EW - Earnings call transcript Q3 2017 | Edwards Lifesciences Corporation

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Operator

Greetings, and welcome to the Edwards Lifesciences Third Quarter 2017 Earnings Call. At this time, all, participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, David Erickson, Vice President, Investor Relations. sir. you, Thank Please begin.

David Erickson

joining for today. you us thank and Welcome,

after third quarter close regular of our released we trading, XXXX Just the financial results.

During accompanying then the release for today's results included in discuss call, the Q&A. and financial the use the and schedules remaining time we'll press

on Mussallem, and Our Scott today's CEO; are CFO. call and Mike presenters Chairman Ullem,

limited will benefits any estimates, matters, begin, they statements currency aren't which and that forward-looking I'd adoption you financial assumptions to today. after Before include, obligation making of projections. to, launches, to we fluctuations. statements clinical in that during current foreign on undertake and new date are regulatory based update on and be them made, as remind like today's and timelines, These call, expectations and we approvals, only product the guidance are trends competitive but and These we speak statements not therapy do for

and of SEC to website edwards.com. these when on concerning results. could in statements that cause Form measures. our financial a involve the our and referring press our important results available our differences filings, are to at adjusted, that terms that risks which GAAP we referring factors quick our reminder underlying may product report safety the release, non-GAAP actual be Additionally, XX-K to other on annual information Information Also, found use uncertainties could materially. XXXX differ and all are are and we Otherwise, we cause

included our release on about our website. in measures use today's information of press is Additional non-GAAP and

Mike? Mussallem. to the turn I'll Now over Mike call

Mike Mussallem

billion growth was in $X are TAVR of and in with global lifted expectations. which strong growth, therapies. by deliver third grew a our quarter on Total double-digit an were opportunity plus robust report line sales market Thank you, overall that performance strong by projection innovative David. continue We're consistent sales basis, underlying by XX% XXXX. our to Sales to our driven organic pleased with

aggressively drive group pursue to and with potential therapies to even continue broader patients. breakthrough of the growth future an We significant heart structural help

Before a operations the the the products. Republic, Caribbean from principal in line Care Puerto U.S. we which significant has I'd Rico results, about disasters recent words the and manufacturing to natural for say get Dominican Edwards impact in product and are our into like locations the the few Critical

area homes very the personal to continue and return their Our Puerto those heart employees have to resumed operations for and and can loss our and visit been the although there, making flooding, was our help full manufacturing weeks temporarily globe are in able a of patients. support employees' have facilities Rico importantly, I conducted so is couple sustained significant and some inspired employees to work areas. until are to Edwards accounted our number manufacturing of personally of affected belongings, we production our by ago. in our to generously safe. None there. people And they damage of across was all resolve Most which of valve contributions reported recently a eagerness

believe we procedures quarter of The resumed fortunately, third these affected of number the were impact majority been have sales in of Houston number have dollars. Florida during couple operations, the treated. hurricanes, our the a was since a While we and normal hospitals postponed patients on million total and these of substantial estimate a

that and XX% remained stocking the in selling consumption our million, transcatheter Therapy; seasonal slowdown. the growth outside both the over Globally, were the typical Growth our of U.S., therapy global adjusted XX% by Transcatheter for were basis stable. $XXX including the the Germany. was by the valve. an U.S. anticipated SAPIEN quarter valve same. in and up to led the heart in adjustment sales to was Heart These Strong We U.S. adoption, strong underlying price for representing network average prior continued Valve inventory driven our year, Turning our the of on broadly inside In the with best-in-class were estimate million, hospitals, procedure expectations results the growth consistent year. adoption $XXX sales fuel across versus procedures about increase X prior an continued

established. with about We underlying where penetration position rates little contribution Japan, recall U.S., from benefit countries still competitive a others the relatively product reflected introduced comments, is with unchanged. from last the where the TAVR previous growth results beneficiaries. remained continue quarter impressive to therapy more with by earlier our Outside Edwards was Growth adoption continue compared growth to rate teens competitor's the and this were Europe more year low European our this TAVR the is with international the same. recently. of was in year, Consistent be was adoption our a in growth estimate where outpace primary strong low. particularly We encouraged in TAVR, therapy countries an overall lower XX%, our estimate We procedure strong to

the product SAPIEN at risk London PCR Valves the improve taller we to Ultra reduce teams valve, CE which recently a further performance. meeting. heart The X TAVR outstanding save near-term -- designed our also skirt its procedures, of simplify to the System help outer time features complications. chance adds System Ultra Turning pipeline, on designed our to system introduced we is Mark advancements and The pending

data a six-month this presented the launch introduce to year London the in seen Conference, earlier this plan positive continuing U.S. by XX-day CENTERA results XXXX. on and Europe system, the initiate trends year. in end to in the were the in presented of the data late At our system excellent expect clinical We Valves

year-end. diagnosed groundbreaking premium around And trial enrolled self-expanding system use and our inform Trial, valve PARTNER plans. to we'll III global We Enrollment of our severe reminder, without previous by enroll. summary, significantly patients study be a to Europe THVT original expect XX% results In kind midpoint goal the experience underlying its launch to as symptoms, remains reflects stenosis of progressing growth and our randomized low-risk XX% full than to aortic this and U.S. XX% our we expect year-end, in our this better to was to our sales around that guidance. have trial to XX%. in guidance of This sales EARLY-TAVR our year continues first the to

valves strong Heart expectations. Surgical the to and quarter our consistent and Valve Europe. the Sales was our SAPIEN from up $XXX continuing our growth performance basis, were the solid outside offset products by system was for surgical driven and core of in partially U.S. Turning Therapy. our the X% an shift valves in to INTUITY with million X Elite underlying on growth valve U.S. Growth This the by was aortic

