EW - Earnings call transcript Q4 2019 | Edwards Lifesciences Corporation

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Operator

Greetings, welcome to the Edwards Lifesciences Fourth Quarter 2019 Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the presentation. [Operator Instructions] Please note this conference call is being recorded.

I would now turn the conference over to our host, Mark Wilterding, Vice President of Investor Relations. you. Thank

begin. may You

Mark Wilterding

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

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

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

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

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

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

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

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

Mike Mussallem

for and surgical major led trial Thank and SAPIEN investments you, regulatory valve results our Mark. low of risk. milestones Edwards. U.S. significant superiority X Groundbreaking to at XXXX of year X approval demonstrated a for PARTNER clinical was patients technology

valuable our CASMED. of position the tricuspid mitral TMTT, and extended with of technology therapies of implemented heart addition addition additions We leadership also PASCAL, important transcatheter to our an and monitoring early initiated the care and surgical and smart of our portfolio critical we growth valves or HemoSphere to in introduction European our

before from benefited billion, details. than sales organic even like growth the double-digit more each on before. Most I'd touch in Edwards get $X.X patients to increased XXXX ever highlights technologies quarterly life importantly, region. to including XXXX, I financial into saving in full-year XX% in Underlying several

in to items by special we’re XX% able while growth R&D achieve per XX%. increasing share, earnings Excluding

The R&D breakthrough to this helped fuel year significant increase strengthen innovations in longer-term investments important outlook. our

convinced heard you about healthcare as the As significant the our patients month, opportunity threatening bringing and to through are as life to tremendous investor last the treatment we value at conference lives of enhance conditions system. ever

growth underlying pleased Replacement Now Valve growth to turning of sales we're by led quarter XX%, higher TAVR. or fourth report we our was to quarterly significantly Aortic our strong Transcatheter results, than sales this expected, quarter

prior-year XXXX take determination XX% coverage basis a strong increase first U.S. results with global closer quarter, of the basis, the published access the was sales resulted clinical improved XXXX exceeding on late In following released the sales impressive year. second $X$XX X TAVR aortic suffering severe therapy in lifted growth by TAVR. $X.X the million were SAPIEN XX% patients National approximately to an underlying and strength fourth of at significantly global more let's look The in the over guidance also of awareness U.S. PARTNER on quarter underlying from benefits TAVR XX% the presented an XX% an of stenosis. quarter increased in with for Now of of in Stronger X the original our growth. billion Full-year expected increased than

TAVR strategy. approximately and year-over-year we comparable growth we was with procedures growth fourth basis estimate a U.S. In our XX% Globally, selling grew procedure our TAVR in global average total the maintained quarter. and prices pricing that were estimated We stable disciplined on the the treatments SAPIEN X step-up fourth was X our FDA than growth following Stronger for strong evidence expansion Ultra driven that and the growth in X recent to by in led indication comparable. continued the TAVR be SAPIEN expected Edwards systems. quarter PARTNER to the

Fourth centers U.S. the based the the quarter in U.S. more growth in fourth across Outside than was XXX broad

total position high around teens growth and on I'm in so the we the the on see we procedures are growth our gratified In employees meaningful that Edwards and grew world. Europe, many quarter, a TAVR in mid-teens estimate was basis, impact was dedicated estimate our stable. to particularly comparable. year-over-year Edwards competitive helping was patients having the

be stenosis, the that Edwards CE who penetration highlighting diagnosed with where company strong by Europe low quarter, aortic surgery. therapy are the in in became severe receive to heart countries adoption fourth risk the for encouraged open of first in TAVR treatment of at for the It’s still continue worth to We is also especially low. Mark patients

Lastly, well the related Ultra the valve of clinician outstanding. X rollout Ultra paravalvular in Europe. underway U.S. performance leak and SAPIEN been has is on feedback the Early improve to

step especially of XX% our risk conference. low patients. now on top investor growth forward, In in the we significant based summary, We underlying TAVR, our expect XX% we range XXXX that be our momentum feel at a the around for this to sales is to shared

and As this will up procedure healthy the growth following we PARTNER annualize we to the trend expect presentation. while continue, rates expect be lower noted, the year growth the as previously we X progresses, stepped

billion range. growth by believe annual exceed compounded $X opportunity implies the in XXXX, continue to rate a low which this We will large global double-digit

TMTT, milestones conference, our Turning including studies. of the we're pivotal to discussed recent all to achieve investor track at four executing on

our to continue can at and updates to aggressively this We year. invest portfolio hear meetings important you in expect medical

more the valve approval an a breakthrough study early intended and feasibility that FDA receive pleased replacement to for access program device technologies. we're designation, to help timely a received medical patients tricuspid EVOQUE addition, system recently In announce designated has to

revenue came quarter of completed Fourth below field PASCAL approximately For was and $XX pricing $X continue year the premium a in XXXX, corrective execute million guidance sales impacted disciplined voluntary action which to quarter. of of the site as strategy $XX million our PASCAL million negatively in European we original introduction moderated of activation. by

to are feedback outcomes PASCAL excellent able Despite disruption our physicians positive. need. physician and we’re patients of launch Importantly, acute to and slowdown clinical in minimize the cadence, is

we we rollout, on remain will success outcomes. patient As focused differentiated the procedural and expand

