- Like other medtechs that have reported so far this earnings season, Edwards Lifesciences saw procedures recover after a January surge in COVID-19 cases hampered hospital capacity. CEO Michael Mussallem told investors during a Tuesday earnings call that procedure volumes, especially in the U.S., “were moderately better than our expectations” for the first quarter.
- The company reported revenues of $1.34 billion for the first quarter, up 10% year over year, beating Wall Street’s expectations. Its net income was $373.6 million, a roughly 10% increase, with its earnings per share also above consensus.
- Despite the earnings beat, Edwards’ stock was down slightly on Wednesday morning. SVB Securities analysts chalked this up to the company’s conservative guidance for the second quarter. Edwards expects sales of $1.36 billion to $1.44 billion in the second quarter, with growth in sales partially offset by foreign exchange rates. For the full year 2022, Edwards is keeping its guidance of $5.5 billion to $6 billion in sales, including an estimated $170 million negative impact related to foreign exchange.
Edwards saw double-digit growth in sales of its transcatheter devices in the first quarter, as procedure volumes started to recover after the omicron-driven surge in COVID-19 cases.
“We felt like we got off to a slow start in Q1, and then recovered and had some pretty good momentum,” Mussallem said during the earnings call.
The company brought in $881 million from sales of its transcatheter aortic valve replacement (TAVR) devices, which are used to replace the aortic valve in a minimally invasive procedure. The segment, Edwards' largest, grew 11% compared to the first quarter of 2021, with procedure volumes estimated to grow at a similar rate.
Stifel analysts noted that TAVR procedures outside of the U.S. grew at a faster pace than U.S.-based procedures, seeing a 20% increase year-over-year.
Sales of Edwards’ Pascal platform, which is used to treat mitral and tricuspid valve disease, increased 65.5% year over year, for a total of $27 million in revenue. Most of this was driven by continued adoption in the European markets, where the devices are CE marked.
In the U.S., Edwards said it is on track for approval of its Pascal Precision platform for patients with degenerative mitral regurgitation late this year. For all of 2022, the company expects to see transcatheter mitral and tricuspid therapies (TMTT) sales of between $140 million and $170 million.
Mussallem said Edwards expects to set an all-time record for TMTT sales in the second quarter, and that the segment is “really going to take off in the second half.” For TAVR procedures, the company expects a continuous ramp in subsequent quarters.
Even with the better-than-expected sales, Edwards’ management still cautioned that hospitals are not yet back up to full operating capacity since the pandemic.
“We’re not sure that U.S. hospitals have fully recovered from COVID,” Mussallem said. “There's still a bit of a hangover of protocols. And, more importantly, this issue that relates to the significant labor crunch and churn in the workforce is meaningful.”
The CEO added that there’s a small patient backlog, but much less than in 2021. Company leadership had less to say about supply chain constraints.
BTIG analysts wrote in a research note that Edwards has “managed supply chain constraints well, but nodded toward inflationary and labor cost pressures.”