- Earnings call transcript Q3 2022

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Operator

Good afternoon, and welcome to the Edwards Lifesciences Third Quarter 2022 Results Conference Call. [Operator Instructions]. Please note that this conference is being recorded. I will now turn the conference over to our host, Mark Wilterding, Senior Vice President, Investor Relations and Treasurer. Thank you.

begin. may You

Mark Wilterding

Scott leader much, all very call good and Officer; afternoon, Mike joining Officer. Thank for us joining Diego. us. you the and leader Surgical Szyman, of of Executive Chief Chopra, TMTT; the for Chairman today's Chief global our Larry Critical Structural Zovighian, Katie Bernard of With Global Wood, thank Financial Mussallem, are portion TAVR; Also global you and our of Heart; Daveen our and Q&A our And Leader call Ullem, of me are Care. global on leader

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

approvals, limited remaining they management and to, estimates, any Please litigation, but note time of update and and longer-term to the will call, matters expectations making aren't results date those that reimbursement, press management today's only for financial does will not accompanying included statements on and opportunities, Edwards today. release schedules guidance made, statements based be that are in These obligation them include, foreign which fluctuations. the for on During financial speak forward-looking These assumptions Q&A. clinical the after discuss competitive use as statements projections. trials, and were and currency undertake regulatory growth then

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

to turn financial management to to and included non-GAAP that, using are press reminder currency, in are terms quick like comments. GAAP And over underlying today's numbers results. Mussallem non-GAAP and that GAAP Mike? is for adjusted, Otherwise, Mike constant his during the I'd mentioned call between call to referring Finally, the release. they Reconciliations when referring measures. with A

Michael Mussallem

Thanks, Mark.

Globally, down, which milestones made month, Shortly PRECISION. who U.S. next-generation with regurgitation. structural In differentiated mitral trials tricuspid thereafter, expected patients third for accomplished as designed unique in quarter Ultra received X strengthened And RESILIA for system us incorporates begin breakthrough European technologies. conviction received approval for third for we selling grew The in we August, transcatheter quarter, procedures approval our U.S. didn't Ultra multiple valve PASCAL degenerative TAVR, our X the approval heart and patient-focused the strategy. and mitral technology. but on slow RESILIA we that our the valve team was clinical less FDA regurgitation, PRECISION our last innovation important regulatory of news numerous than our company's September, good platform. in welcome Edwards' suffering aortic This SAPIEN for to industry-leading repair patients leaflet early the transcatheter-based and heart from we announced now SAPIEN progress PASCAL is treatment in clinicians this in in appreciate edge-to-edge

Alliance our heart AS in confidence reinforce next-generation in progress continued pivotal X enrollment moderate TAVR evaluating of the the during Additionally, accelerated transcatheter-based growth patients developments our for SAPIEN third technology, with and transformative These quarter, structural trials, XX. TAVR our inventive.

and We a in even technologies continue value. group drive to breakthrough broader will aggressively help future to potential the significant with pursue turn patients of

our financial performance. to turning Now

currency billion the of total $X.X Third company ago constant on increased year quarter period. versus a sales X% basis

grew in in support infrastructure Japan. although aggressively Adjusted at growth, COVID of technologies therapies. to drove commercial even Our was R&D expectations, and staffing lower while shortages of innovative it end XX% the persistent investing U.S. broad our new EPS reflecting this portfolio hospital and headwinds

and across sales low and that a X% be of will XXXX, selling global flu impact global range challenges of centers. We season than year X,XXX and we're the euro Edwards' third over persistent digits Local U.S., expect pleased end growth that staffing treated declined our due full seasonality. in with of hospital intensified comparable mid-single typical constant growth the increased our COVID the versus patients in that primarily will the $X.XX TAVR stable, predictive foreign increased of average sales to prices were Edwards a global winter well We although billion. quarter, our hospital in year. to of exchange total estimate at anticipate basis. TAVR In currency with U.S. Japan, COVID We billion the negatively SAPIEN the third the $X.XX by difficult For was continue into were Sales due our we XX,XXX below and procedure procedures be yen. was next shortages year. summer In the weakening previous price on third estimate prior share selling procedures expectations our quarter In million stable. quarter. headwinds were and the more TAVR to TAVR, $XXX the staffing which impacted global

in third And around country. U.S. centers be rates total limited were U.S., staffing grew procedure during the across high by anticipated. were which As the U.S. digits on growth staffing the impacted Outside TAVR double our third in the TAVR expected, constraints, while double regional TAVR and of currency in QX. a a somewhat growth we worse digit There comparable. was constant basis, growth issues our in quarter volumes centers nearly to level grew of sales overall than continued estimate low we procedure the quarter, variability quarter, half our

created mid-teens. annual some remains QX, summer sales position limited Long OUS compounded shortages Europe quarter. in opportunities our COVID, rate Japan Scattered third lingering In quarter low. impact a U.S. exacerbated Japan, though outside by seventh as stable. see growth remains which of procedure adoption growth we and believe regional the volumes. expected, In growth the widespread international outside of on of a were excellent In significant we even down on grew competitors, that. anticipate we compete even capacity competitive strain the with faster in TAVR TAVR and hospital slightly remains a geographies quite term, was as wave Europe, procedure X-year underlying impacted sequentially broad for we and range staffing of seasonality, Our