To we therapies, on transcatheter mitral trial study patients repair PASCAL to mitral complete the pivotal continue by track disease update end IID of enroll in to valve our are with in Clasp the year. further mitral and enrollment of the degenerative

In clinical quarter. with trans-delivered In evidence and pivotal low encouraging. in has begin to our pivotal our trial we SAPIEN also addition, with MX EVOQUE for enrollment technologies trial continue IIF these enrolling disease. we're gain in replacement, profile experience mitral functional both to MX with patients anticipate mitral and Early been the second Clasp

Turning We've with to to CLASP providing solutions enrollment very and transcatheter regurgitation. treatment trial options. severe tricuspid for pivotal patients tricuspid IITR to therapies, our symptomatic PASCAL in few initiated prognosis in study with we’re committed patients poor

meaningful our As we're as program. select with our tricuspid EVOQUE generation next tricuspid in mentioned, replacement system to progress made continuing we in experience gain we And on sites technology. develop addition, our Cardioband

$XX we and remain committed to $XX all the continue of XXXX. summary, million investor our for TMTT In of sales conference expect in to milestones to million outlined recent

these are will We’re XXXX $X the passionate to life to by grow portfolio threatening opportunity optimistic solutions global approximately about diseases. and that bringing our TMTT billion

quarter sales valve a actions $XXX has the of value our prior-year the X% lower focused high taken premium declined structural our of of Fourth original quarter We Despite adoption underlying surgical partially increased the encouraged advance INSPIRIS adoption leadership driver offset remain the in been stepped-up of by in growth XXXX an innovative over the X% as our as our headwinds, strong of on guidance has global to to continued basis be full-year fourth team U.S. continue surgical $XXX it line X%. to by technologies. sales throughout million on basis, surgeons. heart, underlying our aortic with the choice In reflecting quarter million X.X% for of TAVR an as partner in the year. valve procedures

heart We're for repair earlier We late quarter, a to mitral anticipate in treatment X%. recovery Our summary are to confirm valve TAVR received in strategy continue In full-year with HARPOON growth quarter process we as structural X% headwinds positions patients. positive the year the the offers for launch. valve valve and surgical XXXX our of commercial expected sustained surgical of in continue beating with degenerative later consistent HARPOON to faster the expect approval in growth. growth XXXX surgical heart, aortic to surgical mitral beginning growth Edwards portfolio innovation. that and we pleased the procedure will more regulatory XXXX our return disease step-up through system to that the European of outcomes into underlying fourth for anniversary we also fourth in sales experience potential in generate

care in our and critical expected full-year over on by structural software. recovery. our in about by following HemoSphere, excited for we're quarter and continued an the quarter an expands, led growth. original premium to Growth increased global global underlying in Prediction all-in-one leadership innovative adoption underlying surgical and in prior-year, million U.S. HemoSphere guidance $XXX of treatment care, patients sales the demand X% global than was of to TAVR with the platform faster X% Index that driven in growth $XXX Hypotension critical extend our sensor options In more XXXX technologies. grew surgical exceeding platform Fourth on Acumen basis strong X% our for launch as sales Even FloTrac increased of of X% basis, ability million sales provide smart our the to XXXX heart our monitoring

portfolio of the oximetry cerebral enhance a of launch In line the to FORE-SIGHT, we HemoSphere broad with our technology initiated our fourth commercial quarter. on commitment sensors, in

integration we and at capabilities expect of HemoSphere Scott. offering leadership analytic the I'll full-range strengthen creates In and enhanced summary, care conference, on excited our X% of our recent critical further recovery to underlying in unique products. now X% about And a hemodynamic discussed growth monitoring. tools the call pipeline we to investor innovative a As over to technologies continue remain of predictive to turn XXXX of sales our of

Scott Ullem

am exceed to our our finish report you, XXXX. enabled Thank pleased financial I year that to the strong Mike. for us guidance to broadly

and a as on XXXX, fourth So as today first provide well XXXX. detailed quarter wrap-up the provide results including of update full-year quarter I'll for of guidance the from an

we generated increased profitable full-year to pleased share to generate sales an to underlying investing margins still $X.X billion. adjusted flow. billion aggressively $X.XX free sales XX% XXXX $X.X the for and XXXX, earnings were on during We Adjusted future of organic per strong For while cash growth. grew basis XX%

With continue our investments, the supply aggressive patient medical able be chain. repeal our end global fund to care to of XXXX, we’ll organization tax research a excise device growing the strengthen support field clinical of the and at development and

share, assets is that today's share intangible full and was our prior-year. the This costs or on per the million per impairment guidance we $X.XX positive decision conference. of between partially XXXX. results, share associated earnings cover month's grew Sales our an I’ll referenced share which quarter to these as strategic operating a production adjusted Cardioband migrating the from adjusted items investor in for reconciliation results grew per reflects and $X.XX by the accelerate as non-cash versus A discuss well quarter therapy details fourth included earnings with other then our release. to basis Cardioband spending to GAAP drive included XX% one-time Ireland. now offset GAAP $XX to last in with Israel earnings of and for per XX% and fourth underlying at awareness $X.XX

