Edwards Lifesciences stock jumped Wednesday after Boston Scientific said it would stop selling its rival heart-valve replacement systems.
The systems called transcatheter aortic heart-valve replacements, or TAVR, are means of replacing faulty heart valves without resorting to open-heart surgery. But Boston Scientific faces a murky regulatory path to approval in the U.S. after its recent clinical study failed. Sales of its devices, Acurate neo2 and Acurate Prime, likely faltered in Europe following the study failure, Needham analyst Mike Matson said.
"Management felt that the increased clinical evidence and regulatory hurdles needed to maintain product approvals globally for Acurate would not be worth the investment," he said in a report. "More specifically, BSX noted that the path to approval in the U.S. was unclear and the approval requirements in Europe would be even greater."
Boston Scientific stock dipped 1.6% to 104.53, while Edwards Lifesciences stock advanced 0.6% to 76.66. Medtronic inched a fraction ahead to 81.25, while shares of Abbott Laboratories dipped 0.7% to 132.06, reversing from an earlier advance. Medtronic and Abbott both make similar systems.
Edwards Lifesciences Stock Jumps On Boston's Setback
Boston Scientific had around $200 million in TAVR sales in 2024. The neo2 system received its CE Mark of approval in April 2020 and began a controlled launch in September that year. Its Prime system received its CE Mark last August.
But in October, a study published in The Lancet showed that Acurate neo2 to show it's non-inferior to Edwards Lifesciences' and Medtronic's TAVR systems. The rate of mortality, stroke and hospitalizations in patients treated with Boston Scientific's devices was 16.2% vs. 9.5% for the rival systems.
"Management has been cautious on its FDA strategy," Evercore ISI analyst Vijay Kumar said in a report. "That said, discontinuation of EU sales was a surprise for us."
But he kept his outperform rating on Boston Scientific stock, noting the news should be a "positive" for Abbott and Medtronic, and a "small relief" for Edwards Lifesciences stock. Abbott's and Medtronic's TAVR systems are priced competitively with Boston Scientific's, while Edwards' carries a premium price.
Notably, Boston Scientific kept its outlook for full-year adjusted earnings and sales.
Needham's Matson rates Boston Scientific stock a buy with a 115 price target. He said any weakness in shares today should be viewed as a "buying opportunity." He cited the potential for upside from Farapulse and Watchman. Both treat forms of atrial fibrillation.
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