EW - Earnings call transcript Q3 2019 | Edwards Lifesciences Corporation

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Operator

Greetings and welcome to the Edwards Lifesciences Third Quarter 2019 Results Call. At this time, all participants are in a listen-only mode. A 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 our host, Mark Wilterding, Vice President of Investor Relations. you. Thank

begin. may You

Mark Wilterding

thank call for and are Scott Officer. Officer; and me Chief us. on and Financial Chief today's Mike Ullem, you Diego joining all With Executive Thanks, Mussallem, Chairman

of after financial XXXX regular Just close trading, Lifesciences third results. released Edwards quarter its the

management the Q&A. for today's and in release results the time call, During financial the statements remaining included press accompanied and will discuss then use

forward-looking include, statements and note aren't that competitive based trials, fluctuations. be that currency Please guidance assumptions statements management litigation, foreign on longer-term regulatory financial projections. to making These for growth but will limited estimates reimbursement, expectations approvals, and are and matters opportunities, clinical

obligation date statements which does made they to only after are any Edwards update today. of These them speak the on and undertake as not

statements may XXXX release, available factors cause that to SEC uncertainties cause that on Additionally, risks Edwards' which and important website edwards.com. found could information the filings, press on be and in concerning all other could at are our product differ of Information the Annual actual involve Report safety Form materially. XX-K and company's these differences results the

are Reconciliations to mentioned when a management to referring Finally, underlying otherwise call are non-GAAP the referring during press between results. they and financial today's that terms GAAP GAAP release. is and measures, numbers adjusted, quick using reminder non-GAAP in included

turn over Mike to call for to Mike? the I'd comments. like With that, his

Mike Mussallem

with quarter strong valve which of heart increase report Thanks a very who the third results, patients transcatheter to Mark. treated pleased We're therapy. number in reflected were large

grew replacement. digits by $X.X all underlying in was transcatheter XX% basis led quarter significantly to double regions this aortic on than in increased higher expected. growth valve sales Sales an we Our globally billion and the

that investments in We're also clear trials progress have therapies new in believe to will meaningful clinical impact. numerous report future we and pleased growing

lifesaving from ever patients even technologies benefiting our importantly, More more than are before.

led Growth by an TAVR estimate exercise our discipline. across selling adoption to global continue continued stable XX% strength sales Globally all we $XXX procedure In million, notable strong our geographies We was with global basis. was TAVR, third U.S. underlying mid-XX% as remains up with price therapy the pricing growth on were quarter the range. average in in growth comparable

all In that a SAPIEN indication warning. expansion total around and an by bolus which year-over-year comparable. that TAVR estimated milestone, and TAVR the strong driven anatomical U.S., their traditional on was led SAPIEN allows Stronger with needs of TAVR we the and a severe X AS grew be growth expected based to significant XX% This X recent patients the individual for to on procedures considerations X treatments Edwards' evidence risk growth basis PARTNER following approval versus FDA our diagnosed than for represents was unexpected Ultra systems. considered

Outside the quarter just this U.S. comparable. a grew was procedures Growth we TAVR across the year-over-year in the over on was and Edwards' U.S. third basis total growth quarter broad-based estimated XX%

We therapy low. strong TAVR is by penetration continue be international of to still very adoption overall particularly encouraged the where

estimate that we competitive In and our the Europe, was in was growth position Edwards' teens stable.

a available valves transcatheter remains demand decade for have been that it's strong. over commercially note to Europe, Although encouraging in

disease, increasing stenosis in focused strong Europe, and the very and TAVR Japan driven see SAPIEN on U.S. of the to Sales an X. other availability remains TAVR immensely aortic as adoption continue therapy. strong remain by Outside we we was growth regions and undertreated

valve paravalvular very positive. leaks. the pleased continues The to valve's we offers As clinician includes SAPIEN and outer further we've discussed, performance skirt remain which to modified the material reduce be X designed a Ultra feedback proprietary with

proven system, are finalizing Ulta time SAPIEN migration improvements our previously the and We at decided system. to of accelerate same announced the the delivery delivery X to

over ramp to expected is plan rollout updated next quarters. The the several

X quarter. SAPIEN updated will pleased to half that in this we of Ultra which contributed is charge to early XXXX. U.S. plan in for such, This a TAVR now most approximately I'm to enrolled. now and to account clinical trial, believe sales provide Europe our As update TAVR our an

trial is XXXX Recall severe haven't suffering XX on indication continues Enrollment this reported from a XXXX. initial focused now that large expansion patients our expectation anticipate we at U.S. first-of-a-kind the yet who completion for nearly throughout sites of symptoms. AS, in and versus

and believe manage irreversible We the potential to the prevent clinicians that to TAVR Early has continue damage. AS that to change way patients approach

you heard results surgical severe were SAPIEN patients clinical low for TCT, sustained risk presented advantages at treated early as with at trial Finally, AS quality-of-life X. last demonstrating month's and

PARTNER clinical patients. together these of the findings Taken use in quality-of-life these support with X superiority the TAVR demonstrated further trial the in

the given summary, expectation TAVR raising nearly performance, our guidance. XX% growth expect year previous year-to-date strength now We full we're our of of XX%. In underlying of our around versus

early growth TAVR while in a consistent we This XXXX. is next still XXXX in difficult to estimate a the return low-double-digit of addition, with globally procedures $X In and opportunity are modeling our to forecasting billion year. process predict,

