Edwards Lifesciences stock lost almost a third of its value Thursday, undercutting the lower boundary of its base, after the medtech giant slashed its outlook for some heart-valve replacements this year.
The company now expects revenue from its transcatheter aortic heart-valve replacements to rise just 5% to 7% this year. Also known as TAVR, this is a means of replacing a faulty aortic heart valve without resorting to open-heart surgery. Previously, Edwards expected full-year sales to advance 8% to 10%.
The guidance cut follows a mixed second-quarter in which slow TAVR sales impacted the top line. Stronger sales in the transcatheter mitral and tricuspid therapies division partially help offset the TAVR slowdown. These include other nonsurgical means of replacing damaged heart valves.
On the stock market today, Edwards Lifesciences stock crashed 31.3% to 59.76. Shares were forming a flat base with a buy point at 96.12, but closed well below the lower boundary of that base, according to MarketSurge. Edwards stock hit its lowest point since April 2020.
Sales Miss, But Earnings Beat
Overall, sales grew 7% to $1.63 billion, narrowly missing expectations for $1.66 billion, according to FactSet. Adjusted earnings came in at 70 cents per share, a penny ahead of forecasts. Earnings grew more than 6% year over year.
TAVR sales advanced 5% in constant current to $1 billion, just below Edwards Lifesciences stock analysts' projections for $1.06 billion. Mitral and tricuspid sales came in at $83 million, helped by the introduction of the new Evoque system in the U.S. and Europe.
"Our vision for TMTT is becoming a reality and our strategic commitment has development into a growth portfolio of differentiated technologies," Chief Executive Bernard Zovighian said in a written statement.
The structural heart business — which includes surgical heart-valve replacements, brought in $264 million in sales, up 5% excluding the impact of exchange rates. To bolster this division, the company also announced the acquisitions of JenaValve Technology and Endotronix.
JenaValve is a leader in transcatheter treatment of aortic regurgitation, a type of heart-valve disease. Endotronix sells heart-failure management solutions.
Promisingly for Edwards Lifesciences stock, the company raised its outlook for the TMTT business. Edwards now calls for sales to come in at the high end of its guide for $320 million to $340 million.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