As volumes you third the hospitalizations COVID. of might TAVR expect, with focus procedure quarter. volumes driven patients decreased this were treatment significantly turn to and varied staffing the fact remains COVID flu a and providers late as population. that summary, We their expanding the the in AS QX in the therapy saw we patients elderly difficult COVID anticipate as We season. of procedure improve country availability TAVR incentivized and of the again a to In remain disease by amongst shortages continuation focused on large the across winter, undertreated

from this We a therapy billion to elderly TAVR stenosis. $XX world to broad-based, TAVR reach to the $X.X for supports be continued population double-digit long-term undertreatment combined previous implies our around of global which and This the evidence, million adoption expectation growth supports confident the expect favorable evidence QX $X.X growing the TAVR the rate. aortic We billion sales that many by XXXX, patients as the our opportunity rate low with sales recognized low TAVR compounded this will of end range rapidly suffering full annual evolving year billion. be potential $XXX of at XXXX and of around by about remain policymakers

degenerative and head-to-head exciting TCT tricuspid of patients. facilitate randomized first This our initiate now our further we to options tricuspid group. Turning us FDA by transcatheter precise a designed to enable edge-to-edge from news and repair. mitral expand will and the DMR transcatheter This results of and treatment experience regurgitation this Europe data followed transcatheter Class CE This therapies presentation patients. U.S. for at treatment PRECISION. IID efficacy established mitral the pivotal PASCAL mitral European We safety pleased product for that U.S. trial conference. commercial recent navigation in pivotal PASCAL is demonstrated were suffering was user from both the mitral therapy PASCAL trial intuitive to received expanding the that patients and approval adoption an the beneficial Recently, system Mark first-of-a-kind for in of also the next-generation and presence of

continue to Eos. mitral regurgitation. trial our through we treat ENCIRCLE the patients Separately, continue patients trial functional the replacement MX to pivotal Class pivotal IIF with of with we SAPIEN for for for enrollment addition, In EVOQUE and our therapies study X advance transcatheter mitral MISCEND

expand are We sub-XX for therapies with believe opportunity. French these mitral will pleased the transform our transfemoral help and patients progress treatment and

tricuspid. to Turning

EVOQUE tricuspid We to make system of PASCAL severe TRISCEND system in tricuspid and this continue in CE Europe progress trial no the pivotal We II anticipate Class replacement the repair symptomatic the regurgitation. with for IIR trial approval EVOQUE Mark longer pivotal with enrolling year. patients replacement the

Mark expect to now sales who around process, reimbursement we CE remain MDR the the therapy contribution patients have many with uncertainties approval XXXX, late today. we As for a treatment excited when in few in We're tricuspid XXXX expect options about place. this in have

in portfolio. valve. Looking experience noteworthy late-breaking data the expect across EVOQUE early we the London conference with Especially on follow-up Valves X-year November, numerous PCR ahead tricuspid new to TMTT presentations is data our

growing presentations to tricuspid of portfolio therapies. positively expect comprehensive clinical of mitral contribute the for We transcatheter body our to compelling and these evidence

Turning sales performance TMTT. of to the

We're PASCAL sales in for excellent spike portfolio X% year. of the mitral reported lives continued as achieve region of basis We QX, pleased QX million the order with increase Surgical quarter patients our grew a of we quarter FX clinical therapies $XXX QX of tricuspid as increased on headwinds outcomes we quarter centers sales the of despite bring vision introduction second as into a patients of third global yet combined continue of seasonality. the transforming to In in Structural initiated prior of in PRECISION, with a increased more of have Europe. forecast procedures and gradual currency sequentially similar Europe. Germany, and to we in our Adoption on to our constant $XX a expansion limited contemporary in COVID to our disease. number over expect be million Third largest Heart, with in data from to sales valve system to the summer a progress in progress PASCAL result and Europe

And although strong to cardiac that despite see surgeries by growth in of being staffing increased to concern, shortages certain be challenges encouraged global regions. driven RESILIA observing our prioritized. we're premium continue products are penetration a staffing are We

to bolster presented evidence, of overall Cardiothoracic the of Surgery portfolio Meeting Milan. European we RESILIA the globally Annual for see in body recently We as momentum Association including abstracts the X continue strong at

for the MITRIS the of mitral valve and We continue technology to believe features decided that we've this in surgical Separately, majority of procedures. April now surgical launched the physicians trials. and advanced U.S. Adoption replacement valve benefits and in aortic both value system tissue related enrollment sales of valve repair in region. exit stop represents our the mitral to HARPOON in our this clinical the mitral

made of other by remain confident our our difficult market be growth surgeons. underlying Given focus the to we the for year the million to In of was hypotension Surgical premium therapies and we adoption adoption for to innovative better and In our decision a comparison. sensors on strong very was products, will growth quarter choice sales $XXX date, summary, continue including Sales mid-single-digit the range developing serve experience rate of XXXX be growth technologies patients Structural Care, sales driven The FloTrac driven cardiac newest a recovery partner that constant surgical of prior full to in and Heart our increased algorithm. portfolio year over year. by currency our index market basis unique with third X% growth. prior smart prediction on ClearSight by Critical increased broad impacted of

Critical call highlighted HemoSphere our enthusiastic decisions more for monitoring designed underlying expect pipeline for over summary, by recovery clinicians informed of continue patients. And growth the our the platform full XXXX. innovations, strong. we about We technologies smart demand turn to Additionally, sales for to to help year Scott. I'll remains even In mid-single-digit make remain Care now

Scott Ullem

Mike. Great. Thanks,

our basis, currency our X.X% billion $X.XX in U.S. sales short and of mentioned, of quarter, Mike in recovery expectations, hospital on slower-than-expected growth of a driven As the a by fell COVID constant of staffing representing Japan.

