(By Balachander) Atleast two brokerages have raised their price targets on Edwards Lifesciences Corp. (NYSE:EW) after the company received a positive FDA panel recommendation on Sapien transcatheter heart valve (THV) for use in high risk surgical patients.
On Wednesday, the FDA advisory committee voted in favor of recommending Edwards' SAPIEN device for approval on the basis of safety and efficacy, and that the benefits outweigh the risks in patients who meet the criteria specified in the proposed indication.
The stock rose as much as 9.2 percent, near to its 52-week high on Thursday.
Goldman Sachs (GS) analyst David Roman views the panel's recommendation for approval as largely in line with Street expectations and sees it supporting eventual approval of the device later this year.
Roman, who raised price target on the stock to $102 from $99, sees the regulatory risk for Edwards as largely decreased in the US, after the positive panel decision. The analyst thinks the key determinant for the company's growth profile going forward is sales execution.
"Based on ramp rates of the SAPIEN device in Europe, as well as early evidence from PARTNER B in the US, we think the company has a proven track record of strong sales execution," wrote Roman who has a "Buy" rating on the stock.
Irvine, California-based Edwards Lifesciences provides heart valve therapy products, including tissue heart valves and repair products. The company also offers critical care products comprising hemodynamic monitoring systems.
Meanwhile, Deutsche Bank analyst Kristen Stewart maintained her "Hold" rating as she believes the stock is fully valued. Stewart believes a favorable Panel and FDA approval was already reflected in the stock.
Stewart raised her price target to $80 from $75, saying the panel outcome reduces risk.
The FDA will now take the Panel's views into consideration and Stewart believes the agency will ultimately approve SAPIEN for the high risk patient population in late third quarter or the fourth quarter.
Roman estimates approval in the fourth quarter of 2012.
On Thursday, EW shares jumped 7.80 percent to trade at $97.57. Over the past year, the stock has been trading in the range of $61.59 and $99.00.