EW - Earnings call transcript Q1 2020 | Edwards Lifesciences Corporation

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Operator

Greetings and welcome to the Edwards Lifesciences First Quarter 2020 Results. At this time, all participants are in a listen-only mode. After the formal presentation, we will follow with a question-and-answer session and instructions will be given at that time. [Operator Instructions].

Without any further ado, I will now turn the call over to Mark Wilterding. Mr. begin. may you Wilterding,

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 Victor. all thank joining and Thanks, are Mike

its Just after the XXXX of regular results. first 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 are Edwards does

risks may information and which Additionally, cause are the XX-K that website SEC pandemic uncertainties concerning of all factors safety report cause the press filings, with and on not that Edwards' that the Form annual differ Information including could XXXX be at associated available those limited company's materially. on important product involve could and our other release, in edwards.com. found differences statements to COVID-XX actual to results but these

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

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

Mike Mussallem

you, Thank Mark.

of COVID-XX times. during Edwards at company challenging quarter responded updated broader to results you XXXX happening and outlook, these we the sense like Before give of has into and our I'd a in light how first dive what's

continue wellbeing has our on employees. expect, been patients the clinical our to you'd counting As of partners and protect priority serve our support us, to

this supporting challenging and express to offering address them our Edwards, healthcare well tireless global to are support. technologies, for appreciate leadership their patient to crisis. maintain community our clinician We partners everyone commitment we're time. I serving frontline gratitude behalf patients of at health care of to dedicated and as as they continuous our on We their as during want and global this striving strong the importantly, in-hospital access dedication lifesaving to to Most brave

encouraged to around and plateauing I'm the indication from by recent of on even know and workers face infection the we challenges. that But many unprecedented in frontline declining healthcare continue areas world. the rates COVID-XX deaths

due sail Smith with words the of together this COVID-XX. Columbia that employees to University, in also the of world want from challenges unique to the our recognize through that I In time. around Dr. XX,XXX have overcome we taken the Craig I actions will am confident associated extraordinary

world. and maintaining is the I resourcefulness, our supply work volunteering and and in our of and the to their of partnerships also healthcare help to Thanks important Edwards infrastructure and agility, the of proud employees behalf our government chain admire on this their global difficult our time. communities a during team critical period be member regulatory passion patients around in of

supply significant manufacturing to our able challenges, been we've than more continued and have countries the to our Despite operations world. around deliver to XXX technologies

to meet the demand manufacturing our able consistently have heart structural Our global employees for dedicated been technologies.

patients who’re to serve of critically our we last become to at conference, and pressure employees, an this products our making global few care. double time. facilities really investor it's increased to apparent production monitoring years and up critical improve need need. We're agility in for capacity with supply our December more grateful our been than the ill our progress there's keep in the demand of to and at In noted this Europe, As focused production energy and resources over

them with of piece third-party work closely valued to disruption. are avoid a critical effort Our suppliers infrastructure in this an we and

We of supply components. are assessing proactively options capacity, the logistic managing alternative closely and managing

team's and countries to for to courage technologies patients procedures commend been when and clinicians also in at all Their needed truly support to clinical and in saving Edwards states world. and frontline March for XX most. our resiliency unwavering. support want patients the clinical in U.S., providing I this alone, is assisting delivering In their for life work time time commitment patients almost clinicians has provided TAVR impressive. in real it's the Our field XX around teams

health continue adhered trusted At We'll to protect continuing our while all technologies of employees, rely for life important hospital governments critical focused strong decision and saving measures confidence successfully team to have the also crisis. culture, I on our unprecedented global ability of our absolute Because safety providing making. local to have this times, the to patient our sources, policies we in patients. of inform navigate work global to and

recognize organizations at this the important want and meeting by to role and charitable community global driven Lifesciences partner the needs to and issued the needs work these respond To than the around emergency communities Edwards Finally, where time. world. our and our more I to live both local Foundation partners impact pandemic, XX Edwards of in grants employees

is Edwards this care underserved physicians donations technologies critical for Additionally, to patients. providing during of crisis care help

a X.X that its Every me our underserved foundation in inspires by goal than and to first the our achieved our understand We people help communities. will partners, longstanding to that stay Matters in truly more can screening of partners our ways closely It’s we charitable Heartbeat charitable Also, our quarter treating in over XX personally. one and connected remarkable through initiative. effort million countries, other

the of our from more new to underserved goal and a Every We're lives by bold using XXXX. our of heart X.X set of critical care end structural the patients improve gained million Heartbeat to first phase Matters knowledge

an not it Not ago incredible been bell it's at from Finally, close. we yet. before and journey Stock our Baxter our Edwards Lifesciences. officially the and even was marking the journey month Exchange, are spin I get results, rang into we the New this years as beginning And York XX off done

monitor still need. global in and disruptions, continue long-term pipeline. will I potential focused this more successes. it COVID-XX team confident remain its and strategy very our we patients actively and There innovation many that achieve in culture patient together, pass, many our confident business and passes, in we once crisis While to will we remain are

quarter turning challenges Now XX% an first $X.X TAVR, basis. first sales COVID-XX, Aortic XX% results. associated million, global sales Transcatheter underlying $XXX Valve In quarter with this to up representing on were Despite sales our quarter, we in Replacement or reported growth. billion

growth procedures This result fell the of few the last a Our our quarter with early consistent global strong quarter of March disruptions. the as dramatically COVID-XX as impacted global TAVR was rate. in sales was growth through fourth weeks