share charge gross profit XX% minimal to a $X.XX with anticipate the which net $X.XX, underlying margin GAAP $X.XX. $XX related resulted strong the million Our per spending combined We a of pretax earnings included billion that EPS we adjusted or per to to our discontinuation. and end low increase to growth share HARPOON staffing in at challenge company $X.X the of of to hospital our total end U.S. is low persist, of sales $X.X likely previous range TAVR previous $X.XX of And sales now range $X.XX expect billion. billion. at also the was billion

sales and $XXX $XXX to million million to Care to Heart million. million, $XXX of We of $XXX Critical sales Structural continue expect Surgical

quarter, adjusted QX. share results. $X.XX For per I'll share expect now $X.XX, projecting the be now earnings earnings additional $X.XX. adjusted we're to cover our We adjusted per of XXXX sales up from fourth to similar and to EPS full year details of of

of of gross Selling, primarily expenses general Our FX the hedges to to offset impact in continue the and sales year full forecasted be margin approximately is dollar. to FX yen approximate activities, to and that At expect the XX.X% At our of the offset current as third margins period against the exchange point due our in current adjusted driven XX.X% prior was from by an resumption program, the expected negative gross in to compared strengthening positive operating XXX foreign exchange benefit the gross points result rate rates, profit This or XX%. improvement and XXXX $XXX profit expected euro in-person last margin XX.X% was X.X% impact sales XXX year. reduction profit the year's in of partially foreign to natural includes contract our over the quarter hedge weakening basis quarter by margin same year rates, gross and commercial the the from dollar. increased includes third in compared to million a which gains of administrative This from XXXX. XXXX. basis we in approximately adjusted

XX% invest decline TMTT in Research expenses to expect year ago the commercial declined a The to team. XXXX development year of to XX% be high over spending. $XXX as we expenses continue reflects continue of the for quarter TAVR high-touch sales. between percent ongoing sales We full and XX.X% our to as build-out unusually year the or SG&A and million the in X% of model and prior

generating our $X.XX XXXX in We XX% a exit expect XX% new to of and and intangible impairment developing net R&D in noncash to TAVR continue related contingent support evidence of of our resulted we program HARPOON per TMTT. between sales and as of expenses to and pipeline be invest charge discontinuation The consisting of costs. a reduction a surgical assets, share liabilities in product other

EPS is reconciliation with Additional between our and GAAP charge details today's the a of release. and included adjusted

taxes. to Turning

of XX.X% XX% Our reported or tax rate this items. quarter was impact excluding the special

stock-based higher This compensation. rate reflected a benefit from quarter's lower

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

expect XXXX points profit Relative now impacted positively our rates than earnings to quarter year. cash percentage sales FX impact sales. a to flow approximate compared $XXX points reported million, basis our quarter was share. prior from defined rates XXXX we activities rates or At year. an more rates, guidance, margin year current compared third $XXX flow XXX million, exchange or had FX negative a as year of million third negative and impact In to the FX impact minimal third X less fourth third capital full expect $XXX Foreign million. percentage X of we sales $XXX on cash year-over-year per the of million growth by impact spending to July $XX to full for quarter sales Free total, compared $XX million. the prior we same operating quarter gross XXXX, points nearly estimate quarter to the decreased by to

to balance share on before back our I'll So sheet an and call the repurchase finish with Mike, turning over activities. update

end equivalents outstanding with the cash, during maintain we to XX. million. the billion million sheet $XXX and million $XXX shares third prior were for Year-to-date, as cash quarter of QX, for from $X.X repurchased approximately investments down million, shares September flexible the short-term X.X $XXX we repurchased and continue Average quarter as in a strong We million. balance shares X.X of through

to $XXX slightly share pass shares billion at will remaining below under be repurchase have with our million expect million previous year $XXX back We now I'll share $X.X to over range. And program. Mike. end the it of that, We our the

Michael Mussallem

come. structural We organic from the to therapies constraints the years suffering disease. procedure improve believe group to for ongoing growth will drive heart Mark. patients will strong to our that, And strategy committed are and investing of still despite patients Well, back year-to-date continue treat associated the on performance, headwinds includes we're with milestones. focused Scott. in confident the over aggressively remain to investments gradually strategic to innovative that from with strong I'll pleased our in Thanks, progress We which turn with staffing pandemic, our it innovation allow resulting broad us more and hospital

Mark Wilterding

a lot, Mike. Thanks

transition XXXX We're to Thank Thursday, take place has want venue. to you I investor forward we Stock everyone York confirmed seeing to really in-person Exchange. X, on conference soon December your at our Q&A, to New historic at that this remind Before who everyone attendance. the looking you will

In comprehensive addition XXXX strategy of More Investor about will Edwards section website your Edwards' the product and ir.edwards.com. guidance, that, you'll on to information questions. and we're take more to our exciting ready innovation the available focused at hear financial our pipeline. Relations With be

Operator

[Operator Instructions].

from Our Fargo comes first Biegelsen Wells question with Securities. Larry

Lawrence Biegelsen

XXXX, on tricuspid, on I consider some Mike then and framework ask to and a Scott. wanted to one just one things and

second with about that starting maybe be growth are growth I half call XXXX, And implied concerns people Just year. my math. next going X% raise -- think there'll it, maybe look will the year, to at some by

any And just about I stop account? call basis P&L the shortfall for we and into some FX heard that and the provide can XXX thoughts headwind, to had given 'XX? Mike, this think last should high-level the quarter? follow-up. considerations one points, So quarter I take how to framework out you Any catalyst

