Q4 2023 Edwards Lifesciences Corp Earnings Call

Greetings and welcome to the Edwards Lifesciences fourth quarter 2023 earnings Conference call.

Operator: Greetings and welcome to the Edwards Lifesciences 4th Quarter 2023 Earnings Conference. At this time, all participants are in a listen-only mode.

At this time all participants are in a listen only mode.

Operator: After a brief question and answer session, we'll follow with the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mark Wilter, Investor Relations and Treasurer. Thank you. Thank you very much, Diego, and good afternoon, everyone.

A brief question and answer session will follow the formal presentation.

If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

As a reminder, this conference is being recorded.

Speaker Change: It is now my pleasure to introduce your host.

Speaker Change: Mark Walter Lang Investor Relations and Treasurer. Thank you you may begin.

Thank you very much Diego and good afternoon, everyone. Thank you all for joining US with me on today's call is our CEO Bernard will begin and our CFO Scott all of them also joining us for the Q&A portion of the call will be Larry Wood, our president of tower in surgical structural heart to being a global leader of T. M. T T. Wayne Markowitz are global leader in.

Mark Wilterding: Thank you all for joining us. With me on today's call is our CEO, Bernard Zavigian, and our CFO, Scott Ullem. Also joining us for the Q&A portion of the call will be Larry Wood, our group president of TAVR and Surgical Structural Heart, Devine Chopra, our global leader of TMTT, Wayne Markowitz, our global leader of Surgical Structural Heart, and Katie Ziman, our global leader of Critical Care. Just after the close of regular trading, Edwards Lifesciences released its fourth quarter 2023 financial results.

Speaker Change: Surgical structural heart and kidneys Aiman are global leader in critical care.

Speaker Change: Just after the close of regular trading Edwards Lifesciences released fourth quarter 2023 financial results. During today's call management will discuss those results included in the press release and accompanying financial statements and then use the remaining time for Q&A. Please.

Mark Wilterding: During today's call, management will discuss the results included in the press release and accompanying financial statements and then use the remaining time for Q&A. Please note that management will be making forward-looking statements that are based on estimates, assumptions, and projections. These statements include, but are not limited to, financial guidance and expectations for longer-term growth opportunities, regulatory approvals, clinical trials, litigation, reimbursement, competitive matters, and foreign currency fluctuations. Additionally, these statements involve risks and uncertainties that could cause actual results to differ materially.

Speaker Change: Please note that management will be making forward looking statements that are based on estimates assumptions and projections. These statements include but are not limited to financial guidance and expectations for longer term growth opportunities regulatory approvals clinical trials litigation reimbursement competitive matters and foreign currency fluctuations. These statements speak only as of the day.

Speaker Change: On which they were made and Edwards does not undertake any obligation to update them. After today. Additionally, the statements involve risks and uncertainties that could cause actual results to differ materially information concerning factors that could cause these differences and important product safety information maybe found in the press release, our 2022 annual report.

Mark Wilterding: Information concerning factors that could cause these differences and important product safety information may be found in the press release, our 2022 Annual Report on Form 10-K, and Edwards' other SEC filings, all of which are available on the company's website at edwards.com. Unless otherwise noted, our commentary on sales growth refers to constant currency sales growth, which is defined in the quarterly press release issued earlier today. Reconciliations between GAAP and non-GAAP numbers mentioned during the call are also included in today's presentation. With that, I'd like to turn the call over to Bernard for his comments. Bernard?

Speaker Change: <unk> Form 10-K, and Edwards' other SEC filings all of which are available on the company's website at Edwards dotcom.

Speaker Change: Unless otherwise noted our commentary on sales growth refers to constant currency sales growth, which is defined in our quarterly press release issued earlier today reconciliations between GAAP and non-GAAP numbers mentioned during the call are also included in today's press release with that I'd like to turn the call over to Bernard for his comments. Thank you Mark.

Bernard Zavigian: Thank you, Mark, and welcome to everyone to our recent investor conference. I introduced our exciting vision of a new era of structural heart innovation to address significant unmet patient needs. Today, I will build on that theme and share key highlights of our team's strong performance in 2023, as well as our expectations for 2024.

Bernard: And welcome everyone.

Bernard: Oh, well recent Investor Conference I Am told you saw exciting vision of a new era.

Bernard: Innovation.

Bernard: The address significant unmet patient needs.

Bernard: Okay.

Bernard: It would be one that seems and key highlights of our team's strong performance in 'twenty 'twenty free.

Bernard: One is our confidence in 'twenty 'twenty four.

Bernard Zavigian: We are pleased with our strong 2023 financial performance, with full-year sales up 12% to $6 billion, including strong growth across each of our four product groups. We invested more than $1 billion in research and development, and we achieved key strategic milestones, including the introduction of new technologies and indication expansion to ensure sustainable, healthy growth in the near, mid, and long term. We exited the year with strong momentum, with Q4 growth of 13% and TAVR growth of 12%. These results were better than expected, driven by your broad portfolio of innovative therapies. In 2024, we are well positioned to enter a new era of structural heart innovation. In TAVR, we are strengthening our leadership.

Bernard: We are pleased with our strong 'twenty 'twenty free financially performance with full year finished at 20% to 6 billion.

Bernard: Including strong growth across each of our fault product groups.

Bernard: We invested more than 1 billion in research and development and we achieved key milestones, including the introduction of new technologies and indication expansion to ensure sustainable healthy growth, even if it Neil Mead and long term.

Bernard: We exited the year with strong momentum with Q4 growth for 15 person.

Bernard: And Toby on graph off twice person.

Bernard: These results were better than expected driven by a broad portfolio of innovative therapies.

Bernard: In 'twenty 'twenty four we are well position to enter a new era of talk to your in house innovation.

Bernard: In terms of it yes.

Bernard: We are strengthening our leadership.

Bernard Zavigian: We are experiencing strong adoption of our flagship SAPIEN 3 Ultra Resilia and continuing enrollment in our Alliance Pivotal trial for our next-gen TAVR technology, SAPIEN X4. In January, we achieved a very important milestone with the completion of Enrollment in Progress, a pivotal trial studying the treatment of moderate aortic stenosis patients, a population estimated to be twice as large as severe aortic steno This randomized trial enrolled approximately 750 patients two years ahead of schedule. At TCT later this year, we plan to present data from Early TAVR, a pivotal trial studying the treatment of patients with severe aortic stenosis but without symptoms. We believe that all of these initiatives position us for healthy, sustainable tavern growth well into the future. In TNTT, we achieved significant milestones with continued PASCAL global expansion and the introduction of EVOC in Europe. In Germany, EVOC was recently granted NUB reimbursement status 1, a very important step in therapy adoption.

Bernard: We are experiencing strong adoption of our flagship sapiens free iconic xenia and continuing into halden.

Bernard: No <unk> pivotal trial for next Gen technology CP next fall.

Bernard: In January we achieved a very important milestone with the completion of enrollment in progress our pivotal trial studying the treatment of moderate to extend it with these patients.

Bernard: The population estimated to be twice as large a severe aortic stenosis.

Bernard: This randomized trial is enrolling approximately 750 patients two years ahead of schedule.

Bernard: D C T nature of each year, we plan to present data from early tablet.

Bernard: Pivotal trial studying the treatment of patients with severe aortic stenosis, but without symptoms. We believe that all of these initiatives position us for healthy sustainable growth well into the future.

Bernard: In T N T T. We achieved significant milestones we've continued the Pascal global expansion and the introduction of evoke in Europe in Germany.

Bernard: <unk> was recently granted and you'd be a reimbursement status one.

Bernard: Really important step in therapy adoption.

Bernard Zavigian: I am also pleased to announce that EVOC recently became the first transcatheter therapy to receive USFD approval for the treatment of TR patients. This is an exciting development for a wide range of U.S. patients. It will enable access to a groundbreaking treatment option that not only has the potential to significantly improve their quality of life but also shows favorable clinical trends in all-cause mortality, re-intervention, and heart failure hospitalization. With the ongoing introduction of EVOOX, we are now offering a unique and broad portfolio of transcatheter repair and replacement solutions for mitral and tracheal patients.

Bernard: I am also pleased to announce that evoke recently became the first private sketch of til therapy to receive U S. FDA approval for the treatment of <unk> patients.

Bernard: This is an exciting development for a wide range of U S patients. It will enable access to a groundbreaking treatment option that not only has the potential to significantly improve their quality of life, but also shows physically but clinical trends in all cause mortality reading too many.

Bernard: Chin and heart failure hospitalization.

Bernard: With the ongoing integration of evoke we are now offering a unique and broad portfolio of transcatheter repair and replacement solution for niton intricate patients.

