By David Wainer
It's never a good thing when your biggest product disappoints investors.
Edwards Lifesciences, the largest maker of minimally invasive heart valve replacements, was down 28% on Thursday, the biggest decliner in the S&P 500 index. The steep drop was largely thanks to a slowdown of its transcatheter aortic heart-valve (TAVR) business, which generates roughly two-thirds of revenue. TAVR is a procedure that allows patients to avoid open heart surgery to replace a damaged valve.
The company announced in an earnings report after the market closed Wednesday that it now sees revenue from its heart valve business growing 5% to 7% this year, down from its previous forecast of 8% to 10%. In the second quarter that business grew by 5%, which was far below what analysts polled by FactSet expected.
Investors have been debating whether the valve replacement market is facing a slowdown, and in particular whether Edwards, which has about 73% percent of the market, is seeing competitive pressure from other device makers like Medtronic, Abbott and Boston Scientific. The disappointing earnings results cemented concerns that the business is growing at a slower clip, with several analysts on Thursday cutting their price targets for the company.
During a call with analysts, the company sought to make the case that the slowdown is a capacity issue. "I think it's just a matter of the workflow right now," said Larry Wood, head of the TAVR unit. "And we need to be able to engage with hospitals," he said, noting patients are waiting longer as capacity issues are sorted out.
Investors clearly didn't take heart from those comments.
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(END) Dow Jones Newswires
July 25, 2024 12:30 ET (16:30 GMT)
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