Scott Ullem

start it haven't going to turn next then the quarter-by-quarter I But Why piece over year be, this the until our to year. details we to then. we year So help will impact investor to XXXX. strategic for year, we will next is you into don't been the near and give you because be more in with is rates. the it guidance, that financial the some an of over or think and as Typically, FX helpful this that Larry, impact quantify that we what give of expect it's such just conference. about will fall talk Scott. We'll know, don't has continue gotten line Financially, Mike it things we impact thought growth what FX top which the was

we're year, want about this current So maybe forecast think to million. it rates, to next when about for Mike, that do at breakout X% don't $XXX have you sales and we like XXXX, but we of quarter-by-quarter yet. at years... the talk gets We near

Michael Mussallem

think we believe we're it. just to and though see performance. now portfolio. I And right deliver. solid when gradually the to next continue suffering see I just a I'd about are billion we're that, path we better. lift like highly feel a $XX and think even -- get going we not TAVR, through a business kidding go shortages, Surgical talk we're there's Critical on much those we introduction year. We're then the going to Well, I say We're as PRECISION catalysts opportunity coming And mean, TMTT going from are and from we to strong mean, coming in very XXXX. like I Care from in still some that are briefly achieve of don't confident staffing the we expect to

Lawrence Biegelsen

how mitral, about And tricuspid pivotal somewhere the a excitement suggested Class trials, that assume for you A be to And about I employ to thinking Is between mentioned? your a That's know maybe aortic. similar know tricuspid. design reasonable for than [indiscernible] employed actually, it opportunity? X mitral of IID. you that wanted are helpful. tricuspid. design around you check it should Our you just that Mike. you'll lot I ask bigger and Bayesian

Michael Mussallem

real the obviously and Yes. some tend pipeline, of situational. specifics just don't typically our of about excited We Thanks, on regulators they world, We're be closely regulatory around the to very change process because the the we Larry. work and FDA. comment including with

and so of And [indiscernible] the well we to I'm -- I tools aware to and on get try know, into I really and add to do anything don't going work upcoming do trial? a smartest have mean, Bernard, you all with want really but the we'll thing we're do available, that? fashion to you in are it's clear. legal a not regulators, the that not are going specific

Bernard Zovighian

Yes.

any study, any design. Obviously, trial thing. small a different has Just

Some comparing some comparing are are together, a to treatment. medical device devices

taking to it the So not that applying IID we for as obviously, other did is easy what as studies. and

Operator

Marcus Our Robbie next question comes with JPMorgan. from

Robert Marcus

similarities of Maybe all than it's should Is Is why the shortfall differences. some below just it first, Is also in that I pipeline? about like between Maybe staffing? ideas TAVR there? impacted Any $XX-plus walk testing? the differences Is I the Japan? through looks patient think it much the more how would but imaging? numbers the we Surgical it came think helpful. the pure the know be business? in Street it so million. Is lots about it It us the Japan? by And of impact from

Michael Mussallem

Yes.

and So let turn kick then to Robbie, answer. and it Larry to Daveen off, the supplement me I'll

what market. When we on performance the procedures, itself, the in market growing business Edwards-specific than the quarter. So TAVR that's looks than the faster rather more going what faster, did at underlying procedures, if was it actually, you you look the but the at Surgical Surgical Edwards in grew was believe like look

to And we you from Larry. little think have kick then I So a cautious. a we'll add perspective? over Daveen, it do to be anything want surgical to

Daveen Chopra

had Mike valve provided was U.S. new our appreciate uplift. Mike. launch the up adoption to Yes, which that. as of MITRIS, Mike as nice globally about well follow the mentioned, growth sure, what portfolio Brazilian saying, driving Surgical was business, so of a I Robbie, driver mitral the of really Yes, as the

area also really single-digit had we're from maybe said, were MITRIS a and surgical within market surgical and that rooms surgery. RESILIA being market growth. operating rooms. cardiac world us that growth top surgical of low kind And coming I little of a the So prioritize drivers. surgery beyond we -- an surgery like rooms our But bit of to Cardiac resources operating operating seeing generally as

generally we market to slow-low of led that that So see kind growth. single-digit

Larry Wood

Yes. This is Larry.

upfront terms imaging there's has to can coronary in with has do relates patient, be for the TAVR both for TAVR, it screen you CT disease surgical happen planning. to case of that have angiograms As sizing. work to a that do TAVR than that more you so a to you patient done, to Oftentimes, need out to a do all of your

to there's for So surgical typically more that a workup done be has patient.

so a issue staffing a any bit slower we can And issues, patients system in longer a through link when take little move talk recover. the about staffing chain at to to little cause and the

I said, faster Mike differences than that's grew So see. as procedures the one we of But surgery. think

and So in beyond drivers aortic -- it's I of think, growth surgery, procedures. a the go lot

Michael Mussallem

Japan. it It started impact are we felt the we Yes. hard. it don't And the hard Japan, probably COVID COVID. Japan. quarter, in in you Robbie, Japan, shortfall just getting great to And in close how hit hard. how towards only But and great and were really quickly Yes, I the in to better. do was middle but comment continue hit know total on of the is from impact we worse was of to it doing that. the