XX.X% our quarter, the adjusted was XX.X% compared fourth the period gross year. same to profit margin last For in

product was of new of partially migration the Israel, by spending and from European a Cardioband and the medical device the reduction offset mix. driven benefit regulations in profitable facility This support more by our

XXXX gross XX% continue We our profit between XX%. adjusted to expect and to be margin

rate actions the product XX% related in in primarily and well support cases administrative previously million Europe, TMTT increase by and in the capacity U.S. TAVR additions hedge and were of fourth as we Our personnel clinical mix investments. and to by should the foreign Selling, to in million lower $XXX be quarter adoption. mentioned disease $XXX prior-year. reflects an offset therapy the or gains awareness XX.X% field exchange general improved as to lifted compared in sales This accelerated have made expenses

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

to developing a expand invest full-year indications generating in to R&D XX% the we new For to XXXX, we as be and sales continue expect and TMTT. XX% percentage and as for technologies, evidence between of TAVR

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

full-year be percentage We of points to in XX%, continue benefit from XXXX five estimated and accounting. rate expect compensation an stock-based our to between including XX%

points impact, Foreign XXXX prior-year. $XX exchange full-year compared to rates XX or by about growth million expect we At an current or decreased rates, XXXX. the fourth $X million negative basis compared sales quarter approximate to now to X.X% sales

impacted Foreign our capital of cash fourth exchange as hedging Free defined cash the flow per for our October of from impacted million spending was margin compared positively activities XX earnings less the prior-year. reflecting this currency Relative rates flow operating million. our $XX penny rates effective share We program. positively million. quarter quarter $XXX a about basis profit by fourth gross points guidance, to by FX to $XXX

cash increase over a For $X.X XXXX, the adjusted full-year XX% free billion, XXXX. was flow

our the investments quarter to year, Total was we at sheet, relatively cash, million. constant balance $XXX remained $XXX.X outstanding and of the debt $X.X at shares of equivalents end cash billion. Turning during the million. had Average short-term

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

Momentum to back turning XXXX. of guidance financial expected investor I'll has in over updated with stronger our call Mike, time we finish the Before at TAVR been the conference. than sales for

to higher As range to in our growth growth around of full-year to that rate which in a expect higher our for around now underlying and sales rates, TAVR full-year top XX% underlying growth the result, we now would company the of we XX% result top range. total the XX% full-year rate expect sales sales underlying XXXX, be XX%

progresses the result prior-year to of We a continue as year decline higher rates expect sales growth to as comparisons.

billion raising billion. now TAVR, to of $X.X range our $X.X For range previous $X.X we’re to versus expect bottom sales $X.X our the end of and billion billion of

care heart $XXX expect We sales of to TMTT sales continue million $XX to of surgical critical $XXX $XXX to million million. to of and million structural sales $XX $XXX million, million

now total $X.X end We’re to $X expect and sales billion. Edwards bottom the versus raising of range previous billion our range $X.X of billion billion guidance our of to $X.X for

previous share adjusted per of For now $X.XX of guidance to we full-year $X.XX. expect $X.XX to XXXX, earnings our $X.XX versus

billion For $X.XX. And I'll be earnings and XXXX, the $X.XX project to back billion $X.XX we and adjusted total billion, first it $X.X share quarter of per between that, sales pass $X.X Mike. of to and $X.XX to with

Mike Mussallem

financial very proud we the we're progress XXXX of transformative conclusion, therapies made in in new So significant advancing and performance. delivering strong

We're a expansion we continue, the progress for expect enthusiastic of in public this structural milestone, based transcatheter need, us patients, to We as XXXX. about Lifesciences will anniversary many and our well in XXth the patients positions still Edwards continued healthcare which mark Exchange York of back continued for heart and December growth bring therapies with systems, on company, closer. We and event can longer turn patients have patient host serving more value longer-term that This we to lives. care is Edwards Stock at treatment leadership Mark. focused it shareholders. And the innovation to share transform and details get year of will XX. Conference and acknowledgement as New better We'll who strong fortunate have today on a over on we success. let options for that, Investor Annual the position me believe few strategy our focus

Mark Wilterding

Thank you, Mike.

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

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

Operator

will Hopkins please from Lynch, question-and-answer of Bob Bank Our Instructions] Merrill question. be first your we time session. America comes [Operator this conducting with question At you. state a Thank

Bob Hopkins

you and remarkable of afternoon came you on here. in those start sort question and Thank good like have U.S. Any where growth obvious a I'd you can new Mike centers. from? out that details more to and it congrats with in XXXX. you pickup the experienced Did centers if number just okay provide an new you, the on TAVR in of QX kind of a big upside

TAVR the on comments further upside U.S. be any great. Just in would

Mike Mussallem

Yes, thanks, Bob.

momentum broad quarter. think I It feels like feel in continuation the a started we across was of that third it all segments. was to it the