As pandemic. even you as their varied patients by procedure and greatly to the volumes might March expect, turned focus in by providers geography, hospital

growth estimate average and better more in share current the selling TAVR in Estimating being growth position is the TAVR once position We challenging ever situation prices procedure anticipate a environment. able to normalize. to than our procedure to were be -- stable. global better competitive Globally, to begins

sales TAVR XX% the approximately basis grew our on in year-over-year a first U.S., In quarter.

a risk. in the as early our rate Our U.S. driven system through by treatments patients up was quarter fourth independent their strong TAVR entered sales TAVR growth surgical consistent of with growth step new March

the were the highly across few and quarter, During last dropped of weeks precipitously, country. variable the procedures

clinician Ultra rollout safety Ultra not trained than of a our proctoring our performance improved European To employees accounted remains quarter stable soon The the SAPIEN go as and already of feedback of very paravalvular COVID-XX that the centers exiting on TAVR threat Ultra clinician more rollout to decided U.S. on XX% to outstanding. of are We the positive resuming device. ensure pause environment. from X partners anticipate to in we for however, back more X be as volumes first of continued the we've SAPIEN leak the and quarter. and the first

recall, March, continues up for years may you risk committed ACC of two As in following was presented PARTNER be that extremely SAPIEN patients virtual clinical to the to follow X Conference. the years. excellent pleased the Overall, at low were in two we X outcomes and we XX the at patients year

mid-teens better March, on being by the to headwind, sales Despite by we underlying even than countries. growth expected this encouraged strong the were U.S. In quarter early TAVR across in dramatically than was Edwards’ an basis. most before related Europe, the the stronger year-over-year impacted fourth COVID-XX. our quarter procedure in adoption slower TAVR and growth through Outside grew first of

very we saw In TAVR adoption. good Japan,

First quarter impact COVID-XX, negatively procedures impacted by meaningfully sales QX Japan were in it expect not although to there. we

sales gradual that recovery In what we followed for resembles severe sales. in we summary, fourth on of second be the in our and today, TAVR will the our most the in impact third quarter, a based quarter quarter expectations by on the COVID-XX original assume know

degree of procedure uncertainty news from of recent Although COVID-XX, also rates terms we recognize high improving of volumes. we're infection the by hospital in encouraged continued

to to TAVR previous We sales flat X%, with range be to minus XX% XXXX now XXXX, estimate X% approximately versus a expectation plus of sales growth. global our for growth of

However, relentless, for is by to We caused $X critical challenges exceed patients these even opportunity that of committed severe Edwards the aortic what the is by XXXX. we in solutions and stenosis remain extraordinary will billion certain know to the delivering remains COVID-XX. confident face that

or experienced of therapies in and approximately In From commercial momentum adoption we a first $XX sales and million. PASCAL mitral TMTT, transcatheter accelerated global quarter Europe. tricuspid were strong standpoint,

last were clinical remains outcomes of weeks COVID-XX. few to We the to our when declined continue feedback the PASCAL's We with tracking sales acute be abruptly pleased of until impact to the and due expectations physician quarter, positive.

enrollments temporarily clinical we've trials. in our active announced, tricuspid and new previously pivotal paused As mitral

a the the transforming a investigators innovative hospital. in are body focused mitral with for each of be our tricuspid clinical We of with and We developing coordinating disease made to enrollment closely supported valvular of evidence. on trials’ patients by with by and resume laser remain decision vision growing therapies investigator consultation care will portfolio and

EVOQUE and the significant a the We continue PASCAL, progress and expect these procedures regarding on negative informative require currently to stay. as we since expect experience anesthesia you updates meaningful and on to focus make systems tricuspid EuroPCR medical general portfolio In transcatheter pandemic procedures ICU Cardioband fighting QX, and meeting. impact healthcare can the an gain mitral upcoming at across hear and

We our support anticipate in our of ensuring strategy model. recovery to outcomes and remain through beginning high-touch committed and success QX differentiated patient procedural

million. well our We to our $XX expectation We through team. manage for million million full challenges and $XX to these to $XX revenue navigate range that million and year unprecedented strategy our from positioned feel long-term are focused previous we're dedicated the to confident of $XX with revising

TMTT by quarter X% opportunity sales on We Heart, continue and of world. an In global passionate for diseases deadly are Structural about first Surgical the improving solutions approximately these to underlying around $X declined billion basis. patients’ million the lives will estimate reach and $XXX bringing XXXX

fourth the quarter quarter. As expected, into driven surgical U.S. TAVR, by the the rapid valve first persisted of in the headwinds adoption procedure aortic experienced

