EW - Earnings call transcript Q3 2018 | Edwards Lifesciences Corporation

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Operator

Greetings, and welcome to the Edwards Lifesciences Third Quarter 2018 Earnings Conference 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. the Investor to Relations. turn Erickson, host, now President, Vice will conference your over David I Thank you. begin. Please

David Erickson

and Welcome, thank you today. us for joining

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

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

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

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

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

turn over Mike non-GAAP included now, and measures website. in call is today’s information to I’ll release Additional our our use press And Mussallem. Mike? of about the

Michael Mussallem

Thank you, David.

sales expectations, $XXX with was quarter a XX%, it third strong an growth by year of XX% XXXX consistent fourth strong in of Year-to-date, tough remarkable or future. investing with a and report And million, portfolio also while our a we underlying to underlying quarter technologies. backdrop expect comparison, XX% basis innovative to adjusted sales guidance performance, our growth full-year even on XX%. aggressively was pleased of consistent driven of be with our to of We’re the a financial

forward, disease sales quarter million. up procedures In were that our Looking heart and XX.X% benefit We increased on estimate to impressive innovative undertreated in were growth. which is structural $XXX many have prior compared reflects third lifesaving heart year, can continued sales patients deadly we Underlying robustly mid-teens. more valve whose therapy, today. learnings, to based therapies transcatheter organic global TAVR confidence the global grow the recent continued

at and modest grew therapy highest or and are stenosis was on Growth aortic research, diagnosed outside due TAVR In not from was year-over-year revenues. remained comparable. this total are there the a U.S., stable. the where smaller the average benefit Globally, patients growth our selling that increasingly in centers, year, decline versus Based mid-teens patients. accessible broader today. who a is rate and in Our lower our we to to a newer the prior third increasingly price worldwide treated quarter the grew confident for would of share U.S. sales are who lower procedures many continued royalty our population

that in results. Access Protocol, to data which system be anticipate ACC regulatory presented continue trial, And we patients of a of increase have transcatheter And We’re for approval guidelines. this year. to self-expanding from impact trial we our Continued study surgery. patients for Earlier pivotal limited meeting quarter, the receive CAP, low-risk U.S. at quarter’s our medical at the announced to our the to PARTNER the in help the X improve receipt year. March we a of risk enrolling specified minimal around commencement continuing and intermediate month, CENTERA the the X will diagnosis of began Ultra trial XXXX, the followed of the U.S. U.S. on in late the open-heart gain awareness, by valve our PARTNER efforts that we Late this SAPIEN end or indication expect care third X

review to a in Following comment TAVR process at is CMS of a July, meeting any formulating of treatment seeking of reconsideration U.S. Advisory disease. changes public This the NCD assume to are NCD. patient the provision or Committee for TAVR the global outcomes Medicare is opportunity. period We National and this a in deadly likely currently the the Determination, draft critically significantly for Coverage affect current important

showed June finalized XXXX. the by procedure new growth to expect estimated in the U.S., Outside continued mid-teens. the NCD significant We be be to

procedures low in digits. the grew double Our

expected international We spread broadly across for share most still believe adoption opportunities is across the of Europe, TAVR we grew growth, impressive spread continue at low. long-term to TAVR mid-teens experienced On an – we some therapy see In year-over-year procedures loss. we rate basis, as a estimate excellent countries.

quarter. this last However, to stabilized share compared our quarter

approval study valve Ultra. the The not in success for of to in of quarter, Ultra, valves quarter. to our impact we minimal of strategy does European commercial Ultra a demonstrated We’ve commercial system implementing X rollout are X This in sales granted its future a an decision which X expected X In track implement results SAPIEN the this and training experience. ensure we advanced injunction preliminary SAPIEN on a have in the clinical of in impact feature-rich that that And of year. platform, SAPIEN now announced our to or and decided Germany SAPIEN sales CENTERA on remain delivery this receive earlier fourth high including our controlled valve on of we system Mark Ultra development country. procedural court to CENTERA clinical targeted unrelated Europe CE or early a introduction of outcomes today, a outstanding a

This underlying We a is Cardioband, a remains by of believe SAPIEN quarter, qualified. see stenosis in be our that X TAVR limited untreated strong year-to-date would growth large SAPIEN a we to THVT I’ll this and to we from discuss X is we adoption, aortic summary, XX.X%, XXXX be continue rollout growing disease. In Ultra. appeal. for Japan, In centers new area region a fastest will still promptly to therapy and continue revised where for strategy contribution full-year because and sales expect moment in which driven

quarter encouraged of underlying aortic basis our up continued unit new We’re our Therapy, our offerings position. and Growth driven $XXX opportunity In X% for sustain solid in was that global the Surgical premium on the aortic by valves. remains we’re an robust to leadership million, our consistent confident TAVR new adoption Valve product with expectations. third and underlying was sales volume strong

we’re RESILIA of that With aortic reimbursement, announce in month. launching the Japan began approval to we pleased our valve INSPIRIS last

valves observed resilient of patients of treating is We growth adoption of expect to X%. a valve when early designed full-year This summary, sales be we underlying physicians attractive an patients heart valve expect this in region. younger new therapy, in important XXXX trend In this active strong we’ve option to to experience. surgical global class of tissue continue our for in X%

provide were an demand on monitoring This on clinicians. our important clarity sales continue across hospital Critical U.S. product and are greater by for expected provide our in excellent our surgical XX% Even particularly to options group excited Sales from as TAVR grew robust our status. can basis. surgical all-in-one extend patients for underlying feedback receive new $XXX primarily the somewhat adoption a designed Care, replacement the was new HemoSphere. an this lines, global purchasing older unpredictable. driver, treatment to is all growth performance strong replacing HemoSphere, systems were more expands, technologies. heart This although is monitor quarter, HemoSphere to by organization for in patient’s million that leadership about continue quarter led next innovative capital In our be cycles hemodynamic additionally be ability valve our to and to aided contracts. we is generation platform monitoring to