next effective Our Medicare's as October of INTUITY This hospitals be should rapid-deployment over add-on procedures. this over valve invasive and and shortens recognized tech the INTUITY add-on year, many substantial will X adoption new for believe by new simplify of was this payment complex this year. payment improvement helped technology We conventional that the recently valves. this approved valve that clinical provide minimally

aortic Europe, globally. this RESILIA valve platform been launching we're forward looking to and INSPIRIS Our launched in has

mechanical for associated which designed We RESILIA active believe Our valve procedures. to blood valves, risks for and thinners. platform offers carry seeking valve-in-valve future alternatives is ideal an patients this tissue the newest and with patients features potential surgical

of We Europe. Care, expect to and Program, Surgical quarter valves, to basis. growth products Recovery our of and and grew underlying heart continue U.S. driven Asia In million, we full summary, in Enhanced core continue underlying was X% surgical were an to X%. a for the our plan for $XXX U.S. sales In a the Pacific. and year by sales particularly XXXX X% the launch on performance This solid growth Critical in

the global our contributor platform, monitoring advance success. expect be launch next-generation a our We significant longer-term of HemoSphere, to to

enable the potentially the patient's ramp minimal clinicians is This decisions. into this to quarter, surgical this capabilities to HemoSphere all-in-one launch sales and add on plan XXXX. and in expected designed status to clarity to to were make timely, hemodynamic recovery designed we system a enhanced provide future. platform to is life-saving modular While is greater continue to

our to of FloTrac dangerous In process full growth acumen underlying to in smart low pressure to to physicians sales Care at are Critical in in probability advance our of suite summary, alert X%. a This IQ disposables X% this expect Europe. be with blood new condition. hypotension year or introducing continue the the we end indicator is in We software of high

structural our heart programs. to Turning

updates We tricuspid are mitral conference therapies and and portfolio be TCT, Cardioband our in complete At a at FORMA December. position around enthusiasm enthusiastic in therapy. in our the TCT overview at more our Today, tricuspid disease. we on some additional to select the transcatheter our to of opportunities continues cover and from system. expect suffering you about updates strong investor Physician week's Medical next expect treat can tricuspid will updates, and I Conference patients

begin mitral ACTIVE to the the million quarter, U.S. During IDE pleased quarter, Europe, in in approximately recorded trial. In treating the reported $X we which patients are THVT this in commercial trial sales line. product are the we called Cardioband

mitral transcatheter be patients continue We our can the for begun first-line program multiple believe are centers. for Cardioband mitral in annular trial repair reduction and an called provided repair We've important into trial expanding the by CLASP patients. therapy to CE that PASCAL many treating actively this Mark

system. We mitral continue Edwards with replacement to CardiAQ treat learnings incorporate valve patients and our

enhancements. commercialize believe femoral the system and now patients. a true to a group that on enhance achieve the to valve much our clinical our focus than progress of our experience introduce and several that profile vein, goal significant We We incorporates have including via advantages, adoptions system this serves between to This important a features stimulates based decided rather number sharpen ribs. recent a to to accelerates our transcatheter plan the smaller therapy delivery transseptal strategy broader of

will will early, and minutes. remain of update portfolio and has excited This Overall, refining while transcatheter mitral in our offerings. Mark we which financial tricuspid are discuss on still CE conference. We implications, change our Scott about an investor timing a provide our few

aggressively operations plant Harpoon service. turn this our an to to our Edwards impacted the remains and we network. made we employees these make are recently to Medical minimally R&D, year. of thorough chain, commercial appreciate decision global a into acquire and infrastructure We support the investing Switzerland a collection on valve dedicated the system. evolving global in a heart and for invasive data track by to significant small of clinical And end and emerging before upside analysis chordal technology, plan expect We with Scott, supply these Separately, our close therapies I absorb potential. operations support to their over to has following option in decision it repair

wind million And and are $XX turn to expect down operations charge I'll to early recognizing a now this Scott. over quarter. the We in XXXX call

Scott Ullem

$XXX were to XXXX. million, up am which of earnings underlying another report our I slowdown. with and share pleased Adjusted Mike. strong quarter double-digit growth, consistent generated were you, expectations sales over per results XX% the seasonal Thank These growth. sales typical

adjusted include In Germany de-stocking million addition, $XX sales. sales of

XXXX year expect expectation to to original excellent growth to sales our continue underlying with above XX%. an We of be XX%

Our XX%. in Switzerland quarters. Adjusted this was operating earnings related track that Mike over includes on discussed, closing to as expanded with which EPS was well customary was $XX GAAP XXXX and to is other year. as our consistent EPS prior per million small $X.XX, achieve Adjusted attractive and the growth charge plant levels adjustments share margin $X.XX, manufacturing

quarter. in As the new excess Adjusted on our $X.XX compensation. tax been estimated less would share last of stock-based benefit per we per earnings we earnings based for previously share guidance the discussed, quarter, because have this forecasting is accounting

Partially Puerto For these as well the closure mix, reflects comparison the offsetting sales in This expenses. the associated quarter, of Maria with compared manufacturing improvement planned gross plant more Hurricane of benefit same was primarily our by a in in a Switzerland. expenses and were to profit last TAVR, business our flooding period as led supply the favorable growing year. benefits from margin chain XX% of of profitable XX.X% Rico

continue at to We excluding year full expand XX%. items, our gross to the and special profit margin, midpoint be XXXX XX% of

