Shares of Medtronic (MDT), Edwards Lifesciences (EW) and Boston Scientific (BSX) are trading lower after news that certain heart valve procedures were linked to higher death rates in a German patient registry.
GERMAN DATA SHOWS POOR PROGNOSIS: According to a Bloomberg report Monday, a German registry of nearly 6,000 patients treated for narrow heart valves between 2011-2013 was presented at the American Heart Association, showing a 16% mortality rate in intermediate-risk transcatheter patients at one year after adjusting for demographics, as compared to 11% of surgical patients. Researchers presenting the data cautioned that patient differences could account for the gap, according to Bloomberg.
EVERCORE QUESTIONS RESULTS: Responding to the news, Evercore's Vijay Kumar notes that all randomized, controlled studies to date have shown better mortality with transcatheter procedures, adding that he is "surprised" at the German registry data. Diving into slides from the trial, Kumar says the transcatheter patients in the study "had higher STS score, had higher Class III/IV heart failure patients, had higher AF, had higher prior MI, and lower kidney function," all of which were statistically significant. The sheer frailty of the patient group "seems to be a big deal to us, and possibly it biases results against TAVR," the analyst says, leading him to posit that the transcatheter group may simply have been a "systematically different" collection of patients. Moreover, the researchers' use of EuroScore "is a very important factor" given that that classification system is increasingly less relevant. Net-net, Kumar cautions investors that "we think these results cannot be interpreted at face value, and we think the stock reaction to the registry results are an overreaction."
PIPER NOTES STRONG PRIOR DATA: Calling the German data "surprisingly negative," Piper Jaffray's Brooks West highlights that the data are in "direct conflict with the strong randomized, independently adjudicated clinical data that was presented in April at the ACC conference" on Edwards' SAPIEN 3 product, which the analyst says supersedes the German registry. West is skeptical of the results and recommends investors buy shares on weakness. Piper Jaffray has Overweight ratings on all three stocks mentioned above.
PRICE ACTION: Shares of Medtronic, Edwards and Boston Scientific are down 3.75%, 4.3% and 3.5%, respectively, in afternoon trading.
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