Bernard Zavigian: In addition, the completion of enrollment in the pivotal trial studying SAPIEN M3 put us on track to further enhance our portfolio. I am confident that we are reaching an inflection point as the only company with a commercially-approved portfolio of catheter-based technologies to treat the millions of patients suffering from mitral and tricuspid regurgitation, in addition to the meaningful progress of TAVR and TNT. We are pleased with the company Innovative Resilient Tissue, which was pioneered by our surgical business. We are on track to treat half a million patients with a resilient-based heart valve by the end of 2021, supported by seven years of clinical evidence. The previously announced spin-off of Critical Care is progressing as planned and will enable a sharpened focus on structural harm. As a result, Edwards' 2025 organic sales growth rate will be even more differentiated. In addition, this will give us more agility, increase our pace of innovation, and provide an expanded opportunity to serve a large and growing patient population. Because we are solely focused on structural heart disease, we are uniquely positioned. Deliver Sustainable Growth and External Leadership

Bernard: In addition, the.

Bernard: Completion of enrollment in the pivotal cry instead of being C. P and M free puts us on track to further enhance our portfolio.

Bernard: I am confident that we are reaching an inflection point as the only company with a commercially approved part of 40 off catheter based technologies to treat the millions of patients suffering from mitral and tricuspid disease.

Bernard: In addition to the meaningful progress of Taobao and T. N. T. T. We are pleased with the company innovative resilient tissue, which was I need by our surgical business. We are on track to tweak how familiar patient with a resilient based on revised by the end of 'twenty 'twenty four support.

Bernard: By seven years of clinical evidence.

Bernard: The previously announced spinoff of critical care is progressing as planned and will enable a sharpened focus on structural heart I was always that it and wants 2025 organic sales growth rate would be even more distinguished. In addition, this would give us more agility.

Bernard: Inquiries, our pace of innovation and provides an expanded opportunity to serve a large and growing patient population.

Bernard: Because we are solely focused on switching and how disease, we are uniquely positioned to deliver sustainable growth and extend that leadership.

Bernard Zavigian: Now I will provide some additional details by product. Our full year 2023 global sales of 3.9 billion increased 10.6% year over year. Our U.S. and all U.S. sales growth rates were similar in the fourth quarter.

Bernard: I will provide some addition detail by product group.

Bernard: In.

Bernard: Our full year 'twenty 'twenty free global sells a Freeport 9 billion increased 10, 6% year over year.

Bernard: Oh, a U S or U S cents graph Reits with similar.

Bernard: In the fourth quarter at.

Bernard Zavigian: Our global TAVR sales of $979 million increased 12% year-over-year. Performance was driven by double-digit growth in the U.S., Europe, and Japan. The company's competitive position was stable globally, and local selling prices were also stable.

Oh, good the caveat sales of $979 million increased 12% year over year.

Bernard: Performance was driven by double digit growth in the U S Europe and Japan.

Bernard: The company competitive position globally and local selling price were also stable.

Bernard: In the U S. We remain pleased with the continued expansion and adoption of our SAPIEN free alcohol is really a platform.

Bernard Zavigian: In the U.S., we remain pleased with the continued expansion and adoption of sapient-free, ultra-resilient tissue technology. This technology builds on Edwards' long-standing leadership in tissue technology and durability by combining advancements in tissue science with the industry-leading Sapien Free UltraValve. Developing safe, effective, and durable heart valves requires significant long-term commitment, and we are proud to build on 65 years of valve innovation while leveraging the expertise and know-how of more than 2,000 engineers and R&D specialists across the company. We are proud of uninterrupted leadership in Structural Heart and will continue to invest vigorously in this platform. In addition... Our scaling of patient activation initiatives, along with next-gen TAVR and additional evidence on asymptomatic and moderate AS patients, positions us for healthy, sustainable TAVR growth well into the future. Outside of the U.S., in the fourth quarter, our double-digit growth was comparable with our global tether growth, driven by Europe and Japan.

Bernard: These technology built on and while its long standing leadership in.

Bernard: Tissue technology, and your ability by combining advancements in tissue science with the industry, leading safety and fleet, obviously, so I'll cover.

Bernard: Developing safe effective and do you have in house values, I think quite significant long term commitment and we are proud to build on 65, yeah on valve innovation, while leveraging the expertise and knowhow of more than 2000 engineers and R&D specialist across.

Bernard: The company.

Bernard: We are proud of uninterrupted leaderships in structural heart and will continue to invest if you ever go to sleep in this platform.

Bernard: In addition.

Bernard: Scaling of patient activation initiatives, along with Nextgen taboo.

Bernard: And Additionally have you done some asymptomatic and moderate E S patient position us for healthy sustainable growth well into the future.

Bernard: Outside of the U S. In the fourth quarter, all with double digit growth was comparable with our global technical rules, driven by Europe and Japan.

Bernard Zavigian: Long term, we continue to anticipate excellent opportunities for growth. Although the international adoption of TAVR therapy remains quite low in many regions, in Europe, Edward Selzgrove was driven by the broad-based adoption of our CPRIM platform. It is encouraging that the growth in Q4 was widespread across all major countries.

Bernard: Long term, we continue to anticipate excellent opportunities for growth.

Bernard: International adoption of kind of a fill up your remained quite low in many regions.

Bernard: In Europe, and while sales growth was driven by a broad based adoption of AR will see print platform. It is encouraging the graph in Q4 was widespread across all major countries.

Bernard Zavigian: Looking ahead, we are pleased with the recently announced CMARC approval for sapient-free ultraresilia, and we are planning for a disciplined launch. We were pleased with our sales growth in Japan, and as expected, we grew faster than overall procedural growth. After more than 20 years of rigorous clinical experience and over 1 million patients treated with Sapien vaccine around the world, our TAVR platform is positioned for continued global leadership and strong sustainable growth. Given the under-twisted rates, we are confident in the future of TAVR, driven by greater awareness, patient activation, a platform that delivers lifetime management for AS patients, advances in new technologies such as Resilient, as well as indication expansion and increased global adoption. Turning to TMTT now, in 2023, we remain focused on our key value drivers to unlock the significant long-term opportunity for patients.

Bernard: Looking ahead, we are pleased with the recently announced CE Mark approval for SAPIEN free causes Elia and we are planning for a disciplined launch.

Bernard: We were pleased with our sales growth in Japan, and unexpected we grew faster than overall paucity of autograph.

Bernard: I still more than 20 years of rigorous clinical experience and over 1 million patients treated with sapiens <unk> around the world.

Bernard: The Teradata platform is positioned for continued global leadership and strong sustainable graph give.

Bernard: Given the win rates, we are confident in the city of <unk>.

Bernard: Bye.

Bernard: John Walnuts patient activation platform that didn't even have life and management for a S patients advancing new technologies, such as resilient as well as indication expansion and inquiries about adoption.

Bernard: Turning to TMT T now in 'twenty 'twenty free we will remain focused on our key value drivers to unlock the significant long term opportunity for patients.

Bernard Zavigian: A Portfolio of Differentiated Therapies, positive clinical trial results to support approvals in adoption, and favorable real-world clinical outcomes. Based on the deep learnings we have achieved from our clinical trial and real-world experiences, we have carefully constructed a strategic portfolio of leading transcatheter technologies to provide both repair and replacement solutions for mitral and tracheotomy patients. Pascal Precision, Evoke, and Sapien M4E will provide best-in-class therapies for a broader range of patients. For a full year, global sales of $198 million increased 67% versus the prior year.

Bernard: Folio of differentiated therapies.

Bernard: Positive Creek or playing results to support approval and adoption in February I believe real world clinical outcomes.

Bernard: Based on the deep learning, we have achieved from our clinical trials and real world experiences. We have carefully constructed a strategic part of 40 of leading tusker detect technologies to provide both repair and replacement solutions for mitral and tricuspid patients.

Bernard: Precision evoke and C. P N and free we provide best in class therapies to treat a broader range of patients.

Bernard: 40 year global sales of 198 million increased 67% this is probably not but probably over a year.

Bernard Zavigian: GMT-T fourth quarter sales of 56 million increased 71% versus the prior year. Q4 sales were driven by the accelerating adoption of our differentiated Pascal Precision Platform and activation of more centers across the U.S. and Europe. We were encouraged by the ongoing double-digit growth of the overall transcatheter edge-to-edge repair procedure, which highlights the large and net patient population. We continue to expand global access to PASCAL precision in new countries, including Japan, where we recently completed our first cases.

Bernard: T M T T false quality access of 56 million increased 71%. This is probably all year.

Bernard: Q4, since we have driven.

Bernard: By the accelerating adoption of our differentiated Pascal precision platform and activation of more centers across the U S and Europe.

Bernard: We will encourage by the ongoing double digit growth of overall tons kept at the edge to edge repair force video, which highlights the large unmet patient needs.