December. by good those assumption, offset planned our improvements. mix conference at near-term modeling anticipating Going forward, We'll improvements, is this discuss investor capacity expectations in a

administrative and general selling, expenses. to Turning

therapy the sales. prior million year personnel in product was increase This Third support line. increased sales related transcatheter our X% quarter to of by primarily expenses of and expenses, valve or XX.X% heart over $XXX driven

full expect of for of the to SG&A, result increase the increased in year quarter special the XX% development prior the XX% items, This million in XX.X% and over continue to was continued our be $XXX Research or of between investments transcatheter year and excluding We full sales valve investments programs. XX% year. to primarily sales.

for between continue R&D, We of items, to year. and sales XX% special to expect the excluding be full XX%

million likelihood $XX result consideration payment. primarily a a plants third the reduction of reduction reduced the of During we This cardiac earlier, the quarter, the contingent which value net regulatory European our in recorded milestone Mike mentioned the was fair of liabilities.

was in Our from XX.X%, rate period. reported tax year XX.X% the down quarter for the prior

This quarter's rate new the accounting for basis employee XXX stock-based from benefited points compensation.

mentioned I this earlier, last in quarter. benefit estimated was guidance as our lower However, than we

We excluding be rate, continue full special to expect items, tax and our XX%. between year XX% to

of Foreign compared was full activities the $XXX we quarter from $XXX to current exchange investments cash during prior At million. $XX as generated growth impact year cash rates capital de year. third this expect rates, by We define XXXX the prior to million. Free quarter the to operating compared now of increased sales million, X.X% sales minimis year. flow flow less

capital reflects Our are investments to making capacity. we manufacturing valve spending increase

and the Total equivalents short-term approximately billion. the full $X quarter we and end the which At Average sheet. shares is cash was cash, debt were million, of for with had balance consistent the our to outstanding the assumption billion. year. during XXX quarter investments fourth of $X.X Turning quarter,

to turning our Now XXXX guidance.

For are all XXXX, sales of we ranges. our guidance full reaffirming year

For $X.X billion $X.X of Heart to the Valve to high we expect Therapy, continue sales end Transcatheter at billion.

at sales Valve million And million. million sales $XXX Surgical $XXX of to the we for Critical million. expect we $XXX Heart Therapy, For of Care, to high expect end $XXX the

sales total billion end to our high expect range. For $X.X we $X.X the continue at Edwards, to billion of

in adjusted share guidance be We also per earnings between our remain confident year full and for $X.XX. $X.XX to

excluding $XXX expect and end the to $XXX special range. Lastly, free million exceed top million -- we continue our flow, of to cash items,

to million, $X.XX. that, For the hand and sales $XXX I'll foreign XXXX, between project at back million per exchange it and fourth And earnings rates, adjusted quarter be to share adjusted current $XXX with to between we and $X.XX Mike. be

Mike Mussallem

believe performance bright. all and pleased Scott. you, lines our our across Thank future very remains achieved product We're with

we're patients, TAVR important for and therapies that, our result And mitral therapies. David. to call deliver valuable we outlook in for the we transcatheter to will innovations strong patients to solutions back valve tricuspid our confident over continue opportunities technologies breakthrough Our to innovative turn Overall, exciting deliver I'll continue value serve. and represent continued a with that as the

David Erickson

Mike. you, Thank

two for I'd upcoming questions, to we up Before it open events. about like remind you

an with Cohen there next is TCT Tuesday. at David in First, informal Q&A Denver Dr.

this you haven't If RSVP-ed, please so do week.

in order which as updates the about New XXXX latest the will information on limit Thursday, take number Investor available will technologies, Conference XXXX. to of our allow questions our questions. December Second is participation, broad X, this you for please event More well outlook we coming ready include ask be now. York, our to on as In in weeks. We're that

ahead. re-enter the as have remainder as additional answer the queue you of we’ll questions, Operator, during many and If please we please go can call. the

Operator

you. Thank

session. JPMorgan. We Weinstein from [Operator will from now comes a Mike first be question-and-answer you, Instructions] thank conducting And line Please our of question proceed. the

Mike Weinstein

Thank very you I taking you question. the much. appreciate

TAVR touch just on me business. the let So, first

grew the business would in guidance basis, months about XX% the growth imply nine midpoint range the quarter, of quarter. seem and first the fourth the the on TAVR for XX% underlying XX%, this year to So, in year the for XX%, XX% XX%

market we to on the but clearly Street's the catalyst? sequentially, TAVR should for how OUS So, is business which was PARTNER X.X this the potentially before meant the I about think was stronger. you just the how -- the we big one that call III think view growth what little Is about let's next U.S. business guess a TAVR The Thanks. market next, get right? imply? of readout over down Two, And you that, expectations, it, Obviously, market below U.S. and years about growth just to is a you market talk bit that, quarter? your can was

Mike Mussallem

the level than at this like growing impressive. Yeah, growth in perspective. we year introduction, did the the we is year We the kind projected the of this observation That thanks, way And way and opportunity Mike, that during this sales results the has U.S. ago And that that sales second we in into is it we're that. the the half. pleased a this where that trying from many year have -- the we pretty correct went the expected. long-term the that appreciate the we're broadly, by that pretty around that we billion you was signal the Remember, that remainder we years think question. of of year, we a lower putting out to XXXX, something introducing to half the very sounds pleased Yeah, it's that it growth be platform. market we that still yeah, math was will year of we're was Europe the is extraordinary growing close. started more high course be less. We first the is remarkable the the of But $X particularly with it's We're a Remember, strong. were half in XX% view. in think XX line We're a it after think thinking is surprised we years turned the second long-term up growth than was first OUS including our in far really expect outside think half, send.

have characterized moderate. way So settle year the to that you We'll investor we're more a yeah, don't is guidance our the rates ago that heavy specific think in at had I expect give XX% something I conference going that December, to accurate. we're it and that into going we just growth but that's