occurs analytics clinicians to the Predictive which alert continue hypotension Acumen Index, available before HemoSphere, predictive leverages blood utilizing to low until be to dangerous introduce turning X% of it We hospitals first-of-a-kind XXXX to Care. guidance of underlying in to it year becomes range Critical limited XXXX for In patients. HemoSphere excitement or by our top expected end on a is technology their HPI, of our of to expect This to current exceed strong is pressure due the growth sales particularly in summary, now quarter. platform surgical out fourth number full-year our a We or X%. early adopters Hypotension of

we our to continue Tricuspid Turning in therapies. portfolio aggressively Transcatheter invest Mitral our or Therapies, to TMTT, and of

you cover be can were the treated December. on overview from you’ve will in our TCT, Beginning in to select of some Investor high by our updates. mitral a last interest reinforcing clinicians level this of transcatheter Today, complete at large our more Conference the our There with at COAPT mitral strategy opportunity. address the continue its and portfolio to trial in repair, Cardioband, demonstrated of in As patients I month updates results and confidence regurgitation, potential. we’re with importance encouraged Europe programs, heard commercially TMTT also the reducing of expect clearly

in acquired platform to and to volume of decided were that the Edwards near-term mitral facility programs, to longer-term sales locations. to order the transfer our continue to and both from quarter supply and expect In expectations, Third we’ve tricuspid this quarter. scale to limited for ongoing we fortify in our trend due supply we fourth that manufacturing constraint, production other $X – our the million

XXXX. improve be by the constraints first-line We this to progressively many Cardioband as throughout important patients. believe provided an annular mitral expect Cardioband for We supply reduction treatment can advances, therapy

positive clinician system, of our the repair mitral last our to on patients In primary on in this European securing trial the to platform built XXXX. expect with continue on hospital is In presentations of approval feedback experiences the variable are of announce CardiAQ. to and U.S., our mitral and month pleased replacement, regurgitation contracts. the we’re the study We by which launch still the new receive EVOQUE mitral scientific of we’re in learnings of pivotal PASCAL therapy process and encouraged valve TCT

and We have clinicians from remain on Cardioband transcatheter number by we replacement disease we systems our U.S., over valve progress In our continue with treat patients mitral In strategy. transseptal help patients early And call in transcatheter to and of continue about feasibility to now who Tricuspid are global Overall, feedback our and the mitral a limited received confident with turn to again, Annular large study. therapies enthusiastic remain for clinical to supply, our initiated and we’ve the the a I’ll System we therapy. Scott. opportunities make tricuspid opportunity. expect to constrained this EVOQUE suffering tricuspid Europe MX and good Reduction in positive repair, SAPIEN continue

Scott Ullem

to sales and XX% up over and was GAAP earnings pleased and you, These in Thank in Adjusted underlying tax million practice $X.XX seasonality. quarter. sales of now quarter last will a would our I’m in third conversion growth rate, Mike. the in U.S. results to as which another and were benefited year. estimated Adjusted XXXX. the to growth EPS expectations quarter share tax our million, typical our approximately double-digit were sales per with sales by impact it report conversion prior earnings with our growth. line by quarter the two per $XX expect lower income. driven Consistent million share operating share $XXX $XX was related Adjusted this a sales for if benefit the $X.XX model adjusted in to reform the We a we inventory return quarters, than was by per $X.XX. United to quarter. earnings was consignment which excess estimate complete was our conversion surgical Adjusted been States, XX%, from this solid guidance have this $XX exclude higher year-end still was valves million tax reserve

improvement For year’s the partially last investments compared were a by the to margin benefits reflects product of Hurricane benefit Maria adjusted These continued and in in was period Puerto This the profit same primarily manufacturing gross Rico. more expenses the quarter, associated of and profitable absence capacity. XX.X%, XX.X% our offset year. last mix with

gross XXXX to margin, XX% full-year excluding be special continue items and XX%. profit We our to expect between

general selling, expenses. to administrative and Turning

increased if ratio the of HVT prior sales. This year exclude increase expenses basis points conversion. XX% a expenses. SG&A would quarter or Third The over to as been $XXX percentage XX was of lower the of consignment driven million, by you the impact of XX.X% related have sales personnel

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

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

reported prior quarter tax year X.X%, was in reform. down from reduction period. was XX.X% tax rate U.S. This primarily the Our for by driven the

the benefited This was than stock-based XXX employee last quarter. estimated rate we quarter’s XXX basis basis which compensation, points accounting guidance points in from higher for our

special from impact was quarter XX.X%. the items, our rate Excluding tax this

We at rate, our full-year continue XX%. items to tax to expect XX% previous special range be excluding our of low-end the to of

quarter or Foreign Compared quarter third guidance, growth X.X% prior $X to prior approximate Free in current $X.XX $XXX exchange sales quarter, cash XXXX flow of of decreased to the $XX flow about by less by expenditures million. X% to benefited or to effective earnings We our rates, from expect about capital as during compared full-year million. $XX per million, operating $XXX we At rates million, this define place. the to rates this have hedging year. the year. million reflecting was lift, continue compared generated a currency we program sales cash FX an the activities July share

excludes million. year-to-date audit Our free settlements which last cash adjusted tax was and taxes, quarter’s repatriation $XXX flow,

$X.X debt we had sheet. billion, was of at cash, cash equivalents of billion. balance the to short-term the Total end quarter Turning and and the $X.X investments

