Edwards slides on heart valve stocking questions

Edwards Lifesciences shares slide as analysts debate impact of heart valve restocking orders

Associated Press

WASHINGTON (AP) -- THE SPARK: Shares of Edwards Lifesciences fell more than 5 percent in trading Tuesday on investor questions about the role that hospital restocking orders played in the company's better-than-expected fourth-quarter results.

THE BIG PICTURE: Late Monday the Irvine, Calif.-based medical device maker reported fourth-quarter earnings led by sales of its easy-to-implant Sapien artificial heart valve. The device is the first artificial aortic heart valve that can be implanted without chest-opening surgery. The company posted Sapien sales of $238 million for the quarter, with about $16 million of that attributed to inventory stocking. That figure was higher than expected and analysts debated whether it demonstrated pent-up demand for the device or a one-time boost that would actually mean lower sales in coming quarters.

THE ANALYSIS: Stifel Nicolaus analyst Rick Wise said in a research note that the stocking purchases could be viewed "as a healthy sign of continued U.S. adoption." But he also added that the stocking purchases "will likely reverse to a drag" in the second half of the year. Still, Wise maintained a "buy" rating on the company's shares with a price target of $113.

SHARE ACTION: Shares of Edwards Lifesciences Corp. fell $6.08, or 6.5 percent, to $86.98 in afternoon trading.

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