Bernard Zavigian: Since launch, we have proudly treated more than 20,000 patients around the globe with Pascal Repair. For mitral repair, we have received FDA approval for a sapien-free continuity access program. Physicians are continuing to treat patients with this novel therapy, and Tricuspid is replaced. We initiated the launch of EVOC in Europe with a focus on outstanding outcomes and the goal of eliminating tricuspid irregularization in patients, and in the U.S. Following the recent early FDA approval, we are initiating the introduction of this novel therapy and building the foundation for long-term expansion. As we did for CAVR, we are focusing on best-in-class physician training, generating more evidence, and achieving excellent patient outcomes. We are grateful for the strong ongoing collaboration with clinicians all over the world to provide treatment options to many patients suffering from tracheal speed valve. In Track Speed Repair, the Class 2 TR Pivotal Trial with Pasquale continues to enroll well and remains on track to complete enrollment by the end of this year.

Bernard: We continued to expand global access with Pascal precision in new countries, including Japan, where we recently completed our first cases.

Bernard: Since launch we have probably treated more than 20000 patients around the.

Bernard: Grub with Pascal we pay system.

Bernard: At my total replacement, we have received FDA approval for SAPIEN. Three continued access program physician are continuing to treat patients with this novel therapy.

Bernard: In practice PDQ placement, we initiated the launch of evoke in Europe with a focus on outstanding outcomes and the goal of eliminating FICA speed yet.

Bernard: And in patients.

Bernard: And in the U S.

Bernard: Following the recent early FDA approval, we are initiating the introduction of novel therapy and building the foundation for long term expansion.

Bernard: We did fall Kevin we are focusing on best in class physician training generating more evidence and achieving excellent patient outcomes.

We are grateful for all of us.

Bernard: Ongoing collaboration with Depletions, almost all the world to provide a treatment option to many patients suffering from tricuspid valve disease.

Bernard Zavigian: As a summary for TMTT, we are reaching an inflection point with the only portfolio of approved catheter-based mitral and tricuspid technology. We remain committed to bringing our differentiated therapy to patients with this life-threatening disease and believe our strategy positions us well for leadership. In our surgical product group, full year global sales of 999 million increased 13% versus the prior year, and fourth quarter global sales of $248 million increased 10%.

Bernard: And if I could see the repair.

Bernard: Class two cheol pivotal trial with Pascal continues to enroll well and remains on track to complete enrollment by the end of this year.

Bernard: As a summary for TMT T. We are reaching an inflection point with the only portfolio of approved capital base My turn into like a speed technologies.

Bernard: We remain committed to bringing a differentiated therapy to patients with vis lives frightening disease and believe our strategy position us well for leadership.

Bernard Zavigian: Growth was driven by strong global adoption of Edwards' premium resilient technology and overall procedural volume. We are confident about the future of this tissue technology and its role in improving patient lifetime management. We continue to see positive momentum in our innovation globally, with continued adoption for patients best treated surgically, including those with complex and concomitant processes. We continue to expand the overall body of resilia evidence, including ongoing patient enrollment in our momentous clinical study. We received C-mark approval for our mitral resilia valve in the fourth quarter and have begun to launch it in several European countries with favorable physician feedback.

Bernard: In our surgical product group full year global sales of 999 million increased 13 persons desk, probably all year.

Bernard: Fourth quarter global sales of $248 million increased 10%.

Bernard: Growth was driven by strong global adoption of it was premium resilient technology and overall, possibly all volumes.

Bernard: We are confident about the future of these tissue technology and its role in improving patient lifetime management.

Bernard: We continue to see positive momentum you know innovation globally with continued adoption for patients best twitching surgically, including votes with complex and concomitant posse deals.

Bernard Zavigian: Turning to critical care, full year global sales of 928 million increased 10% versus the prior year, and fourth quarter clinical critical care sales of 250 billion increased 11. Growth was driven by contributions from all product lines, led by Hemosphere and Smart Recovery, with strong adoption of our acumen IQ sensor equipped with the Hypertension Prediction Index algorithm. Critical care strategies to drive growth through smart recovery and smart expansion, which are designed to help clinicians make more informed decisions and get patients home to their families faster. And with that, I will turn the call over to Scott.

Bernard: We continue to expand the overall body of raising the evidence, including including ongoing patient enrollment of our momentous clinical study we received CE Mark approval.

Bernard: Ah well mitral valve.

Bernard: Volumes in the fourth quarter and have begun to wrench in several European countries with federal physician feedback.

Bernard: Turning to critical care.

Bernard: 40 year global sales of $928 million increased 10% versus the prior year.

Scott B. Ullem: Okay, thanks a lot, Bernard. So today, I'll provide a wrap-up of 2023, including detailed results of our fourth quarter, as well as provide guidance for the first quarter and full year 2020. As Bernard mentioned, we were pleased with our better-than-expected Q4 sales performance, with strength across all products. We achieved total sales of $1.53 billion, which represents 13% year-over-year growth. And we achieved adjusted earnings per share

Bernard: Fourth quarter clinical critical care sales of 250 billion increased 11 persons graph was driven by contribution from all product lines led by he must feel it's marked recovery with strong adoption of our acumen <unk> sensor equipped with the hypotension prediction.

Index algorithm.

Bernard: Critical care strategies to drive growth through smart recovery and smart expansion, which are designed to help clinicians make more informed decision and get patients home to their families faster.

Scott B. Ullem: Our gap earnings per share of $0.61 included one-time expenses associated with our planned spinoff of critical care. A full reconciliation between our GAP and adjusted EPS for this and other items is included with today's release. We are maintaining all of our previous sales guidance ranges for 2024 with the exception of TMT2. Absent big moves in foreign exchange, we expect total company sales of $6.3 to $6.6 billion.

Speaker Change: We stopped I would tell Nikola Walter Scott, Okay. Thanks, a lot Bernard so today I'll provide a wrap up of 2023, including detailed results of our fourth quarter as well as provide guidance for the first quarter and full year 2024.

Speaker Change: As Bernard mentioned, we were pleased with our better than expected Q4 sales performance with strength across all product groups. We achieved total sales of $1.53 billion, which represents 13% year over year growth.

Speaker Change: We achieved adjusted earnings per share of <unk>, 64 cents or GAAP earnings per share of <unk> 61 cents included one time expenses associated with our planned spinoff of critical care.

Scott B. Ullem: TAVR sales of $4.0 to $4.3 billion, surgical structural heart sales of $1.0 to $1.1 billion, and critical care sales of $900 million to $1 billion. Given the early FDA approval for Evoque, we now expect full-year TMTT sales to be at the higher end of our previous $280 million to $320 million guidance. For the first quarter, we're projecting sales of $1.53 to $1.61 billion and adjusted earnings per share of $0.62 to $0.66. Now, I'll cover the additional details from our P&L. For the fourth quarter, our adjusted gross profit margin was 76.8% compared to 81% in the same period last year. This expected year-over-year reduction was driven by impacts from foreign exchange.

Speaker Change: A full reconciliation between our GAAP and adjusted EPS for this and other items is included with today's release.

Speaker Change: We are maintaining all of our previous sales guidance ranges for 2024 with the exception of T. M. T G I.

Speaker Change: Absent big moves in foreign exchange, we expect total company sales of $6.3 billion to $6.6 billion cover sales of 4.0 to $4 $3 billion.

Speaker Change: Surgical structural heart sales of $1.0 billion to $1.1 billion in critical care sales of $900 million to $1 billion.

Speaker Change: Given the early FDA approval for evoke we now expect full year T. M. T T sales to be at the higher end of our previous 280 million to $320 million guidance range.

Scott B. Ullem: Last year, Edwards' gross profit margin was lifted by a significant impact from FX. We continue to expect our full-year 2024 adjusted gross profit margin to be between 76 and 78 percent, driven by high-value technologies that yield strong gross profit. Telling, general, and administrative expenses in the quarter were $480 million, or 31.3% of sales, compared to $411 million in the prior year.

Speaker Change: For the first quarter, we're projecting sales of $1.53 billion to $1.61 billion and adjusted earnings per share of 62 to 66 cents and now I'll cover the additional details from our P&L.

For the fourth quarter, our adjusted gross profit margin was 76, 8% compared to 81% in the same period last year.

Scott B. Ullem: This increase was driven by investments in transcatheter field-based personnel in support of our growth strategy and patient activation initiatives. We continue to expect full year 2024 SG&A as a percent of sales to be 29 to 30 percent as we invest in field-based personnel and patient activation initiatives and increase our focus on efficient G&A leverage. Research and development expenses in the fourth quarter grew 16% over the prior year to $270 million, or 17.6% of sales.

Speaker Change: This expected year over year reduction was driven by impacts from foreign exchange.

Speaker Change: Last year Edwards gross profit margin was lifted by a significant impact from FX.

Speaker Change: We continue to expect our full year 'twenty 'twenty four adjusted gross profit margin to be between 76, and 78% driven by high value technologies that yield strong gross profit margins.

