MedTech Losers of 2013: Edwards Lifesciences

Edwards Lifesciences
The U.S. heart valve market is forecast to grow to $1.5 billion by 2016, with transcatheter aortic valve replacement(TAVR) as the primary driver, according to a 2012 report by Millennium Research Group. So, the first company to market in the U.S. with a TAVR product is sitting pretty right now. Or so you would think. But a painstaking and what some dubbed overly cautious launch of the Sapien heart valve, which was approved in November 2011, has jeopardized Edwards Lifesciences's market share as the competition gears up for expected rollout in the U.S. in the first half of 2014. Because of the high risks associated with the TAVR technology, Edwards took a much more systematic and cautious approach to the launch than is normal is the medical device industry. "In addition to vetting medical centers and their doctors, Edwards has hired a sales force of about 60 that it is paying based on successful procedures, rather than sheer volume," according to a February 2012 Wall Street Journal article. "And it is demanding significant upfront investments in surgical infrastructure from hospitals it agrees to work with."

Slow and steady may not win the race, though. In November, Medtronic announced that it would launch the competing CoreValve in the United States one year earlier than analysts expected. The rising threat from Medtronic coupled with slower-than-expected adoption rates of the Sapien likely has Edwards in the hot seat. "Edwards Lifesciences continues to fumble the U.S. launch of Sapien," notes Glenn Novarro, managing director, medical supplies and devices, at RBC Capital Markets. "[Its] first-mover advantage over Medtronic was reduced when Medtronic announced a sooner-than-expected U.S. approval."