As think of sites was But that and number this came sites growth, XXX than we surgery from the treatment. new off mentioned, in it, saw was or patients was it quite at of effect sideline spectrum clearly the some whether it there And that point. just are patients sites large switch that wasn't for risk our TAVR a coming think all there centers. patients We more risk in though we cases, mature a into we to low the coming across it of risk indeed, it that was profile. new even predominant are

Bob Hopkins

TMTT. I interesting. want ask also one Okay, And then on to quick one

Just wonder if on you an update us could give

there PASCAL, early said on you specifically any the half the of that be a any in milestones of in in could timeline March, PASCAL or litigation confirm ruling of just on as just for other injunction Germany on has first and year Abbott could that litigation? kind that

Mike Mussallem

Thanks. period over out this Well, is time. as in know, countries you playing an litigation extended of Bob, several

be lot to So stories. there's of going a

was to on there's a there's sometime the follow. decision U.K. results pending trial In and March, think recently Germany, the that, at completed first hearings, to start I that's in fact, a going there in be to probably QX. couple one a In of with

U.S. I hearing beyond that. So possibility for think and there's a

Bob Hopkins

Thank you.

Operator

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

David Lewis

two just me. afternoon, for Good

of quarter third it Japan Was for you was between And any then five stocking ex-U.S. and at in accounting maybe procedure about driver the quarter? follow-up? quick that? growth a rate. the difference from a currency particular just There to Mike, there growth Was growth First, constant the points.

Mike Mussallem

tracking I'm in David. you that the on with sure not the difference I’m numbers,

you're maybe but some something make comments not, general seeing anyway. that So can I'm I

that in Osaka, Although by market it comparable. an the And really OUS ASP for growth it's our was other. And that we comparison, to minor did exact either. that and pretty Japan quarter, hard predicting and but in difference third in appreciable pretty there see the a they're little in say be procedure growth generally was was the each to in think bit us close we we

David Lewis

how probably And is clearly acceleration, really then helpful. we're in investors with so but are that's share much. U.S. as your TAVR would lot think you guidance you're plan momentum degradation on I SAVR SAVR the not business, have Thanks significant Okay, the expected. just very us TAVR ahead the seeing seeing this I unchanged, could acceleration you many guess of yet the seeing of people but think Mike, focused in we're business, slightly

Mike Mussallem

kind of Yes, thanks the is surgery, folks were again, procedures it's would think feels that say closer to bulk you David. our of step-up something feeling sideline switching there's to But hard Well, new the they right the the on probably off we think that, one-third, is with that now. it a quantify surgical And business, that perspective. from don't asked know. step-up what's But as I patients they're if opposed two-third, going in coming to TAVR. in that we from

feel we it going rebound we're So feeling surgeon from today to growth. we're of or in the we anniversary although kind like surgical, that as feel it we

Operator

you. Thank

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

Raj Denhoy

can there there's you Is I to strong percentage be stick way wonder detail I growth maybe more a added evening. quarter parse bit maybe they quarter us? any got some centers? can little can for have in the you out to good what new a a Hi, of such might if provide more

Mike Mussallem

say primary saw in and it first it that through Yes, centers large the There's recently the between. new they saw centers centers but couldn't Yes, We thanks, of some the of mean I was were people more have based. in that of all it TAVR every our board. from partner that were a really across very driver started We I Raj. the beginning growth. way broad added,

Raj Denhoy

was issue customers Europe, has offer could then, can premium just little pricing in receptivity discipline had noticed one we bit in any, mixed Europe price to been quarter into of XXXX? with a this your we’re this on up obviously Okay, strategy have you the with strategy PASCAL maybe seeing anything the more that, PASCAL I there where ask I as moving amongst on you're mitral

Mike Mussallem

we were like to we very feel differentiated so technology. committed We this. Yes, have

a not price And prove We strategy. And to data ultimately case. We this discipline. of we to confidence model. have today a executing to continue high-touch this be we're have lot that, out the think will in obviously there do but there's we're we going that that know

sales feel us, will million estimate and more XXXX. For the long-term that that leadership, in to committed build it's gave you important in confident $XX toward $XX to million we of we're have TMTT

that's feel. a of hopefully, So reflection we how

Raj Denhoy

Okay, you. good. Thank

Operator

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

Larry Biegelsen

Good the question. and afternoon, on quarter thanks one one TMTT question. the you picture big Mike, and congrats taking for question for

XX think picture in years track understand of of I growth. Mike, durability But delivered And the XXXX. growth. big double-digit you're to plus it to want do So investors you’ve your on again

my important one it I of deliver growth about growth just how each year? now is, So question are you And follow-up. to and right at durability have how Edwards the XX% feeling is

Mike Mussallem

Larry. Well, thanks,

is for going continue different to think important is it's One it two Edwards. and how things. we So

end-up overall You addition driven TMTT we of hit only XXXX, rate. a by brand We which market a out an itself number. billion care area taking get more a is we to to that infers by than long-term has right it of lot financially be We billion growth portfolio said numbers of has our growth opportunity feel one associated that I with $X know that a just for that of a a us product $X be patients confidence lot for Having great that that have said new company remember pretty are you well XXXX. like and our our TAVR, basis. with by future. just is in double-digit driven that believe When not played a really the on focus now, which when start therapies to has that, and to we biggest continues on we

pursuing a billion makes prospects So you opportunity $XX our it think about me feel pretty good ahead. in out when XXXX, about us