Mike Weinstein

had year. then out and raised some different try you're And haven't been you guidance a since the several for probably Scott, that parts it's of quarters guys maybe tease quarter moving full the just then Could reported Okay. and the your you quarter? on earnings can some fourth you the impact commentary? items prepared back third hurricanes some think you Obviously, of running and through run through Thanks. be just in the kind may business, holding but other in

Scott Ullem

Yes.

about feel expectations, than end quarter we we third that good It's So, said, are be a expectations. lot pretty met lofty originally the that year. of to where year-to-date. as had we're really glad we expected a higher we And our Mike

is I continued our back growth. think really don't anything So, holding

per in fourth impact noteworthy. that We'll think little some a in help not which will sure But around really share. be that's I get margin. it's FX, earnings the gross I'm changes bit less there from quarter our guidance. will

pretty the to we would way is it fourth this we're the Beyond that, much off we and quarter we're we path. thought looking on earlier right think year, think --

Mike Weinstein

I’ll Okay. jump let some Thank other you, in. guys.

Operator

Thank you.

comes Our question Please of from the Stanley. Morgan proceed. with line David Lewis next

David Lewis

Thanks, the a questions assuming then Can six-month afternoon. On quick the a Day, Analyst a terms reformulation quick sort for be the the follow-up. restarting just I maybe platform? this product of CE we start of CardiAQ, the trial more I just of in want mark there restart Should rough you trial have would And I and chance sense update. SAPIEN then general and product? delay next-generation you of XX-month? is Mike, us thinking What December with stopped the appreciate of and we on give delay good a and have to an of And it. couple get follow-up. sense we or that to update or a a

Mike Mussallem

actually conference, of our in felt should implement to which timing. change lay us we share I bigger sales, do to be We're to going to David. going We going time meaningful are it investors. point be but think back. we to the to to it to the mark in that's that success, was going you that this strategy enhancements it's -- to a these to the we to David. it do be to really was specific prepared is although when collapse for long-term out eyes appropriate delay we time CE with the think good we is be trade-off might Thanks, of think to Overall, today significant success, The jump that for investor not important wanted get that prepared Yeah.

that more CENTERA before In to that next-generation we're the reasons. to and really of going terms We're System correctly think systems we excitement we probably and be be on details identified, exciting, not for that a Ultra of there that we're as don't customer here be get to yet. but next-generation are year-end, that. And you into valve, around ready SAPIEN that I going launching competitive will we're on pleased working share lot could both even

David Lewis

to minimal, far, or dynamics has have U.S. way? want the say, you that of but from S. not U. accounts board what on And to much. have certain quarter seems anything here shown some given the you perspective. quantify other rate growth their market and the been share rather the Obviously, accounts impact then fact in surprise in again. particularly and just in to Edwards hurricane it the in utilization come in try that actually Is was any U.S. so sort a sequential predictive earnings a the Mike, back Thanks which companies each let's that reported next utilization numbers so came from the quarter for market of, quarter third perspective there or weak

Mike Mussallem

Yeah. Thanks, David.

I to a stable, and think the pretty compared U.S. pretty ago. continued be that have outside both quarter positions to inside that, share consistent,

growing on. of news line very we nicely I from that didn't they market help marketplace of in much. much probably going growth. feel might our that dynamics changed are there's future. the haven't market with a not still growing Lotus lot could a like other be that as we that the have competitors, we're from pretty that us We of but helped It noted probably that know and much may is that competitive don't in lot So quite probably the perspective. dynamics particular, exit In still The our -- thought as

David Lewis

you Great. very Thank much.

Operator

Thank you.

comes Biegelsen Wells Fargo. Please from of Larry the line proceed. next question Our with

Larry Biegelsen

the taking for Thanks afternoon. Good question.

the you to sounds as September, Let next a your me similar based guess, critical-care TAVR grow and the and you and year to ubiquitous question XXXX. business talk ask like comments recent mitral the comment about Mike the expect I different contribution it XXXX a year willing public in the rate maybe are on tricuspid way bit at is, from little next a big question a should low-risk sounds the ACC a think year you early to like transition plan about presumably data tricuspid dedicated for any mitral in next have the and invest we that Thanks picture And it set I is see force in XXXX which sales XXXX? in in before on at year will the as Europe, the P&L taking question. we P&L leverage don't fair?

Mike Mussallem

Yeah, thanks, Larry.

things. few a So,

out First for of guidance correctly you've specific all, share XXXX. as pointed ready to we're not

You our think we've our business their We valve some pretty all a aortic they're both know to and and and be businesses we of clear clear critical-care business and think quite possible. have they're really those bit growers nice going terms think what trajectories about and transcatheter -- heart in all been all is business, I our maintain leadership.

So that. that's

a of transcatheter, tricuspid, and year. to don't In XXXX be much expect terms I sales of mitral,

one progress key be an focused to on a evidence drive growth. provide making think term. will growth out, what to mid important it's of platforms it'll on We're crack kind toward so more laying in important the those in going is of creating the going will in really place, year, but value, long some year time probably most more important sales to and what's code of milestones, I terms us be not that sort

perspective. that from think you should about So, it

thoughtful investments, of that. terms we're always about In

advance, get some investment. try be we and pretty some be in you investments in need to field too not and were spending that aggressively thoughtful will of that far on resources made are to try know, course, ahead advanced Of be of and, going we'll ourselves although R&D to

affect plan. think the XXXX from don't overall you in should So, see dominant I an that

Larry Biegelsen

the questions, guys. taking for Thanks

Operator

Thank you.

next of comes proceed. Bank question Hopkins Bob with Our the of line from America. Please

Bob Hopkins

thanks good and Hi, afternoon.

