瑞银美股医疗设备行业美国医疗供应与设备风险回报仅略为正201931227页

GlobalResearch12March2019USMedicalSuppliesandDevicesUBSEvidenceLabinside:ExpectationsRaisedforPARTNER3;RiskRewardOnlySlightlyPositiveACCLandmarkTrialsReadOutSunday3.17Aheadoftheread-outsofEW'sPARTNER3(P3)trialandinterimlookatMDT'sLowRisktrial,weanalyzeddatafromaUBSEvidenceLabTAVRsurveyof100USphysicians(61Cardiologists,39CardiacSurgeons).Overall,weseethesurveydataasbullishforTAVRgivenstrongvolumegrowthexpectedwithlowriskuptake(17%ofimplantsin2years).However,wethinknon-inferiorityoratrendtowardsTAVRsuperiority(withoutstatisticalsignificance)arethemostlikelyoutcomesinP3(anddoctorsagree).GivenourviewthatthestockissetupforstatsigTAVRsuperioritywethinkriskrewardisonlyslightlypositiveheadingintotheeventforEW.WeareraisingourNeutral-ratedEWPTto$180,basedon31xour2020EPSof$5.90from$175basedon31xprior$5.82.DoctorsalsoseeBuy-ratedBSXgaining10%marketshareby2020,apositivegivenwemodeljust$90MMinUSTAVRsalesina$3Bmarket;doctorsalsoratedembolicprotectionas6/10onascaleofimportancewhichcouldimplygooduptakeforClaret.ForBuy-ratedMDT,thereweremorepositivesthannegatives;wecontinuetothinkthestocklookscheapat17xFY20E.DoctorsalsonotedBuy-ratedABTcouldgain~5%sharein2021andforecasta50%increaseinMitraClipvolumein2019,apositive.20%saidtheywoulduseTFX'sManta(54%notsure),amodestpositive.PhysiciansintheSurveyOptimisticaboutTAVRVolumeGrowthRespondentsperformedanaverageof85TAVRprocedureslastyear(median67)andexpectonaveragetodo108nextyear(+27%;median85,+28%).WeviewthisasagoodsignforTAVRgrowthgivencons.expectationsinthemid-teens,althoughwecautionthatdoctorstendtoover-estimatetheirownvolumegains.LowRiskOutcomeNotClear;DoctorsAssume17%ofTAVRMixin2YearsThesurveyaskedphysicianswhattheyexpectfromEW'sPartner3:43%saidtheyexpectTAVRwillbenon-inferiortoSAVR,23%saidTAVRmaytrendtowardssuperioritywithoutstat.sig.,and19%saidTAVRwillbestatsig.superior(8%betterSAVRoutcomes;7%don’tknow).Wethinkthisillustrateshowdifficultthelowrisktrialistocall.Inourview,TAVRcouldlookbetterthanSAVR,butwedonotexpecttheendpointdifferencetobestatsiggiven:a)thetrialwasdesignedfornon-inferiority;b)eventratesinthelowriskpopulationarelow;c)LRTre-hospitalizationrateswere6.8%forcardiac,2.1%forHF,and3.1%forASsymptoms,sothatendpointmaynotbeaslamdunk.Re-hospitalizationisatrickyendpointtocallgivenitisfairlysubjectiveandcanbeinfluencedbypracticepatternsasevidenced.MDTExpectationsSimilar;EWModestEdgeinLowRiskInterestingly,theskewoftrialexpectationswassimilarforMDT'slowrisktrialanddoctorsgiveEWamodestedgeinlowriskwithEWvotedasabiggersharegainer(57%vs.43%forMDT).Today,doctorsseetheirhigh/intermediate/lowrisksplitat~53%/39%/8%,movingto43%/40%/17%intwoyears.Patientage(15%),severeinsufficiency/stenosis(12%),lowriskscores(10%)andconcomitantcoronarydiseasewerepickedasreasonstostillgetSAVRin2020.Interestingly,49%ofdoctorssaidtheythinkSAVRandTAVRvalvesareaboutasdurablewithslightlymore(30%sayingTAVRwouldlastforlesstimethanmore21%).EquitiesAmericasMedicalSuppliesMatthewTaylor,[e-mail][e-mail][phone]YiCheng,[e-mail][phone]USMedicalSuppliesandDevices12March20192TAVRMarketHealthy;onTracktoReach$7Bin20241)TAVRMarketGrew~11%WWand~20%USin4Q18LookingatourTAVRmarketmodel,marketgrowthremainedhealthyin4Q18at~11%WWand~20%intheUS.MarketleaderEWestimatesglobalTAVRprocedurescontinuedtogrowinthemid-teensinthequarter,andUSproceduresgrewinthemid-teensyoy.GloballyEWsawmodestyoysharedeclinesandisholdingitsglobalASPstable.IntheUS,itgrewinlinewiththemarket,withgrowthhighestinnewerandsmallercenters.AtitsanalystdayinDecember2018,EWupdateditsthinkingtoestimatethatthe$3.5BglobalTAVRmarketin2018growsto$7Bin2024,passing$5Bin2021,drivenbyindicationexpansion,therapyawareness,andtechnologyadvances.ThisincludesexpansionintheUSandOUSwiththeUSgrowingdouble-digits.MDT'sTAVRbusinessgrew16%intheUSand15%OUS.ThecompanygainedshareintheUSandsomeOUSmarketswithitsEvolutPROvalve,andplanstolaunchthenext-genEvolutPROplusvalveinFY20.Thenewvalvefeaturesalowerprofileandimprovedpredictabilityofplacementforenhancedease-of-use.BSXplanstostartalimitedreleaseofitsLotusEdgeTAVRinMarchinEurope,andinearlyQ2intheUS,pendingFDAapproval.Thecompanyisalsoenrollingitsintermediaterisktrial,LotusREPRISEIV,withfullenrollmentexpectedthisyear.BSXwilllikelyleveragetheSentinelsystem(embolicprotection)initsUSlaunchofLotus,givingphysiciansabettervalueproposition.SentinelusedaspartofprotectedTAVRexperiencedcontinuedmarketadoption,aidedbytherecentlygrantednewtechadd-onpayment.BSX'sACURATETAVRvalveisperformingwellinEuropeandthecompanywilllaunchthenext-generationACURATEneo2inEuropein2H