Just the which maturing both by of million. about reduced amounts $XXX after quarter, we the end retired these of bonds,

Now turning XXXX to guidance. our

heart slightly therapy care we For as the higher sales earlier, sales. are full-year, lower discussed and now we modeling critical transcatheter valve

valve each achieve current $X.X we company, guidance of sales higher-end for billion are heart million billion to the million and valve $XXX as of therapy, $X.X heart to transcatheter ranges $XXX prior expect for surgical total For $XXX $X.X the ranges to to for and of million total $XXX critical $X.X to million to billion. therapy care, billion the our guidance Edwards unchanged for continue

are cash prior earnings flow free per for guidance unchanged. adjusted also ranges Our share and

our We EPS continue to expect full-year to be and adjusted $X.XX. between $X.XX

expected be higher-end million. to $XXX continue adjusted free million to of cash flow we to Lastly, $XXX at the

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

Michael Mussallem

confident remain are sales patients in for outlook and Thanks, continued Scott. We our around more about passionate strong helping growth the world.

aggressively organic growth to leading with technologies, investing future. in focus continue our driving innovative while We on

as for pipeline turn coupled continued product leadership, and greater of market pursue foundation multibillion robust Our with over we our And David. longer-term success positions that, us opportunities. value, shareholder to well with I’ll it back

David Erickson

Thank you, Mike.

weeks. our longer-term updates discussions here with as for outlook technologies This coming Before will calendars to Xth, we headquarters will morning Wednesday open the be well our California. XXXX More in questions, would include the like when available mark leaders, we latest Xth, Irvine, December it opinion hosting views XXXX. key for at evening remind will of Conference you be the to for Tuesday our and on and on event in potential, our Investor information I your corporate as market December of

to broad order questions. we number In allow participation, now. you of take ask the that please questions We’re limit to ready

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

Operator

Thank you.

We will thank conducting question-and-answer now you. [Operator be Instructions] session. a And

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

Larry Biegelsen

the afternoon, legal question. XXXX Good on taking question. Thanks for One guys.

guidance following Conference puts in XXXX until helpful takes December. provide won’t you’ve in always and the But been you know I Scott, at some and year. Mike So the looking Investor providing

tailwinds underlying the than getting similar Street’s does should modeling modeling It to sales in growth. there’s consensus seem more help XXXX, this XX% to like EPS growth XX% which think XXXX revenue is year, I and about about next which you’re growth is the year.

I out anything follow-up. one is would And you So there call there? had

Michael Mussallem

Larry. Yes,

own You’ve kind of answered your question.

in mean, longer-term We’re not mid-teens for and want very we to XXXX with is we picture, comprehensive TAVR that undertreated. opportunities, growth to think AS when in expect to And growth our a dramatically you get TMTT and we a continue big guidance beyond the position that mid we some healthy, And portfolio provide very business I to backdrop. Investor it that know through marketplace until positive nice XXXX But to couple with just we Conference. matter. provides think if this is

and And We’re aggressively continued space been that strategy. committed just our win confidence invested. to have we’ve in innovation we in

the Larry. into nothing get later, numbers this we’ll So we I but at have think to share time. specific

Larry Biegelsen

Okay, I understand.

“I Ultra both spoke stock.” I’d So Mike, what have day. bit question. investor legal But to me meantime, I said, decisions, little ask And in buy today, that transcatheter with those a heart SAPIEN he Boston enjoy you’re valves, but concerned push Germany could Boston appealing let and my know and luck is X a Edwards doing like the frankly, potentially option. in in and any love I in this I’m does an

how So her or taking concern? speaking Mike, you questions. were if investor, his would Thanks to the that for you relay

Michael Mussallem

I you big time. Well, Boston’s invalid patents actions extended countries in involves a we’re multiple of a and know in that think leading patents that yield changed view our is to period recent Boston and and of an property The position. intellectual has number our litigation initiated Scientific are over picture, likely of have developments confident court not number

Larry Biegelsen

for the Thank questions. taking it. Got you

Michael Mussallem

Sure.

Operator

you. Thank

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

Jason Mills

other perhaps XX and wanted some having puts product rates in suggest your be takes. And meaningful and far more The What to Washington and Hi, opportunity on impact Mike, puts growth mind comes go that XXXX XXXX. seemingly months for we’ve Center from takes trial trials launches for low-risk are are the to Hospital would thanks for frankly the about taking XXXX and of the last you Larry’s could with thus back TAVR is marketplace. obviously seen LRT question in material that question. I to there and and the recently. to for

if stick share to in both So you as well market create time? strong, the and as respect anticipate sort new the United environment, I low-risk can launches growth your you we’ve of over entrants, over months, trials and just product next the with XX commensurate the are States and trends, rates guess, in seen that by we growth offset market six Boston maybe with goings what of on Europe, would year with sort to still would the an this that rates market where States, your and share maintain United

Michael Mussallem

it’s good question. Jason, Thanks, a Yes.

we said, the correctly surmised, indication But confident a to catalyst. TAVR. come going I think, prospects the continue to about As data be growth as some kind of be to the has out you that’s long-term this for to I potential related low-risk

As before but we a not quite probably a to said positive function, already a nicely. that’s net growing step market

talked quite stable. our we’ve has pricing been As before,

And confident mean, question rapidly valve that so impacts to of comes that growing our but the market to is and absolutely pretty we’re to going have but and in the from Ultra we it’s back going at XXXX real our first true time share, position. same new have the we’re a share year I it’s competition, CENTERA.