Speaker Change: Selling general and administrative expenses in the quarter were $480 million or 31, 3% of sales compared to $411 million in the prior year.

Scott B. Ullem: This increase was primarily the result of continued investments in our transcatheter valve innovation, including increased clinical trial activity. For the full year 2024, we continue to expect research and development to be 17 to 18 percent of sales as we invest in developing new technologies and generating evidence to support TAVR and TMTT growth with the goal of treating even more patients. During the fourth quarter, we incurred approximately $17 million of one-time costs associated with our previously announced spin-off of Critical Care. Additional one-time costs will be incurred throughout 2024 prior to the expected separation at year-end. Turning to taxes, our reported tax rate this quarter was 12.3% or 13.4% excluding the impact of special items. For the full year 2023, our reported tax rate was 12.4% or 15.0% excluding the impact of special items.

Speaker Change: This increase was driven by investments in Transcatheter field based personnel in support of our growth strategy and patient activation initiatives.

Speaker Change: We continue to expect full year 2020 for SG&A as a percent of sales to be 29% to 30% as we invest in field based personnel and patient activation initiatives and increase our focus on efficient G&A leverage.

Speaker Change: Research and development expenses in the fourth quarter grew 16% over the prior year to $270 million or 17, 6% of sales.

Speaker Change: This increase was primarily the result of continued investments in our transcatheter valve innovations, including increased clinical trial activity.

Speaker Change: For the full year 2024, we continue to expect research and development to be 17% to 18% of sales as we invest in developing new technologies and generating evidence to support <unk> and G. M. T T growth with the goal of creating even more patients.

Scott B. Ullem: Our lower-than-expected non-GAAP rate in the fourth quarter benefited primarily from U.S. tax credits on foreign remittances and income tax. We continue to expect our 2024 tax rate, excluding special items, to be between $14,000 and $7,500. Foreign exchange rates decreased fourth quarter reported sales growth by 80 basis points or $9 million compared to the prior year. FX rates negatively impacted our fourth quarter gross profit margin by 320 basis points compared to the prior year, relative to our October guide. FX rates had a nominal impact on fourth quarter earnings. Free cash flow for the fourth quarter was $48 million, defined as cash flow from operating activities of $136 million less capital spending of $88 million.

Speaker Change: During the fourth quarter, we incurred approximately $17 million of one time costs associated with our previously announced spinoff of critical care Adil.

Speaker Change: Additional one time costs will be incurred throughout 2024 prior to the expected separation at year end.

Speaker Change: Turning to taxes, our reported tax rate this quarter was 12, 3% or 13.4%, excluding the impact of special items.

Speaker Change: For the full year 2023, our reported tax rate was 12, 4% or 15.0%, excluding the impact of special items.

Speaker Change: Our lower than expected non-GAAP rate in the fourth quarter benefited primarily from U S tax credits on foreign remittances and income tax.

Speaker Change: We continue to expect our 'twenty 'twenty four tax rate, excluding special items to be between 14 and 17%.

Scott B. Ullem: Adjusted free cash flow for the full year 2023 was $943 million, defined as cash flow from operating activities of $896 million less capital spending of $253 million. Adjusted free cash flow excludes the $300 million payment related to the Medtronic Intellectual Property Agreement. We continue to expect full year 2024 adjusted free cash flow will grow to be between $1.1 and $1.4 billion. Before turning the call back over to Bernard, I'll finish with an update on our balance sheet and share our purchase agreement. We continue to maintain a strong and flexible balance sheet with approximately $1.6 billion in cash, cash equivalents, and short-term investments as of December 31, 2020. During the fourth quarter, we repurchased 6.0 million shares through an accelerated repurchase agreement and a pre-established 10B51 plan. As a result, the average diluted shares outstanding during the quarter declined to $607 million.

Speaker Change: Foreign exchange rates decreased fourth quarter reported sales growth by 80 basis points or $9 million compared to the prior year.

Speaker Change: FX rates negatively impacted our fourth quarter gross profit margin by 320 basis points compared to the prior year.

Speaker Change: Relative to our October guidance FX rates had a nominal impact on fourth quarter earnings per share.

Speaker Change: Free cash flow for the fourth quarter was $48 million defined as cash flow from operating activities of $136 million less capital spending of $88 million.

Speaker Change: Adjusted free cash flow for the full year 2023 was $943 million defined as cash flow from operating activities of $896 million less capital spending of $253 million.

Speaker Change: Adjusted free cash flow excludes the $300 million payment related to the Medtronic intellectual property agreement.

Scott B. Ullem: We continue to expect average diluted shares outstanding for 2024 to be between 600 and 610 million. We have approximately $1 billion remaining under our current share purchase authorization. And with that, back to you, Bernard. Thank you, Scott. In conclusion, we are proud of the significant progress we made in 20- Advancing New Breakthrough Therapies for Patients and Delivering Solid Financial Performance and Healthy Profitability. We are even more excited about 2024.

Speaker Change: We continue to expect full year 2024, adjusted free cash flow will grow to be between 1.1 and $1.4 billion.

Speaker Change: Before turning the call back over to Bernard I'll finish with an update on our balance sheet and share repurchase activities.

Speaker Change: We continue to maintain a strong and flexible balance sheet with approximately $1.6 billion in cash cash equivalents and short term investments as of December 31 2023.

Bernard Zavigian: This year, we anticipate launching groundbreaking technologies and advancing multiple important clinical trials. These breakthroughs, along with significant unmet patient needs, give us confidence in our ability to accelerate growth in 2025 and beyond. For TAVR, we will continue to drive global adoption of sapient-free ultraresilia, present pivotal trial data from early TAVR studies of asymptomatic AS patients, and enroll in Alliance, a pivotal trial studying the next generation sap

Speaker Change: During the fourth quarter, we repurchased 6.0 million shares through an accelerated repurchase agreement and a pre established <unk> five one plan as a result average diluted shares outstanding during the quarter declined to $607 million.

Speaker Change: We continue to expect average diluted shares outstanding for 2024 to be between 600 and $610 million.

Speaker Change: We have approximately $1 billion remaining under our current share repurchase authorization.

Speaker Change: With that back to you Bernard.

Thank you Scott in conclusion, we are proud of the significant progress we made in 2020 free advancing new breakthrough therapies for patients and delivering solid financial performance and healthy profitability.

Bernard Zavigian: We also look forward to a number of key developments in TMT, including the U.S. and European introduction of EVOC, the expanded global adoption of Pascal Precision, Class II-TR enrollment completion, and SAPIAD M3 approval in Europe by the end of 2025. In surgical and critical care, we remain committed to healthy growth and expanded leadership. In closing, longer term for Edwards, we are confident in our plan to expand the structural heart opportunity, which reflects our sharpened focus on valvular and non-valvular patients and our commitment to innovation. We believe that executing our strategy will create value for all of our stakeholders. With that, back to you, Mark.

Bernard: We are even more excited about 'twenty 'twenty four this year, we anticipate launching groundbreaking technologies and advancing multiple important clinical trials.

Bernard: These breakthroughs along with significant unmet patient needs give us confidence in L. A.

Bernard: Ability to accelerate the growth in 2025 and beyond in Teva will continue to drive growth and adoption of SAPIEN three ultra resilience present pivotal trial data from early Teva.

Bernard: It is symptomatic patients and enrolling I N C Alliance a pivotal trial studying the next generation SAPIEN next fall.

Bernard: We also look forward to a number of key development and T MTT, including the U S and Europe and in collection of evoke the expanded go to about adoption of Pascal precision.

Mark Wilterding: Thank you very much, Bernard. With that, we're ready to take everyone's questions. As a reminder, please limit the number of questions to one, plus one follow-up to allow for broad participation. If you have additional questions, please re-enter the queue, and management will answer as many participants as possible during the remainder of the call. Viego. Thank you.

Bernard: Can I ask two T. All enrollment completion and CPA then free approval in Europe by the end of 'twenty 'twenty five.

Bernard: And in surgical and critical care, we remain committed to a healthy growth and expanded leadership.

Operator: And if you'd like to ask a question at this time, press star one on your telephone keypad; a confirmation tone will indicate your line. You may press star two if you would like to remove your question; participants using speaker equipment it may be necessary to. And once again, please try to limit yourself to one question. Our first question comes from Larry Biegelsen with Wells Fargo. Good afternoon, thanks for taking the question and congratulations on the early approval of EVOKE in the US. I feel like I need to start there.

Bernard: In closing long as Tim Floyd walls, we are confident in our plan to expand the structural heart opportunity, which reflects a sharpened focus on value and none that have enough patients and our goal and our commitment to innovation.

Speaker Change: We believe that executing our strategy will create value for all of us take hold deals with that back to you Mark.

Thank you very much Bernard with that we're ready to take everyone's questions. As a reminder, please limit the number of questions to one plus one follow up to allow for broad participation. If you have additional questions. Please reenter the queue and management will answer as many participants as possible during the remainder of the call Diego.