During share an aortic premium the deceleration to which March, last in procedures of Based in outcomes implanted one of surgical very aortic We U.S. valve become few experienced surgical has INSPIRIS we of Japan. encouraged on valve, increasing related feedback, valve continued the is RESILIA and positive COVID-XX. it's number patient driving physicians’ by INSPIRIS not aortic in valve a the surprising sharp and the our weeks remain adoption that procedures. favorable

valve available beating to environment system In mitral we the commercially stabilizes. plan and Europe, it heart our launch now HARPOON, as is repair

potential that faster begin also and degenerative to begin expect HARPOON pleased second and enrollment in recovery for our begin recently earlier with the the consistent disease patients. we half to -- received approval Recall to addition, more we're valve study begin U.S. mitral offers IDE report pivotal outcomes treatment to enrollment of of and FDA In for XXXX. that surgical

XXXX XX% Surgical to decline Heart with expect of now because previous to growth. we for the expectation impact from zero summary, year sales full to Structural XXXX X% our versus X% In associated COVID-XX, of

will at QX QX. that Our in expectation Europe U.S. continue and case is end lower the rate the in of

our that of driven will to growth, by sales market QX anticipate our positive return newest technologies. adoption We

technology and options move As patients extend in and as COVID-XX global to Heart provide Structural for treatment even we premium our surgical Surgical we're excited ability transcatheter expands, beyond technologies. leadership more innovative about our

disruption COVID get treated. will structural the who as treatment there and heart Surgical, ultimately are and their delayed TMTT subsides TAVR, summarize, To patients

of However, recall time because sadly, of nature these published patients patients delays, deadly at that difficult chronic will but the Journal It's these Thoracic we quantify given conditions. and that worsen not to some versus expect impact heart of survive data X% for month, in waiting and for suggests on patients the this mortality the Surgery X% as have delay months. at is one valve replacement the aortic patients at a they progressive XX% This COVID-XX valve waiting six of effects months, structural very the heart of three severe risk disease. weigh difficult a risk after the time

surgical of by demand lower underlying for partially on quarter monitoring million increased pressure Growth In TruWave X% our require hemodynamic in that driven line offset monitor recovery our who Critical support the the the an ICU. groups products. surgical $XXX on enhanced product devices, larger focused smaller patients. was The Critical helping of for sales distinct first primarily in which the basis. is setting, in Recall Care, disposable require and -- in our quarter first Care group Europe, by monitoring demand greater two of

While active, lower, recovery demand surgical partially increased the enhanced for by will revenues products. significantly ICU pandemic remains from our offset be products

focus as COVID-XX. their in We have orders also on spending hospitals HemoSphere delay the U.S., in seen as some limit they capital

with sales growth X% plus XXXX XXXX a of because X%, versus of related summary, growth. previous be to expectation X% the to of now to X% our range Care In COVID-XX, minus Critical to flat for to we estimate uncertainty

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

Scott Ullem

expectations, periods we our TAVR than Today to thanks results upon with during on the lot, expectations. early were running Mike. how of QX of were some a directions growth we rates guidance the of perspective very financial quarter. $X.X billion. underlying know our ahead including fourth Appreciate very total different with the running the what sales I'm in of reflected XXXX first along closer two Hey our the in March, Pre-COVID our our to that in a overall Europe. little sales today. strength I'll a unfold quarter with based may at notable on Through results provide year QX, pleased additional rest quarter the

U.S. the last of lower sales originally weeks we when phase second The we expected. COVID and impact the felt quarter March the Europe of were was few the in and than of in substantially

COVID plateauing. sales depressed, though admissions even be in Our to remain appear April

within so sales GAAP earnings was in release. range. share with so which expected, GAAP and is reconciliation was was our spending, per earnings full share were adjusted earnings adjusted our our QX quarter per $X.XX, While in our was first lower share than included that the a $X.XX. today's guidance between per

the the well of Now, for first the of discuss balance results I'll year. our guidance as cover quarter as details

XX.X% spending Medical European For COVID exchange the impact favorable the first prior from was consistent our much support quarter, benefited mix our in lower GP of the quarter. foreign with have hedge the adjusted rate gains an a by gross rate year's product margin didn't and in This first regulations. year of new quarter. offset Device

later sold. we'll as is Although see year the inventory this the negative cost impact from COVID higher

lower expected Regarding operating impact. quarter were result expenses, first expenses primarily a COVID the as than of

declined clinical as expenses expenses, activity. travel and as meeting less to naturally delayed due trial well Some

long-term investment intentionally measures. have We our the at significantly are And cost supporting plans not control actions implemented time, implementing we reduce our same growth to strategy.

been has and helping priority people our secure Our to patients. safe, keep focused on

year. first in Europe. to the administrative the TAVR we or personnel $XXX prior by support and have TMTT Selling, increase the made clinical to This quarter million compared in in were sales million expenses driven of field cases additions U.S. in in XX.X% general and $XXX was

Research to and sales, compared tricuspid increase transcatheter year. of was million X% This primarily to $XXX or million, the development result continued the in grew and of $XXX expenses investments XX.X% therapies. mitral our in prior

impact around response year. to have urgent As response in of sales spending made remainder a we research to development for in moderate reduction a TMTT planned clinical a pause strategic results the COVID-XX trials previously, to will This decision the and corresponding the we the in announced and globe. negative

from XXX rate points, tax basis point to compensation, XXX This rate to a or unfavorable benefit stock expectation. quarter included for guidance our was based was accounting the reported which employee $X.XX basis taxes, this Turning our XX.X%.