Jason Mills

on uptick you since Okay, your or it’s If on meeting may maybe clinical those to couple excitement were replacement mitral? specifically landscape study enroll, with I’m trial if not how about or at a may PASCAL Europe Cardioband on COAPT our know? wondering the perspective and the the month whether in around Mike, And so you different what fast helpful. any also would may have change in on questions augmented extra COAPT of do then several may side, the I these TCT side, be an And respect And not mitral with or how benefit studies have presented? of in was it then trial enrollment you PASCAL? going or And more the that COAPT. asked trials

Michael Mussallem

Thanks, Jason. Yes.

does opportunity mitral of the As try of you we’ve it our a The COAPT the strategy address very excited quite this on demonstrated reducing got out, new reinforce correctly that’s importance and pointed we’re large. results clearly in in the and bit regurgitation. our going about developments. mitral And confidence space to

therapies just- help to We’re that suffering are these in areas. about we’re transcatheter patients enthusiastic the

feel trials for facilitate we other enrollment, So hurt we side have clinical It that, can’t it. good the should PASCAL and that about our It both that’s ahead. sure. on

Jason Mills

Thanks, Mike.

Operator

Thank you.

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

David Lewis

you. Good afternoon. Mike, for just two questions

on $XX of First, the my TCT. million just you contribution In sort Cardioband. as at sense reiterated

the scaling talk about think assume talked manufacturing how you we thinking year? have better up So million sort just reached? next in decision follow-up. relative the conservative or quick that could was about you you And scale-up for I year, manufacturing basically you Cardioband next on way quarter? is see of fourth $XX manufacturing. Should about zero the as when revenue Is And to a about XXXX, then a

Michael Mussallem

David. thanks, Well, Yes.

being You’re We expect also acquired scale-up able the to our right, short our we’re optimistic supply more and and that change. goals and of now Cardioband more we facility. fell current to about of base

And so to transition we’ve already begun this other process to begin facilities. the

finish As expect to in to of by transition supply the improve the the we end and progressively prepared we’d probably expect I the throughout constraints year. mentioned XXXX, manufacturing remarks,

for to numbers, gives David, able So it’s and direction sense to us but a actually that why. of the rationale the you estimate hopefully premature be

Scott Ullem

just Scott. David, Hey, I add. it’s

not million we did probably range. look zero, more maybe $X it’s what In like QX, terms QX, be contributions going or something of in to in to that to going it’s but somewhere

David Lewis

biggest helpful. the this Mike, obviously, forward Okay, was call to update for the with And pivotal – U.S. that’s in the decision move then the PASCAL.

move about and decision can forward and structure trial in you of primary to on like? the talk so much. So, going Thanks the the is company that what look just MR,

Michael Mussallem

Yes.

one randomization the inoperable going heart local It’s by by So is trial a where going are two be patients for what it’s that MitraClip one this call class versus to and to trial, to mitral the primary we’re – – be going team. be the studying to regurgitation. we deemed

major MR around grade and the secondary It be a non-inferiority way labeled of XXX events. today. MitraClip is study patients endpoint centers at same reduction primary the then adverse So endpoint will XX

David Lewis

much. so Thanks Okay.

Michael Mussallem

Sure.

Operator

you. Thank

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

Isaac Ro

I wanted to thank a pricing. with and afternoon, start on you, question guys. Good

prepared for what been interested various quarter long. fighting mentioned I’m guys share in your that global a for interest market in all think the ways. has the I still year in active But seems It you pricing are that’s think, like your topic been on competitors I TAVR stable. went comments in dynamic competitively? pretty in of sort

be I’d if put you the on you. pricing? going interested So your in guidance Thank that year what’s could in color of on rest assumed What’s the topic? for in some on

Michael Mussallem

right. We aggressive Yes. we competitors. steady that our that saw down in and be prepared stable, quarter Isaac, sell thanks. perspective difference a last look you’re come. from a to I it’s to That’s continues although that continue did versus quarter between share to that little a remarks mention We would in stabilized remains probably conversations sometime in Yes, Europe. Edwards XXXX. pricing we probably significant before. the very we global And probably, bit. there That’s average condition pricing believe some selling that about we to some and for price know expect had been

So know if question. I don’t that get an extra helps

Isaac Ro

Yes, sure. just MEDCAC the What will follow-up play then if And out you. don’t make lot that that to least, That’s time? I’m at think debate gets Thank just understand has over think panel reasoning means that overall? TAVR why a been as your impact, of lot you’ve sure meaningful a you trying the initially in got and how NCD to helpful. I the There for for you – how comments marketplace updated? outcome. on your about, a of obviously

Michael Mussallem

it’s question. Yes, a good

CMS is perspective I taking a what’s think from and TAVR on success. going at big look our a reimbursement consider a picture, that in

We on the and have will for updated. impact happens opportunity. to TAVR – for now expect So although it significant it updating be the NCD right needs don’t a whatever

Now, when some do of or no significant change. you decide, kind down. course, just own share modeling, they with But it trying we’re our could we to have of modeling depending on that we’re what influence up

Isaac Ro

Understood. Thank you.

