Hospital staffing problems persist: Transcatheter aortic valve replacement (TAVR) procedures, a minimally invasive surgery to replace a thickened aortic valve, make up Edwards Lifesciences’ largest segment. The division reached its highest ever sales in the quarter, but also saw the slowest growth in two years, analysts with investment banking firm Stifel wrote.
A lack of hospital staffing in the U.S. and shortages of contrast dye delayed some procedures, although the latter was resolved at the end of the quarter. It’s less clear when hospital staffing shortages will improve, especially as rising COVID-19 cases contribute to the problem.
CEO Mike Mussallem said the quarter was different from earlier phases of the pandemic, when patients had delayed procedures out of fear of getting sick.
“We feel like patients are entering the system now and are queued up to go through and there's just a lack of capacity in hospitals, in some cases to handle all the patients, and so that care is being postponed,” Mussallem said. “It is very concerning because we know these patients don't wait well and there are going to be some casualties.”
Pending approval: Edwards has focused on transcatheter mitral and tricuspid therapies (TMTT) as a driver of growth. So far, most of its sales are in the European Union, as its Pascal system for treating mitral and tricuspid valve disease currently has a CE mark. This makes the segment more susceptible to the strengthening U.S. dollar. Even though the segment grew in the quarter by revenue, the market for these procedures slowed.
“If you think about it on a short-term basis, the TMTT procedures are more resource intensive, they require general anesthesia, an ICU stay for the patient, so therefore, they have been impacted more than any other procedure that we know,” said Bernard Zovighian, corporate vice president for TMTT.
The company expects to get FDA approval and CE mark MDR approval of its newer Pascal Precision system by the end of the year.
Lower guidance: Edwards lowered its sales forecast for 2022 to between $5.35 billion and $5.55 billion. It had previously forecast sales of $5.5 billion to $6 billion. The company still expects earnings per share between $2.50 and $2.65, though the company indicated it may be on the lower end of that range. The changes were due to foreign exchange pressures and hospital staffing.
Edwards’ stock opened at $100.04 on Friday, down about 7% from Thursday’s closing price.