this from tax rate also favorable benefited Our audit a quarter settlement.

be increased of XX%. result a now rate, excluding to As between special year uncertainty, full XX% tax XXXX we expect and our items,

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

to impacted effective our rates program. Relative per currency profit year. gross prior penny basis positively our about impacted points a reflecting earnings share first hedging margin exchange by XX compared by FX the Foreign negatively guidance, our rates January to quarter

the billion investments cash, have sheet, balance the very to end of sheet approximately and cash Turning balance we at with strong $X a equivalents quarter. short-term in the

In addition, we $X until undrawn up an our have line public billion bonds mature to of credit XXXX. and don't

purchased repurchasing Consistent opportunistically X our we shares Additionally, with we generate flows. healthy $XXX million shares, for quarter. to the of million continue cash first during practice

bank XXbX We Edwards selloff. QX automatically still have XXX.X the authorization market average the million with a our In started million. the to remaining of preestablished into February. stock to $XXX buying Edwards’ behalf million and to in down in million XXX outstanding were stock went This March, full through by year on shares price share open in we program for million, when market million. effect purchased back for We updating program. from of declined Average shares repurchase XXX XXX are was XXX outstanding guidance a shares

Annual we that Thursday, Meeting this note will Xth. Please Shareholder our virtually year host May on

outlined of will on proposals to the for filed last effecting purpose number our in a one of proxy shares be be the outstanding voted of month, to X our for shareholders As increase stock split. by statement X the

the split make adjusted financial our information to expect execution Investor under of Relations We available the split. website following

spending the $XX million activities of quarter capital cash for of flow as defined $XXX operating from cash was million $XXX free Adjusted million. less first flow

year. cash quarter free the first lowest Our flow quarter our during is traditionally

flow updating We year. cash guidance free for not the our are

it Although, of to short we expectation of billion. $X.X our will billion original fall expect $X.X

for full guidance XXXX. year the to I'll Now turn

progression or to hospital disruption nor extent As procedures the predict you therapies Edwards utilizing COVID of the the the timeline provides. of know, we cannot accurately

sales today. range is and a there upon we earnings wide we result, for and know of wider-than-usual XXXX of outcomes a guidance based potential will range a provide what As

to at treatment We multiple rates. scenarios the which return pace normal have modeled hospitals more based on

of guidance fourth the the quarter growth for that is estimated of recovery sales a assumes Edwards’ second the impact during a gradual Based comes Our plus X% and a versus to third $XX reflects of flat full Critical a and of of million be revenues upon XX% of XXXX recovery XXXX our to X% plus X% course minus the with the severe to XXXX; in COVID TMTT assumptions, and be most TAVR That minus to range close minus X%. minus range Care growth expectations. our followed $XX quarter to to by flat to to original X%; million. Surgical, with quarter year to

The two heart businesses previous guidance for receive tempered three take to and many $X.X total is and factors common company recovery to structural treatment. XXXX expected takes by by of be the patients months. our billion range billion be it process sales the screening time to the It's for billion. will seek alone our $X influenced to to billion $X.X versus of to $X.X now for

quarter, $XXX we to of million sales estimate For million. $XXX the second

recovery the recovery in these a also conservative into year, or beginning such resurgence that extend a in our conditions later We've followed case, versus as COVID modeled XXXX. more scenarios base a by recovery

to to But not if We those providing those operate financial conditions we are guidance necessary. are under prepared related scenarios.

wave anticipate Our of COVID-XX. a second does guidance not

the continue view overall, we're visibility a into to obviously quarters providing We'll of providing forecast. that’s our in So level an thinking guidance to provide evolves while transparent ahead. high you how of abnormally subject our risk,

new and learned communicate turn it months all internally our to remotely. growth ways a of running external It of partners, our to we continue we've even make our back Mike, team I'll at keep In will I about Edwards. one couple of the additional with in Before made goals. last comment confident systems Edwards with smoothly, close to and our how the I'm strategy sustainable global succeed patient-centered and stronger infrastructure and has us books team and

Mike Mussallem

Thanks, Scott.

Edwards went new more our today. that you Never you're has XX whether story, at patients know we you the put has than company follow public first. years or important dedicated our ago, this talented been to So team and always since

extraordinary team the optimistic I'm of together about and around stand continuing our community, innovations I'm to and we global patients with the to partners, for As grateful deliver our the future world.

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

Mark Wilterding

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

the the questions, management additional If answer please participants call. of as as many during possible the you queue and have will reenter Victor? remainder

Operator

Thank you.

You have now our question-and-answer [Operator Instructions]. session. reached

America. comes Our first from question of Bob Bank Hopkins of

You may proceed your question. with

Bob Hopkins

Mike. Thanks,

well It XX% guess guide is congratulations seems hear that providing. So is to like glad at year-over-year. guidance the question on QX everybody and strong you're just the on my I about results. first the the midpoint down is

the Just run your on worse or that rate rate is curious, you're that? currently a run that is little current than

Mike Mussallem

living different might can as Even Bob. we're you by be feel this So numbers to the really care varies heart the a summarize structural for I down than also QX it now. we're by -- critical it tough it better come business. than right it different providing I very is is imagine right geography. varies acutely way and can even our businesses It's business. our It more hard, probably going QX that that now. add that moderately is quarter.