Larry Biegelsen: So I'd love to hear you guys talk about your commercialization plan for EVOKE. Are you ready to launch now? Should we expect a price premium? And talk about the reimbursement pathway. Should we expect you to file an NCD?

Diego: Thank you.

Diego: And if you'd like to ask a question at this time press star one on your telephone keypad, a confirmation tone will indicate your line is the question queue. You May Press Star two if you would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys and once again, please try to limit yourself to one question and one follow up.

Bernard Zavigian: And I had one follow-up. Thank you, Larry. I hope you're doing well. Let me start, and then I will ask Devin to add some color here.

Diego: Our first question comes from Larry <unk> with Wells Fargo. Please state your question.

Bernard Zavigian: So first, the way we are thinking about this one is like we did in TAVR. We want to make sure that we are going to introduce this very novel therapy, keeping in mind building a foundation for long-term expansion. So we are going to be focusing on physician training, generating more evidence, excellent patient outcomes, making sure we have coverage, payment, and reimbursement established in the US and in Europe. So we are taking a long-term view, the same way we did in Thailand in the last 20 years. But again, David, I'm sure you want to share some of your plan. No, definitely, thanks, Bernard.

Larry: Good afternoon, and thanks for taking the question and.

Larry: Congratulations on the early approval of evoke and in the U S. I feel like I need to start there.

Larry: So I'd love to hear you guys talk about your commercialization plan for evoke are you ready to launch now should we expect a price premium and talk about the reimbursement pathway should we expect you to file.

Speaker Change: N C D and I had one follow up.

Thank you Larry I hope, you're all doing well, let me start and then I will ask you to Devine to add you know some good over here. So you don't first you know the way we are thinking about this what is like you know what you didn't cover we are we want to go to make sure that we are going to introduce some of these very novel therapy I think in mind, you know building Sunday.

Devine Chopra: You know, I'll start by saying, of course, we are very excited by this approval coming through the FDA Breakthrough Pathway. This innovation is obviously the first transcatheter technology in the US to change the life of many patients suffering from tricuspid regurgitation. As we look at kind of our rollout model, you know, as Bernard said, we're really planning a controlled rollout to technology with a focus on great clinical outcomes. And we're really gonna start with those centers who are in a clinical trial, and then over time, we'll grow to new centers. We're going to have a dedicated team of clinical case support who have been training on the over 1,000 evoked cases that have now been done to date, and this team will continue to scale as we move forward. Specifically, on your question about NCD, I think I heard a question about NCD in there and the kind of timing. Obviously, with VOC, it's a parallel review technology.

Speaker Change: Asian for long term expansion, so we're going to be focusing on physician training generating more evidence excellent patient outcome, making sure we have enough coverage at a payment to reimbursement established in the U S and in Europe. So we are what we are having here a long time long tailed view all of a sudden.

Speaker Change: We didn't put it in the last year between Geos, but again, David I'm sure you want to share some of your plan no definitely thanks Bernard.

David: Jeff by saying of course, we are very excited by this approval coming through the F. D. A breakthrough pathway. This innovation is obviously the first transcatheter technology in the U S to change the life of the many patients suffering from tricuspid regurgitation.

Devine Chopra: So CMS is working on national coverage, kind of on their own process, and we're continuing to work with them to kind of provide information to help support their process. So as we all hear more about that, you guys will definitely... Thanks, David. So, what you can see, Larry, here, we have a long-term view on this one, you know. We want, you know, to shape, you know, the space in a way that we like, and in a way that, you know, everybody is going to be very proud of, like, you know, we did for Tavern. That's helpful.

David: As we look at kind of our rollout model you know as Bernard said, we're really planning a controlled rollout the technology focus on great clinical outcomes, and we're really going to start with those centers that are who are in our clinical trial and then over time, we'll grow to new centers. We're gonna have a dedicated team of clinical case support who has.

David: <unk> been training on the over 1000 evoke cases, and I know had been done to date and this team will continue to scale as we move forward.

Bernard Zavigian: And, Devine, just one follow-up question for you. What are your thoughts on the likelihood of us seeing a statistically significant mortality benefit at one year or 18 months when the full TRICEN2 data is presented at TCT? And how important is that for adoption and reimbursement?

David: Typically on your question on I think I heard a question about N C D. In there and the kind of timing, obviously with a vote. It's a parallel review technology. So CMS is working on the national coverage kind of on their own on their own process and we're continuing to work with them to kind of provide information to help support their process. So as we all.

Devine Chopra: Thanks. Well, I think right now, as we've talked about, we've obviously shown very favorable trends in all-cause mortality, heart failure hospitalizations, and tricuspid regurgitation, and those are some of the key trends that will help us lead to our approval. Obviously, our full data set will come out at TCT in the fall, with one-year follow-up, and it's hard to speculate on what that data will show us. All right. Thanks so much.

David: All hear more about that we like you guys will definitely in the loop on that.

Speaker Change: Thanks, David.

Speaker Change: So what youre going to have your lottery here, where we have a long term view on this what we want to shape your office space.

Speaker Change: In a way that we like the way that you know everybody is going to be very proud off like we did get off of Teva.

Speaker Change: That's helpful MTV and just one follow up for you what are your thoughts on the likelihood of seeing a statistically significant mortality benefit at one year or 18 months when the full try saying two data presented at TCT and how important is that is that for adoption and reimbursement.

Robbie Marcus: Our next question comes from Robbie Marcus. Oh, great. Thanks for taking the questions and congrats on very nice data. Maybe just to follow up on that, you know, we've seen just TMTT in general, whether it's Mitral or tricuspid, maybe RAMP over the past few years, a little slower than expected. Obviously, COVID really disrupted that upward trajectory. Maybe I could speak to some of the bottlenecks that you see in the system, especially with tricuspid replacement. It's a totally new therapy, so there'll be some. Some education, I imagine, but maybe just speak to what you see as the bottlenecks and what Edwards can do to help ramp up adoption in a pretty sick patient population. Thank you, Robbie.

MTV: Well I think right now as we've talked about we've obviously showing very favorable trends in all cause mortality heart failure, hospitalizations and tricuspid regurgitation and those were some of the key trends that help us lead to our approval. Obviously, our full data set will come out of TCT and the fog with one year follow up and it's hard to speculate on what that data will.

Bernard Zavigian: So let me start on your earlier comment about, you know, a little slower than expected in the past years. And then, you know, Devine can talk about, you know, the bottleneck. So if you think about it, since the beginning, since six years ago, when we put together this vision, we have studied this patient population, mitral and tricuspid, and we knew that they were very complex and diverse, and we knew from the beginning that one device, one therapy, repair technology only, would not be sufficient. You know, repair technology, and we are very pleased about Pasquale, but it can only treat, you know, some small proportion of patients. So that is why, you know, we have this vision of having a portfolio.

Speaker Change: Yeah.

Speaker Change: Alright, thanks, so much.

Speaker Change: Our next question comes from Robbie Marcus with Jpmorgan. Please state your question.

Robbie Marcus: Oh, great. Thanks for taking the questions and congrats on a very nice data.

Robbie Marcus: And maybe just to follow up on that you know we've seen.

Robbie Marcus: Just T M T T in general, whether it's mitral and tricuspid, maybe ramp over the past few years, a little slower than expected, obviously, COVID-19 really disrupted that upward trajectory, maybe just speak to some of the bottlenecks that you see in the system, especially with tricuspid replacement, it's a totally new therapy there'll be some.

Robbie Marcus: Some education I imagine, but maybe just speak to what you see as the bottlenecks and what Edwards can do to help ramp adoption in a pretty sick patient population.

Bernard Zavigian: So, right now, what we have is this portfolio on the tricuspid side. We are on track to get also a mitral replacement. And what we are, you know, what we are going to see, what we are going to see all together is an acceleration. Clinicians will be able to treat more patients. So the dynamic in the next ten years is going to be very different than the dynamic in the last. Yeah, I'll make a couple quick comments.

Speaker Change: Thank you Robbie So let me start on your earlier comment about you know a little slower than expected in the past Yale and then David can talk about sort of a bottleneck in the system. So if you think about it you know since the beginning since you know six years ago. When we put together. This vision. We did study this patient population you might have.

Speaker Change: In fact, the speed and we knew it actually we are very complex and diverse and we knew from the beginning of that one device one therapy or repair technology only will not be sufficient.

Devine Chopra: First, you know, we're really excited because we see that the replacement technology really has the potential to treat a large number of patients, because especially in tricuspid regurgitation, no one patient is alike. There's really a huge heterogeneity in replacement we really see as the core of treating the largest number of patients. And then we see other technologies like TIER as well as other modalities that are still in trials potentially to add new patient groups on top of, We've seen in Europe where tricuspid as a therapy has been approved longer, that centers are starting to continue to build up and grow the tricuspid practice. As you bring a technology to market, you start seeing the awareness of the disease can grow, and you see more referrals, and you see more patients getting to the heart team. And some of that becomes from how are we imaging people correctly, and are we referring them correctly to centers?

