Edwards Lifesciences 2025 Investor Conference 2025 Investor Conference Mark Wilterding Cautionary Statement Presentations and comments made today by management of Edwards Lifesciences Corporation (the "Company") will include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements can sometimes be identified by the use of words, such as "may," "will," "should," ...

Industry Overview - Cardiovascular disease is the largest contributor to healthcare spending globally, presenting significant growth opportunities in the cardiovascular devices market, which is projected to grow at a CAGR of nearly 5% from 2025 to 2030, driven by minimally invasive procedures, technological advancements, and AI integration [1] Company Analysis: Boston Scientific - Boston Scientific has a market capitalization of approximately $144 billion and specializes in a wide range of interventional medical devices [2] - The company is well-positioned in the $20 billion global MedSurg market, which is expected to grow at 7% through 2026-2028, with Boston Scientific aiming to exceed this growth [3] - Recent acquisitions, including Nalu Medical, Silk Road Medical, Intera Oncology, SoniVie, and Elutia, Inc., enhance its growth potential [3] - The Farapulse Pulsed Field Ablation System has gained FDA approval for expanded use in treating drug-refractory, symptomatic, persistent atrial fibrillation, contributing to its market share in electrophysiology [4] - The WATCHMAN business is rapidly growing, with favorable future prospects driven by new data and device launches [5] - Full-year net sales are expected to grow approximately 20% on a reported basis and 15.5% organically, with adjusted earnings anticipated between $3.02 and $3.04 per share, indicating a growth of 20% to 21% compared to 2024 [6] Company Analysis: Edwards Lifesciences - Edwards Lifesciences, valued at around $49 billion, focuses on structural heart innovation and reported a 12.6% year-over-year growth in Q3 2025 [7] - The company benefits from its RESILIA portfolio, with strong contributions from therapies like INSPIRIS, KONECT, and MITRIS, and is expanding its global access [8] - The introduction of the SAPIEN M3 is expected to enhance physician awareness and referrals, contributing to the growth of Transcatheter Mitral and Tricuspid Therapies, projected to reach $2 billion by 2030 [10] - The TAVR segment is experiencing growth due to renewed focus on treating aortic stenosis, with FDA approval for the SAPIEN 3 platform for severe AS patients without symptoms [11] - Edwards' updated sales growth guidance is at the high end of 9-10%, with adjusted EPS guidance raised to $2.56 to $2.62 [12] Comparative Analysis - Boston Scientific is viewed as the more compelling investment option due to its broad electrophysiology portfolio, strength in the WATCHMAN business, and impactful acquisitions [9] - Both companies have outperformed the broader medical sector, but Edwards has shown more resilience [16] - Boston Scientific trades at a forward price-to-sales ratio of 6.51X, which is lower than its historical median and Edwards' price-to-earnings ratio of 7.53X [16] - Analysts remain bullish on both companies, but Boston Scientific's attractive valuation makes it a more appealing choice currently [18]

Core Insights - Edwards Lifesciences has announced its founding sponsorship of the American Heart Association's Heart Valve Initiative, aimed at improving care and outcomes for over 28 million people with heart valve disease globally, with more than 60,000 deaths annually in the U.S. attributed to valve disease [1][2]. Company Initiatives - The Heart Valve Initiative will focus on enhancing patient education, clinician training, and quality improvement to drive measurable impact in the treatment of heart valve disease [2][3]. - The initiative will expand the existing Target: Aortic Stenosis program, which was also founded through Edwards' sponsorship, over the next five years [3]. Goals and Objectives - The initiative aims to improve adherence to guideline-based care, starting with aortic stenosis, and will expand data collection to include asymptomatic and moderate cases [6]. - Plans include establishing a heart valve certification program for hospitals, advancing public reporting and hospital recognition, providing multimedia education for clinicians and patients, and launching a national awareness campaign to support informed care decisions [6].

