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Analyst: Edwards Lifesciences’ missed TAVI sales akin to U.S Ryder Cup loss

Losing the Ryder Cup this year to the Europeans was every bit unexpected. Almost as unexpected as Edwards Lifesciences suddenly pre-announcing late Monday that it would miss its 3rd quarter revenue forecasts largely because of poor sales growth for U.S. transcatheter aortic valve replacement procedures. Third quarter U.S. TAVI sales of $55 million were off […]

Losing the Ryder Cup this year to the Europeans was every bit unexpected.

Almost as unexpected as Edwards Lifesciences suddenly pre-announcing late Monday that it would miss its 3rd quarter revenue forecasts largely because of poor sales growth for U.S. transcatheter aortic valve replacement procedures. Third quarter U.S. TAVI sales of $55 million were off from analysts expectations by a hefty $13 million.

The humiliating and unanticipated loss of the U.S. golfing team to the Europeans is the analogy that Citi research analyst Amit Bhalla drew on in a research note to investors Tuesday alerting them to Edwards Lifesciences revenue shortfall. In a note entitled, “A Ryder Cup Performance by US TAVI, Lewis indicated that while company management expects a strong rebound in the fourth quarter, there are inherent risks involved.

Several reasons contributed to the revenue shortfall.  Austerity measures in Europe, especially in Southern Europe, hurt sales volumes as did a seasonal effect – the TAVI procedure requires a full heart team from Edwards to be present during each procedure, so summer vacations had a big impact on surgeries performed, the company said in a news release.

More importantly, Edwards Lifesciences was hoping to get a decision on a clinical design that would help it win reimbursement for TAVI procedures that did not use a transfemoral approach on inoperable patients who are involved in a clinical study. That didn’t happen so it couldn’t get a reimbursement it hoped to get.

Bhalla noted that “the negative impact from reimbursement was greater than we had expected,” but he did not change the “buy” rating he has on the California medical device maker’s stock price.

The company hopes that it will have a strong fourth quarter largely due to pending approval of the TAVI procedure for patients who are at a high risk for open heart surgery.

Meanwhile the surprise after-market close announcement from the company on Monday caught investors by surprise, who have been punishing the stock. In early afternoon trading on Tuesday, the stock was down 19.9 percent to $86

[Photo courtesy of Flickr user John Beagle.]