Operator

Thank you.

next of from Please Vijay Our line Evercore proceed. comes question Kumar the ISI. with

Vijay Kumar

my for Hey, guys, thanks question. taking

When obviously, possibly you But on you next about XXXX the XXXX think approval a – start where and the PASCAL Europe mid base into in pressure to the to I below up have wanted negatives, have pricing of eyes in could ramping are right, think I that given commented the maybe case the some coming seems and with be year, any we just other think U.S. of? XXXX are assuming other. drivers, growth obviously, at Mike, XXXX. think, So turned reason year. point, PASCAL and don’t the the all competitor new ongoing of of low-risk mid timing one we’re that Cardioband why XXXX, levels side, you launch you could in be on I one you the and have to launching. Is the offsets TAVR I

Michael Mussallem

Yes.

that that we’ve The has impact be going products long with forward. for at at big the accounted appreciate in is you’re pricing excited kind looking it having Europe dealt will won’t the I we of new approval a it. The in we although So impact going negative, and we been and about was a that. for fact something the competition so that about there look that fully that on time. the been have we’re future we’re That’s inevitable pressure positive QX, there have to somewhat future. And U.S. pretty

We’re going Ultra to CENTERA be to about as well. excited bringing U.S. the and

yet talk we’re a business business larger of remember more of launch year, that it’s – going the has our to to But positive. those, also and have on is influence but sales. aortic the be THV, you and TMTT probably the much terms going prepared near-term to what time in terms we’re our on about PASCAL In of when not some upside to of XXXX

Vijay Kumar

active could I And one if maybe trials. Cardioband, that’s And then Mike. helpful, on the the

different versus thesis very the a population. patient or redesign the the – be need think, do you some I not are a device that it drug from true, clip whether could and trial, to or we’ve be to just, feedback COAPT, patient population I the there seems people. spoken debate Cardioband post annuloplasty If trial. designed is And the is [ph] Cardioband assumption you to some may then to needs

know, or annuloplasty need trial – how So Cardioband the would I the design it how is those dead, Street the one, guess, want be if be does versus helpful. is thinking I wrong assumptions and right is to Street think, I to comments, Any on changed?

Michael Mussallem

to we the but our that’s positive So, annular some really belief on to going we it’s Cardioband feel feedback and therapy. we for that for picture part, a require by provided us, to could advancements continue first-line that. big reduction a our important continue get is strongly Again, be – about

of post-COAPT, the trial of our trial, to we Conference we you are of that. clinical on in learned with assessing the terms that that we what design Investor implications active more December. to we’re about to going when implications the And in share get future have In hope was based

Vijay Kumar

Thanks, guys.

Michael Mussallem

Sure.

Operator

you. Thank

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

Raj Denhoy

just a Hi, I maybe if good wonder I afternoon. bit could Europe. dig little on

it’s you as that, give that mentioned just I really the can some curious confirm sit the we that, you think, loss dynamics share in you in see did us I’m at you but terms Europe here this can stable anything early of year, and you in point. if today?

Michael Mussallem

Yes.

we’re to to happened, and loss share quarter, like growth and last share indicated perspective. is our we year-over-year reflected so so we we continues as be What loss in experienced sequentially seemed felt think, we our it rates. some continue. has from That I share stabilize saying

Does see the that that continued a was get at this as trend quarter. – it your third we saying, Raj? so question, continued we’re didn’t into So

Raj Denhoy

in don’t curious to and of it can it worse in a terms more where you that experience And Was there’s it’s why anything specific offer even if was? any you you Yes, I’m did does. accounts loss expect Europe? going share get why or It doesn’t.

Michael Mussallem

that of countries, – a I’m parts vast is know that. of able of kind a to don’t mean, a I this I Yes. here. do lot pretty lot moving

when of valves. I just think true. It what heart it’s generally widespread. back the Even in we results in change it’s a take it’s not doesn’t procedures happened like actual transcatheter QX, to think to lot

Raj Denhoy

my from just follow-up. Maybe fair. Okay,

go valve, curious to you a mentioned that I’m as of If Ultra you rollout Just look measured at that now you think there’s going slower for Europe. in not bit And more to out? something you about you’re why a that is? roll need that

Michael Mussallem

a it’s good Well, question. Yes.

from the experience than that of SAPIEN additional rather ensured with own to high-performance the Ultra training. that out learned we we that improvement, through Remember, to we the wanted took our but system on – we it procedure had in steps amounting the And an sheet ensure also benefits X. from valve different Excel is So balloon with aorta, is alignment Ultra training. we

us So this sure through as very we valve performance own to this of knowing our we maintain became that different we apparent high experience. roll a just it’s that and that to wanted out level make

Raj Denhoy

Okay. Thank you.

Operator

Thank you.

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

Bob Hopkins

and Thanks very much afternoon. good

Michael Mussallem

afternoon. Good

Bob Hopkins

I just Mike, of want to ask questions, on a PASCAL. couple

us a PASCAL the from time the assume you’ll as study. all, would you the to First I sense trial. any just of first data first give can from European data see that be

So when will we see data? some that of

Michael Mussallem

it Yes. data guess would be on when PASCAL. will be that mid-next year We would really available

Bob Hopkins

your the about curious on focusing TCT. is misunderstanding. and my What’s market MR, Mike, opportunity focusing also, I’m this for just then all one But bigger the that And the maybe attention the obviously on create trial which at U.S. secondary strategy PASCAL strategy MR. primary Okay. is

So what’s the secondary? strategy on

Michael Mussallem

forward Yes, trial. have our anything I right, to Conference, to when obviously, Investor we But with the you’re We Bob. But to mean, population radar existing well. more say that’s get specific probably moving about hold report have on screen. this it’s patient didn’t important want up getting an to will I we as our at point. that don’t – on

Bob Hopkins

Got it. Thanks very much.