Bob Hopkins

just the just lifetime, once the that the what a through generation in this despite I we're a that by event curious, the QX, that are once QX confidence your of all QX back now? -- data guidance, in for gave points Mike just that kind we'll follow-up the type the am you back you'll in way to all view going normal? of, normal to what way the be be then quarter what right on and informed are are you things Scott, that, thanks that And sort guys considered, or -- is a things you

Mike Mussallem

to good this tough Bob. And it's do. a So question, very is

it's to starting signs challenging positive We're to time estimate So see we already. revenues. know that

start tenor recovery. take And we in the And preparing that's -- some of themselves to we that the we tone so time. really to going hear know people

that treated we diseases diseases might very that of easy in so expect know And and QX be that in postpone. that QX, QX. treated those know many the treat not indeed also to and are are have we the might patients we been serious We forth,

the we’re combination QX. broad in a those likely be us -- say in situation more that factors again, to typical that range volume so possibilities likely of there's And and to of encourage we’re but a

Mark Wilterding

please. Victor, next question,

Operator

next comes question Morgan with Lewis David from Our Stanley.

You may proceed.

David Lewis

or one lot follow-up recapture. not are it and the fixated thinking kind and and second for just So referral XXXX system what the of extent some their talking channel, probably to as just channel, follow-up going these then of question sort the quick you. of a referral investors low about patient be in just re-access of you the to of to to considering quick quarter age Mike, and you world? about quarter procedure one. investors yet, is think normal, I’ve of post-COVID that what fourth concerned But willingness should risk a think recovery implies age a but patients And really do disruption extent sense a about on given about if fourth of that to be the

Mike Mussallem

thing sure decided have to afraid is many were it's home. no, in meant COVID patients it's our real. One David very that they stay Yes, scared. of and cases They're for

there's the are as think But a if as factors waiting. there's of bunch you that funnel, of a So, patients many that a recovery. bowl, influence it been do

patients to to we that come by that these is they a But fact the that. of really the community. effort to this quarter, going a really It's with in situation, fourth in grips beginning to and process going AS dangerous the patients, and they're whole going key. big think to be to to So I in screening to again, particular, is the months be needs that think treated community heart advance begin need going and are the respond valve be that

not the now, to we're to what will that's have what anticipating rates that's going cause QX to prior But right levels, not be returned that is. And happen. it even close. screening So

David Lewis

dynamics. center given consistent think But of certain we're just quarter, with the to sort And certainly share were of we the assume I in part the there new whether the think early to low patients of if expansion? of Or sort the that to challenging share are right capitalizing than quarter through it sort it's you market clear was the SX peers pretty months know what first out definitive the this think you you in the fourth running of moving talk in close attributes taking now now about better is about clinicians? XX% relates with kind seeing in you're channel of that it's you the share evidence tied Can as regions. and to X.X quarter, of unique risk on shining

Mike Mussallem

generated study said, thanks, to outstanding overall really see even estimate we to But growth Well, environment. make a now X better will sense us that do -- platform. the challenging SAPIEN procedure that going at do trying just know as to think feel reinforced you we right future, be more is Yes, but seems X years. how about right and it's was PARTNER we David. position two the We think and speak it's nice to this once current trying to normalize. to sometime just that in inappropriate to now and in share competitive things the We're much be that in lot data a to

Mark Wilterding

Victor, question please. next

Operator

Yes.

question next comes Citi. Joanne Wuensch Our with from

Joanne Wuensch

trying around to catch process you on your I normal the in thought in, being I'm your What comments to couple Did close and/or that then versus sort data. the patients like to delayed. the wanted of gap that ultimately a investors are want of procedures. We this And Thank at on hear thoughts results that? I SAVR mark two to TAVR about did data? did the thought to on the just a up that or my out a quarter terms in year concept you. spend year ACC bit. dial patients pushback left go two a from you your comments fourth of back the are of I some get would system? of head little A think for here. moment your get questions just the see these

Mike Mussallem

Yes.

going I'm bit a Joanne. little a have question, second follow-up your on So of to

Overall in try outcomes risk your of and get SAPIEN me Let one. low with -- extremely we first X patients just were at we years. pleased two were the at

Now one remember was with year a endpoint. But for right, years. it -- we trial, was a XX agreed patients one year This what this one to follow was. these a

snapshot a so you're into And to going the future. get year each

years. Yes, that's it's positive numerically numbers Then together. still one of come numerically at But gets and better. to superior the stays did surgery the closer is two things TAVR it --

quite at this are numbers small the point, So Joanne.

couple So a superiority and change between the just of be can called equivalent. statistical - of or just being difference couple deaths strokes can that a

if but by small no discouraged so weren’t all. very it's And we differences, at that

We to encouraged. very continue be

catch And is resuming second up question of treatments. and normal your expected about

So treated sure up, a you're to patient? there's asking make lot Are catch XXXX. patients asking, Joanne. have to those? I'm about you during want asking answering what of what that the Even I on you comment been we won't that if me Are

