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Leading medical-device maker Edwards Lifesciences ( EW ) jumped in early trading Monday, a day after its artificial heart valve passed a hurdle that could greatly expand its market. Edwards conducted a large clinical trial comparing its transcatheter aortic valve replacement (TAVR), Sapien 3, to traditional open-heart surgical valve replacement in patients with aortic stenosis, or shrinking of the aortic valve of the heart, who were characterized as “intermediate risk” for open-heart surgery. The study followed up on patients 30 days after surgery and again a year later, and it found that deaths and strokes were both significantly lower in the Sapien group. Sapien 3, which is delivered via catheter through a small incision in the patient’s thigh, was approved in June 2015 for patients who were at high risk if they had open-heart surgery. Adding the intermediate-risk population to the patient pool led several analysts to hike their sales estimates for the product. “We estimate the patient population could increase 50% to 150,000 to 200,000, including intermediate-risk patients,” wrote Canaccord Genuity analyst Jason Mills in a research note, as he raised his price target on Edwards Lifesciences stock to 113 from 95. “We increase our Edwards 2016 sales estimate to $2.796 billion from $2.779 billion and pro forma EPS forecast to $2.72 from $2.68. For 2017, our top-line projection increases to $3.1 billion from $3.06 billion and pro forma EPS to $3.21 from $3.09.” Edwards stock was up 18% in morning trading on the stock market today , hitting a new lifetime high of 106.10. The stock was already doing well, ranking at No. 23 on the IBD 50 and also rating a spot on IBD’s Leaderboard . It’s 27% over an 83.53 buy point, and thus in the profit-taking zone. The news also led analysts to lift their estimates for the entire TAVR market, which is currently split between Edwards’ Sapien and Medtronic ‘s ( MDT ) CoreValve. Leerink’s Danielle Antalffy raised her estimate for the global market in 2021 to $4.8 billion from $4.4 billion. “With Edwards’ Sapien 3 likely the only valve available in the intermediate-risk patient population for at least the next 12 months, we assume the majority of the incremental market opportunity benefit falls to Edwards,” Antalffy wrote in her research note, in which she raised her price target on the stock to 115 from 93. BTIG analyst Sean Lavin upgraded the stock to buy from neutral, with a price target of 115. Medtronic stock was up more than 1% in morning trading, near 76. Scalper1 News
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