million a of I So because TAVR happened were little right? what adjusted quarter apples-to-apples million clear worldwide the question just Germany bit Is sales sales in $XXX a an maybe THV the all so think Germany just second THV to to third there's of quarter the first be confusion business and your in the in quarter. on compares that and of that in the clarifying basis for on $XXX just

Scott Ullem

the let adding Scott. is for $XXX giving back stocking we're sales, on also apples-to-apples $XX of adjusted you the So, just consumption in million hold so second me Bob, Yeah, – its sales quarter to XXX second of it's stocking, the and Germany. Germany $XXX Yeah, the one make number. relative sure million million

Bob Hopkins

Okay. your market And comments did on get one quarter clarify that market, basically rate for obviously to XX% competitor risk, Mike, U.S. and the then that approval held was be your this the you change you because level? that just, intermediate despite share that think this so approval growth will around

Mike Mussallem

It's that best with is those each we're market with of Bob. that into because, basically growing tough think Yeah, we big approvals other. probably out a estimate line it's But this consistent that -- we in our cycle has guidance. thanks, Yeah, share. been wasn't in report and pretty change hard there we our always to the factored estimate you know,

Bob Hopkins

in comment that's sustainable on maybe Japan, a then spot quick And in view. is growth that the Okay. one quarter, bright how your clear

dynamics market currently? Japan Just in of give sense a us

Mike Mussallem

Yeah, primarily centers quantify, still but as more us opportunity for to and we there. is they're the continue we expansion in still to continue in to we believe for could one about so as early just is that right the that well. go December add Hard patients, significant country expected that adoption treating now had high-risk they're talk

Bob Hopkins

much. Great. very Thank you

Mike Mussallem

Sure.

Operator

Thank you.

with Please proceed. Chris comes of Our next Pasquale line from question the Guggenheim.

Chris Pasquale

foundation on and you have this the us point but have what's a on of many the there. investments what's this hard European just obviously, to mitral organization to lay of year? tell, sales piece actually to way people added looks Cardioband some making been you an been with program update Thanks. mitral guys year this start for couple along Mike, you give revenue it's like how going from at your transcatheter Can you the just the

Mike Mussallem

believe Yeah, position. not things to I'm is the of but the yeah, that Europe. Cardioband in Cardioband been not sure the we Maybe mitral we in in adding only tricuspid exact the numbers, apparent also but that's one organization the position applicable not have Chris, people here

our cases So, get in credit, we also still for all commercial Cardioband resources our and, no tricuspid cases at tricuspid of the to there. and matter Cardioband don't that field any addition supporting We think contributor supporting this mitral well, be cases for those sales important commercial time. are an cases could they're resources Cardiobond

maybe in here probably of There's up. that quarter. out want to ramped the few we've right more now where basically but fourth sort resources, So, we be a leveling

Chris Pasquale

you the for just potential I for operating years. the therefore one drive required Scott December. signal from last differently then have mode know along? we've in detail potential couple the to of what every trying several you're been in about get and seen the you shifting XXXX priorities terms last investment for lot to level seems one investment like to it of And into operating that leverage Okay. or it they we'll about next following form the this just leverage, thinking come Are is guys of Larry's that's more new in as in year question year up But on a and

Mike Mussallem

to top-line continue leveraging percentage last made especially more going of it's very Mike margin the in two in to global. We're I to couple over No, around but driving primary we get improved is to It's operating down. that our at said continues our looking to ratio are field years favorable. and look we're more as We've resources years aggressively progress opportunities tricuspid in development. focus SG&A continue of organic transcatheter business said, continue therapies, efficient. we've lot a SG&A as of an to research Edwards again, for think just gotten over overall That the growth. We’ve support focus, a the area sales to invest and last mitral invest is but, and of going drive to

Chris Pasquale

Thanks.

Operator

Thank you.

Our Please of question next your Matt now Miksic, from Please the comes Matt Miksic is line with proceed. proceed. line UBS. live.

Matt Miksic

sorry again there. my Thanks so you for question. to much. taking mute I’m Thank Yeah,

was of the of in the want half one one, think you on U.S. sense terms of kind that first newer -- in was in smaller, get of had and QX? just color the you Mike, U.S. what market entering and made on the year expanding comment of in surprised many like some I any So, the to if and geographically mention, had growth questions don't look comments I a the did performance that thing or centers I the you here

Mike Mussallem

Yeah.

We to dozen have know, have, new probably centers joined. We centers new don't I continue joined in maybe quarter. the a

of we now contribution and centers XXX get So, from probably those. we in were excess do

of a Center. weren't own that did It across into that And seen from maybe a present. their the small. they centers so, as contribution TAVR that seeing a though we're group networks board come people new being insider large centers when already because Maybe centers or pattern were the seems them found by unlocked in, were referral weren't they just patients that actually to

getting we But So, imagine, as are that. getting contribution a are from you the large. numbers can

of bit have And quite -- a so, is this under TAVR is in that's on treatment to of going and front us. us that us a in going the validates gives confidence runway this for

Matt Miksic

you risk just from the And follow-up I last market, I'd be substantially that before XXXX the entering we that But immediate treated would get a this catalyst early to this through catalyst you patients now of to XXXX, data. be of in expect market to can two your indication didn't three do terms to is of follow-on patients penetration to number it that patients we get is in be to, the we or there's of too kind be expand is years? into love quickly next to where of another think, growing you of have a something -- intermediate-risk the number over sense get clinical another the expect feel or early terms and an in this perception it's may group as for TAVR are not but a like going until of this to on U.S.