Joanne Wuensch

XXXX the at end or patients are deferred sadly to have we at the stage and now, think of the answer okay, be should they year, Because come been system what into who the Yes. about, trying never? back may

Mike Mussallem

Yes.

get for patients. some deadly is likely never So nature, a not really structural survive. just delayed the are treatment, if may be there time who And to of patients And heart this tough some who’ve ultimately, treated. because

distresses disease of the is gets large and extraordinary us numbers the It's it patients you If just here, progressive. greatly. clearly an to the difficult that be run times, group just

great of time the no, has some already conditions who not It's know to have world turned waiting passed heart this attention as very we But a patients COVID. list, anecdotally patients. so about which a on away for is set structural tough their sad. is the And

Operator

you. Thank

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

Matt Taylor

your of line that to inform triage, just different of that and of color recovery about from phases of guess them was how supporting going you kind assumptions possible in they're give here? or heart you're phases Have kind thinking I the might in normal you about of early recovery? terms talked of operations thinking, the customers, us I of they'll customers to of cases your how to through that move in your manage to getting hoping the some some more some from structural you're

Mike Mussallem

we Yes, Yes, conversations thanks. a about have had of lot certainly that.

here great And by region. share I'll a will somewhat so anecdotal. varies be It deal what

different can other U.S. might New what world, in of in of imagine the than parts City in other is You you the parts see York and the situation very frankly.

In many there doing are turning back U.S. to again. the get that to trying people their to attention are procedures

so machinery they know they their to of to income back it. You a regulations out maintain There very then that procedures know start to they to to get again. there's state doing real that patients just on needs, and lot are various be and are want are to there with work there dependent and also able hospitals through need

get And case, that again screened influence patients in to and come to and our begin in we have whole process.

when so stops. stop, also And procedures screening

going motivated right and so And to And that's to going restarting variable, be on are are. you the that's it where of to depending it think going some but system get I highly the clearly on going it's is people now. take time,

Matt Taylor

one Just have Do be you've those for TMTT I which framework makes in any you might the when know paused get out restarted? laid able sense. your sense to trial, that here follow-up. you you

Mike Mussallem

for us. when challenging able ready. open a we're way paused, up one that's individual going it was be The to they're to centers Yes,

stop, that around that And It's know be going they really motivated restart. think the get we if went fair again. us to to it longer. something I broadly, If have you're going investigators going started that mean? lot Probably to two same people I is to of think But clinical much site-by-site encourage disappointed that like are -- us encourage we but who going what quarters. a you're a a be estimate have to does to ask we'd us

Operator

Thank you.

next Wise Our question with comes from Rick Stifel.

You may now with question. proceed your

Rick Wise

there of Hi, patients valve on And actually going bit Is of obviously seems Mike. a me that to touched that to post-COVID environment on are highlighted surgical is A be little and on quicker. better, bigger them environment, The the hospitals, thought? valve reflect that and out outlook. picture I couple to that to side you start pressures get anxious surgical with. could pressure get argument back It that cetera. TAVR in an but TAVR -- accelerate questions. adoption, the coin on this as to et of start again, One you've coming post-COVID to a you've faster, there's recovery reflect opposite any the growth accelerate on patients hospital given merit desire accelerate as

Mike Mussallem

Yes. And of outcomes. you might wide as Thanks, Rick. imagine, range is there indeed a

number try to how people given equipment The to are could people ICU considering serious of particularly it the doesn't AS is. short And very that procedure of and that and be resources think going, to but motivated fact that are to to going length the I so go. get say, an TAVR restart hard encourage it's although stay need and a there

And really scenario a the faster. have that halt. come be screech to so we've yes, clear to up we a could on it where is, system thing the other is there But watched

process. restart -- patients your I'm that sure so this And scared. And from know you it's own a indeed, are research

them places can patients so more feel possibilities. the hospitals the go It's a restarted. getting be or a system just comfortable, of to getting And this -- to re-enter of range it's and create whether test wide hospitals is whether it's that going

Rick Wise

as second just a And question.

thinking, but like, I of Can know, the You to updates, us Cardioband you there that which what updates and much. at you not with are be, so couple you're just data don't should me consist the what and what PASCAL, times on language Thank likely emphasized be will EVOQUE. informative to will share could of expect? strong a EuroPCR it we what what -- sounds

Mike Mussallem

is we of that the believe attention abstracts XX your shared, going is but on tricuspid late-breaker believe XX Yes. which be very I some the early to, to going much, oral position. and at to a EVOQUE call Yes, probably I accompanying be number and in things going patients experience a Rick. to probably be are two some days. Thanks posters, of there

will CE then FMR PASCAL, Mark the that And one and that in that how valve days DMR And XXX patients six at chance be have had time a XX first see performs. that XX the to at so has community patients evaluated year months. will and we the both the and CLASS study study, patients, actually

it on update lines for those informative will sure. product So a be nice

Operator

you. Thank

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

Larry Biegelsen

may they're of that about make hospital? follow-up. dynamic? thinking do TAVR Do the back had one SAVR faster and you And be So to more compared procedures? or because think necessary you Mike, the how you to other you to types of advanced medically of will recovery pace procedures the come are for them think go reluctant age about I How think do patients valve

Mike Mussallem

Larry. Thanks, don't on I procedures. Yes. view have strong other a

is there What You put know we focused really particularly so deadly we're know AS is that's that us, our data reinforces on heart there that. is we where energy. do diseases, some structural that and

And and also on about also that something motivation them patients to there do providing is when so helps economics, is get going think and think that think do can their makes back us care, to that I they're the frankly concerned that is their be for for again. a strong get people to want this. I feet back And it they good here really really to hospitals time a at

Larry Biegelsen

then, a QX, on actually down as basically just Scott, that the on kind should of a point And be put or That's guidance, finer the to for just Thanks we bit? maybe taking little it. about flattish thinking year-over-year helpful. questions.