Larry Biegelsen

ship general you much TMTT Thanks, in QX or how mitral little as market Thanks the did slower results? transcatheter in developing impact because Mike. for hold of MITRA-FR expected is mitral And and a the a bit sales taking questions. -- the

Mike Mussallem

it's stopped market and we had We Yes, a certainly about our was question. the supply had October, basically QX. we started we have sales We in had sales modestly growth November would feel good and during it interrupted. have off If restarted higher maybe in wouldn't Overall, opportunity. December. good growing that, we of

growth probably you there's been has the been there than the U.S. more As know, outside in U.S.

again, impact Europe. some And be to forward expect start results And able when at to PASCAL our they hope on get to But this activation so and to of we regain again. is that kind influence system. own see we in in the probably focusing site look MITRA-FR or momentum that as new having from they we results, we'll see get QX

Larry Biegelsen

Thanks questions. for taking the

Operator

Thank you.

your with comes question Stewart next from Our Please Kristen Barclays. state question.

Kristen Stewart

up have the ACC follow-up. to months here over here, the PASCAL much the be at if little bit we and data coming be a you expect would Conference coming my could a on then data I see thanks I any not so could wondering two-year just that out Hi, coming about coming maybe question. explain could risk. we would was whether taking up data that or expect Any just for

Mike Mussallem

I number, can't for expect there some to tell certain data. we you be

we early expect be for update there to in So clasp on studies. example, of TMTT, the an some

on some tricuspid data PASCAL maybe and patients added Cardioband longer-term tricuspid. both So more data and

in data on I two-year those, that say X, there's be could there anything don't we'll whether of to So early yet. official see PARTNER too it's terms know

can't really until anything we it's clear. say So

Kristen Stewart

you the on to then that. get for designation I approval and $X you believe trial It that clarity at towards had should design study, Day safety to I in that timelines any you with like to Do did opportunity that's the market respect the and starting just and that achieve I of Analyst along FDA Okay, that with we as enrollment? know breakthrough yet have that expect any PASCAL commented timelines critical. the getting for pretty know sounds for you well. billion MX

Mike Mussallem

thanks, Yes, Kris.

that You there. there for I trial, be is we we expect that clinical MX patients first updated is believe what pathway here will we're we Ultimately don't both know details there's some is what, bigger may going clintrials.gov. very MX, being ever are in transseptal those small QX. be confusion I and that to SAPIEN breakthrough impressive proceeding pretty to expect to what said transfemoral ironed having indeed just have indicated up profile. But still about two out. some our programs replacement picture excited trial go that on But we

Kristen Stewart

Okay, a thank you very much. Congratulations on good quarter.

Mike Mussallem

Thank you.

Operator

Thank you.

with question. Barclays, Canaccord Our next sorry comes your state Genuity. question Jason Mills Stewart Please question next from with from Kristen comes our

Jason Mills

question. Mike the Thank Great. you, for taking

less question maybe when market So, don't centers, about XXX plus ago, model, something first I it we think TAVR, talking discussed we ever than that. in years the were big picture developing was

you transpired discuss there to centers? plus if of next additions you're of the here, the the to that that whether to centers and centers the years of projecting to XXX the continue needs you what's is compounded So over how talk number or of growth, that from of couple that in sort generate where enough XXX think go benefit not you promulgate market to be we've there hindsight, XXX to growth it also type think with may now about gotten could to be got could within or

Mike Mussallem

allows had incredible by right came the for really before where centers deliver more NCD, of with if it that to and acknowledgement, a that demonstrated qualified on are ability has to we wasn't that in Yes, TAVR this which procedure for CMS, terms some to beginning. favorable are sure an we and the we XXX we gotten wouldn't were rulings Well, today, also to mean improved with If them that maybe thanks, interpretation for clearly a are it. a so have that become it's to and And we've really procedure, shoulders from to Jason. outcomes. up as go it. XXX all be those I stand to look those of again, the greatly we're results that that are able going to procedure, went the say good be new would people not And qualify and forward, starting updated center deliver teachable

XXX U.S., So the Centers in the behavior just growth a is it and physicians severe it is asked get are an treated. change to But patients of less we we but center capacity, yes. bigger where ideal. their be a has necessary think depends site. can absolutely places of question, on to regular picture, of the actually a kind you we and with not of the centers better for getting trying than with put the example, own aortic We're on and lot what the system there getting number to patients that basis. stenosis And see assist system but let’s

Jason Mills

out a of maybe and that guidance, those perhaps into what and very in thing us Scott, Scott. the relative estimates and quarter? things the great you see Thank expected help quarter. that quantitatively earnings press there in the and leverage But when Congrats impacted quarter the in to you consensus you you nature. kind press how in that a Mike are the come upside then generate one would to impacted, And associated care more one-time things it’s and Cardioband. housekeeping for moving that positive spending item helpful release of other understand how TAVR more you, on one-time you called release you see to was with and

Scott Ullem

Jason. Thanks, Sure.