XXXX higher Based that slower results, comparisons. it's we year-over-year on in of XXXX second report half the our growth will likely trend given the

that TAVR believe remains strong opportunity We robust our the sustain that global position. and will innovations encouraged our are continuing

of important patients portfolio In and advancing to solutions in TMTT, third to in today. therapies our tricuspid meaningful transcatheter the options progress mitral made few tricuspid technologies or mitral bring with underserved we quarter

Europe. quarter, was revenue third this sales was in PASCAL In commercial $XX million. The the of of global bulk

patient with rollout on physician of success We training, PASCAL and focusing disciplined procedural are pleased outcomes. the

the than While receive we positive contributor revenue. lower differentiated feedback on continue therapy, strategy premium-price physician to expected our to a this was slightly

to I'll or CLASP developments. trial PASCAL study valve mitral recap now to continue In select enroll degenerative give in IID we repair, our And disease. valve primary pivotal of U.S. a mitral brief you

secondary in commitment In IIF from a XX trial enrollment our valve or results one-year We with have our initiated body with evidence, European also at build functional on clinical study our recently mitral we presented patients TCT. CLASP positive disease. of for line to patients strong pivotal CLASP

clinically low in mortality failure as capability cardiovascular significant encouraged also and mitral statistically as status, and especially and hospitalization exercise heart functional sustained life. and of impressive in regurgitation. were well of improvements experienced reduction an quality rate substantial by Patients We the

In reduction acceptable feasibility mitral platforms study end pleased and we Data MX significant EVOQUE SAPIEN experience on the both to the both a these highlighting SAPIEN the before the U.S. profile a therapies of and early replacement, remain with TCT trial initiate experience with we're track demonstrating valve transseptal presented ongoing MX year. with and feasibility, safety latest MR pivotal at therapies. clinical with were an of

the of were this made the PASCAL in pleased September, trial end year. by tricuspid We received repair, we Class patients we activating plan II TR pivotal start Turning FDA pivotal in the the that accelerate to to regurgitation. approval a by sites tricuspid We for to end trial second in the quarter symptomatic transcatheter our decision tricuspid to severe year. of with PASCAL study

the TR highlighted acceptable data reduction Cardioband we days. TCT, at study feasibility XX At latest tricuspid demonstrating performance with early our from significant safety and

year is In now the company below Edwards to summary which full and activation. expects disciplined pricing site be revenue TMTT continues strategy $XX premium introduction moderating XXXX for a million as

XXXX. trial early plan -- X trial We anticipates clinical as end pivotal include In in as well our continued the in SAPIEN XXXX process, in forecasting sales milestones by XXXX the TMTT doubling CLASP addition, initiating ambitious achieve the pivotal XXXX the pivotal enrollment which SAPIEN our our remain year. MX still on-track the to trials while of

billion to patients of the continue for We and $X about solutions opportunity bringing TMTT reach portfolio to need. our in estimate global approximately by passion XXXX a

third the of underlying for sales quarter X% Heart, Structural Surgical In an on million increased $XXX basis.

our TAVR high-value was of Our continued technologies partially by expanded. premium aortic U.S. growth procedures was as U.S. outside valve by the the and in adoption lower strength adoption driven surgical offset This

and steady is increased In encouraged more standard surgical the the the the with RESILIA quarter, adoption remain care world. driven around third many INSPIRIS utilization among valves. regions grew active very patients. INSPIRIS demand in geographies valve by in of becoming of We valve all tissue younger

European year. earlier mitral mitral the system Separately degenerative more potential treatment our heart disease valve beating offers of consistent the for surgical for regulatory HARPOON recovery to expect valve at faster for patients. we HARPOON of the outcomes repair approval and around end continue

TAVR recent on surgical our for we provide the full to aortic sales, year in although X% headwind PARTNER summary to our expansion an based underlying In year-to-date expect incremental of to the to superiority X continue results expected are X% sales indication results. of growth

remain to premium and excited leadership our patients provide Heart for We ability about innovative treatment more global surgical to Surgical technologies. Structural our options in extend

on were quarter In million Critical X% underlying for $XXX the basis. grew an sales and Care

strong Our to monitoring contributed product this growth boosted HemoSphere, and lines performance all-in-one geographies our platform. with by

at predictive smart on of HemoSphere from in HemoSphere. monitoring. to of the received use FORE-SIGHT enhanced our analytics a range of create capabilities full tools strengthen clearance technologies CASMED in to and We unique cerebral the leadership a our quarter integration further recovery The acquisition offering FDA will oximetry technology third

In growth to integrated quarters summary, expect the quarter, momentum year full XXXX the the HemoSphere from the three fully platform continue sales XX%. given expected underlying sustained of of in we the the to year first through fourth growth X% and

to turn I'll now And Scott. the call over

Scott Ullem

Thank you, Mike.

strong strength top impressive supporting all our Particularly underlying from SAPIEN recent which TAVR, was with evidence regions. our sales our underlying growth continued therapy. XX% reflecting of X benefited XX% We in performance growth the across global line this clinical quarter

versus approximately growth, to XXX the number Growth was of to in billing items quarter forward days consumption related increased onetime Japan. year prior in change and the tax contributing of ahead aided buying the by basis largely points