Financial Data and Key Metrics Changes - Sales in Q3 2025 grew 12.6% to $1.55 billion, leading to an increase in full-year sales growth guidance to the high end of the previous 9% to 10% range [5][27] - Adjusted earnings per share (EPS) for Q3 was $0.67, exceeding expectations, while GAAP EPS was $0.50 [22][27] - Adjusted gross profit margin was 77.9%, down from 80.7% year-over-year, primarily due to foreign exchange and operational expenses [23] Business Line Data and Key Metrics Changes - TAVR global sales reached $1.15 billion, a 10.6% increase year-over-year, driven by renewed clinician focus on aortic stenosis treatment [13][14] - TMTT product group sales were $144 million, up 53% year-over-year, fueled by strong performance of Pascal and EVOKE [17] - Surgical product group sales were $258 million, increasing 5.6% year-over-year, supported by the adoption of Resilia therapies [20] Market Data and Key Metrics Changes - TAVR growth was supported by new evidence, guideline updates, and expanded education, with strong procedure growth in the U.S. and Europe [14][16] - In Japan, TAVR sales growth improved, reflecting a gradual recovery in market growth [16] - The global market for TMTT is expected to grow to an estimated $2 billion by 2030 [12] Company Strategy and Development Direction - The company is focused on structural heart therapies, positioning itself for sustainable multi-year growth [6][12] - There is a commitment to expanding into heart failure and aortic regurgitation as next-generation contributors to patient impact and growth [12][30] - The company plans to discuss long-term financial goals and market potential at the upcoming investor conference in December [27][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing strong Q3 performance and multiple growth drivers [5][6] - The management highlighted the importance of recent clinical data and guideline changes in driving TAVR adoption [14][37] - There is optimism regarding the upcoming approval of SAPIEN M3 in the U.S. by early 2026, which is expected to enhance treatment options for mitral patients [20][46] Other Important Information - The company has approximately $3 billion in cash and cash equivalents, with a share repurchase authorization of about $2 billion remaining [25] - The CFO announced plans to transition out of the role by mid-2026, with a succession plan in place [27][29] Q&A Session Summary Question: What drove the strength in TAVR growth this quarter? - Management attributed the strong performance to renewed focus on TAVR, new evidence, and a lack of typical summer seasonality [32][33] Question: How does the recent TCT data impact physician practices? - The data presented at TCT reassured physicians about TAVR's long-term performance, encouraging earlier treatment in the disease progression pathway [36][37] Question: What is the outlook for TAVR growth excluding Boston Scientific's exit? - Management indicated that while the growth was strong, it should not be considered the new normal, and they expect continued good performance in Q4 [32][33] Question: How does the company view the potential for broader diagnostic rates for AS? - Management sees the recent studies validating the market potential for AS as positive, suggesting that greater awareness and referral could lead to increased adoption [43][44] Question: What is the expected impact of FX on margins next year? - Management stated that they would provide detailed guidance on FX impacts at the upcoming investor conference [40] Question: What are the expectations for the SAPIEN M3 launch compared to EVOQUE? - The SAPIEN M3 launch is being approached with a controlled strategy, focusing on training and ensuring optimal outcomes before broader adoption [46][47]

Core Insights - Edwards Lifesciences announced successful patient outcomes for its mitral and tricuspid therapies, with one-year data from the ENCIRCLE trial meeting all primary and secondary endpoints for safety and effectiveness [1] - The outcomes were published in The Lancet, highlighting the significance of the findings in the medical community [1] - Additionally, thirty-day data from the EVOQUE system STS/ACC TVT Registry was reported, which is noted as the largest real-world transcatheter tricuspid valve replacement registry [1]

Financial Data and Key Metrics Changes - The company reported total sales of $1,530 million for Q2 2025, reflecting a growth of 10.6% compared to the previous year, which was better than expected [9][10]. - Adjusted earnings per share (EPS) for the quarter was $0.67, while GAAP EPS was $0.57, which included a one-time charge related to external investments [26][27]. - The adjusted gross profit margin was 77.6%, down from 80% in the same period last year, attributed to increased manufacturing expenses and foreign exchange impacts [27][28]. Business Line Data and Key Metrics Changes - In the Transcatheter Aortic Valve Replacement (TAVR) segment, global sales reached $1,100 million, marking a 7.8% increase year-over-year [10][11]. - The Transcatheter Mitral and Tricuspid Therapies (TMTT) segment saw sales of $133 million, growing 57% due to strong demand for PASCAL and EVOQUE technologies [18][19]. - Surgical Products Group reported global sales of $267 million, an increase of 6.8% compared to the prior year [24]. Market Data and Key Metrics Changes - TAVR growth was stable in both the U.S. and outside the U.S. (OUS), with a notable increase in Japan where sales grew in the mid-single digits [15][10]. - The exit of a competitor in Europe led to a rebalancing of market share, contributing modestly to sales growth [15][44]. - The company anticipates mid to high single-digit growth opportunities in TAVR, supported by recent approvals and guideline changes [16][10]. Company Strategy and Development Direction - The company introduced the "Sharpen Focus" strategy, targeting significant growth in structural heart therapies, particularly in aortic regurgitation and heart failure [8][9]. - The focus on a balanced portfolio across aortic, mitral, and tricuspid therapies is expected to position the company for long-term leadership [9]. - The company is raising its full-year 2025 sales growth guidance to 9% to 10%, reflecting confidence in its strategic initiatives and market position [10][33]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to achieve sustainable growth, driven by a strong portfolio and upcoming catalysts [34][66]. - The management highlighted the importance of recent approvals for asymptomatic TAVR, which are expected to create multi-year growth opportunities [11][12]. - The company is optimistic about the impact of potential changes in CMS guidelines and the NCD on patient access and treatment volumes [61][62]. Other Important Information - The company announced the departure of Larry Wood, the leader of the TAVR team, who will be succeeded by Dan Lippis [16][17]. - The company is in the final stages of the regulatory review process for the acquisition of GenaValve, with expectations to close the deal in Q3 [33]. Q&A Session Summary Question: What drove the better-than-expected U.S. TAVR performance? - Management attributed the performance to a renewed focus on TAVR within the clinical community and the impact of early TAVR study data [36][38]. Question: What trends were observed outside the U.S.? - Management noted positive feedback from the rollout of the S3UR platform in Europe and emphasized the importance of addressing undertreatment in Japan [43][45]. Question: Why not raise EPS guidance further? - Management cited ongoing headwinds, particularly related to GenaValve, as a reason for caution despite strong Q2 performance [48][49]. Question: What is the expected impact of the NCD reopening? - Management expressed optimism that changes could streamline operator requirements, improving patient access and care [61][62]. Question: What is the outlook for the TMTT business, particularly EVOQUE? - Management reported strong physician and patient excitement around EVOQUE, with real-world outcomes aligning with clinical trial data [71][72].