Speaker Change: We have technology and we are very pleased about the Pascal but cannot be treated some.

Speaker Change: A small proportion of patients so which is why we have this vision of having a portfolio. So right now what what we are these bespoke to 41 it looks like its bit side. We are on track to get also a mitral replacement and what we are.

Speaker Change: What we are going to see what we are going to see altogether is an acceleration tradition, we'd be able to treat more patients. So if a dynamic in the next 10 years is going to be very different than the dynamic in the last 10 years.

Speaker Change: Again, even devine, yeah, I'll make a couple of quick comments first you know we're really excited because we see that the replacement technology really has the potential to treat a large number of patients because especially in tricuspid regurgitation.

Devine Chopra: And we can see that that's exactly what we see potentially that will happen now with the new therapy of tricuspid in the US. We'll be able to start building up diagnosis referral to heart, and also, we see that there's an opportunity, as you know Larry talked about at the investor conference, the TAVR group reading so much with patients, and we see that all those learnings from patient activations in the future will be able to be leveraged over to the TMTD space both for mitral and tricuspid to continue to grow the market. Great, I appreciate that. Maybe one on the TAVR market.

Speaker Change: One patients are like there's really a huge heterogeneity in replacement, we really see as the core of treating the largest number of patients and then we see other technologies like tier as well as the other modalities that are still in trials potentially to add new patient groups on top of that we've seen in Europe, where tricuspid as a therapy has been approved longer.

Speaker Change: That centers are starting to continue to build up and grow the tricuspid practice as you bring a technology to market you start seeing the awareness of the disease can grow and you see more referrals and you see more patients getting to the heart team and some of that become becomes from her imaging people correctly, referring them correctly at centers and we can see that that.

Robbie Marcus: We have the exciting data from early TAVR coming later this year at TCT. How do you think about what that will do to the tapper market growth going forward? You've put up double-digit growth in the fourth quarter. That's what guidance includes over the next few years, for the most part. How do you think about what's coming from, you know, low, intermediate, and high risk and severe? And then how do you think about asymptomatic ads? Is that just what helps keep you at double digits, or can that help accelerate growth? Thanks. Yeah, thanks. This is Larry.

Speaker Change: It's exactly what we see potentially that will happen now with the new therapy of tricuspid in the U S will be able to start building up our DAU.

Diagnosis referral to heart teams and also we see that there's an opportunity as you know Larry talked about in the Investor Conference and the tower group reading, so much with patient activation and we see that all of those learnings from patient activations in the come in the future, we'll be able to be leveraged over to the TMT space, both for mitral and tricuspid to continue to go.

Larry L. Wood: That's a great question. I think the first thing is that we're just going to learn a lot from this trial. There are a lot of unknown questions out there in terms of what percentage of patients are truly asymptomatic when subjected to a stress test. But I think the biggest thing about it is, as we've talked about, and I spent a lot of time, the time from a patient to get diagnosed or treated is just really long. And a lot of that is the interpretation of the guidelines.

Speaker Change: So the market.

Speaker Change: Great I appreciate that maybe one on the type of market, we have the exciting data from our early tapper.

Speaker Change: Coming at them.

Later this year at TCT, how do you think about.

Speaker Change: What that does to the type of market growth going forward, you've put up by double digit growth in the fourth quarter. That's what guidance includes over the next few years for the most part.

Larry L. Wood: This is a review of, And it won't require this additional evaluation of symptoms, and people can just move through. But remember, only about 13% of patients right now with severe aortic stenosis actually get treated. So there's a huge under-treatment right now. We think asymptomatic just adds. In addition, you know, Robbie, you know, what I like is our commitment.

Speaker Change: How do you think about whats coming from you know low <unk>.

Speaker Change: Intermediate and high risk and severe and then how do you think about what asymptomatic ads is that just what helps keep you with double digit or can that help accelerate growth.

Speaker Change: Yes. This is Larry that's a great question I think the first thing is we're just going to learn a lot from this trial. There is a lot of unknown questions out there in terms of what percentage of patients are truly asymptomatic when when subjected to a stress test I think how fast do people programs and what happens to people why they are waiting.

Bernard Zavigian: You know, after 20 years of TAVR, we are still super committed to bringing big evidence. Look at these two trials, PROGRESS and early TAVR. This is, you know, this is the potential, for sure, to learn more, but also to expand education, to change, you know, the guidelines.

Speaker Change: I think the biggest thing about it is.

Speaker Change: As we've talked about and I spent a lot of time at the Investor Conference. The time from a patient to get diagnosed and treated as just really long and a lot of that is the interpretation of the guidelines in this.

Speaker Change: This overlay of symptoms and its aren't really sand in the gears, preventing the patients for moving through and unfortunately, given the deadliness of disease, a lot of people never actually make it to therapy.

Larry L. Wood: So as a leader in this space, you know, for sure, we like it, we are committed, but I believe that in the next 10 years here at TAVR, we are going to see some very exciting things happen. Yeah, I think that's right, and I think it's sort of a return to a little bit of the earlier days in TAVR, where I think we are planning on having a steady cadence of new trials and new data and new evidence that continues to not only raise awareness about the therapy but also open up new opportunities for patients to get treated that don't currently get treated today. I appreciate it.

Speaker Change: I think with the early trial, assuming that it is successful it will just streamline that process, where we can just apply Greg Lang criteria do aortic stenosis and.

Speaker Change: It won't require this additional valuation of symptoms and people can just move through but remember only about 13% of patients right now with severe aortic stenosis actually get treated so theres a huge under treatment right now we think asymptomatic just add to that.

Speaker Change: In addition, you know Robbie you know what I like is our commitment.

Speaker Change: Two I still 20 years of Teva, where stimulus you've got committed to bring big evidence.

Travis Steed: Thank you. Our next question comes from Travis Steed with Bank of America. Hey, thanks for taking the question. Maybe I'll be talking about Evoque over a multi-year period.

Speaker Change: Look as you know these two triangular progress and early Teva. They this is you know this is a potential for Hulu to lay up more but also to expand indication to change it if a guy lives. So as the leader in the space you know for sure you know we like it we are committed but I believe that over the next 10 years here in Teva, we aren't going to see some very exciting things happening.

Devine Chopra: Just curious how that market develops compared to the mind chill market, if you think that it will go faster or slower. And when you think about the data that we have so far, it seems like replacement is doing better than clipping. So I don't know if you think about the mechanism of action, you know, why replacement would be better than clipping and, you know, kind of where you see a place for clipping in the market with TriCusp. Go ahead.

Speaker Change: No I think that's right and I think it's it's sort of a return to a little bit of the earlier days in Havre, where I think we're planning on having a steady cadence of new trials and new data and new evidence there continues to not only raise awareness about the therapy, but also open up new opportunities for patients to get treated they don't currently get treated today.

Devine Chopra: Yeah. So I guess I'll start off with the latter part of your question about the technology. As I kind of mentioned, we see that in replacement where you're able to really eliminate tricuspid regurgitation, we see an awesome opportunity to help patients and really improve their quality of life. And we see that replacement, with its broad applicability, really being able to treat a large chunk of those tricuspid regurgitations. The vast majority of tricuspid regurgitation

Speaker Change: Yeah.

Speaker Change: I appreciate it thank you.

Speaker Change: Our next question comes from Travis Steed with Bank of America. Please state your question.

Travis Steed: Hey, Thanks for taking the question maybe talking about evoke over a multi year period. Just curious how you think the market develops compared to the mitral market. If you think that goes faster or slower and when you think about the data that we have so far it seems like replacement is doing better than clipping.

Devine Chopra: But there's still, but again, based on the disease state and the heterogeneity of tricuspid regurgitation, there's still going to be many patients where replacement may not make sense for anatomical or other considerations, where whether it's, you know, a clasping technology or other modality may make sense. Back to your first question about how the market develops related to Mitral. You know, I think we see continued strength in this. We think the Mitral market had some early strength and kind of slowed down during COVID.

Travis Steed: If you think about the mechanism of action and a Y replacement would be better than clothing, and kind of where you see a place for clipping in the market and tricuspid.

Speaker Change: Right, Yeah, So I guess I'll start off with the the latter part of your your question about the technology is as I kind of mentioned, we see that in replacement, where you're able to really eliminate tricuspid regurgitation, we see an awesome opportunity to help patients and really improve.

Speaker Change: Their quality of life, and we see kind of replacement with its broad applicability really being able to treat a large chunk of those tricuspid regurgitation. The vast majority of tricuspid regurgitation patients, but there's still but again based on the disease state and the heterogeneity of Tri country irritation, Theres still give me many patients where replacement.