We the $X.XX in grew development, driven programs. by structural research performance. sales the per while significant prior our heart adjusted achieved primarily our our on quarter investments third in share maintaining notable this growth Our transcatheter year of over earnings XX% and

we our share the $XX quarter, $X.XX. charge adjustments last our third to combined additional other normal strategic recurring charge to million quarter's related quarter decisions valve per GAAP aortic earnings with primarily third the regarding During an reduced This inventory transcatheter portfolio. recorded

full the the release. with discontinuation revised Ultra adjusted Including is $XX rollout reconciliation of included per of second and charge, is plan A the our CENTERA earnings share XXXX and million. today's GAAP impact between quarter

details results then third I'll XXXX. now of cover for quarter our guidance and the discuss

to adjusted by was last compared of XX.X% For same This favorable in by year. gross spending the from quarter, regulations impacts exchange the the variances. support was product European partially our the manufacturing improvement margin period mix, device primarily in new offset and and XX.X% driven foreign profit

consistent be gross We to with adjusted margin our expect profit our year rate. year-to-date full XXXX

expenses in Europe. of Selling, general transcatheter third XX% heart in or were personnel-related transcatheter driven therapy XX% $XXX organization prior field field mitral by sales. structural year quarter the the was tricuspid increase over This the expenses expanding administrative and including million and

expect between XX% sales for continue special excluding year of to full SG&A the to XX% and We items XXXX. be

structural prior This result clinical heart programs the XX.X% primarily or million grew in $XXX to sales. of expenses development transcatheter and the in Research significant of investments quarter was year generating over including XX% our evidence. the increase

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

Turning taxes. to

impact or compensation. from Our employee rate for the benefit Stock the drove reported year or accounting tax stock-based this quarter XX.X% was items. appreciation special of a $X.XX XXX X.X% basis point for excluding the

tax in to reform now XXXX also from employee of Switzerland. tax benefit compensation. excluding XX% tax full our rate special our the accounting stock-based the guidance items the passed reflects year of be recently for We bottom rate of Our XX%, at which increased benefited previous expect range to

share year about Foreign the to or At to less rates than effective guidance, or rates points estimate impact million prior growth less year. currency program. X.X% sales third by versus than $XX sales to our by versus continue the $X.XX the decreased exchange an on profit to hedging versus impacted current we rates, $X basis margin approximate rates Relative year XXX third reflecting negative full year. prior July gross FX FX compared the quarter year. per had our million quarter impact our XXXX prior earnings prior X% positively

defined quarter our property million and $XX intellectual settlement. third benefit a less previously Adjusted activities from operating million cash global related flow capital as cash $XXX the for spending $XX to announced of excluding of free flow million was litigation tax $XXX million

was benefit cash million. excludes $XXX year-to-date, the free litigation related Our adjusted and flow settlement tax which

XXXX top free to projects, to end million We our of adjusted remain We our previous capital million with track $XXX expansion full now cash line on global range. in expect capacity. strategy the in to increase guidance be $XXX above year implementing flow

quarter $X.X quarter, cash, outstanding of sheet. was $XXX we of with equivalents, to the the short-term million. XXX remained end cash at the quarter At debt Average investments balance million. our Turning and have billion. level Total shares during the prior

continue to We expect million. diluted for to million average and XXX be outstanding XXXX shares XXX between

our And now finishing with guidance. up XXXX

TAVR. for increasing are our year-to-date Edwards for we ranges Given sales performance, our guidance strong and

we growth And total expect For range our of to TAVR, now we $X.X of top range. sales around sales $X.X underlying XX%. previous Edwards, billion nearly billion sales $X.X for of top our expect the now previous to billion around the with $X.X billion

sales For TMTT, below we now $XX to expect million. be

sales expect $XXX and We million Structural continue the around $XXX CASMED million million; end of Surgical to $XXX to including top Heart Critical of $XXX sales to million range. our Care

$X.XX are earnings previous our adjusted from raising to guidance up range to $X.XX of We our full guidance per year to share $X.XX, $X.XX.

quarter XXXX, $X.XX the $X.XX exchange billion share of to per project of between $X.XX billion For earnings to current fourth total rates, $X.XX. at foreign sales and and we adjusted be

I'll And it with pass back that Mike. to

Mike Mussallem

our We're strong performance. very year-to-date with Scott. pleased Thanks

growth opportunity. we increasingly clinicians and patients As choose TAVR, optimistic our about remain long-term

remain our that continue group We investing committed to from of patients future, organic strong our drive investments to from aggressively broader structural a therapies strategy. heart are will disease suffering consistent We our innovation innovative the and growth. resulting with benefit in confident focused

turn And to I'll with it Mark. that over back

Mark Wilterding

Mike. Thanks

ready potential, Before up longer-term registration a New XXXX. news about we We're our as are This will form remind York would our City. available information I now. open event like to questions, it technologies, on to on Investor our latest outlook for market updates Xth December and on in on as you for Thursday, include questions our take More Conference XXXX well website.