One questions. had you guess increased was I leverage sales. two on So

second was The

the of moving Cardioband. impact

$XX first the the increased of so guidance sales per On million. our by increased one, range we midpoint midpoint the share, we've of earnings by And range $X.XX.

that a through sense gives So the P&L. leverage putting the you that of we're

are investments expected of We some to some accelerate incremental planning sales. the with

including quarter from our in question Edwards in product facility fourth including facilities, production our yes, second other gross new operations, taken to some your about Ireland. decisions for involving profit, Cardioband the we've Regarding migrating Israel production

profit little bit lower XX% a fourth reflected guidance expected. in results, unchanged than for But up And saw for And were our we so gross XXXX quarter to it's show you XX%. in is that at XXXX. the which

Mark Wilterding

Next question please.

Operator

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

Robbie Marcus

I I'll here fourth great Maybe reasoning just add give on questions how both think quarter, us in a should congratulations you. and about upfront. the went two maybe just in great But And potential any well. as understand exactly get them we the investments Scott, investing totally Thanks. help I'll quarter. quarter the for such business the for where my financial on

here? $X.X a billion ended flow. benefit And the free cash sheet, XXXX. north generating flowing utilization billion a second, about with in year $X through cash What's plan of balance of for Thanks. then you're of in updated on you the the cash

Scott Ullem

thanks. Sure,

So extra initiative Heart like that beginning at growth. announcement And the quarter, November investment Association, adoption operating supporting. first initiatives. regarding adding I’ll there the that been the of an give we field and therapy we're just our where in awareness we've reflected to, of support guess example, included they're undertaking invested regarding about also things you expectations two-thirds question Relative disease resources dollars. one expenses. I incremental They to significant the then American by was

grow in are for Europe putting that example don't model resources expecting NCD also without the in growth to help the support that high-touch we in we place. You XX% in U.S., have

is up of sales. regulations Cardioband I those other the earlier third showed in the migration and device mentioned probably So cost those medical of production. European then probably the two-thirds and

not and our We've strategy number changed. of our a priorities. is Regarding got balance, capital philosophy our deploying cash for

Edwards. The the of global in first investing growth support supply chain one our is to

Second, strategic companies. other to alliances, third, And sheet. the investing balance in buy purchasing managing like then options externally things acquisitions,

to a opportunistically will to stock and buyer dilution and going of executing offset time over to help repurchases over share the we're be continue well down. share be Edward count as So time manage

Robbie Marcus

a Thanks lot.

Operator

Matt your next Our comes UBS. state with Taylor question. question Please from

Matt Taylor

Hi, you for the taking question. thank

year. and thing possible be how growing I Is And I the to that they grow going seem this fifth be still you guess get So growth wanted the here? it could you about many there think was to how insight ask we're into do quickly to year? that about a centers first towards whether center more could have given

Mike Mussallem

It's join, centers are Matt. tell we us how in little the going fast tough a to for center. good thanks well, to growth pretty saw Yes,

reported had time said last it, than we I think on more the we XXX.

two and interpret So it Yes, do would maybe next like how our it, the year be know. you number, and we over they look that that. many centers NCD, to or where to XXX-ish fast we'd we about how is and are say try of do now. the for can forward If get we're XXX estimate act for we that is go hard something to see actually qualified kind us those guessing

but you certain. insight, gives we so And can't that be some

Matt Taylor

I hoping the must based you more same here growth was so or us you QX. the some U.S., strong QX. insight, of seeing give seems growth in kind strong was the trends then And could be It in like insight in the on

have growing investors kind a seem bit your and much about questions you're is you think some board, could QX bolus suggesting And it across be little that that the you a be talk seeing this I sustained? sustainable, with sustained? of around more how how it's can in versus to of it's what comments

Mike Mussallem

But Well, Yes, take and we'll important the for rates. difficult always anything year what to is for with full-year Matt. rate hate to think for we it. predict to is anniversary it growth see it likely decrease of this, you assumption to and is quarters the you our thanks, just do month know the we the as we course and during revenue growth TAVR us that say XXXX can is one how

assumption QX dollars. And is revenue terms that to TAVR that similar QX probably in looks of

And big from a saw remember in XXXX. QX step-up to trend was similar to QX. QX have last a we QX year versus going there XXXX You'll

know to that's hard but for maybe it's So helpful. certain,

Matt Taylor

thanks, Okay, congrats.

Operator

Thank you.