Mike Mussallem

talk Thanks, of dramatic Yeah, Matt. about under-penetration before. really that We we've believe tried Yeah. to patients. there's this a

patients in we XXXX were stenosis So, that symptoms, treated. less when with severe being felt XX% than we at aortic looked

have the patterns so, us. it potential change referral clinical front the And what's the guidelines it though and practice full approval time of some time we're overall, unlocked to that's But have And for takes we've big And in takes we nice even, seen intermediate a with pleased that change been to time coming to we're it risk to we happening. close takes not let still growth. opportunity. for for alone change indication was that

to continue we So, have work on that.

So TAVR's data The – still on new underutilized. that continually we present.

to terms last compare got highlight they're see at I data within to some up trial. PARTNER think the how in will the economics the be making contemporary coming the which measured we've interesting where TCT upcoming to were of argument going economics helpful very and that actually economics the is

Matt Miksic

Thanks for the color.

Operator

you. Thank

of Our Jason comes from proceed. Canaccord Please the next with question Genuity. line Mills

Jason Mills

hear Hi. can Thanks am on question. a okay? phone. for you cell I the Mike, about taking

Mike Mussallem

Yeah, fine. Jason. Hear you

Jason Mills

Super.

sure enrollment. you've and had your take evaluate least look exclusion of as just I'm Perhaps, one Cardioband the you mitral. a to at intrepid have interest supposing your a moving a in other on thoughts United of to you course first comments, what chance discern point, versus hard and how just mitral you've criteria far at commercialization chance interested in functional those And probably patient with out? as the inclusion, really broader Medtronic observations it's regurgitation? start both towards look States out trials? of algorithms to will So, products the sort know the I what announced a learned of this at for are or commencement but in of coming those of play to

Mike Mussallem

is competitors forward and transapical really broadly, to not get deep criteria this. Yeah. design interesting. Thanks, different going that have the Jason. strategies We comfortable deep to feel tack themselves our conference. going into Yeah, drill that and the necessary system moving the can on more exclusion to going we I'm our chosen investor inclusion to all unlock with portfolios insightful. or But I is transapical into here. We're we you are that a But trial a or see that deep be think when sure believe

important. And be so to that's going

might has near-term, going impressive there technologies about play a talk the couple come an that We'll them. that to also to pretty marketplace, is case presented be in in a technologies pursuing that exactly and of role replacement important aggressively very is are data how – make the repair together. some to primarily we have think unseat We ready But mitral all repair there. therapies and to mitral we're

which is really an now, most And catheter-based mitral get we considered And the stay alternative. Surgery not and is do treat on so, change. interesting the the patients long-term just what very really lot and a not able it's focused we're with able going to curves, effective, systems, so we're strategy. we what have learning And of steep on good portfolio. why our And see. not cause are with which Right in practice to patients of do we to toolbox, and informing experience terms until going have We're these are treated. feeling technologies, full to the change. think is we being it's medicine of of to therapies that's about gathering safe all our we a be a

maybe we'll good more a starter. but that's and when we're picture ad paint comprehensive try December, So, in together

Jason Mills

to looks on to fourth the interesting as look a the Mike's that. step the start margins fourth quarter hold sort And Thanks grow range, up teens perhaps high you quarter got to right. perhaps I a bit a Mike. quarter? your is. may and faster than call, squeak-in U.S. a to that business what outperformed. prior to I international business like sure will gross grew quarter seems And mid of for in in we’re but trend TAVR forward little you than It expected out guidance XX% going you reaccelerate see Do OUS be in it want the make guys. pointed Do that initially Thanks, the in expect to a I’ll as Scott slower going U.S. this XX%, you and in that then just was you be markets? to question then side, as back follow-up, bit think little fourth that

Mike Mussallem

on had going a projection U.S. early U.S. XXXX, there's the world Yeah, the numbers our in happen expectations. that the thanks growth an I be TAVR both to we some and sent across line lot likely. U.S. of projected with It we XX% that of in when suggest signal, XX% if when growth expectations. to Jason. I the Remember originally inside we have inappropriate that was our would below outside the slower? in will get that of a I where year, our may thought I probably Well, think large surprise what was was was think and Do based right is

to things I is certainly that the of strong, you're continuing where dramatic but low penetration any OUS that expect Jason, One what is is changes, the is impressive don't be asking. that's big if

Scott Ullem

Scott. And, it's Jason,

little see stay and probably in quarter that think we gross may same fourth not levels. that we in pressure be at FX We of would the rates QX gross from benefit. their current versus foreign at quarter Regarding had current margins margins and QX actually under third benefit a if bit currencies the

Jason Mills

queue. Okay. get in Thanks, I'll guys. back

Operator

you. Thank

Our Please next with the Raj proceed. Denhoy line Jefferies. question of comes from

Raj Denhoy

if Europe? trial approved of ask there's you just is could expect get I and I to terms additional us on CLASP product where us if the in today, in told you trial, PASCAL Wonder when afternoon. Good enrollment Hi. the can think any color that you that give do

Mike Mussallem

Thanks, Yeah. Raj.

in attention feasibility think of walked experience XX-patient it impress about it there really call One I reduction there was was high your that feasibility might if of article mitral results with it a rate know you had, success was, conclusion that a regurgitation. away about and with I and a things the technical noticed This don't our of that I a to, August early in actually the published that Lancet the was was PASCAL. and study

you that in think at there's a if that We such so presentation more kind end it's were a TCT group pleased six-month point, maybe should to so and see think primary that so, think think of a a a six-month expect that well, today share going and new that more give the can going refer relatively and gain think at we're technology this. to I is you're TCT, we we see information. on you itself you than that this. trial what's about website you're more engaged that's XXX-patient -- with trial to little -- so we'll we I same on certainly results going to Lancet The to profile fact And would there noteworthy that be ClinicalTrials.gov, with

Scott Ullem

thoughts too potentially expectations the product, around do for I the about Mike and as getting doing that several opportunity a know, is we market? think when question are or and your on know is guess the that do as what I about next aggressive in maybe Europe can get if in you think is you mean, there, that right year, million market more, you timeline you $XXX you what