the you follow-up. to one, In broad order to we for of please allow one ask questions participation, that limit plus number

remainder as call. will If of during queue questions, management participants you many have the the as the please possible additional re-enter and answer

Operator

At you. Bob America. we'll Instructions] state conduct from question time, a session. question-and-answer comes Hopkins Please question. with Our [Operator Bank this Thank of first your

Bob Hopkins

and good Thanks Great. afternoon.

to new should or the I just such -- hearing market congratulations wanted that say. I the views First on off I'm just of sure views on kind third a Mike nice right on make messaging quarter. updated TAVR your

ultimate strong that market obviously very, the time on is that I your the or take a guess hearing the size in changing message to views despite there. you're the really I'm QX, very performance not will it of get

impression that's could first you missing just timeframe comment that if strength my of conservative that something to increasingly guess unless new. seems and on a I I'm I'm related is wondering like estimate that else that.

Mike Mussallem

We into you Well, and opportunity reading caution that know are quarter's felt too always result. large Yes. the Thanks Bob. we've the know and growing much TAVR we was one superiority results helpful.

right about more about think this it to continue We about know would that we've we that encourage we'll rate broad think you but over over growth to time, now, talked time.

-- XXXX. We the the have trajectory. look still an December, go struggled that our in some time to it, $X estimate hard we'll billion quarters you accurately. take grow if think thought that XXXX to a TAVR update reasonable in we that's would We back $X.X in we guidance in at opportunity to billion certainly a that We'll future. and if share We from

Bob Hopkins

should quick one for offered then consider. XXXX Great. enough. we about that you And That's things few just a fair follow-up Scott,

any like there's for example, that you And of I purposes? for think trials Is are XXXX should I have growth. just have still a modeling XXXX you thing know other if you people you'll consider year can great things on that we you is deliver Just leveraged curious growth? – a where about curious, one earnings you going lot Thank you. think revenue think

Scott Ullem

year. every perfectly objective And try the at Well, long profit but to the consistent that's it, certainly operating we're We up that's margins objective. certainly term. inch our not over

address right And and the going things we go with us think in Don't and XXXX it continuing were levels we continue coming to we've R&D. think programs off. we invest to I gotten expect every to high time programs XX% to you're other think at research XX% down years a online relatively few end think of up in to I going back to other But are it see rolling or it we to about aggressively development. where are ago.

to I of through profit the we're our benefit see of because these The currency think got last gross profit on is this we've thing, rolling I'd going pressure year. on – FX downward just FX margin, hedges say some gross

gross but robust was quantify year. to as expect ready will be year yet, not that guidance this we're it so probably as I And next not our profit

Bob Hopkins

Great. Thanks for taking the questions.

Operator

Morgan comes with David from Please Lewis state next Our your Stanley. question question.

David Lewis

Great. Good afternoon.

Mike, start ones I'd two thought me. PASCAL Just for just I here. quick with

dynamics. you parse it the if launch initially, a focused Just, of could PASCAL launch disciplined outcomes. Like out sort was on

This your premium raised quarter strategy. you pricing

in your And So, this to what's it And is have Scott. the more changes rate launch then this pricing or a business what can limiter? bigger double? more quick Is the it give comfort I follow-up that disciplined for XXXX strategy?

Mike Mussallem

David. Yeah. Thanks

different. premium that always that also differentiated been careful technology so go this are clinical we site moderating But selection screening this and really because not has we patient price That's for. called a strategy, support plan. know launch our price very is We premium we of position have there. training the through plan high-touch So and activation executing that's what site That support. strategy case

Was So to there what's changed a second question part it. David? that's the

David Lewis

you in changes XXXX is you business you're double the you your I change mean, this Mike in next employing business as strategy Do What or think you the going doubling this get do year? next to to this can strategy next suggested. year? year

Mike Mussallem

are will gotten a disciplined an a It be limited that and It it's driver. be and be will do today clinicians primary of the we the strategy. from feedback sites number increase fashion. adding believe sites. great we'll – in We've They in so

David Lewis

But variances. so I on quantify margins gross quarter think particular manufacturing help mentioned margins the Ultra CENTERA can you the this so expecting were you Thanks. we margins from you particular impact And as much. strength given FX helpful. for and gross quarter? any Thanks in Scott gross you strong update. then When us or TAVR just as just probably talked weren't obviously this about Okay. about Very next appreciate year

Scott Ullem

Sure.

hit hedged before. me non-GAAP by I've benefit some one in of about. There EU this the was was offset that margin. It good you some us delivery with XXX European Ultra what's moving we've these point pieces mentioned margin. think Let gross had of production costs. I take through contracts, through basis these end-up moving of different manufacturing system associated That And new about the around the gross that flowing device were with to regulations of these money. costing examples XX.X% the connection talked is contributor We delivery there probably strategy system inefficiencies

manufacturing run some did contributor through and negative cost that to So the variances. was of

had you And of also and We again that's some quarter. XX mix. benefit how we XXXX gone together points basis third that roll up versus all up

David Lewis

the of Ultra Is this it that CENTERA XXX impact possible than was basis more points Scott and quarter?

Scott Ullem

are – out. called this more charge, quarter. gross think I pieces were Well, a XXX no But the margin points there was two impact, don't terms in right? think special I of it's basis than One

that. I think be would it less than

David Lewis

Okay. Thanks so much.

