RBC Capital Upgrades Edwards Lifesciences, Sees $5B Market Opportunity

In a report published Monday, RBC Capital Markets analyst Glenn Novarro upgraded the rating on

from Sector Perform to Outperform, while raising the price target from $135 to $185, citing "robust" opportunities related to TAVR growth and Mitral. Analyst Glenn Novarro expects the worldwide TAVR market to expand to about $5B by 2020, up from the earlier estimate of $3.5B. The more optimistic outlook is backed by "expansion into intermediate-risk patients." In the report RBC Capital Markets noted, "Our due diligence points to Partner IIa data being released at ACC in April 2016, with positive results versus open surgery in intermediate patients…We expect the FDA to approve an expanded label for EW's Sapien valve into intermediate-risk patients in late 2016/early 2017." Edwards Lifesciences has inked a definitive agreement to acquire CardiAQ, "a key player in the transcatheter mitral valve (TMVR) market, for up to $400M." Novarro added, "The acquisition gives EW two shots on goal in the mitral race… We believe the mitral opportunity for EW could be worth ~$1.5B- $2.0B by 2025, or ~$16/share."