (BSX).
Performance in 2Q17
In 2Q17, the Surgical Heart Valve Therapy segment reported revenues close to $207.0 million, which is a YoY (year-over-year) underlying sales growth of around 6.0%. That was mainly due to the resumption of the mitral valve supply that was interrupted in 2016 as well as the solid demand for the company’s Edwards Intuity Elite valve system. Being a premium product, the Intuity Elite valve system has pushed up the average selling prices for devices in the Surgical Heart Valve Therapy segment. Since this platform significantly improves patient experience, it has been well received in around 200 US hospitals that offer this therapy. The company’s surgical aortic valves also continue to be used extensively in international markets such as Japan and China.
If the Edwards Intuity Elite valve system manages to offset the impact of the shift of patients from surgery to TAVR therapy, it may have a positive impact on Edwards Lifesciences stock as well as the stock of the Vanguard Total Stock Market ETF (VTI). Edwards Lifesciences makes up about 0.10% of VTI’s total portfolio holdings.