Mike Mussallem

little a will I at that We've it's it's like. That are more still week. users feedback this going responsively point. it to I penciling But next optimistic We're think to very think and aggressive. one sounds be we're as move think this line. in move. at is it's point. about going the gotten to one interesting some I nice wouldn't XXXX TCT fast data. time can the see mean, we obviously, the in evolution as Well, product be that at We early line But anything we're -- discussed I at what's bit

Raj Denhoy

can And Fair product United very surgical what maybe don't often. asked that in that that new in valves, ask of States? of one But enough. technology add-on for that due the to adoption any get around INTUITY, payment on product terms Okay. growth I'll for the thoughts

Mike Mussallem

to really technology. their it's effect it's burden these got try the went going adopt October and remember, really think It We impact. when X a on We're help we hospitals, to technologies, that pleased system. this to new it's have often, Yeah. cost new of positive year, going hospitals into

some Medicare that. of helps for patients, So, defray this

experience innovation have we people some have going like longer-term it an it to with involved think it's do impact because and to we some provide, associated results and to to the hopefully, is with that what so, think very to to going INTUITY product get want And a positive allows continue. chance they're and

Raj Denhoy

That's helpful. you. Thank

Operator

comes Goldman Sachs. next the Our of Isaac proceed. from Please question with Ro line

Isaac Ro

guys. Thanks. morning, Good

TAVR the OR market, U.S. specifically to First capacity. question regards was with on

over of TAVR? or if procedures you figure curious you share alleviation visibility you there you. portion handle today us have active theatrical of to And items? could issue extent if percentage have starting what timely side they those the limit if see to the here Thank out wondering your approach is said terms with this of Just ORs for I'm in demand Just fashion? you constraints you capacity limiting out you'll trying a any to an that's hit think guys on

Mike Mussallem

we’ve I Thanks, Isaac. appreciate that the before. question. And been asked

issue an way. able to existing to or add expand to the the is they're hospitals system, question the even seven as resourceful. TAVRs an within are don't And teams, bigger we same it where in see it's a way capacity. to We remarkable as just the this continue day, We their We ability pretty feel so can and be able relates do six see the capacity to TAVR. places

they profitable most think – make I find that to teams. and they be able they're hospitals the will addition find

So far, us. is been an for not issue capacity really

Isaac Ro

maintaining a of curious means, or platforms U.S. share whether as about training whether for Thanks. can and landscape kind multiple more competitive you entrants? there become start in training to we that the pricing of if not your aggressive in when perspective change new your some were of here us going of into just they're that And terms become more with three the how to think two would to the or behave from then lot or sort that to on regards not platforms? how event from XXXX or of a just best problematic what beyond, Okay. and the required rule Is customers follow-up what's you guess look think thumb maybe about of

Mike Mussallem

We be dynamics it, will the product workhorse comfortable they experience. we one. will typically, have We be most going it because system just one they're more Yeah. good case reasons, the and with have Either the reasons anatomical think, or to of to on continue very have go will get or you most they than valve -- shelf. typically, that find like But than that have a competitive outcomes. think hospitals that like they time, to will one of a that they call to the we primary more

on think mentioned. unusual be or shelf exact the three four to hospital systems you've I reasons for will it see

Isaac Ro

Thank Understood. you.

Operator

Thank you.

question comes Bruce proceed. next of with Robinson Our Humphrey. SunTrust Please from the line Nudell

Bruce Nudell

quarter. had Mike, Good U.S. Are below you assuming basically I decelerates afternoon. about Hi. question the market just the that XX%? a fourth

Mike Mussallem

It's may it's tough direction little It's bit that that's be There know. probably time. to in but there, probably share of a the moving in case. over

there's share going expect don't quarter. shift be a the we to necessarily that So in big

line the expectations. with So, market I expect probably our grow in would to

is So, know, that I to the range XX% in probably don't direction. moving XX%

Bruce Nudell

average really also, And that of the an perfect. for in in PARTNER III. allow changing age then gears patients? to in patients? there trial update the there just Okay, to What's younger tricuspid is use aggressive And

Mike Mussallem

Yeah.

able of the the I so to age with data that. not -- I'm see it. should no not particular this to see we're and really up -- age set the don't of for indication The these opened study This III yet, and unfortunately, have age or So patients. PARTNER support limit. supposed up I expansion can't share characteristics

So, I to important. don't know that going it be is

into I some running just don't you. bicuspid, of that. a if insight answer for We're have of for group patients that hopefully, a terms get clear In registry I we really know

Bruce Nudell

much. so Thanks

Operator

Thank you.

proceed. Our next question line of from the Jennings with Please Cowen comes Josh & Company.

Josh Jennings

the of data. And SAPIEN hoping see expect Ultra? and rate think -- going files to about PBL skirt, was valve the should X Ultra about what with outer Thanks. X to from Good we low we evening. should added features ask SAPIEN taller how I the when

Mike Mussallem

Yeah.

X about and SAPIEN following It's Mark, we're CE the will the there. getting see a data ultimately have So, so CE excited Ultra -- out the you'll Mark.

of So, mid-next I'd at look imagine year some may be in. that

couple little we're good material, promote skirt so that's should performance. then made acute the it performance, results. is better tissue features got we make different hopeful and on taller growth, should that of some a which -- really get should that and has terms And long-term we results. a its of also improve the of In it's improvement skirt current in that,

seeing it middle may think be of year next it's valve So, then this we're start about you over and platform. a those following that time. it But I we'll one certainly be things of optimistic again,

Josh Jennings

year, U.S. you the like sounds it about And trial potential the approval in to risk the with Program front of for in XXXX? Continued Access have indication low a this ongoing completion the enrollment low-risk of approval. to expecting wanted Great. are be slated will I end ask

Mike Mussallem

Okay.

yeah, because I of Ultra valve the expect able wouldn't to PMA the -- by it would end XXXX, into a decision first, we So count that I should the hope would we would continued get be if be we U.S. get access. we'd don't that. on on made we've that a supplement that know necessarily there.

