Japanese Reimbursement for EW Valve - Analyst Blog
23 August 2013 - 1:00AM
Zacks
Edwards Lifesciences
Corporation (EW) recently disclosed the approval of
Japan's Central Social Insurance Medical Council (Chuikyo) to
provide reimbursement for the Edwards Sapien XT transcatheter
aortic heart valve in the country. The reimbursement in Japan will
be effective from Oct 1, 2013.
Notably, Edwards gained reimbursement approval for Sapien XT within
its expected timeframe (before the end of 2013). The expert review
panel at the Japanese Ministry of Health, Labor and Welfare (MHLW)
recommended the establishment of reimbursement for Sapien XT.
Earlier, in June, the company had won the regulatory clearance for
the Sapien XT valve.
Following the approval, Chuikyo established a reimbursement of 4.53
million yen (roughly $4,600 at current exchange rate) for the use
of Sapein XT valve in patients with severe symptomatic aortic
stenosis. Generally, the reimbursement rate in Japan covers the
cost of the medical device and associated taxes, certain hospital
fees as well as the distribution expenditure.
As reported earlier, Edwards plans to begin the complete launch of
the product following the reimbursement approval. This makes Sapien
XT the foremost commercially available transcatheter aortic heart
valve in Japan. The launch should bolster the company’s foothold in
the country. Edwards expects Sapien XT to significantly leverage
top line going forward.
Other Updates on Sapien XT
While Sapien XT is still under regulatory review in the U.S., it is
the leading transcatheter aortic heart valve in the European
market. Positive data from post-approval studies across Europe
continues to demonstrate the clinical competency of the Sapien XT
valve. Meanwhile, the company continues to enroll patients in the
intermediate risk cohort (Cohort A) of The Partner II Trial in the
U.S. The enrollment is expected to complete in October.
With submission of Cohort B clinical results from The Partner II
Trial for the U.S. Food and Drug Administration (FDA) pre-market
approval in late April, Edwards envisages the U.S. approval to come
through in mid-2014.
Our Take
Considering that aortic stenosis is a potentially fatal disease and
mostly remains untreated in patients, we expect Edwards to
meaningfully expand its addressable market with the market launch
of Sapien XT. According to findings, the incidence of the disease
is higher in older populations. With a sizeable aging population in
Japan, we believe that the country presents a lucrative market for
Edwards’ valve.
We note that Edwards reported poor sales performance in Japan in
the most recent quarter. Sales in Japan in the second quarter of
2013 decreased 0.6% (at constant exchange rate) to $59.3 million.
We believe that the company can turn around its performance in
Japan following the commercialization of Sapien XT and other such
product launches. Moving forward, the company should gain momentum
in the country.
Currently, the stock carries a Zacks Rank #3 (Hold). While we
remain on the sidelines for Edwards, other medical stocks such as
Gilead Sciences Inc. (GILD), Affymetrix
Inc. (AFFX) and Alere Inc. (ALR),
carrying a Zacks Rank #1 (Strong Buy), are worth considering.
AFFYMETRIX INC (AFFX): Free Stock Analysis Report
ALERE INC (ALR): Free Stock Analysis Report
EDWARDS LIFESCI (EW): Free Stock Analysis Report
GILEAD SCIENCES (GILD): Free Stock Analysis Report
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