Operator

you. Thank

Our line next from of Rick Stifel. comes proceed. the Please with question Wise

Rick Wise

Mike. afternoon, Good

a it it means? thinking of better back on controlled Does receptors? Is and take help using what this this you the come it I release your process we going new forward it could mean assume? get to makes take me will to the slowly. And get months to controlled Ultra. and the that? now TAVR for us both that And frame to is years. sense, the all CENTERA were, should you six the us help it – generally it your legs of norm as you understand behind launch maybe could or Does Can sort mean new and that no, couple a Let more sea comments it,

Michael Mussallem

the We feel don’t certainly know I norm. it’s Yes, responsible. new

are over We are we already offering to going some improvements systems think high systems performance. that have customers and that very

performed data the X big way that So is in sets. you SAPIEN know

feel at whether to so or systems generations sure perform or the And the Ultra, make of we to CENTERA better. that level that obligation continue next it’s least at

And so do that. we just time want to make sure to that we invest the

specialists. patients not feel there’s from but to them we’re For I like and them, It’s do patient. start slowdown focus we done right a hey, you systems, in this to great advancements reproctoring our like get of going let’s be understand that recognize, the these again, performance training want we expect to part, on most so number well, clinical by really people first

Rick Wise

for how products? that Scott. is investments ramp in you you right. to completed? maybe these highlighted on? for long capacity about Scott, products. that affects, that if go question spending new All Maybe that’s at going in think And of talk – anticipation how When the that growth new a And what all,

Scott Ullem

All right.

increasing for couple our some remember, to we’ve and do And had constrained, to and years. investing we capacity So been supply THV. catching were now a support up we so just of

up an support Now in also expansion we’re to TMTT. ramping

on a outside And earlier in to investments U.S. year in the facility so as and the we’re Rica making a plan existing in just of Ireland. our and been in working facility a And facilities you know, building put Costa U.S. new this we’ve announced

investment the spending of continue that down and number is think I so going road. for to a years And

years going needs and expenditure we these higher the seen to $XXX probably investments. be million year. will ahead. able be capital reflected it satisfy large that to And for be result the You’ve We’d in untapped this really is addressing markets our over

Rick Wise

Thanks, Scott. Thanks, Mike.

Operator

you. Thank

proceed. of with comes Capital the Glenn question Please next Our Markets. from line RBC Novarro

Glenn Novarro

don’t in Hi, I’m know on PARTNER the you later positive about good and X. of from year hearing call Hey, rollout for XXXX want Mike, afternoon. benefits I what slower this a I some to But as in SAPIEN guidance hopefully XXXX. Ultra give think

of as one slower easier So and going And assume, little know should well. to kind we a build comps second-half? bit first-half our a I are as models be for stronger the a XXXX,

we and of about XXXXX So maybe Thanks. color U.S. think TAVR how should on some kind ramp?

Michael Mussallem

thanks. Yes,

products the jump. I sort or absorb the the the – got right, marketplace the than data. function step going happen I you the think rather think idea. way think We a roll that more products whether out risk it’s gradual right rather of low is we you’re way should do of rest than fashion a this or the And physicians you’ve in to ramp way in and the new think, of XXXX.

think risk yes, it’s So I come approval doesn’t itself Remember, about to think that. reasonable low in the late XXXX. until

Glenn Novarro

you trial? PASCAL my are follow-up, launching just clarify Can as that in to where then in you’ll just you can us in think to you when as be specifics some just And Okay. us remind And Europe. Europe? enrolling XXXX in Thanks. give you

Michael Mussallem

specifics resisted on We’ve Yes. giving XXXX.

We’re on continuing we’re right on that so to track patients. enroll trial,

more so so Glenn. it’s Investor be to at want that the XXXX. detail But may in for And where have you, it we right Conference, we be and to expect launching we

Glenn Novarro

uptick, anything us for more helpful? is just one the is? We’re for XXX, it Okay. you tax be in Can rate ballpark modeling year ballpark would XXX but Scott. I can an in bps, rate sneak the next where next the tax Scott, for Thanks. year give

Scott Ullem

at Yes, a that I at this lower year. And can we the we’re would beginning this of that reluctant say to it’s lot expected point. than do have

we rate than. into lower-end the tax we’re XXXX, on of tax the premium a employee from know, big get this for influences in XX% any performance-based rate the the more is of but on I’m mind, you one our that Keep options. reluctant As excess looking stock-based, benefit to full-year received at XX% to

when And we’ll in a little so the able Conference we Investor December. that’s to get estimate be to a variable maybe that bit better

Glenn Novarro

Scott. Thanks, great. Okay,

Operator

Thank you.

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

Bruce Nudell

and afternoon, Mike. for Good taking question, my thanks

had you You’ve just CENTERA are your of pricing, some up customer to And in given with Europe. appeal all the discussions CENTERA experience that about expectations? the commercial seeing is

Michael Mussallem

customers been a mean, our feature-rich frankly we CENTERA sense tried of has and I really Yes. that lot the experience like excitement. it. who It’s have

early trial. are for people those very that And strong And so the system. the U.S. has that feedback feedback on positive the in is quite early been the in even

Bruce Nudell

today that my we And $X a very convincing benefit but And important way. rehospitalization COAPT. said, billion be Actually, explicitly be about now actually – that both people from last and clinical for market this mean, mortality I have in mortality a we’ll And expect before on follow-up to quarter. a thinking and your to in got you hope XXXX. very is you’d said, proof-of-concept? it I listened dare you you don’t benefit, comments

Michael Mussallem

surprised in have and being, you’re is as that, and and $X I $X know impressive trial we we I this here’s our said, backed Yes. projections our about confidence the we off and right and think billion haven’t shown very that past that the even on us. billion COAPT

we’re to process people We So mitral I starting to I that we anything studying terms a but we the we’re in don’t able deeply, like bit record, thinking the about you little broken that models point. we’re get of Conference. when Investor with guess, would this be have in to Bruce. get of share to now. at mean, a feel

Bruce Nudell

much. very Thanks

Michael Mussallem

Sure.

Operator

you. Thank

Wuensch the comes Our of BMO proceed. line from Please Joanne with next Markets. question Capital

Joanne Wuensch

and evening, question. you thank my for Good taking

of necessarily respond ask many things How us next frequently defining of how STS is, [ph] that really There’s already One not sort or shifting patient much pool intermediate-risk. low them investors low-risk versus penetrated has OG low-risk metric labeling been with of segues of the how that? for the the sort as you the to shocks the can into help would of year?

