Demand for Edwards Lifesciences (EW -1.06%) transcatheter heart valves has been so strong that Edwards Lifesciences' shares are among healthcare's brightest shining stars. Since 2011, Edwards Lifesciences investors have been rewarded with an eye-popping 231% return. Today, Edwards Lifesciences' reported third-quarter results that are initially causing a retreat in the company's shares; however, investors might want to focus more on the long-term opportunity for this company, rather than short-term results. 

Driving sales higher

Use of Edwards Lifesciences' Sapien 3 transcatheter valve in high-risk heart disease patients has been steadily increasing, because it's a less invasive alternative to traditional surgery.

Typically, the 1.5 million Americans who suffer from aortic stenosis are treated via traditional surgery in which the narrowed aortic valve is replaced with a mechanical valve or a tissue valve. However, elderly patients with comorbidities that are not thought to be good candidates for this type of surgery are treated by transcatheter aortic valve replacement, or TAVR. In TAVR patients, a valve is placed within the narrowed valve using a catheter that's inserted via the femoral artery in the groin or through a small chest incision.

Since TAVR doesn't require surgically opening the chest, patients experience faster recovery times and, sometimes, improved outcomes. 

Because of that, TAVR now represents more than half of Edwards Lifesciences' total sales. In Q2, global sales related to TAVR procedures grew 48.7% to $418.6 million and U.S. sales were up 71.5% to $246.4 million. In Q3, transcatheter heart valve sales grew 38.5% year-over-year to $410.1 million as U.S. sales rose 55.9% to $259.5 million. Thanks to that strong third-quarter performance, Edwards Lifesciences' total Q3 revenue grew 20.1% to $739.4 million. 

Although year-over-year growth in the quarter decelerated from the second quarter, and that's something investors need to keep an eye on, we're still talking about a dramatic increase in the company's business, and the company's management appears unfazed by it. Edwards Lifesciences still expects to deliver at the high end of its $2.7 billion to $3 billion sales forecast for this year, and management increased its full year adjusted EPS outlook to between $2.82 and $2.92 from between $2.78 and $2.88 exiting Q2. Last year, the company's EPS totaled just $2.29. 

In Q4, Edwards Lifesciences expects sales of between $750 million and $790 million, and adjusted EPS of between $0.67 and $0.77. If they deliver on that forecast, it would mark a nice improvement over the sales and adjusted EPS of $671 million and $0.63 in Q4, 2015, respectively.  

Stronger tailwinds

One reason investors may want to look beyond the slowing year over year growth is that demand for Sapien valves is likely to increase as TAVR expands into intermediate risk patients. The high-risk patient population represents the smallest proportion of this addressable market, and the FDA recently cleared the use of Sapien 3 valves in intermediate risk patients, which means the Sapien 3 can now be used in roughly half of all aortic stenosis patients. 

In trials, Sapien was compared head-to-head against open heart procedures and Sapien patients did as well or better than those receiving traditional surgery, so there's reason to think that doctors will shift toward it. The rate of all-cause mortality or stroke in Sapien TAVR patients was 19.3%, compared with 21.1% for open-heart surgery patients at year two.

The approval adds TAVR tailwinds and since TAVR growth is leading to TAVR representing a larger proportion of Edwards Lifesciences total sales, the company appears to be in a strong position to continue delivering solid double-digit annual growth. 

Even better, Edwards Lifesciences is studying TAVR in low-risk patients, and if those trials pan out, then the addressable market could still double from here. Results from this trial could be available in 2018. 

Looking ahead

Edwards Lifesciences is helping disrupt patient treatment, but it's admittedly not the only company competing for market share, so investors need to keep a bit of their enthusiasm in check. Medtronic is also a major player in the space, and it's studying the use of its Core Valve products in intermediate- and low-risk patients, too.

Nevertheless, Edwards Lifesciences pegs the TAVR market at $5 billion by 2021, so there's plenty of runway still, especially when we consider that Edwards annualized TAVR sales are tracking at only about $1.6 billion now. While no one knows what the future holds for this company, the potential to treat increasingly more patients makes me think this stock deserves a spot as a core long-term holding in growth investors' portfolios.