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

Vijay Kumar

here. guys, the maybe TAVR. in on back about double-digits underlying hold line the half? Mike, that half back half in the guess The really I maybe a implication solid or think print the of growth last the XX% of, high-end sustain back Hey, on on is congrats we on the that revenue comment how we should

Mike Mussallem

a we possibilities. news half more done either growth done there is difficult at know. Vijay. certainly the we double-digits? good The ever going in it's are for those of TAVRs good It's below than mean, dip strong. question, us so is XXXX second stay Do to Do history. of in to I the be it, Yes,

procedures so per And terms those in day, are of going to be records.

this annual not Now rates. we've probably we of the growth It's in the is can how much clear, over terms year? you growth given best but guidance there

Vijay Kumar

recall and Thank did here impact you. for gross margins guys QX margins on you we progression gross gross the QX, year? then in you the margin on Scott, net one the me Got should about the yes how excuse think throughout

Scott Ullem

benefit XX quarter in MDR. basis and XX Israel operating of TAVR European quarter predict costs a gains tied it's explain it fourth gross our to of we in year had the offset those and earlier we XXXX, throughout little bit on that we a of with So points showed getting in happened help least baseline we higher and But hedge the about ends mixed up can of about QX that basis I maybe where progression what XXXX mentioned did XXXX, higher fourth difficult to lot FX because in QX the up had the margin by with XXXX, points QX performance. versus the

XX even least generally, the you probably basis if assumption points get more. that relatively during mixed I So course modeling this That's up to right look year, to shows expecting gross the at it to point. XXX the But purposes. for flat on continue benefit margin, at we're up of or to XXXX, it's think can be

Vijay Kumar

you, Thank Scott.

Operator

Thank you.

your Our Oppenheimer from with Suraj Company. Kalia comes Please next state question & question.

Suraj Kalia

quarter. congrats everyone. Mike, in afternoon excellent Good an

So TAVR the your capacity and question been growth about Mike, in asked. assumptions had

way. different can at come if me I see Let it from a

XXX in of what us centers? cases roughly centers utilization give seven look done U.S. do you Can a in per you these the the upon year to Our per these within currently in cases perspective of math nature? suggesting how XXX independent capacity are is percent center being And

Mike Mussallem

it Yes, that’s done imagine, don't terms you between in as small. and the a in of might is good center, center We Suraj of one a at look there question. amount very large that difference a average number great procedures for way

been so the service sometimes you and on been day. a The add to different. for are know us those quite add of a team I'm ability, thing day, capacity. they found it's proud cases has remarkable per test our a way to They that our a manage, we they add the have So to team Actually, centers found is more to have ability has have high-touch model.

about cover us. of adding the what heavy cases, example for every But list the for lift and so the they XX% in ability and then long us to a in have far so show for that up we're to prior-year to versus we've their hospitals flex these happens patients line, more So react as ability the gets U.S. that. one been to do pretty the be is by to impressed growth grow capacity was

Suraj Kalia

taking finally And Mike, thank great you here. arm, competitor blank it. MX for I'm my quarter. the drawing sort me mention forgive Did Got a question of you and congrats

Mike Mussallem

mention just that we it's not we to it prudent really still trial communicate that finalized. design And not so for competitor the is MX one it's has decided final. arm, didn't Thanks, no that been till us

see clintrials.gov point you'll some published So at and that at will be it.

So we'll let know. you

Operator

you. Thank

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

Rick Wise

and the there you and reflected Scott. Hi, small, assuming Mike, can up, care. the how if come you're is hi remind about I China correctly, and guidance? you're I in mostly us thinking maybe situation? critical exposure hasn't recall think what your what's And SAVR impact or But

Mike Mussallem

employees Yes, we're maintain had impact We we've been we've been concern Edwards inside always patients. haven't Rick. that thanks, key and fortunate feel able is and for any our aware our all, supply obviously of Yes, far, employees to so our first to of we line.

don't a the to watchful. we us. what's point a just at still small there this this not with on percentage going huge So It's you're China's sales, Edwards but from we expect coronavirus at really but point, stay of change for be right, significant

Rick Wise

this replacement an today. follow-up, is a it's that about for saw strange And that device moment but Okay. important not got question the just as as, XX as much how Europe field mitral Abbott’s a in My better, same? you is the question at makes probably approved can dime does anything this maybe you mitral that you openness the European of Does feel coming them? that it about to say we much. feel you that Thank worse, does make regulators this, so consider extrapolate waves the for

Mike Mussallem

believers Well, we’re you and opportunity the big transcatheter Rick. know therapies. for thanks mitral Yes,

new whenever so a and regulatory movement And the field, there's approval that's positive. whole the for

I on is So we you we're that, We're those favorable we we things in going know our behavior see and general are physicians be but we so think any on smaller good. to keep really and disease. think pleased, that, kind when openness meaningful it. focused systems, our of We're think most that is within have change And to a very movement portfolio. the patients what's mitral, there mitral eye a transfemoral innovations glad of cause to just within the type about these is

Operator

Thank you.

next state Leerink. Please your Our Danielle question comes from with Antalffy SVB question.

