Edwards Lifesciences Corp. (WBMD), maker of the Sapien aortic valve, fell the most in six months after it forecast fourth-quarter earnings lower than analysts’ estimates and a rival heart valve reached the European market.
Earnings excluding certain items will be 81 cents to 85 cents, the Irvine, California-based company said today. The outlook was less than the 86-cent average 22 analysts’ estimates compiled by Bloomberg. Edwards declined 5 percent to $73.24 at the close in New York, its biggest decline since April 24.
Sales of the company’s Sapien valve, which is used to repair a damaged aortic valve in the heart without cracking open the chest, were slower than expected in the U.S. in the third quarter. The valve will soon be facing increased competition. Boston Scientific Corp. (BSX) said today it received approval for its Lotus heart valve, a second-generation device, in Europe, and Medtronic Inc. (MDT) plans to present data on its CoreValve at a medical meeting tomorrow.
“While the third quarter 2013 represents a usually seasonally weak quarter given lower procedure volumes in the summer months, the Street had been anticipating a U.S. transcatheter heart valve beat, which did not transpire,” said Danielle Antalffy, an analyst at Leerink Swann & Co. “Our sense is that an expected beat was a major driver of the stock’s recent run, with shares up almost 13 percent in the last four to six weeks.”
Third-quarter net income rose to $76.9 million, or 68 cents a share, from $69.2 million, or 58 cents, a year earlier, the company said in a statement. Revenue increased to $495.6 million from $447.9 million a year earlier, with sales of Sapien outside the U.S. beating analyst estimates.
A German court ruled rival Medtronic’s CoreValve infringed Edwards’ patent in July, though Sapien sales haven’t increased yet because of it, said Jason McGorman, an analyst at Bloomberg Industries in Princeton, New Jersey.
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