-- it's if is wave now, So passing you of will. kind the

not it it's when significant continuing. a hit, hit But So way. in pretty it

Robert Marcus

should of during these of about forward? going how XXXX severe and third seen thinking control are? pullbacks OpEx and came it How pick some they since The worst we here. question the follow-up more one the up be ever second most of And probably the Maybe sustainable COVID. quarter was from in fast how -- know. quarter we've to where good That's could

Scott Ullem

of operating we're lot with of was for healthy the was making Part benefit into it discipline incur just sense a dollars. efficiently. Thanks sure that overseas Yes. about company lower of question, of U.S. a translate But the the we that expenses this Robbie. running

Operator

question next from with Evercore Vijay Our Kumar ISI. comes

Vijay Kumar

you, first on my Mike, one U.S. is, TAVR. Maybe specifically for

double Is these And people curious, implied the to QX, low growing? just double-digit the I market million center, U.S. mentioned that $XXX that perhaps this challenges. centers still And a that that is think underlying some of the you singles? I'm you're in TAVR? assure seeing comment grew XX% I the of think of half remaining is staffing what's digits.

some others? us in why some context give Just on centers in and the not seeing we're growth double-digit perhaps

Michael Mussallem

the give that low into a had growth And performing. been little bit. I growing nonetheless, saw a into have hospitals Larry, across significantly. don't color mentioned But But what's get some we Larry really weren't just yes, how Yes. to that that I'll it a the We that. need probably centers and know let's in that could many growing saw you were at to Vijay. sense us single centers on me, we some other there, Larry how double-digit But in of all. don't why we to country terms But just great guess variance second. check makes I here numbers. get and indeed, turn over

Larry Wood

think Yes. the to go looked than more about that's When they mean, talk talk across think the we be we country staffing But I the across to, and challenges. I I country anywhere country, it the in anybody country. middle the we consistent very, that clearly, were anecdotally, pretty just growing Texas [indiscernible] centers very well. certain of areas in impacting others. of seems And

were more population They our And of little density big flatter. of areas. bit the some the urban areas, a programs and

think, anecdotally, are it there's patients staffing And see I to hear things there. start big continue to grow, these but in still wane, actually these but And I that through so again, think we differences, -- issues. working we backlogs as it the me encourages challenges do some

Vijay Kumar

Scott, for maybe, And one you. Understood.

Why ASR? not has the think this. sheet. on of I have you balance I that done a peer think $X cash billion your big announce

this Just that cut Clearly, in there's TAVR of nervousness Edwards the underlying [indiscernible] believes markets. the long-term some evening? guide growth market [indiscernible] still

Scott Ullem

you're right. Well,

balance We have It cash a future sheet. on lot gives invest to the for us flexibility of growth.

including then And yes, fund able that ever -- to going done And biggest $XXX repurchase been we're this plant that continue it that accelerated repurchases, it's of million. is capacity. so supporting year, physical share part In back infrastructure, sure we're Part total is our to And year external ability making shares. this share we've building to over we're production year. earlier buy growth. of additional at

And given great so is go in going that's shares, to under price to that, continue good investment. year a We're to about buy do be chance pressure a opportunities going that. the and we to only to think been look us stock haven't this for it's the long-term thing

Operator

Joshua from Jennings comes question next with Cowen. Our

Joshua Jennings

return that U.S. about in Hoping to I think double-digit ask Or indication to mean do growth return TAM TAVR we Is $XX is calculation. indication believe TAVR the U.S. XXXX up opening the that moderate? and up and early essential? we requires could just by I to prior to the growth -- you see billion ingrained growth asymptomatic TAVR a potential PROGRESS symptom that CAGR to to do return opening double-digit expansion?

Michael Mussallem

why you don't take Larry, that?

Larry Wood

much rates, really Rest the they're U.S. and mean, Japan that. with of the at Josh. just started Thanks, lot to the numbers. places, treated very that -- what in outside points getting patients I of in contributors Yes. they're And There's of trials only is of and end smaller U.S., we if really still those World is those on the about numbers penetration than aortic stenosis the XX nature look have trials, drives a because you out getting are And undertreated. they're these just not have X-year of we just that the big X

as to things the of think to lag of that through indication the a some getting had, getting And just staffing think legs a this I return then we've little expansion that of the going back beyond I I billion. it's matter healthier. COVID give normal. being us sort bit $XX see So some of it's

Joshua Jennings

a follow-up just the quarters Great. of in as early than the the you or the RESILIA the SAPEIN X XXXX Ultra incorporated And about, reception in coming think tissue I should U.S. tissue in price And and days? how RESILIA in we and on premium. the marketed into in that about just guess, franchise the SAPIEN Can the penetration you've XXXX? the talk

Larry Wood

and RESILIA, a Surgical built of they've follow business Well, get to work very great fortunate been that we that to around do. able Sure. all our we're the has brand brand that

I the the that now, at that's RESILIA in the largely the look have on you heart leading based think when brings. and been tissue people Surgical how in it valve to side and the so And [indiscernible], benefits receptive world

For excited approval we SAPIEN that We're to it the really a getting than platform. launch. SAPIEN started little in X came super expected. We're earlier bit UR, just add to our

premium scale have excited on do do. think we things We've I We inventory to that. $X,XXX. But other about for to And the a people increased we list it. by need about going are up price price some of our and are

and Now around there's things different people rebates, get the country.

to going don't us be So I while a take for that I rolled popular know a I to platform, model in that is everything. this to get all it's expect it But would but going out.

