Medical device companies are battling low utilization, economic uncertainty in Europe and headwinds in the U.S. in the form of the medical device tax and changes wrought by healthcare reform.
In the midst of it all, Edwards Lifesciences (NYSE:EW) showed that the launch of its highly anticipated Sapien transcatheter valve implantation system could not have gone better. Especially given the context that the procedure that is clinically highly effective also requires a lot of physician training.
In the quarter ended June 30, the Irvine, California company garnered $145.8 million in transcatheter heart valve sales, $61.5 million of which came from U.S. sales of Sapien alone. The total sales show a 71 percent increase from the same period a year ago. That’s the kind of growth that medical device companies can only dream of these days.
“Even in a challenging environment, we reported strong growth in sales driven by the continued success of our U.S. transcatheter heart valve launch,” said Edwards Lifesciences’ chairman and CEO Michael Mussallem, in a conference call with analysts. “As the number of U.S. Sapien procedures grows rapidly, we are extremely pleased with the high procedural success rate being achieved.”
In the U.S., sales of Sapien increased from $41 million in the first quarter to $61.5 million.
Analysts noticed the robust performance.
“You had a really strong quarter in Sapien sales in the U.S. in particular and globally it was a strong performance,” said Mike Weinstein of JP Morgan.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Bruce Nudell, an analyst with Credit Suisse was even more explicit in his praise.
“Mike, terrific launch clearly,” Nudell told the CEO, in reference to the U.S. launch of Sapien, which won approval late last year.
Currently, Edwards is waiting for U.S. regulatory approval to market Sapien to patients who are considered high risk in terms of undergoing open heart surgery.
The performance of Sapien in the U.S. should be music to the ears of Medtronic given how there was anxiety about Sapien’s rollout. The Minnesota medical device company is developing the CoreValve, a competing device, expected to be launched in 2014.