Financial Data and Key Metrics Changes - The company reported total sales of $1,530 million for Q2 2025, reflecting a growth of 10.6% compared to the previous year, which was better than expected [8][9] - Adjusted earnings per share (EPS) for the quarter was $0.67, while GAAP EPS was $0.57, which included a one-time charge related to external investments [23][24] - The adjusted gross profit margin was 77.6%, down from 80% in the same period last year, attributed to increased manufacturing expenses and foreign exchange impacts [25][26] Business Line Data and Key Metrics Changes - TAVR sales reached $1,100 million, increasing by 7.8% year-over-year, with stable competitive positioning and pricing [9][10] - TMTT product group sales were $133 million, growing by 57%, driven by the success of PASCAL and EVOQUE technologies [16][17] - Surgical Products Group sales were $267 million, reflecting a 6.8% increase compared to the prior year, supported by positive procedure growth globally [21][22] Market Data and Key Metrics Changes - In the U.S., TAVR growth was bolstered by renewed clinical focus and recent approvals for asymptomatic indications, while international markets, particularly Japan and Europe, showed strong growth despite competitive challenges [10][13][42] - The exit of a competitor in Europe contributed to a modest market share rebalancing, positively impacting sales [13][40] Company Strategy and Development Direction - The company is focused on its "Sharpen Focus" strategy, targeting structural heart failure and aortic regurgitation, which are seen as significant growth opportunities [7][8] - The company is raising its full-year sales growth guidance to 9% to 10%, reflecting confidence in its product portfolio and market position [9][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about mid to high single-digit growth in TAVR, supported by recent approvals and evolving clinical guidelines [14][30] - The company is committed to advancing evidence for aortic stenosis patients and is confident in its ability to deliver significant value to patients and shareholders [31][62] Other Important Information - The company announced the departure of Larry Wood, the leader of the TAVR team, and Dan Lippis will assume leadership, ensuring continuity in the TAVR franchise [14][15] - The company is in the final stages of acquiring GenaValve, with expectations to close the deal in Q3 2025 [30][98] Q&A Session Summary Question: What drove better-than-expected U.S. TAVR performance? - Management noted a renewed focus on TAVR management and timely treatment of patients, driven by recent clinical data and approvals [34][36][39] Question: What are the trends outside the U.S.? - Management highlighted positive feedback from the rollout of the S3UR platform in Europe and ongoing efforts to expand therapy in Japan [40][42] Question: Why not raise EPS guidance further? - Management cited ongoing headwinds, particularly related to GenaValve, as a reason for cautious EPS guidance despite strong performance [45][46] Question: What is the impact of the competitor's exit on market share? - Management emphasized the importance of demonstrating the value of their technology and ensuring patient access to high-quality care following the competitor's exit [48][50] Question: When do you expect CMS to reopen the NCD? - Management expressed hope for a timely reopening of the NCD, emphasizing the need for coverage of asymptomatic patients and streamlined operator requirements [55][58] Question: What is the outlook for the TMTT business, particularly EVOQUE? - Management reported strong physician and patient excitement around EVOQUE, with real-world outcomes showing promise [67][70][72] Question: What are the long-term margin expectations? - Management indicated a focus on annual operating profit margin expansion rather than setting specific targets, aiming for consistent growth [75][76]