Danielle Antalffy

I your and hoping year the loss, called competitor like seems out taking comment there. on Mike, Hi, question. guys you're are It sounds specifically the good losing not seeing so in for Congrats you share, everyone. holding share afternoon U.S., on quarter. had you landscape to share. Thanks could it out really much what a the strong like competitive was strong on

as specifically just the are going today adopting and what player. So up centers how with be you new what seeing you're they're valve one I'd seeing on and open curious

And more protected from bit little so loss. they're a

about how out. so playing much. that's Just curious Thanks

Mike Mussallem

so our so as a comparable was share no of the Well, in or procedures the on was that of our quarter. change that thanks. Yes, Danielle, the real point in from in believe U.S. whether last growth not that we going we overall OUS, to view, significance position indicated, our was growth in

there but XXXX. be some indicated modest our have may changes competitors, in don't to probably been between it. in in gave our share clear visibility Now position really December, with there we will we have loss When we share guidance

also So out. to we that's, didn't that It XXXX. you didn't, have play in We to expected really. happen

but just it know so launch we process. of their early the they're been our delays in part still have competitors, on And may

Danielle Antalffy

have like feels that's quick And Europe, seeing follow-up, you're it too sounds perspective? safe a say safe in like just a what stabilized things share from to there, it

Mike Mussallem

such it feel we And we that's carefully. watch market shifts, moving We’re obviously on have that reasonable a not a handle like don't we seeing fast it. big share very

point. it this stable feel at yes, reasonably So does

Danielle Antalffy

you. Thank

Operator

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

Pito Chickering

Good afternoon questions. taking guys, thanks my for

more is your question similar or little Is new more the into market just First established those centers. in dig your to the centers market share share centers?

Mike Mussallem

say of that We That that was there may probably board. the I'm when others up we one. just saw in just a really the others. look across are at overall my at addition good it XX%, a have some on centers is primarily fingerprint, with And Edwards. at question. we data start those are that My again, the significantly. not But centers. my start up I that There that was growth fingertips our sure that sense U.S. varies are nice kind from new there

Pito Chickering

the costs U.S. hiring other personnel break SG&A for so sense the XXXX, the should in and at that incurred side, can us there. you recurring in understand you help and out similar or the I relative Europe quarter TMTT in Great. costs field TAVR they levels to growth makes fourth the much. in Then marketing Thanks on But decrease?

Mike Mussallem

thanks. Yes,

ahead maybe that. little ahead having properly SG&A what a high Scott, comment one-step the some see our in to think said stay of try like on of mean, we're SG&A we XXXX what that, line, begin resources procedure we have we So stay XXXX. leverage and and guidance to I in we Having noticed for level growing we that what like when looks as can case TAVR try for commensurate out that still our fast and think Scott there's case. every give best said we growth, bit here businesses anticipate guidance we probably let But TMTT, we you a SG&A. of and I coverage, would as add maintain we that, is in and and what you're

Scott Ullem

work addition TAVR the the and aortic and and referring of today. options, resources options around XX% I that doing the XXXX. to education outreach also we're XX% are guess around treatment stenosis benefits in say But severity field, I'd selling doing available regarding physicians for to to we're field, therapy support of clinical the patient on

And field we the with activities activities associated expenses about earlier. resources there are talked other and so, just beyond those

Operator

you. Thank

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

Matt Miksic

do Hey, Investor thanks talked meeting little on had on on outstanding to It while for about a to quarter investments bit taking or you've that. a think a touched of I around question or something so on. identifying tracking you about in investments talked you've maybe to here question helping I patients And like terms here, made was follow-up patients your year. kind the Mike, care Day part really Analyst on a and the you of and just congrats And The back cardio support Day. maybe of and sounds system.

if rolled and of talk you're types are technology to think patients? identify be degree could I understand that you going, if to support what these you I you them growth other about, this help out it correctly, employing, just widely may how kind and that's there you've how of

Mike Mussallem

started other themselves, Matt. us. continues this better know what is educating a here. to for patients or thanks, And educated, trying is down that three to path. going few pathway, One priority broad, Yes a broad There's help referral categories be Scott the you be

make sure work. findings helps their better actually systems and We also have that that team pathways echo have a referral and

maximum We that to program operate allows benchmark have efficiency. a centers at

mentioned, initiative I'd pretty new be a we've investment. area you should got of trying American an know that It’s here, base is the So detail broad new Association. with it's rather Scott based, broad Heart as that

Matt Miksic

enrollment should a maybe these maybe terms to some and at a that getting That's we study if for us that one into programs? an great. point mitral should on could early from EVOQUE, moving we about sense expect -- of feasibility That's while in I seeing some think if of early just a what of be follow-up little getting we'll takes maybe of data It could and terms great. And what just give in enrolled program? then where you the

Mike Mussallem

we're position we're enroll. these But we're early going to not how disclose predict timelines yet going pivotal like, technology. or the looks to cadence are early about in Enrollment feasibility excited where and stage studies a ultimately trials

Matt Miksic

enough. Fair Thanks.

Operator

to we gentlemen, for our closing allotted management exhausted and back Ladies remarks. you. for Thank now turn Thank time you. call I'll questions. the have

Mike Mussallem

continued and I your questions. in interest Mark additional for and welcome Thanks Edwards any Scott,

Operator

access you. this XXXXXXXX. XXX-XXX-XXXX conference local replay call, time. your dial Thank a XXX-XXX-XXXX the To a for ID Once XXX-XXX-XXXX, you to disconnect access access use This Thank dial of replay, Please again once all lines please or local conference XXX-XXX-XXXX. or ID at conference concludes your you and access participation. may this again, today’s XXXXXXXX.

Edwards Lifesciences (EW) 30 Jan 202019 Q4 Earnings call transcript