Scott Ullem

breakout ultimately for at intentionally is the a is say, it and that just where there most point. third know crosses can't gradual in is on second followed to QX. What from being a and based below expectations, severe better upon quarter the our not our question, something original we to a Yes. original that versus point Thanks this by tough fine fourth to QX expectation put recovery QX we've quarter being versus It's our assumption we But Larry. the for that resembles sales. expectations meeting quarter our that tried

Operator

Thank you.

question Morgan. Marcus your Please proceed from next Robbie with Our question. comes with J.P.

Robbie Marcus

Yes. Bob's I second to Thanks quarter. wanted question for taking about follow-up on question. the

I a But have $XXX just to to the get from to quarter hits has could in us what much pretty happen we to a help little is of So bag here, million, $XXX to know point what $XXX this from happen us million? get the you bit what I $XXX the was million. what hoping million range hits there of has bottom end end? give one-third top understand to Thanks. outcomes. the wide to here of and

Mike Mussallem

give bit a Yes. by We're you little of accustomed to color but here. Robbie, not it sort slice of and month, try I'll

second. Based we're COVID the probably will a had needs range. middle to as range quarter If today is what we've on terms So be there out. get going are the to closer far, be of -- of has to and of never range we a seen quarter or does to it a whether in from this level keeps we receding itself improvement the We COVID of the the wide not. of top what it's today, or And we depend a uncertainty lot where to continue the certainly play the are much going to greater that range. just the bottom of how possibilities so where of

Robbie Marcus

hearing it us pieces it and P&L down like here I companies moving Scott, the wondering how love Thanks. for you're sounds their was employees some I But you just margin, the if you about the think when gross by times. together R&D. all maybe And do put it. P&L tough of down and right help help in the EPS? investing Got SG&A R&D, us reach during

Scott Ullem

Yes, sure.

proactively So our of includes, capacity obviously starting supply really happening reduced margin, there on gross our that it right We're volumes. with chain. now, things managing and number unusual are manufacturing are that are and

our are supporting will the in our to offset gross in alternatives trying seven logistics around degree. that And facilities up in for that we and a looking of margin in negative got terms costs expedited are operations extra show world. involved We in our other manufacturing freight just

So there gross will be profit. pressure on

and those had we natural growth originally we've that just we're able In time declines But on and travel being SG&A, conferences some still schedule the investments a had on of headcount because natural some the in timing growth envisioned. headwinds just company. there to are to terms complete

are in that delays get just to about, we've And clinical enrollment in to what's our shares that's upon your as or certain being soft. to bit. that specific really it growth. little that R&D you and a going into of the then dependent QX is extent tax most get not R&D, those Does gate and sure we've ability talked question? trial In talked outstanding, which about a recovery invest I'm to so

Mike Mussallem

everything And this And employees pandemic. our we and earlier, to to we a not planning and continue tried be the to I might layoffs to we're process. support world do continue to and I state and prioritizing have partner that through associated protecting their just really the entire with this great on around can as countries Yes. every and going we jobs add cases in focus said we're

Operator

you. Thank

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

Matt Miksic

for Hey, us thanks fitting in.

and I expect the you a And restarts? what you on one new U.S., of couple market been and little could if were One the talk trend So bit system that's about then the what of had an centers. across Mike, of next kind developing over -- the rolling for out as you follow-ups. follow-up. a do quarters seeing important couple

Mike Mussallem

toward that that XXX data the XXX on and is currently and that headed we We NCD more probably than -- total. estimate hard this centers said that following that there have don't year was one. approved was I Yes. in last we're

really I know don't we've since number on can tell sites. we are and you exact focused I the hit, the stopped doing are training now. COVID existing right that where to the So

rate sites, And bigger was off that the And way some driver before that the that board. so the the COVID extent. QX new was hit change going across sidelines. patients adoption that’s concentrated the all in probably going to coming terms new to was in of wasn't But

Matt Miksic

would in opening like sense some other of you of hopeful back some re-improving, you starting seeing reemerging And hospitals the Asia anywhere that. you That's or can some or for to surgeries. the quite thinking either geographies, the helpful. procedures compare in U.S. ability the sort focused or Europe just us what's say, how else and happening that and let's what the we're give signs up all that then geographies, open up of the mentioned you to on other world other the here? more elective back on obviously to you're and Thank But rest, the are in about

Mike Mussallem

Sure.