Mark Wilterding

Next question, Diego.

Operator

Our Fargo. Biegelsen next Larry your Wells Please question. with question comes from state

Larry Biegelsen

And Good low with afternoon. for prepared this I in with grown Thanks year market. for wanted really I talked remarks. the for here. growth and strong release procedure the you Mike, TAVR calling taking double-digits mean the start about to that XXXX XX%, on the about the outlook congrats a line your quarter in you've you're press questions. in in

the late in got low-risk approval August. just You

So And one market why I think will much you do follow-up. so had next slow the year?

Mike Mussallem

next for year. it's with struggle it's quarters. us these about Larry, not I'm slowing We tough because call sure. so not I'm Yes to this sure

bolus year. saw this we think a I

an X led we believe in approval. FDA and what PARTNER those result the spectacular results of was most this that we quarter to of saw quarter ultimately which So last

through awareness it through And we that a to moving was fast don't the it system. patients educated but They stimulated think combination that the patients, we system. system real so physicians, started think that stimulus increased move the and

we little you if have that So even might bit a pulled of will forward.

the lower usage we of growth So comparison end The going that that's to in going still the we're thinking half to the second about way XXXX. up have rates year. half look are to next

Larry Biegelsen

be U.S. We've heard business, heart business I That's questions prepared year strength you or XXXX keep indication. the your down next in data TAVR comments helpful. that heard of even anecdotes could procedures beyond. I'm then that confident Thanks the feeling the Mike low-risk given And XX% still are kind to guys. valve but state and growing of your curious remarks, for surgical taking XX% -- your about ahead? and you the flat looking How could in

Mike Mussallem

Larry. thanks, Yes,

as factors quarter. TAVR sidelines third new the the of coming big now been One although patients the were with might in have as surgery off with patients treated treated not that or even

So third rate the going TAVR when a and challenging? in bolsters X% we've be that future. confidence it our quarter, about growth withstood it grew of you and think the big that Is to

Of to to sure there's well. will. worse future. continue and that that's get Do step-change think kind we impact on been course, a much surgeries? PARTNER have to data TAVR not But probably think here an We going is it X of time moderates with in going the I'm the probably as that over that

Larry Biegelsen

you. Thank

Operator

you. Thank

Our Kumar from comes Vijay Please next with question question. state your ISI. Evercore

Vijay Kumar

back Hey, on quarter here. approach different But slightly really guys nice question. I XXXX want from to angle. congrats a TAVR on the it a

Given be be they numbers in the overall maybe doubles market data to X mean in numbers? do I Shouldn't clinical could than shouldn't Edwards low reflect came but expecting we PARTNER headline better the on better. market? better the much data, the

Scott Ullem

world, Of proud. a U.S. biggest have also this can that that that don't we've message have And everything the point coming is large we recognize out competitors more way. you course, felt And got to we're I market in data. proud really Nobody that in but we do in. the the of think new to there single our are we've in at

whether adoption that have some So or trialing actual it's we think will an impact.

on of if bad. really kind not like we so stay the can that's we grow And market so balanced

Vijay Kumar

And mitral. That's helpful, one then Mike. on

just a details. any is have or additional -- the MX of design what what is start clarity you trial, the that on do this trial F the be the key Will on I'm So slated comparator -- arm curious which year-end approach was is?

Mike Mussallem

We're on Vijay. And share that. early don't while discussions it's to anything still we trial clear and don't point. at We reasons for not competitive exact design. thanks, share this it's Yes, in have

regard. So really add clear new we'll then Once we point posted clinicaltrials.gov to everyone. on it clear course that to it it's of this at make in will don't get anything have and

Vijay Kumar

guys. Thanks,

Operator

you. Thank

Robbie Our Marcus with JPMorgan. question Please next your comes state from question.

Robbie Marcus

nice let commentary if Thanks into I us the Japan you're a appreciate could contributor to quarter. of become volume color the impact back and here. the market seeing growth. starting help starting? a on from financial what and just stocking with you the there? tax some congrats It's material to ahead on Wondering us more And also maybe the

Mike Mussallem

Yeah.

a So worth that did put million customers there to some in of we stocking And We it's reports was of XXth say place, in around Japan $X tax took consumption there. stocking. Japan less some that heard was just that I think want place than TAVR September. the

gives of your that rough a question. So if you that's that idea

Robbie Marcus

how many expect from new the And to Thanks. you Yeah. expansion centers? what system? TAVR over them No, volumes Or you out TAVR expecting and a, just not new are shifting that's expect thinking b, be helpful. And you incremental them the of the but the in frame? you now to NCD of about these time with do Do centers existing you are centers, expecting place, the well, are of cannibalize volumes the -- there? how volumes to – in

Mike Mussallem

Yeah.

the time that would is approximately So pleased turned at that XXX it would the we estimate be These with achieve could NCD that eligibility. add new I out. sites. sites way were think that the And our

that Now know term I some. in all will take might It don't except whether those the for time. do some near of

greatly by We centers, that extent. total is there's to those believe, probably small and market other come Will to centers some think additive that and it as large I yes, somewhat the we it believe yes. from a a still on. take of new underserved

Robbie Marcus

Thanks a lot.

