Edwards Lifesciences rises to all-time high

Associated Press

NEW YORK (AP) — Shares of Edwards Lifesciences Corp. advanced to all-time highs Wednesday after the heart device maker said it expects better annual sales of its Sapien heart valve.

Edwards raised its full-year profit forecast, and while it cut its overall sales estimates, the company said it expects greater sales of the Sapien transcatheter heart valve, particularly in the U.S. Sapien is designed to replace diseased aortic valves. The Food and Drug Administration approved the Sapien valve in November, and Medicare agreed to cover Sapien surgical procedures in May. An FDA panel suggested broader marketing approval for Sapien in June.

The Irvine, Calif., company said it now expects $550 million to $600 million in worldwide Sapien revenue in 2012, including about $240 million to $260 million in U.S. revenue. In April Edwards cut its estimates to $530 million to $600 million in worldwide Sapien revenue in 2012, with $200 million to $240 million from the U.S.

Edwards shares gained $5.80, or 5.9 percent, to $104.45 in afternoon trading. Earlier the stock reached an all-time high of $106.94. Prior to Wednesday's gains, the shares were up by nearly a third since its last earnings report in April.

The Sapien valve is usually inserted into an artery in the leg and then threaded into the heart. That's a less invasive procedure than open-heart surgery, the typical method for replacing diseased aortic valves. The FDA approved Sapien for use in patients who are too sick to have open-heart surgery, but the agency is considering approving the valve for patients who are healthy enough to have the surgery but still face serious health risks because of age or illnesses like diabetes.

Edwards reported its second-quarter results late Tuesday. It said revenue from transcatheter heart valves climbed 71 percent to $145.8 million worldwide, and U.S. Sapien revenue totaled $61.4 million.

Net income rose 17 percent to $67.8 million, or 57 cents per share, from $58.1 million, or 48 cents per share. Excluding one-time charges related to licensing agreements, the company said it earned 67 cents per share in the latest quarter. Analysts expected income of 65 cents per share excluding one-time items, according to FactSet.

Revenue grew 12 percent to $482 million from $431.2 million, falling short of the average analyst forecast of $489.2 million.

Jefferies & Co. analyst Raj Denhoy said the transcatheter valve business was "very strong," with U.S. sales of Sapien surpassing his expectations by about $15 million. He said growth in other markets was solid.

Edward now expects adjusted earnings per share of $2.60 to $2.68 in 2012, up from its previous estimate of $2.58 to $2.68 per share. It now projects $1.9 billion to $1.97 billion in revenue. In April the company said it expected $1.95 billion to $2.05 billion in revenue and said it would reach the low end of that outlook. The company said difficult global economic conditions and unfavorable foreign currency exchange rates have hurt its revenue.

Analysts were expecting $2.66 per share and $1.95 billion in revenue.

Earlier in the year Edwards forecast an annual profit of $2.70 to $2.80 per share. It also expected as much as $560 million to $630 million in worldwide Sapien revenue.

For the third quarter, the company forecast adjusted income of 57 to 61 cents per share and revenue of $465 million to $485 million. Analysts were expecting a larger profit of 65 cents per share and $483.4 million in revenue, on average.