Devine Chopra: We think that the tricuspid market, as referrals and awareness of the disease continue, will continue to kind of grow at a very strong rate, at a rate that we think can kind of probably exceed Mitral, especially with the two modalities entering the market at a very similar time. So we think we'll have an opportunity to treat a larger proportion of patients.

Speaker Change: May not make sense for I anatomical or other considerations, where whether it's a you know a clasping technology or other modality may makes sense.

Travis Steed: And follow up, curious about the SMART trial. If the data there is good, if you think there's an impact on the market? And then also, there was news last week about one last competitor coming to the market in 2024. Does that change your view on 2025? And I'm just curious what kind of competition you have kind of baked into your long-term guidance. Thanks a lot.

Speaker Change: Back to your first question about how the market develops related to mitral.

Speaker Change: We see continued strength in this we think that micro market had some early strength in kind of slow down during COVID-19, we think that the tricuspid market as referrals and awareness of the disease continues we'll continue to kind of grow at a very strong rate at rates that we think thinking kind of probably exceed kind of mitral, especially with the two modalities.

Speaker Change: <unk> entering the market in a very similar time, you have an opportunity to treat a larger proportion of patients.

Larry L. Wood: With regard to this market trial, I think we'll just have to wait and see what the trial shows. But I think the key thing is thinking about how physicians select TAVR valves for their patients. And that's really a multifactorial decision.

That's helpful and follow up curious on the smart trial, if the data. There is good if you think there is an impact on the market and then also there was news last week when the one less competitor coming to the market in 2024 does that change your view on 2025 and I'm just curious what kind of competition you had kind of baked into your long term guidance. Thanks a lot.

Bernard Zavigian: I think you have to look at mortality rates, stroke, future interventions, all those things. And hemodynamics is certainly one consideration, but I don't think it's even the driving consideration compared to some of the other factors that are, you know, probably higher on the hierarchy for patients. In terms of the competitive space, you know, we didn't have a lot in 2024 because it was expected that approval was going to come late, and we know it takes time to ramp up a new therapy. We'll have to see what the impact on 2025 is and what the revised approval timing is. And, you know, there's no real value in me speculating on that. Yeah, and in addition, you know, me being in my first year as a CEO, I like to reflect a little bit on, you know, where we are as a company. And, you know, when I think about valves, you know, making a heart valve, you know, it is not easy.

Speaker Change: Sure.

Speaker Change: You know with regard to this market trial, I think well just you don't have to wait and see the trial and we don't know when it's going to show, but I think the key thing is is thinking about how.

Speaker Change: Physicians select tavern valves for their patients and that's really a multifactorial decision I think you have to look at mortality rates stroke future intervention all of those things in hemodynamics are certainly you know one consideration, but I don't think it's it's even the driving consideration compared to some of the other factors that are.

Speaker Change: Higher on the hierarchy for patients in terms of the competitive space.

Speaker Change: We didn't have a lot in 2020 for because be it was expected to approval was going to come late we know it takes time to ramp a new therapy will have to see what the impact on 2025 is and what their revised approval timing is and there's no real value me speculating on that yeah and in addition, you know as you know.

Speaker Change: Maybe it'll begin my first year as CEO I'd like to reflect a little bit about you know, where we are as a company and and you know what when do you think about valve you know, making it a havas.

Bernard Zavigian: You know, given the nature of patient needs, you know, this is not luck, you know; we have been committed and focused for more than 60 years, and we bring, you know, experience, you know, very deep knowledge of what, you know, we have seen even in the past few years, many platforms, many companies, you know, coming in and leaving the market. You know, after a year, two years, or three years. So, you know, we are leading the space with a very significant long-term commitment. You know, more than 2,000 engineers, you know, R&D, R&D specialists. We are proud of our uninterrupted leadership in the space, and we are going to continue investing. So, you know, look, for sure we take all of the competitors very seriously, but we are very confident about our leadership, about our technologies, and about our vision. Great, and congrats again on the vote approval.

Speaker Change: Easy.

Speaker Change: Given the nature of patient needs you know this is not luck.

Speaker Change: We are committed and focused you know for more than 60 years and we bring it in my experience very deep knowledge.

Speaker Change: What we have seen even in the past few years, but many platform. Many companies you know coming in and leaving the market.

Speaker Change: Yeah, two years of free Yale so.

Speaker Change: You know, we only think the space we've had a very significant long term commitment to no more than 2000 engineers R&D R&D, especially we are proud of all and then throw it to little sheep universe space and we're going to continue investing. So you know look you know four shall we take all of the competitor you tell me the very seriously, but we're but we are very confident.

Speaker Change: About our leadership about Dell technologies and about all evidence.

Speaker Change: Great and congrats again on live up approval.

Speaker Change: Thank you. Our next question comes from Patrick Wood with Morgan Stanley. Please state your question.

Operator: Thank you. Our next question comes from Patrick Wood with Morgan Stanley.

Larry L. Wood: Amazing Thanks for taking the questions I guess, maybe for the first one on <unk>.

Larry L. Wood: Thank you for taking the questions. I guess maybe for the first one on Taver and Japan in general, you know, do you think you've been taking back some share post-trial? It sounded like you felt very good about the market and you were taking back some, some share on that side, just any color you could get that would be great.

Larry L. Wood: Japan in General do you think you've been taken back some shadows trialing. It sounded like you felt very good about the market and you were taking back some some share on the outside just any any color you can give that would be great.

Larry L. Wood: Sure. You know, I think what happens when new technology comes into Japan, just because of the way the certification process works and people have to move through that process. That certainly has an impact on us. I think in Q4, you know, we grew faster than the market, and I think that really relates to some of the trials ending and people kind of moving back to our platform. But, you know, this is sort of something that goes on, but we're very pleased with how we grew in Japan in Q4 and continue to look forward to that market growing. It's a much more penetrated market than places like the U.S. and Europe, so we continue to see that as a long-term growth driver for us. It's very helpful.

Speaker Change: Sure you know I think what what happens when new technology comes into Japan, just because of the way the certification process works and and people having to move through that process are you know that certainly had an impact for us I think in Q4, we grew faster than the market and I think that really relates to some of the trialing.

Speaker Change: Ending and people were kind of moving back to to our platform, but you know this is sort of something that goes on but we're very pleased with how we grew in Japan in Q4 and continue to look forward to that market growing because it's you know a very.

Speaker Change: It's it's much more penetrated market.

Speaker Change: Just like the U S and Europe. So we continue to see that as a long term growth driver for us.

Speaker Change: That's very helpful. And then just quickly as a follow up I get this might be difficult to comment on but the faster than expected approval of a vote.

Larry L. Wood: And then just quickly, as a follow-up, I understand this might be difficult to comment on. But, you know, the faster than expected approval of evoked, you know, what in your discussions with the FDA? And what do you think they placed a great weight on in getting it, you know, comfortable with it?

Speaker Change: What in your discussions with the FDA and what do you think they placed a great weight on and getting comfortable with it and you know and the market faster than expected do you think that was like one area of data or sensor products. Because that's obviously not been the experience for everyone. So just curious to get any thoughts there.

Devine Chopra: And, you know, into the market faster than expected? Do you think there was like one area of data or sense about the products? Because that's obviously not been the experience for everyone. So just curious, can you tell us that? Yeah, no, sure. This is Devine again.

Devine: Yeah No sure. This is devine again, I'll kind of jump in this one obviously you know we received an approval through this FDA breakthrough pathway.

Devine Chopra: I'll kind of jump in with this one. Obviously, you know, we received approval through this FDA breakthrough pathway, and this was a really innovative pathway where the basis of approval was the breakthrough cohort of the 150 patients we presented at TCA. At the same time, as we worked with the FDA and answered their questions, we presented and gave them other data from our larger cohort, other descriptive statistics, and as we've mentioned, it's that larger cohort where the results really show those favorable trends in all-cause mortality, heart failure hospitalizations, tricuspid reintervention. It was those kinds of trends that I think that the FDA probably came back to us and said, Oh yeah, this kind of We probably don't need the advisory panel that led to our approval.

Devine: And this was a really innovative pathway, where the basis of approval was the baked the breakthrough cohort of the 150 patients we presented at TCT.

Devine: And but at the same time as we were working with the FDA as an answering their questions. We are presented and gave them other data from our larger cohort cohort other descriptive statistics and as you as we've mentioned and its that larger cohort where the results really show those favorable trends in all cause mortality heart failure hospitalizations.

Devine: Cockpit re interventions it was those kinds of trends that I think that we believe probably had the FDA come back to us and say Oh. Yeah. This is kind of makes sense, we probably don't need an advisory panel that led to our approval and so we're very excited that the full cohort of data the full one year cohort in the 400 patients will be presented at TCT. So we can kind.