Mike Mussallem

Yeah.

Operator

Thank you.

question. comes question line Please Taylor is Matt state your next your with UBS. open. Matt Taylor, from Our

Matt Taylor

Hi. on helpful? your of for be TMTT be just follow-up talk an could you And if give how wanted how that PASCAL? that broad question. next about much expect maybe the on devices? Sorry I are strokes, just would update And in thinking about on that. you you year. to Could Thanks to also about comments you from the annular taking replacement

Mike Mussallem

Yes.

So, And small. go trial, We'll to The a of likely this big now yes, opposite is devices replacement PASCAL. get it's relatively right try here. so gaining be in to complete from lot and to paint more still bulk experience. We're will our that going come just in won't is product positive clinical more Cardioband have picture. number. order The be of there, a a feedback but the impact We PASCAL. comparison, on the by

Matt Taylor

you Great. Okay. much. very Thank

Operator

you. Thank

Please question Canaccord comes question. from next with Our Jason Mills Genuity. state your

Jason Mills

Great. Thanks Mike.

a long-term clinical mitral. Sorry point about a a evidence time trying mitral. long-term the in at a accumulated, a And $X leader in look U.S. will expect quarter. sort projections on traveling. OUS? billion point as background in Just sense a of in breaking noise. do not I’m at time? leadership Edwards your XXXX. question, that start up be on to we do I you lot to great views at your position there's wanted if trajectory that yet that get for of to be long-term Congrats by understanding on closing respect versus With How to you anticipate

Mike Mussallem

Yeah.

So it's a great point.

don't have exact So an of I breakout OUS. versus U.S.

head Given know but adopter. OUS, the earlier a OUS U.S. approval is you of start big for rapid that

predict. -- the for tricky include to going to a bumps it is be little that U.S. that's But some does So

XXXX. think in billion where I $X we're bigger suggesting is stops Jason is the not it thing

conference, focused gets just I along going. the long try some in of We're now term would regard. We'll to on get right signpost that but a say like the feel where and We more provide it that's clarity sort that's investor we the as way.

Jason Mills

next commentary leverage perhaps not Mike. respect if it? percentage as that R&D for where we only that Days seeing talk true operating XXXX. you Bob's And we in and trending margins pressure to in of stand hold But would about is a we is, maybe to get at not XXXX see Thank source do of question, then, if does your as we leverage downward year with on terms as SG&A that we SG&A assume potentially your that's a and Okay. of commentary Scott, today of on previous sales line look Analyst

Scott Ullem

of there I are with is, to couple really and a trying that think, One SG&A. through efficient be we're and growth things influencing run Well, expenses administrative overhead that our in XXXX scale are it, and back-office and type both beyond.

investing we're things are who At like resources clinical field cases. the supporting same time, aggressively in

leave to going And of as, in we're we'll our but in think, going tell it's like, give to is about SG&A. try -- update we so, over two be balance when I the months XXXX tuff look efficient that you to to it to And conference. I'll in get time, looks guess, like just very those couple what a investor more what I

Jason Mills

Got Thank both. it. you

Mark Wilterding

Next question?

Operator

you. Thank

comes Denhoy your next Our from question. Jefferies. with Please state Raj question

Raj Denhoy

Good Maybe just of a Hi. afternoon. clarifications. couple

you're studies, that CLASP the in but is I studies approved the of given enrollment States. F&D lines for U.S. get believe we terms of much going don't those the On us United approval. the how us know might given products and both time enrolling in you've when I States, haven't United really them, see you in

Mike Mussallem

approval. think, we talked about that's I right, haven't

relatively put of I -- are enrolling place, we we now at investor that we're more in so and report that we're we to conference. track say haven't our the early. may details and on enrollment our sort right still completions really with because we'll report we have But track So, for think is on

Raj Denhoy

Okay. And competition. just one That's quick maybe fair. on a

of or was competition suppose, the You mentioned, perhaps United conscious coming in and outlook, States. your the But LOTUS in underwhelming. you update, updates little potential you out are as Portico being yet -- a from given haven't of a the TCT little much I on some seen mentioned you

guess, impact competition current is call competition on and And curious the have thinking potential the it, so, U.S. I'm what next, the to I your XX will months over XX in

Mike Mussallem

Yes.

superior, some We expect to companies. tend pretty we are big good that there good We it a great These substantially technology these and to But us give that out are we think to relationships will companies have impact. that impact. so have really they that's going have think think advantage. is our

Raj Denhoy

quarter. Congratulations enough. Okay. good Fair on a

Operator

you. Thank

Credit Suisse. with your Miksic Please Matt question. from state comes question next Our

Matt Miksic

U.S. of one I Hi. really comments of of training, peers sense that covered -- as like on Thanks. I requires is, get of the have business initiation new Wanted their front. your or of to to the just sounds just some or But one your again. U.S. from response And efforts And sort on that your strength, maybe quarter maybe or that sort say, follow-up. redoubled you're where involvement has wanted you, front. in should in it center sort because in wondering usual, impressive a think, if I a TAVR activity and strength we've