Michael Mussallem

because again, backed Yes. through the about for We penetration this group. We low at our any designation surgery have stay risk. up groups, patient risk that, all there’s customers whole that think, groups have for is anatomy stakes obsolete an believe are We the equivalent and out substantially what by for there. is of, about demonstrates quite be notion how it – once it’s that is perspective. Having question I largely NCD. believe going to said studied to categorization significant the going to it’s to clear And that NCD that that of will TAVR of become paid that going to be about going high we’re not off-base don’t think the it’s been there at label to on gee, very the patients various X that by trial surgery? from go and PARTNER risk be this and patients least, risky it’s The to is is a it point, this go more has been

So the change. going to is think conversation we

study to I in probably patients that PARTNER think symptoms. really have aortic done valves going stenosis transcatheter we X aortic believe last and helpful big be to data, it’s the severe with

Joanne Wuensch

second serves, you full December. But on update to I’m timelines. you’ve you a you. with in us Thank an or are my development? we’ll that question product give clinical where If get paused can do FORMA. update memory with And has sure to trial product

Michael Mussallem

thanks. Yes,

revised it’s And we some led and early resumed procedural basis So FORMA, enhancements. still we’re patients a system But learnings experience pleased new we as system with compassionate rolled that with on that. the with we to had treating FORMA out and the system.

Joanne Wuensch

you. Thank

Michael Mussallem

Sure.

Operator

Thank you.

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

Chris Pasquale

Is wanted the issue the product really to Mike, first about the fix with Thanks. the you things manufacturable? just design tweak change is with not Cardioband. facility more and location are on there itself need to here confirm just an the that or this make to I product. it

Michael Mussallem

constraints, supply fixing Yes. No, – we’re Chris. comply really talking about

If that issue that mean there. been with the I the we with an demand? your has is, question or the demand is performance there believe

system. got system to. and But at Edwards want the to There overall of a over some supply that of like time. quality significantly. to and ability to lot related has – system we’re suppliers the We’re that always shortcoming, about innovating But integration we’re the has not talking at to lot on this we’ve level constraints been a improve just been we recall, going supply level we’d but our the the are I’m that into performance

Chris Pasquale

but is not it’s talking to performance, it clarify, just made? just manufacturability of with being the about just to or was clinical Yes. product the problem itself, make where it too hard And a

Michael Mussallem

Yes.

the in make typical we very both typical kind some you things, they’re and migration Israel also They not would very many, of We just wouldn’t manufacturing need like to employ. system. of small we in what get feel these have itself. into suppliers that suppliers in Edwards be when of – in Edward that’s a course, facility So, of many the to suppliers facility

the in both fortifying near-term boosting our confident, and able feel also we us long-term and scale being for the that expectations. to supply So

Chris Pasquale

bit. bit That’s for about something Should helpful. double-digit for then this you we that a just frame upgrade talk sustainable short-term in growth And or a right little business about on quickly could get going that’s the now, through a quarter, that little noticed be while? as you’re opportunity thinking that can business very cycle you how a Critical should XX% you The actually be Care, grew HemoSphere?

Michael Mussallem

Yes. very I mean, what’s our these rate. popular really have and with growth adopters we’re right, really been customers sales boosted has pleased with HemoSphere on early And Care. you’re going in Critical

been help really little to that cycle this part like. cycle purchasing deep this for from to for get did is we’re our going we replacement replaces what bit monitors. replacement a Overall, not contract. capital look a us of year some that’s It’s existing predict driven is this. benefiting the Now has HemoSphere The one it organization what this at hard point. as It’s into group we’re

growth rate just mean growth it’s in we’re what And to a future yes, rates. exactly quarter. enjoyed third going so, to wouldn’t tough for to I it’s the we say going anticipate the that maintain automatically like

Chris Pasquale

Thanks.

Operator

Thank you.

the proceed. JPMorgan. from question next with Please Marcus Our Robbie line of comes

Robbie Marcus

help Scott, how question. some the better year into the on the questions FX, count is us or you for than both about expected. line that? and think and could bottom XXXX? here. margin taking there hedges your in the the with financial top drivers And Gross maybe we included came latest for housekeeping what Maybe balance of in Thanks

Michael Mussallem

Sure.

to XXXX up expenses the where right a not it points with in having last Hurricane it the by that little right growth that and As THV, it is about it above think of Street, manufacturing reflected going and we was turns versus the that capacity benefit bit but Maria investments from thought from out, third quarter experienced reflected of where gross about improved over mix, in XXX margin recurring was on I benefits we year. and XX.X% the expected, which It little the we was came offset a we’ve That earlier. where was someone been also be. seeing bit basis the talked consistently we

Robbie Marcus

and FX current where stands for And for year top line this and bottom next year rates?

Michael Mussallem

sales, time benefit expect about we a down we’ll insulated, to or the see get profit So in for of be million. FX, line, we to we’re we for tough the $XX gross the it’s it’s is during predict year. third about by the that impact largely At that But the the hedge EPS, profit full-year, to X% to the the going realized quarter. benefit $X.XX from line, course what gross these outcomes continue

Robbie Marcus

And program? thanks. that follow-up, give on maybe update Harpoon a just any the of haven’t heard could Thanks. us you lately. as Okay, Maybe the I way status

Michael Mussallem

Sure. talked Last of the we about time we it. cause that some of we earlier. saw We complications examining said are the root

haven’t We that completed analysis.

will So as completed. have soon we we report that as you to

going that’s hopeful that We’re much go not longer. to on too

Robbie Marcus

you. Thank

Michael Mussallem

Sure.

