- Edwards Lifesciences on Thursday said sales climbed 14% to $1.1 billion in the first quarter, exceeding analyst expectations, even as heart valve procedures fell dramatically in the final weeks of the period.
- Executives predicted the worst impact from the postponement of surgeries due to the coronavirus pandemic would be felt in the second quarter. However, Edwards anticipates a gradual recovery in sales of its transcatheter aortic valve replacement systems in the third quarter, followed by a return to more typical volumes in the fourth quarter.
- The company has stopped enrollment in its mitral and tricuspid valve pivotal clinical trials due to the COVID-19 crisis and expects a significant hit to those procedures in the second quarter, as they require general anesthesia and a stay in the intensive care unit, CEO Michael Mussallem said. The rollout of the Sapien 3 Ultra transcatheter aortic valve has also been paused at centers not already trained to implant the device.
Edwards' quarter was off to a strong start before the pandemic disrupted the healthcare system and federal guidelines called for the suspension of elective procedures. Fueled by an expansion of the patient pool to include those at low risk for open heart surgery, sales of its transcatheter aortic valves grew 24% in the first quarter. U.S. TAVR sales rose 30% from the year before.
The company's first-quarter results outpaced those of medtechs whose devices are used in procedures that are more readily postponed. Johnson & Johnson, Medtronic and Intuitive Surgical, for example, have all reported experiencing a hit to their businesses from the pandemic.
Edwards' sales were running ahead of expectations at the start of the quarter, company executives said on Thursday's earnings call with analysts. However, in the last few weeks of March, TAVR procedures dropped precipitously, Mussallem said. "We've watched the system really screech to a halt," he added.
As a result of the pandemic's impact, the company reduced its total 2020 sales guidance to a range of $4 billion to $4.5 billion, down from its earlier projection for sales of $4.6 billion to $5 billion. For the second quarter alone, Edwards projects sales to be between $700 million and $900 million.
Still, Mussallem said the company is expecting a recovery to begin in the third quarter, given that heart valve treatment is difficult for patients to postpone for long. "I think the community is going to come to grips with the fact that these heart valve patients, and (aortic stenosis) patients in particular, really need to be treated," he said.
William Blair analysts made a similar prediction in an investor note, citing recent interviews with doctors and surveys make it "confident in an eventual rebound."
The CEO gave an update on a mitral valve repair device called Harpoon, now available commercially in Europe. Edwards plans to launch the product as soon as the healthcare environment stabilizes. The company recently received FDA approval to begin enrollment in a U.S. pivotal investigational device exemption study in the second half of 2020.
Edwards plans to share early data on its Evoque tricuspid replacement valve in development, as well as its Pascal mitral valve repair system, in conjunction with the EuroPCR cardiology meeting scheduled for May, according to Mussallem.