Mike Mussallem

-- a I'll business Yes. been that's call on with bump U.S. little as one XX% you and it this cover in things a the approach I'd basis. cases. as a still -- space be we We're usual. more probably regular leader bit pretty fortunate quarter, team all kept our the our can those of this in procedures, to say, imagine, busy we

to able effort of incredible pretty that's just this cover all patients a did through. be come team to our So bolus

pivoted new be gradual that and And So think centers? to we a course but them. big No, have we will grow over way, not of time. support in we starting

Matt Miksic

been the Okay. the your around know on in That's have TAVR there's U.S. you of that, OUS. conversation then, premium-priced lot And and helpful. on is a but just environment. OUS strategy focus a I

seemed I a or that, touch I and annualizing pricing check duel time don't year, and change it that we're think, comments, -- I felt last it incremental your was maybe environment that like And you've know, on seen think pressure a heavier. the in this year-over-year. if

in that any have So, color regard. again, you

Mike Mussallem

Well Yes. discipline. our certainty with of is thing I could one speak the

continue get might even watched pressure. disappointing. We've so compete, significant it's and is on to aggressively. think evidence general turning one price the time price they're of a We even bit some so things some where more technology there to may which would are price over If be say, those exercise pretty a it discipline. little environment. be more competitors of tougher that's aggressive But We I more and lot anything, differences, to pretty,

Matt Miksic

Well, Thanks. results congrats on the solid there.

Operator

you. Thank

Wise Rick your state question Our Stifel. question. next with from Please comes

Rick Wise

could It maybe Good terms the ramping in rollout Mike, in next device? sounds afternoon, left ramp talk to and everybody. it's the of up of about vantage points. to the couple little from What's a do quarters. if few Ultra like you Ultra going a more

-- of product You're very clear for of sales XXXX that most it's most XXXX. in going to be the

have the it? gross a Thank part Just would a of on And it accelerator? learning Or -- Is down of volume be it margins? for will kinds that of and how us you as it impact How Mike. the a into just on you positive has it's Ultra? opposite gross about Is Does drag you move been a me. no color about gainer? any do it as those Scott turns That launch grows it you the think as curve? things. growth margin the share question you, all for we think

Mike Mussallem

All right. Rick. Thanks,

let's just There's We're leak over increased this the leader pleased a of going allows We pleased great competition. going feature. as with just love is We more and think think from more our start If important the to us to that. reduction protect Ultra. paravalvular really become we'll existing So it's be with be positions top. time. We valve. Ultra to

think I you expect. From let Scott should that's So comment. margin perspective, probably a I'll what

Scott Ullem

you're headwind early the to There will making here. some externally. Rick you not X. changes in really time gross similar margins but be have And as days it'll to to it's been a we've something margin SAPIEN over going see know We're substantially

Rick Wise

you. Thank

Operator

Thank you.

question. Chris Pasquale your state Our Please next Guggenheim. question with from comes

Chris Pasquale

you day prior one How in the And less selling back basis that making that to you you quarter? versus Japan? can that selling much benefit sales XXX had out? up circle Scott called Thanks. of day point the was for was impact

Scott Ullem

about first we in yes and had -- X% a Days half. the headwind

most literally of selling A was so piece And Japan -- third the small the in preorder. quarter X% very this was fact tailwind had days. we've

Chris Pasquale

Mike then mix positive and those us wondering to volumes. following can the sense help long still INTUITY? point question you a this how how offset Okay. INSPIRIS just products And mix up at the give of much of procedure there your premium business is Just on surgical valve Larry's about can lower be a tailwind

Mike Mussallem

point at so this significantly. it's pretty growing Yes, been

side, aortic of probably On accounts growing the volume it's XX% our for quickly. more or pretty it and

portion. becoming valve of the regions. It's in pretty a of really So number it's choice significant a

Chris Pasquale

Thanks. Great.

Operator

Thank you.

Josh comes question. from next with Cowen Jennings & Company. your question Please Our state

Josh Jennings

start Congrats off on Hi. just Good on again results. evening. asymptomatic wanted opportunity. the to I

interrogation commented just upon being on out sort of asymptomatic, EARLY testing? due TAVR stress clinicians pushed I And being and just wanted screening Mike out? in these I some of just think pushed more and updated the determined enrollment or thoughts is think symptomatic you patients to to on by rigorous get some enrollment

Mike Mussallem

Yes. Thanks, Josh.

trial not is but had we've remarkable. of we Right really not indication, That's So And treat only now was X about really into this guidelines. on PARTNER symptoms. PARTNER only and get in fast trials. not we're talking are -- all that patients enrollment what that now on a you have But our patients been AS when homerun. they're guidelines a say

And these acknowledge so even many and centers save don't it.

process been it's been it's of it's kind trial first so and big then just And because one. a and kind a bumpy a a slower of it's really

trial. faster the going worried about was implications of this it -- not wish we So

Josh Jennings

indication bicuspid label another that had could question fully. with the is and just label Understood. current cases bicuspid in some Thanks taking being open some just what just questions. the early anecdotal from -- the And are on Are these I field? -- Or maybe language that bicuspid where, reason the opportunity for the low days? utilization low-risk done And is just the is we've you updates, the question leg asked getting risk bicuspid the more up and about primarily. a if just feedback whole limiting

Mike Mussallem

Yeah.

not more of do and many being So patients? patients been funny need growth see now, we before get we treated. So often have rate right? off-label if other -- who could They're indicated continue to these issues. They think have as No, procedures. They our I'm we you're treated suggesting just higher bicuspid different it's younger. I is bicuspid

And therapy. don't so, case that's why the they often require TAVR

Operator

you. Thank

question Chickering state question. Pito Our Please your comes next with from Deutsche Bank.