Operator

comes Our Joanne Citibank. with next question from Wuensch

Joanne Wuensch

great hospital I because due So wanted our spend on to to of a anytime not time it's better, bit soon. but little get by expected staffing diligence, getting

about next of growth about in just think double-digit high U.S. effects think single-digit the around lingering to I TAVR year growth? this. head we the get want to growth being versus my So how should more

Michael Mussallem

So. I can us start out, Joanne.

So we variable. you're expect cured It's to be highly don't right, staffing overnight.

As of by almost half TAVR that hospitals at Larry the have fact indicated, that double in the growing we digits. were just U.S.

another So in really are have improving. really it. people of there's again, a staffing. cases of with many not we then say, it's that from large oh, there's suffering conversations that bunch we're progress, swath suffering The from those people folks making And

traveling to take ways up the this been such improve and it. had be in P&L in move a many say ways use on Some might That's some year to were burden long that. that X that of is hospitals able of to time. There beyond takes it But to they've a curtailed widespread that them process a nurses. probably or going

it tough a say. deep our Probably so does we can hamper to that, Joanne, here next So because I predicted do at mean tough it's get flu. you We're anticipate to that. winter, conference, going investor providing the just COVID what's the on and But some. year? be of probably guidance beyond growth with

prepared at so And have Larry, to to that time. little we'll anything add? be a go deeper you

Larry Wood

Yes.

these and physicians treated. be treated. need to get patients are the important there they patients to very And it's remember, think are to motivated very, I out mean, the still I

for they're else doing hospitals people. not treating not so anybody And incentivized is. for And frustrated are as procedures, I think

I try own to nurses things their traveling added P&Ls. of have try as resolved. they mentioned, replace everybody help So just wants the situation to hospitals the think to one is out as to staff Mike I get first think staff, to do, the the use new

because people much can't but as on we quickly, from nurses are resolved. to maybe this going working so time this a hospitals get It's super into hard create place. seen but staffing, getting this the hard why working to on you better really And haven't just scratch from take lift are that's

Operator

with Next question Stifel,. comes Rick Wise from

Frederick Wise

And follow-up Mike. actually focus numbers. -- Larry, for The to but on -- I the just it's not I couple -- question A your questions. apologize, chain. sort Larry a it was on U.S. comments of growth the is really, [indiscernible], I'll expand hard referral on of U.S.

could very not getting so the stenosis those one it You where to around talk or current it's of And I to has way? and we are change? in can imaging. anything backlog. Maybe the can just that imagine diagnosed there brain is How clinics But hard [indiscernible] are on some sort about patients related sick. to are my COVID talked one that, be of and better the aspect focus points. showing patients Or sort they the wrap gathering of slowed you some patient treated? being is they of being mean, imagine treated, about front I in thing to quite that of can't these understand still might people up make around aspect get at dynamics patients And -- the

Michael Mussallem

system and have really Larry getting think treated. Yes. pandemic, Why engaging do scared from Rick, in start, I don't I it away patients of jump and Yes, days in early the in. the the

part, be slowly. they to get and actually, the can but want process. I where a AS bit patients different a a deeper grinding they're And Maybe they're multistep system, postponed. being along the little it's system go the finding just off, think Larry, pushed place into And being they're for now in the you we're most treated. that. on They're to willing

Larry Wood

Yes. Sure.

is that I backlogs think still seem hear are from increasing. would referrals what are we talk to patients are I which hospitals, getting what indicate physicians growing mean, to. at referred hear we we the anecdotally at from that least

to pushing said normalcy. I patients think up sick of health So multiple and a talked we I back before heard improves patients think have have to they has get sick tests have I their there's I patients just system back the full just to yet. of and But gets screening come as moving think kind a patients list the with that certainly the TAVR. time to that from better. set little imaging they get centers this as about down that bit. starting have is hopefully, don't But part more system less and waiting staffing earlier, with the do And juggle again, of But then to that

Frederick Wise

buildup One of team. the follow-up. alluded last quick to Mike, commercial you the TMTT

over where few are to as we Just the where you we, hoping the 'XX? -- related specifically to and maybe PASCAL we next be approach curious, are are months where rollout,

Michael Mussallem

up and as definitely Yes. in Europe building team, team Thanks, Yes, that U.S. well we're growing as Rick. the we're the

Bernard So here. right we have

So us you don't where Bernard, why update we are?

Bernard Zovighian

Okay.

start So with maybe U.S. let the me

in early pleased obviously PASCAL an very U.S. about approval the We are having with

which train We our We field already and some training organization. are to is executing physicians. expanding plan, started our

negotiating some We hospital contracts. are

have with patient cases U.S. #X outcome. in done is for that And few it our you We great us, objective. the know some

are us. initially focusing So the the -- site and part that clinical of trial are on we we with

So are the that's basically U.S. in where we

Operator

comes Pito question from next Bank. Our Chickering with Deutsche

Philip Chickering

quarter, TAVR questions apologize for the at growth looking all is this this topic. on the one I and U.S. First

urban centers at growing that larger the new centers, those are the smaller all centers? coming growth or or capacity the at at newer from all is Looking

Michael Mussallem

Yes. Yes, and bag, want few a it's really you Pito. mixed I can start. But a It's [indiscernible] to quite make comments -- Larry,