Operator

you. Thank

line the Our next Partners. Antalffy Leerink of from proceed. question comes with Please Danielle

Danielle Antalffy

one Thanks taking U.S. ex-U.S. on much Mike, two good you. and I have on for so for the just afternoon, guys. One litigation. question. questions and Hey,

we’re feeling happen one Europe? this environment, on about sustainability And just know before. have from the So next, months. I two This first on And presumably the seeing you the I But follow-up in I’ve context in U.S. going to of of call to four XX how sometime asked it, be just market could XX litigation. the over are a that players then pricing potentially is what or particularly

Michael Mussallem

Sure.

selling approved wonder heavy than to a we are market. is able that. especially in It’s product pricers, lot U.S. we market. have to different necessary with U.S. and the to necessary to largely think come be pretty our experience valves and We disciplined to lot whether THV of heart clinical And be in a the U.S. going a all the our competitors the get investment that’s lift work

anything decline, going So that’s think be – we’re but in models, concerned. dramatic. we model long-term overly to there’s don’t we a modest not price We our

when our we part, own some on discounting pricing, volume, do right? most we do based the For

Danielle Antalffy

Okay.

Michael Mussallem

Yes.

Danielle Antalffy

I how last feel me. question it. the here got not for that assume, necessarily the let’s But significant to understand that X Ultra. it to trying I of And advance wrong? then guess, be me comment or does without for feels SAPIEN get to competitive advanced. get you’re SAPIEN positioning about with there’s is Ultra share think But in Okay, I like curious Appreciating no going your It any shift about enjoined. just market you just thinking to certainly that reason on Ultra tell litigation. I’m from should ongoing there about assuming here. if I’m me think you for am But X

Michael Mussallem

we’re Yes. I really pleased. mean,

X supports I awful lot demonstrated it performance, data of is has SAPIEN best-in-class and think, that clearly that there’s that. an

that and that. and do to in Our able do with along some that be Ultra efforts was have even and for it to to able better advantages physicians patients go

it where about feel stands. very good we’re the X So proud SAPIEN platform of and

Danielle Antalffy

so you much. Thank

Operator

you. Thank

from comes of Barclays. Kristen today line question Stewart final proceed. Our the with Please

Kristen Stewart

Hey, for the guys, taking thanks question.

will But you’re rate? just for to not Sorry explicit stage not about there’s you reflected And about Analyst being – of give tricuspid, XX up kind need you be and of closer about new my sales at thinking sort do R&D or just guidance. a on rate little I I in came terms on assume of at whether giving this I you philosophy and the run not this quarter. a ramping Day. back generally mitral XX things how to really that’s from of guidance perspective ongoing support the your know Is voice maybe or of further. then we investments feel like wanted just made kind XX bit think that be heavier or this think to marketing how this circle a to year? and should under And kind about P&L. in may a additional

Michael Mussallem

Scott in Yes. let few Thanks, and I’ll Maybe additional make comments add color. a then Kristen. jump and

We’ve in portfolio also opportunities. mitral So, not R&D we’re aggressive associated the only investors big tricuspid. transcatheter and see our picture, in and with but new rich portfolio, current been aggressive, we in

think, at our third we a in I quarter. for our quarter. R&D high Remember, sales least percent looks always company, of is lowest is this as the this our – seasonal our seasonably –

So deceiving. to the stay nonetheless, a bit we’re tend in be going ratios investors space. But to aggressive

Scott Ullem

invest that up benefit the in tax programs commercialization. advance reform on and even to XXXX, had We really we add. just aggressively accelerate end these able more of ultimately I of being we’ve to to and had this so some deck

to to these invest fortunate be And long-term so continue organic we’ve able programs been top and to for line fund growth. to

Kristen Stewart

just employee assuming is of year-to-date you related the no that stock this Scott, that year, I to then, I Is XXX. year, with make for guess, think, comments. before. that a And start of of tax, at something But know and forward consistent up the on of compensation? topic the you of to kind both I full out is of next typically didn’t thinking kind kind benefit? adjusted how this I Okay. was run look much came quarter kind But tax rate follow-up of year-to-date line, the just if that

Scott Ullem

up price exercises higher benefit happens. also The the to greater, as is is, estimate, performs and double so price stock get Yes, tax then you when know, this well, reverse the really – because to the even you it’s tend benefit. hard stock this go is

not does same of and many of as the those the upside, may not is if so rate. as stock exercises mobile to then the tax flow not exercise degree be on the the value And there through

this XX.X%. we’ve quarter, realized rate an – tax this So adjusted year, effective of we’ve about

talking about this to a operating our and this the of you just one benefit. XXX excess is one when the But that’s volatile reason it the But from operating to before also is our because think of line It’s points we’ll and result mentioned for started we profits more the get tricky. we’ve accounting try new tax margins as practice. for that XXXX. call our bottom about why Conference of give – was Investor You basis more

Kristen Stewart

much, sense. that very Thanks makes Okay, guys.

Michael Mussallem

back Edwards. Scott, telephone. and interest continued thanks I your all that, it Well, Okay. for I’ll with questions David over to additional in any David. And by welcome turn

David Erickson

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

missed XXX-XXX-XXXX the XXX-XXX-XX. XXX-XXX-XXXX use If any you have by hours. dialing today’s you conference access available replay and portions or XX the of And for can this be call, telephonic number will

will replay much. be audio on Investor an Additionally, Thank you the relations of available section our website. very

Operator

Thank you. conference. concludes This today’s

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

Edwards Lifesciences (EW) 24 Oct 182018 Q3 Earnings call transcript