So, will discussions We one. good be about don't certain now, with I soon. I'm it's But probably clear right any for you FDA – in it. answer have too or

Josh Jennings

Understood. the answers. Thanks for

Mike Mussallem

Sure.

Operator

from Please Our Kristen of Stewart next comes proceed. Bank. question Deutsche the with line

Kristen Stewart

was Puerto or just from for Thanks go question. quarter-to-quarter quantify cost could that. that follow-up I hurricanes? a Rico Hi. compare the wondering takes this puts what are? of quarter. the to the impact current And for you And Scott, can and the And gross of maybe if you taking have was the margin after what just some

Scott Ullem

Kristen. Sure,

profile. as the much about points. events. was out Hurricane me basis XX Maria, expected would through turn you whole excluding it But So, take pretty gross But let like, it special we margin

mix about third our Maria the then is of at basis accelerating points So, It talked by by of XXX XX assets in basis points. which items, facility supply year-over-year we points before offset about and driven XXXX. basis you those higher higher, and basis about benefits quarter And about FX basis XX manufacturing about XX Swiss and other on about of X.X was about point closure some XXX basis points. points ended than XXX depreciation chain points.

$X.XX, expected. like per turned what we we the benefit much had into actual versus excluding pretty It earnings it's tax overall, share of So excess expected.

achieve, thought higher expected would like looks EPS it, we $X.XX, is a why So, but it's our we're about like $X.XX. way we which thinking it more ETB the than modeling

Kristen Stewart

to stage, then guide use know well you're and what And but are Perfect. so use, early for? market this Mike, guys regarding exactly what that your you to I very transcatheter at looking on going the CENTERA, what You experience valve you the said determine a are just I know Okay. looking going be in considering to whether of some to that in I United guess, be be States? of to at the definitive, what exactly guess, order will CENTERA or launch or not pursue the launch inform you and Europe expanded milestones in you'll

Mike Mussallem

it's a have for Kristen, lot physicians also particular observe behavior of CENTERA be advantages going the with their We're – CENTERA Yeah. of to interesting, has hands. they it. to us when associated the in

use probably less self-expanding point. are probably that spending physicians those of much at systems this are Some

we're maybe lot has So, have the going think teach to that that that to what just the they're today that's and higher future. an us and to a need for to about system we about see they a than look chance feedback to how improved about forward feel going price systems a we using

Kristen Stewart

mind? So, in it's your differential cost, a guess, just mainly I

Mike Mussallem

are interested physicians cost They're we're believe we probably framework to practice. here see it but the use differential, prefer for improving going in that what seeing it – We is the would driving that's and think are way pleased clinical be. CENTERA going whether really to with will to but that value CENTERA, be us like of is really not really

Kristen Stewart

Okay. Thanks for I All taking questions. appreciate it. right. my

Operator

Thank you.

comes JMP John Securities. with the Please question of next Gillings proceed. line Our from

John Gillings

thanks guys. Hey

mitral on segment. me one from the one tonight Just big -picture

and Can products. maybe Edwards' that teams impact make that's to be valve? and, in decision overall shaping of had which CardiAQ stages robust we're know, treatments to that changes disease, approach the the up mitral you portfolio what's you extent these on for early to the between help of mitral pretty development mitral there's the given if and cross-pollination ideas Thanks. disease understand view to the to portfolio of of any how some product a us you've got So, shaping developing

Mike Mussallem

chain there's decided team each that team a to lot strategy. and are share together, across for throughout sharing together much management works and even technologies, they organize is sit into the dedicated there organization. about Certainly, Yeah. learning. clinical goes progress Edwards, team of lot and regulatory talk the team our programs the and transcatheter so Thanks. mitral across they set-backs. The tricuspid their very a our teams supply team Inside of their inform commonality we've that and a though the actually these It across does operations of

it's learn have a each from key opportunity yeah, So, we're we to products that having by portfolio other. this able of that

be hear Actually, into do We key little to more be we'll it a to December. off. like long quarterly deeper using run to think will little it's a a of factor on success a our feel Edwards conference in you'll chance today. for insight going to we it think So, Again, pay actually and but Investor call, that. able Conference get tough we at it's in our get a the to shape we're that strategy

John Gillings

Perfect. Thanks, guys.

Operator

Thank you.

Mike Mussallem

Well, any that, thank your interest to I Okay. Edwards. David for you and with back Scott continued And in and you, welcome by additional David. questions telephone.

David Erickson

underlying rates and and special Relations sales can section found the call, call. and GAAP items, which of adjusted at this our Thank numbers website non-GAAP press include included joining on in Reconciliations growth between during release for Investor and today's today's for us also mentioned edwards.com. you are be in amounts

conference missed portion XXX-XXX-XXXX telephonic XXX-XXX-XXXX and today's replay XX the all please I’ll and XXXXXXXX. call, those use available If this, you, of the number any conference To number access for XXX-XXX-XXXX dial you be will for XXX-XXX-XXXX hours. or numbers XXXXXXXX. repeat is or

audio addition, much. Investor the Thank In our very website. section will be on of Relations replay an you available

Operator

This you. today's conference. concludes Thank

participation. and at your your disconnect may you for You lines thank this time

Edwards Lifesciences (EW) 24 Oct 172017 Q3 Earnings call transcript