While Edwards Lifesciences reported first-quarter sales growth of 14%, the structural heart company saw a steep drop in procedure volume in the last few weeks of the quarter due to COVID-19.

"As you might expect, procedure volumes in March varied greatly by geography, even by hospital, as patients and providers turned their focus to the pandemic," CEO Mike Mussallem said during the company's first-quarter earnings call, according to a SeekingAlpha transcript.

Mussallem said the company expects the impact of COVID-19 on its transcatheter aortic valve replacement (TAVR) sales to be most severe in the second quarter, followed by a gradual recovery in the third quarter, and a fourth quarter that more closely resembles the company's original expectations.

"Although we're encouraged by recent news of improving infection rates from COVID-19, we also recognize the high degree of continued uncertainty in terms of hospital procedure volumes," Mussallem said.

The Irvine, CA-based company now expects global TAVR sales growth for 2020 to be flat compared to 2019, plus or minus 5%. Prior to COVID-19, Edwards expected to see its TAVR sales grow 15% this year. That said, Mussallem reaffirmed the company's confidence that the global TAVR market opportunity will exceed $7 billion by 2024.

As a safety precaution during the pandemic, the company has paused proctoring for its newest transcatheter valve, the Sapien 3 Ultra, at centers that are not already trained the device. Mussallem said Edwards will resume the Sapien 3 Ultra rollout as soon as the environment becomes more stable in terms of COVID-19. The company has also temporarily paused new enrollments in its mitral and tricuspid clinical trials.

Will procedure volumes really be back to normal in Q4?

The prediction that the fourth quarter will be relatively normal in terms of sales seemed to surprise some analysts on the earnings call.

"What are the things that sort of informed your view that we'll be all the way back to a normal quarter in Q4, despite this kind of once-in-a-lifetime, once-in-a-generation event we're going through right now," asked Bob Hopkins, a medtech analyst at Bank of America. "What are the data points that gave you that confidence that by Q4 you'll be all the way back to normal?"

Mussallem said that while it is a challenging time to estimate revenues, the company is starting to see positive signs already.

"... We hear people preparing themselves to start recovery. And we know that that's going to take some time. We also know that the diseases we treat are very serious and that we expect those diseases are not easy to postpone," Mussallem said. "And we know that many of the patients that might have been treated in Q1, Q2, and so forth, might indeed be treated in Q4. And so, the combination of those factors encourages us to say that we’re likely—and again, there's a broad range of possibilities—but we’re likely to be in a more typical volume situation in Q4."

David Lewis, a medtech analyst at Morgan Stanley, pointed out that a lot of investors are assuming that if the fourth quarter is going to be normal, that probably implies some sense of procedure recapture. But given the age of valve replacement patients and factoring in the low-risk referral channel for TAVR, he asked Mussallem to what extent investors should be concerned about disruption to that referral channel, "just considering the age of that patient and their willingness to re-access the system in a post-COVID world."

"One thing for sure, David, is our patients were scared," Mussallem said. "They're afraid of COVID and it's meant that they have, in many cases, decided to stay home. So, there's many factors that influence the recovery. But if you do think of it as a bowl, as a funnel, there's been a bunch of patients that are waiting. So, beginning the screening process again, that really needs to begin months in advance of the fourth quarter, is going to be key. It's going to be a big effort by the whole community. But I think the community is going to come to grips with the fact that these heart valve patients, and [aortic stenosis] patients in particular, really need to be treated, and that they're in a dangerous situation, and we think that they are going to respond to that."

Right now, he added, the screening rates have not returned to prior levels or even anywhere close to prior levels. But, he said, the company does anticipate that will happen.

Citigroup's Joanne Wuensch also questioned the thought process for anticipating a normal fourth quarter.

"Because we have been trying to think about, okay, patients who are deferred now, at what stage should they come back into the system? And the answer may be at the end of the year, 2021 or, sadly, never," Wuensch said.

"So, this is a really tough time for patients. And ultimately, there may be some structural heart patients who’ve delayed the treatment who never get treated. And just because of the deadly nature [of their disease], some are not likely to survive," Mussallem said. "If you just run the numbers here, it gets to be an extraordinarily large group of patients and that distresses us greatly."

So, are patients dying because of deferred TAVR procedures?

Mussallem said the company is aware of some patients who have died on the waiting list for TAVR because their procedure was postponed due to COVID-19. One analyst on the call, however, shared a more optimistic viewpoint on the recovery curve because of the progressive and life-threatening nature of aortic stenosis.

SVB Leerink's Danielle Antalffy said that in his checks with physicians he is hearing that most of the urgent patients, meaning those whose disease is expected to progress so much over the next few months that they will either be hospitalized anyway or die waiting for the postponed procedure, are still getting their TAVR procedures today, despite COVID-19.

Mussallem confirmed that Antalffy's checks are correct and that some of the most urgent TAVR cases are still happening, but it is a much lower number than what it would have been without the pandemic.

"We know that many [aortic stenosis] patients do not get treated. And that's actually one of the reasons why we are so enthusiastic about our work because we can get after this population that's not treated. So that pool of untreated patients just gets bigger, and we know that there is mortality associated with that."

How quickly will TAVR procedures ramp back up, after COVID-19?

Matt Taylor, a medtech analyst at UBS, asked Mussallem if physician customers have indicated how they plan to triage the patients whose procedures have been deferred due to COVID-19, and how they plan to move toward a more normal procedure volume for structural heart cases. The answer, Mussallem said, varies a great deal by region because some places have been hit harder by COVID-19 than other places, but his comments suggest that a lot of U.S. doctors are eager to get back to the operating room.

"You know, hospitals are very dependent on doing procedures to be able to maintain their income, and they also know that there are patients out there with real needs, and so they want to get back to it," he said. "There are various state regulations that they need to work through and then there's just a lot of machinery to start again."

In terms of transcatheter heart procedures like TAVR, patients have to go through the screening process all over again before they can have their procedure, if it was deferred due to COVID-19 Mussallem explained. He also emphasized the fact that the whole screening-procedure system has come to a screeching halt during the pandemic.

"And so that's the restarting of the system that's going on right now," he said. "And it's going to take some time, but I think people are clearly motivated to get it going, and it is going to be highly variable, depending on where you are."

One thing the TAVR system has going for it in terms of restarting that system is the fact that TAVR patients don't usually require an ICU bed, and the length of stay in the hospital is short. In some cases, patients are able to go home the next day.