Pito Chickering

having for can last? bolus long quarter. we when you afternoon, talking used Mike, think questions. with patients? about the TAVR this think do Thanks growth low-risk Good How you should taking this And we're bolus before how guys. my bolus that word the

Mike Mussallem

good question. a That's

PARTNER we think the was of bolus drove the started what superiority that The forth. think report the X lot on so we pretty results. eye-popping awareness and a So, that discussion, was

times even One things we've gets made, decision fast. move of the Many the through learned longer about don't than when the patients them they does take days. TAVR from about it that so is system XX

that not around up that it's QX. activated got frame, would patients in those time of some they surprising show if So,

the it reach think But sort growth think say, some we're of that we long-term we our seeing fourth see more in the here level. think third, time to -- moderates second in started bump over as expectations. we a we in So, as think the demand of what quarter, we rate a more and we in consistent new with

Pito Chickering

second Fair question. And Okay. enough. then

you cardiologists in? saw. sales the think and So you to is filling your quarter target sort more demand you’ll your force U.S. change obviously coming When that patients XX% this to help do general marketing of the sales busy guys efforts quite low-risk of keep

Mike Mussallem

Yeah.

anticipate to customers. our ever service providing don't we less So existing

do make model, result. a each has sure that a within really and patient everything is model our to we high-touch Our power successful

the level the a do cardiologists We on point. between understanding variability find good You're have. of high general

job in staying are great a of therapy understanding of are. dated their do options and somewhat Some others what current

So there do that and a on that's us taking some extent. one is do to there, as effectively. learning are we over and We're job how that ramping for that time do we're that to to -- to how we're

Pito Chickering

Great. quarter. Thanks so much and great

Mike Mussallem

Thank you.

Operator

you. Thank

for Our with final state question. Bedford comes Jayson your question James. today Please from Raymond

Jayson Bedford

geographies? had XXXX for from growth? any revenue just in the follow-up on in a the currently help stem stimulate Good regions are Or Thanks quick more to expecting of the entering reimbursement in I new PASCAL. Does questions. change you in . afternoon. doubling taking you're

Mike Mussallem

gone indeed it number limited a is chunk far. so of number of we've good a to probably customers, A geographies Yeah. geographies that very new of -- limited

existing there'll new more in well. the but we'll as like be geographies be entering in yes, So penetration we're geographies Germany, some that

Jayson Bedford

Okay. on international And versus way The quick TAVR double-digit in low U.S. just any XXXX, as can trends a there? growth one. comment you

Mike Mussallem

to so guidance. there try We just of give some But look put we'll speculate going us. just into we to on. out us it'd on to ball, better wanted kind that give get thought and a you It and of something into as more it than to We're sort preliminary deeply. for get then you was goes deeper that of rather foul a be high-level for turns time kind

Jayson Bedford

it. Got Thanks.

Operator

you. and state Please have still we question. Adam from question. ladies comes one Piper your question Jaffray. do And Thank last gentlemen, with more And that Maeder time for

Adam Maeder

Congrats guys. thanks on Hi, question. end, and the for taking the quarter

Critical Care, remind maybe over this me level for that Just longer business be you you're of thinking growth should the we a HemoSphere. term? standpoint? about Is growth us sustainable? one of the can And benefit be a trajectory How positive capital on seeing by continues driven the to from

Mike Mussallem

can Well, growth we're And a pleased the been in on this tell year, really you with has step-up what's that we've enjoyed done rate Critical from what the Care. in going past. we've

HemoSphere to that, The to HemoSphere are there that in add Care more and the has that added stimulated some in team all-in-one future. even it rate. And platform important. this has really be been continues said new growth year Having later our will and features Critical features

we to happen, lift provides those growth. think it a So as

don't you're same I bolus. to know see that the Although, going

feel a when continue like, a But in to we're Care. discreetly going to expectations right get little have share investor bit strong or we clearly, there more Critical franchise together we at our the So conference. we now,

Adam Maeder

clear. Thanks, guys. very That's

Operator

for Q&A you. to Thank it turn I'll This now closing remarks. back management the session. concludes

Mike Mussallem

Well.

in Just thanks back Edwards. welcome questions by for I'll Scott, turn to interest telephone. continued I and it your and Mark, you. additional And any

Operator

XXX-XXX-XXXX. and this access call, dial a to please telephone Thank And you. replay ladies gentlemen, of

If can XXX-XXX-XXXX. you're outside the you U.S. dial

outside telephone Once the a ID, enter from and XXXXXXXX. please conference the U.S. ID, XXXXXXXX. use And XXX-XXX-XXXX conference the again, again, replay dial, XXX-XXX-XXXX. Once

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your your for participation. disconnect lines all at may You time. you Thank this

Edwards Lifesciences (EW) 23 Oct 192019 Q3 Earnings call transcript