Larry Wood

bag. of flattish. those are actually mixed of that some a certainly, growing is some really centers well. also centers But we have It more big of I are those mean really sort

we overreaching bigger said of centers think start So just again, maybe I smaller centers growing I broad to as But aren't digits. that probably hard that it's more centers our in about centers double small little have comments. But -- really growing well. than some have or And half before, really, to but centers. of generalize make the I are bit big a growing. were

comments. general some of sort just are these So

Philip Chickering

But the market I Europe, where in German And sort growing at is then curious, the mature XXXX German its how know COVID quarter? -- just grew market, or that throughout of year. third and that's the in specifically colors and looking the in been market Fair largest Okay. enough. most any

Michael Mussallem

it about, depends So of kind Pito. we're talking what

have So see in or the talking in if you're about been talking tended talking TAVR their about transcatheter ICUs to We Germany, In more the own surgery it you're by in or have probably or to COVID. rates. do you hit I market particular, than transcatheter Germany, about other mitral, growth each you're segments. to don't the they growth Larry Bernard, other to more maybe mitral of in Europe, want know, hurt you more our that? any have add But tended a which anything some country little than bit they

Bernard Zovighian

Yes, correct, Mike.

October, wave in spike in COVID mainly -- a seen Germany, in in October. in September, have specifically We late

only how to seen. is know it That's to So resolve. going it in we going Is Is don't to be better to be it going October? get yet acute, yet an November?

Larry Wood

Yes.

scattered a a bit U.S. Europe I think but have there, things. those the I is say in some we we would little QX are there the typically that they because generally vacations more issues of see just certainly sorts challenges bit seasonality tougher and the we speaking, more seen widespread. always staffing in with little have than are But holiday

Michael Mussallem

said having all I that negative. pretty it those But sound things sounds all know

truly KOLs and They're ever see big great who opinion just in dedicated guys energy leaders really than are leaders. key They're more just good cranking. them and probably motivated. German out We also global past. the we've with going. of seen are centers You have really These

Operator

question next from Furlong Morgan Our with Stanley. Cecilia comes

Cecilia Furlong

the in thinking the for really TR, about enrollment to as as in centers? update approval? growth penetration recent an could of wanted trials then either provide X PASCAL you're time PASCAL, you're well And about then ask growth I from just thinking forward, to well, versus about drivers how expanding seen U.S. How new as drivers? if terms just going with PRECISION and bigger the what progress lines kind FMR to you of PASCAL turning further you've Europe, standard potential in

Michael Mussallem

Okay.

So trials. precision the we'll by we'll And about your start then regarding talking in on also Europe. question out comment

do want Bernard, So you to...

Bernard Zovighian

Yes.

and way, feedback began we a we PASCAL positive. outcome. the So initial great PRECISION physician And center system from clinical got the from PASCAL very to patient outcome, the by conversion of is

physician use, that the navigation system bringing. the new of improvement is the ease appreciated So the

beginning it, year, though we excited are it. the even this are of we at about very So

So devices. with we see a lot of promise [indiscernible] from this innovation

So that's [indiscernible]

Michael Mussallem

or And patients the was to functional other with the PASCAL. question TR update PASCAL are studied that there any the related being

Bernard Zovighian

during remaining put we the are with believe conference. are the provide of So focus pivotal that Class are we am investor IID on trials, continuing going going continuing. to bit It a you -- more the update these two but We to is X studies little enrollment. X more the well. I these having going [indiscernible] And here sites completed

Michael Mussallem

trials IID doing IIF we're IITR. doing So that the and are same probably

yes. So

Bernard Zovighian

Mostly.

Cecilia Furlong

seeing Great. process And what what today the up you're really year forward? going push end MDR I you're from out, could the follow you and your EVOQUE really your comments kind about Can on Europe just just drove about of quickly through in just if how thinking the process. and talk

Michael Mussallem

really Yes. game potential on but that system the EVOQUE the Thanks. being to tricuspid a and comment We're changer, very want replacement it do Bernard, you excited MDR? about has valve think of

Bernard Zovighian

therapies process everyone, So this uncertain, for EVOQUE. like process. you And like are And process. new MDR new breakthrough is as this navigating specifically this process new a is know, we

are performance patients, with of with the We continue see Valve, be data going very At to London you EVOQUE. pleased to longer more follow-up. additional

one. for looking so And this much very

being promise approval an we excited have this to able So disappointed not by about the year. for But are very of this sure, technology.

We with questions. are very notified our answering working closely body,

very patients this no who to And bring forward are much therapy to today. so looking options have important we

Operator

question Bank Travis next from with Our of Steed comes America.

Travis Steed

sequentially? TAVR wanted the is down I more on kind implies just which And be $XXX down expect understanding both comment color if quarter-over-quarter? on It little U.S. a a of QX, better of both a you guidance. wanted to why OUS, and sequentially that's down million in

Scott Ullem

headwinds. I'll exchange experiencing continuing start. foreign what is of Part we're

and the sales of $XXX in incorporates the U.S., U.S. just outside euro weaker weaker of the during the from the of you've outside million the course And so And the and seen get and U.S. yen year. the

that's quarter. us in so fourth And part what's of the hitting

Michael Mussallem

outside and expect procedures, actually in U.S. U.S. quarter. more the We the Yes. the both in fourth

Travis Steed

quarter-over-quarter? Okay. Do to so you U.S. -- be up think expect you TAVR

Michael Mussallem

not certainly The up. procedures predict foreign prepared the We're will to be [indiscernible] exchange.

