NEW YORK (AP) -- Shares of Edwards Lifesciences Corp. rose Monday after a Credit Suisse analyst upgraded the stock based on the potential of a new heart valve device.
THE SPARK: Analyst Bruce Nudell raised his rating on the stock to "Outperform" from "Neutral" and his price target to $77 from $73. He said Edwards could get $250 million annually in revenue from transcatheter mitral valve replacement procedures by 2020.
THE BIG PICTURE: Edwards makes heart devices and other surgical products. It gets about a third of its revenue from a heart device called Sapien, which is designed to replace diseased aortic valves through a less complicated procedure than open-heart surgery.
Later this year the Irvine, Calif., company expects to start human trials of a transcatheter device designed to treat mitral valve regurgitation. Mitral regurgitation can cause blood to flow backward into the heart's left atrium leading to an irregular heartbeat, heart failure, a stroke or heart attack. The mitral valve is located between the left upper and lower chambers of the heart.
Chairman and CEO Michael Mussallem described the market as a big opportunity for Edwards.
Nudell said mitral valve problems are more common than the aortic valve conditions treated with the Sapien valve, but patients with mitral valve regurgitation are less likely to have surgery than aortic valve disease patients.
SHARE ACTION: Edwards shares gained $1.97, or 2.9 percent, to $69.17 in afternoon trading. Shares had dropped 37 percent from early October, when Edwards posted a disappointing sales outlook, through Friday.