some in was strict hit the the U.S. countries to Japan so So say and happening is of in Europe a QX. I COVID. net-net matter the which where much from there still in in is TAVR are be and so U.S., different. we actually by world there Latin by around growth numbers trailing procedures saw think different the be than going than March. were that U.S. there that And the patients from kind Australia comparison. much not recovery impacted tough places in that got those We the similar and COVID-XX weeks may mean and U.S. small biggest sure. a of Interestingly and to where maybe sort a Those by it impact effect markets. we drop-off would Within a think the some others. wasn't young, is very just enough, the was Europe is not America Europe, But seems still the QX in are not phenomena more in like other COVID-XX. know perspective Japan meaningfully kind is are harder Europe, to we effect of wave But in of of for our what's that the pronounced Europe

Operator

you. Thank

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

Raj Denhoy

wanted you of you these to build been have would kind on made the back where this. prior comments to thought just and getting about fourth you to I quarter

to of basis be here significant we're some we on one XXXX, about as expect we a normalized XXXX? year will rate XXXX in do kind in dollar do see the a when growth you going XXXX? you in you think that a so in off thinks of kind When maybe rate or And heightened think do kind at to these right, of up as be make as actually loss procedures fall that growth of about is

Mike Mussallem

Yes.

we to obviously say premature QX, in like Sorry start that way, favorable that XXXX mean, When some we've in approaching XXXX we're you'd to in got it's big recovery into but a think -- comparisons. pretty going you get Raj, tell. I for us can we're to

I would so And anticipate that.

Raj Denhoy

terms country as Understood. up any broad that follow-up as just next early to open set of And Germany week. guess little Have anything to you maybe in to picked for ramp or just last gets anticipation country start ready a Germany in I of in in the up follow-up, to again? a a entire feedback getting open to in procedures up a way, is the bit question.

Mike Mussallem

but have about very them hear this do physicians comments. to going point, don't anything getting of the mean and at anecdotal there start We want Yes. broad are active we conversations I Raj, researchers again. many

hard So how data there's up. will a conversations Germany really anecdotal no that, about few start about but

Operator

Thank you.

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

Vijay Kumar

Thanks same in, I'll and noise on the to for me squeezing your go. bicuspid Mike, was ask them back try low risk. in data at both One, some of to ACC, competition making

curious any the seen Just on in on get Thank market? related, on mitral litigation impact you And side? the any you. the front, views to your have update competitive

Mike Mussallem

Yes, Vijay. thanks, Sure.

with all not our bicuspid outstanding been know for contraindicated lot a time. balloon-expandable extensive these data there real we're outcomes have the some So bicuspid you the patients patients real And on world SAPIEN X. has we At of world valves that published and been Edwards, SAPIEN patients and treat with experiences. these there's

more we conferences at there that is to evidence data of grow just think cardiology in will we So future. expect body going be the and

we're interest there was lot Your of lot other But a Yes, defend a going we with we the best and that don't of can this. about big patients, is that so IP positions our IP. the litigations in dates. We through them. countries think and litigation of I of a believe move believe to we're lot going on picture, in hope to question prepared necessarily

be source continued at this point. noise so of a it And will

Operator

Thank you.

with Our final SVB question comes from Danielle Leerink. Antalffy

your ask now question. may You

Danielle Antalffy

could I if question. Just I one -- just have

these the Just sick. if the patients commentary, of around on these patients. some could very are Mike, I appreciate I recovery that and losing

most patients, I curve urgent checks, too as they'll recovery be probably next progress lost? or with over won't being disease I'm that bullish will few necessarily you the my upgrade. patients their the survive be designated months today. more I'm re-hospitalized much a my done will saw hearing the that guess are little i.e. in Therefore, on there these However,

to a like so actually it because just get done? very be lot are to So sense going you sounds how that, to case, of getting of are the patients confident trying those Thanks sick a me much. is that

Mike Mussallem

AS a express, number smaller we about because to many So patients be get why right, much get to think treated. doing But being we're we this after to bit enthusiastic a not about of it much do going you're know right. a you was in if Danielle. patients of But I and believe were you sick growth we're at Certainly, that concern. to our there reasons that's be do are very lower deep during and that's not And what this now, number work population that that's think And aren't so we're time. that just a and We to we going what treated the doing can dehumanizing. trying one than are we not treated. actually sense done, compared why it's little about XXXX the treat to if it's zero. how patients it's many patients that's we going expected

patients So that. is that bigger, with pool just gets mortality associated of that untreated we there know and

Mike Mussallem

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

Operator

is with have now final question Josh We your Jennings, open. one line Jennings here. Mr.

Josh Jennings

me here. I'll for in to just it fitting Thanks keep one. I guess,

with be challenging competitive bit just headwinds, that? because little when is terms in new terms all outlook again. could market, terms Just to approval we just for and on your change later imagine for in of moving proctored competitor thoughts the year, competitors. forward any I the wanted competitor with this the that of cases an the in the getting competitive launch landscape, potentially in hear your a Thanks of a a

Operator

I our the we concluded you presentation I apologies. is believe Mr. Ladies speaker me? hear Wilterding, I here. speaker. just operator. has believe the may can gentlemen, conference have our My and lost This apologize.

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

Edwards Lifesciences (EW) 23 Apr 202020 Q1 Earnings call transcript