Travis Steed

Yes, [indiscernible]. Okay. That's But I follow-up. more and -- a guess you U.S. comment.

the on And we're earnings models to as like year. consider picture, OpEx year takes want for given I the you question next the Okay. at XXXX? P&L sure the for growth X spending got some Street's to big you just and was follow-up of puts next make kind and on accounting flow-through. know margins X on all for the of FX I

Scott Ullem

at until the Yes. help get to to to you line on least on and off tying margin. But and the the X. I'm we for to ticking modeling And ask December detail hold again, the York going on to we you top wanted New gross have

So top line, similar headwinds we're expecting, this we've as year. to mentioned, what we seen

margin. We that over it add to had headwinds. gross million year. $XXX in million call this $XXX So then you And lower

we expect a just points basis to which XXX about the would full year, perspective. you down take go from we this modeling year So XX.X% from where

of range share. what more said, things, like the earnings expect to per [indiscernible] X talk the should least preliminary I about And flowing a of those we'll to at P&L get down So combination you

Michael Mussallem

we this margin Well, hedge largely and impact an will of inflated go year contracts, had of that gross Yes. because away. the

Operator

Our comes Securities. Truist from Newitter next question with Richard

Richard Newitter

winter just not about months, better, that to COVID you just getting sure certain And the part and points I a into to about just couple back Japan is made 'XX. what's of be of and like the then it sounds what XQ? worse then saying come to wanted to then getting you and specifically, guys flu worse early related keep trends getting what's

question flu COVID the to want where can and tough that? you So clarify on of say, I I worst a what's that through regions? factored beyond sure in same think like the being getting what guidance little the should up assumed winter? how specifically And for into make better, into but that? What a understand you and you're guidance exactly what's And Japan, we it sounds it, XQ? picking was

Michael Mussallem

right. All

So there's in there. several questions

few getting take of a them. after I'll see a if Let's shot at

season. we have that and don't said, start to come seventh intelligence, U.S. frame. Will Very rugged getting coming has The in First, end Japan? difficult generally, let peaked the say, Europe oriented, believe, is Japan, better. we another here. yes, wave is say. In wave and I know. down. And a We'd me with Japan, they that that, yet expected to is that's expect be time experienced and it fully that -- particularly in we COVID we is flu haven't probably November through the and more this to January

question that could. of could Yes, also XXXX? So yes, it early your affect

of have we And to a had some the and the that all the is likely world number current about around predictions variance. from this just what's on experience based happen of

that does that know, your don't get question? I answer So

Richard Newitter

worse guess, the that into fourth for guide, you I gets what's that, that in assume already? quarter And assumed Yes. did your

Scott Ullem

we Rich, in it assumed guidance. our

in conservatism continuing between, we and into in something to quarter continue respiratory the expecting going And that's and play factor COVID it's that an from fourth so headwinds illnesses, expectation, that flu there whether or we guess, is appropriate XXXX. I or of a amount are to expect

Richard Newitter

And headwind. year-over-year if -- that On a said basis I you X point I that could know XXX just more. the

to that clear. I that, into know So as year. that's But FX the you, out impact hedge against go continue pushes rates next also

be Am even little maybe more thinking right? that of a about I bit mitigation falloff a actually in further that there to 'XX? less that or pushout and would cause into 'XX So of

Scott Ullem

thinking are You about that right.

a what we're XXXX will XXXX. of what we're is we benefit seeing have XXXX. -- similarly, first otherwise in a the headwind And in we're would FX lot seeing some what of see in there in of Some going incurred then be part to

Michael Mussallem

are. exchange rate that stay they where assumes All

Scott Ullem

exactly. XXX one percentage clarify headwind on to thing. X margin, a it's basis rate, to nearly want current gross assumes point just It's Yes, the I point line. headwind top a

Operator

And our next Maeder question Sandler. comes from Adam Piper with

Adam Maeder

two quick from me. ones Just

second, the correctly, the but the enrollment you we the -- bit could future data in update we you a should be Obviously, moderate set there's got out any data of I that little enrollment when readouts just I study? IID expect or cadence I but thinking then how saw that think at the First, heard initial trial? some trial uptick ALLIANCE AS was pace from And about from recently, if more? hoping for we on study? PASCAL additional flesh should TCT,

Larry Wood

is All right. This Larry.

rates. the accelerated given add And it actually really forward. as environment, moving enrollment, you trials bit but to at on, going these this those really encouraging PROGRESS, enroll counterintuitive, little are to seen overall us our trials which and relates So trials it's year. we in got for really that trials just an is clinical worry get And and a to have just starting ALLIANCE we acceleration

And how And what it. think so moderate randomized way we're that physicians lot optimal about to rigorous in the treat think been is from a a platform. the potentially think is very we this encouraged to study and of just think I a disease excited And I And trial. the of the engagement groundbreaking by XX trial people about are in terms that. I trial AS there's

Michael Mussallem

IID And readouts is Adam, good your question a about additional one.

early of which the additional the follow do there available? to sufficient U.S. us IID, trial be far, has year, want a Class give readout been patients approval, but all of the be for we might of So really Bernard, to data. this get data full was an this sense that when as in you will

Bernard Zovighian

Absolutely.

starting more as follow-up You more patients, to can see as expect additional next year. early data,

Operator

the all hand floor to we back that's gentlemen, Mike and for have Ladies I'll remarks. now time Mussallem for questions. the closing

Michael Mussallem

for Thanks your the everybody, interest and thanks, additional in much. continued Scott team I telephone. welcome and so any questions Well, Edwards. IR certainly by Okay.

Operator

today's you. a All may conference. Have concludes This day. parties disconnect. great Thank

Edwards Lifesciences (EW) 28 Oct 222022 Q3 Earnings call transcript