Edwards Lifesciences hits all-time high on Sapien 3 study

Shares in Edwards Lifesciences (NYSE:EW) hit an all-time high yesterday after the company reported strong 1-year data for its Sapien 3 replacement heart valve over the weekend.

Results from the Partner II trial from 1,077 intermediate-risk patients showed that the Sapien 3 beat surgical valve replacement across a variety of safety endpoints, Irvine, Calif.-based Edwards said at the American College of Cardiology’s annual meeting April 3. The combined all-cause death & disabling stroke rate was 8.4% for TAVR with Sapien 3 and 16.6% for the surgery arm, according to the study, which was also published in The Lancet. The Sapien 3 device won a nod from the FDA in June 2015 for high-risk patients.

Expanding the indication to intermediate-risk patients would more than double the eligible patient pool, chairman & CEO Mike Mussallem told Reuters. That moved investors to send EW shares yesterday to an all-time high of $107.90, before the stock closed at $105.08.

The Partner II data on Sapien 3 showed all-cause mortality of 7.4%, compared with 13.0% for the surgical arm. The cardiovascular death rate was 4.5% for the TAVR arm and 8.1% for the surgical arm; rates of stroke were also lower for the transcatheter group, both in terms of all strokes (4.6% for TAVR, 8.2% for surgical) and disabling stroke (2.3% to 5.9%).

Analysts’ reactions were uniformly positive, which also fueled the buying. The Sapien 3 study results were as good, “if not better than anyone could have expected” and physicians’ response is expected to be “overwhelmingly positive,” J.P. Morgan analyst Michael Weinstein wrote in a note to investors.

“We talked about it being potentially game-changing and it was truly that,” Weinstein wrote. “We expect the treatment paradigm for intermediate-risk patients to change almost overnight and for the TAVR market to accelerate dramatically.”

“As data continue to accumulate supporting the use of percutaneous technology in lower-risk patients, the size of the opportunity continues to expand for TAVR technology,” Wedbush analyst Tao Levy told the Wall Street Journal. “In addition, we would expect patients who previously may have resisted the surgery due to the invasiveness of the procedure may now consider the benefits of replacing their aortic valve through a less invasive, percutaneous approach.”

That gives Edwards a significant edge, as it’s likely to have the only intermediate-risk TAVR on the U.S. market for at least a year, Leerink Partners analyst Danielle Antalffy wrote. Transcatheter valve replacement is slated to capture more than 90% of the intermediate-risk market over the next year to 18 months, Antalffy wrote, citing a pair of high-volume physicians, a cardiologist from the U.S. and a European cardiac surgeon.

“Both physicians believe that capacity is likely to expand driven by infrastructure expansion and procedure optimization as TAVR is already becoming a minimally invasive and lean procedure that can be conducted in cath lab or hybrid operating room (OR) without the need of an extensive team, as was the case in early days,” she wrote. “These physicians believe TAVR will eventually eliminate surgery in all severe aortic stenosis patients except the less than 20% of patients who require some sort of concomitant surgery.”

Mussallem told Reuters that Edwards expects the FDA to review the data behind its bid for an expanded Sapien 3 indication before the end of the year.

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