Devine Chopra: And so we're very excited that the full cohort of data, the full one-year cohort of the 400 patients, will be presented at TCT so we can kind of see all the data, not just kind of the breakthrough cohort plus the initial kind of look at the other data. And that going forward, right, for us as we launch out this therapy, we're going to continue to have a great deal of evidence. We're going to continue to have trials and more data to help show how great this therapy really could be for patients. We plan to build this therapy with really careful physician training, great clinical outcomes, and support this therapy just like we as an organization did for TAVR not that long ago. And so I'm really excited for that long-term opportunity and what this means for helping patients. I'm looking forward to it.

Devine: See all the data not just kind of the breakthrough cohort plus the initial kind of look at the other data and that going forward right for us as we as we launch out. This therapy. We're continue to have a great deal of evidence we're going to continue to have trials and more data to help show how great. This therapy really could be for patients.

Devine: We're playing to build this therapy with really I'm careful physician training, great clinical outcomes and supporting this therapy, just like we use in Oregon as you did for tavern, not that long ago, and so I'm excited really for that long term opportunity and what this means for helping patients.

Speaker Change: Looking forward to it thanks again for taking the questions.

Larry L. Wood: Thanks again for taking the questions. Our next question comes from Vijay Kumar with Evercore Police. Hi guys, thanks for taking my question and congratulations on a nice sprint here. Maybe on the last question on EWOC, Adivin, you made some comments here about the totality of data, but I'm curious about, you know, when you think about market development, is there like a bar, like do we need to see statistical significance in mortality, like, you know, there's a reason this valve was called the forgotten valve, so I'm curious what wakes up physicians to take this valve seriously, maybe compare and contrast Yeah, no, I'll start off a little bit first with the totality of data.

Speaker Change: Our next question comes from Vijay Kumar with Evercore. Please state your question.

Vijay Muniyappa Kumar: Hi, guys. Thanks for taking my question and congratulations on a nice sprint here.

Vijay Muniyappa Kumar: Maybe on that last question on Ewok, Ideally and you made some commentary about the totality of data.

Vijay Muniyappa Kumar: But I'm curious on on.

Vijay Muniyappa Kumar: When you think about the can market.

Vijay Muniyappa Kumar: Hello.

Is there like a bar like do we need to see a statue lubricants and mortality.

Vijay Muniyappa Kumar: There is a reason this valve is called forgotten about but I'm curious what makes up physicians just take the spouse seriously.

Vijay Muniyappa Kumar: Maybe compare and contrast on how the adoption curve could look like versus I don't know if Teva is a good example of that but I would love your comments.

Speaker Change: Yeah, No I'll I'll start off a little bit person Digitalglobe data you know now with evoke we've implant and track data on clinical trials on over 1000 patients in various studies and what we've consistently seen is that these patients are patients who don't have an option. There are patients who are looking for options.

Vijay Muniyappa Kumar: You know, now with Evoque, we've implanted and tracked data in clinical trials on over a thousand patients in various... And what we've consistently seen is that these patients are patients who don't have an option. They're patients who are looking for options out there and don't feel great and can't do the things that they want to do every day in their lives. And that the Evoke technology really makes a huge difference in their lives. This concept that quality of life really does matter for patients, to be able to play with their grandkids, walk up the stairs, it really does matter. And I'm not trying to discount that these other statistics matter, right? Mortality, heart failure, hospitalization, those all matter as well.

Speaker Change: Out there and don't feel great and can't do the things that they want to do everyday in their life and that the evoke technology really makes a huge difference in their life. This concept of quality of life really does matter for patients to be able to you know pick a pay with your grandkids walk up the stairs it really does matter and.

Speaker Change: I'm not trying to discount that these other statistics matter right mortality heart failure hospitalization, those all matter as well, but we've I think shown in the breakthrough cohort that we had to starting point have this amazing quality of life improvement and that's why our indications about improvement in health status, we've got the favorable trend in the other data points.

Devine Chopra: But we've, I think, shown in the breakthrough cohort that we, at the starting point, have this amazing quality of life improvement. And that's why our indications about improvement in health... We've got the favorable trend in the other data points, all-cause mortality, heart failure hospitalization, tricuspid intervention, and those favorable trends will continue to see more data as we go in the future. But as I mentioned before, we're gonna continue beyond just this study, the tricentuple. We're gonna continue to gather data on patients. We're gonna continue to gather large data on large numbers of patients to help show how Evoque can really help patients. And I think that kind of data, along with all the other key things we talked about, careful physician training, controlled rollout, excellent outcomes, will really help create this market and really drive market development. And so it's hard for me to speculate how this will compare to technologies like TAVR, same question about Mitral, but I'm excited about what it can do. I think there's so much opportunity to grow this market. Yeah, and thank you, David. Well said.

Speaker Change: So all cause mortality heart failure hospitalization tricast through intervention and those favorable trend will continue to see more data as we go in the future, but as I mentioned before we're going to continue beyond just this study to try some new people. So we're going to continue to gather data on patients. We're going to continue to gather large data on large numbers of patients to help show how it can really help.

Speaker Change: Patients and I think it's that kind of data along with you know kind of all the other key things we talked about careful physician training controlled rollout excellent outcomes that will really help create this mark and really do the market development and so it's hard for me to speculate how this compare maybe the technologies like <unk>.

Speaker Change: However, you know same question about mitral, but I'm excited for what it can do I think there's so much opportunity to grow this market. Yeah. Thank you the video with that and we don't really expect as you think about you know Teva 20 years later, we're still generating evidence. We're still you know innovating with the E X full we still believe that there is a way to get off.

Bernard Zavigian: And we are very excited. You think about TAVR; 20 years later, we are still generating evidence. We are still innovating with the ultra-resilient X4. And we still believe that there is a way for TAVR to grow at a healthy double digit rate in the many years to come globally. So for TMTT Evoque, we are probably thinking the same thing. It is not the next five years; it's the next 10 or 20 years here that we are thinking of.

Speaker Change: Teva needs to grow at healthy double digits for many years to come globally. Some fault him. So here you know 40 MTT evoke it's probably you know thinking the same if he's not in the next five years. The next 10 or 20 years here that we are thinking off yeah, just just to pile on on that having spent so much time in this conversation.

Larry L. Wood: Yeah, just to pile on top of that, having spent so much time in this TAVR space, when we deal with regulators and with payers and stuff, there's a lot of focus on mortality, and people get really, almost singularly focused on it. But spending the time with the patient groups that I spend, living longer but living poorly is not an option. If you told them they had this exact same life expectancy, but their quality of life would dramatically improve, that's far more valuable to them, and I think when you can get that quality of life improvement, and you can get the mortality benefit, that's where you really have the home-run therapies like what we've seen with TAVR, and so that's really what we're trying to build on, but I wouldn't discount the quality of life That's helpful. And maybe, Scott, I have one quick one for you on this Q1 EPS guide. I think at the midpoint, it's slightly below street level.

Speaker Change: When we deal with regulators and with payers and stuff. There's a lot of focus on mortality and people get really almost singularly focused on it but spending the time with the patient groups that I spent living longer but living poorly it's not a feature to that if if you told me I have to say exactly life expectancy, but their quality of life would dramatically improve thus far.

Speaker Change: More valuable to them and I think when you can get that quality of life improvement and you can get the mortality benefit benefit that's where you really have no home run therapies like what we've seen with <unk> and so that's really what we're trying to build on but I wouldn't discount the quality of life benefits, they're really significant for patients.

Speaker Change: Understood that's helpful and maybe Scott one quick one for you on this Q1 EPS Guide I think at the midpoint is slightly below she I'm curious on.

Vijay Muniyappa Kumar: I'm curious about what's driving that. Is that a step up in OPEX, or is that a gross margin or below the line sort of issue that's impacting Q1 EPS? Yeah. It's a couple of things, but largely it relates to just the lumpiness of SG&A and R&D and in what period we record those expenses.

Scott: What's driving that is that a step up in opex or is that a gross margin or below the line sort of issue that's impacting Q1 EPS.

Scott: It's a couple of things, but largely it relates to just the lumpiness of SG&A and R&D and what period, we record those expenses you know Q1.

Scott B. Ullem: You know, in Q1, the increase in OPEX will outpace revenue according to our current forecast, and that's the reason why we end up with the midpoint of the range of 64 cents level with the EPS from the fourth quarter. But overall, it's important to remember that for the full year, we're expecting bottom-line growth to exceed top-line growth once you get through the different quarter-to-quarter cadence. Thanks, guys. Our next question comes from Matt Taylor with Jeff.

Scott: The increase in Opex will outpace our revenue according to our current forecasts and that's the reason why we ended up with the midpoint of the range of 64 cents level with the EPS from the fourth quarter, but overall, it's important to remember that for the full year, we're expecting bottom line growth to exceed topline growth once you get through the different.

Scott: Quarter to quarter cadence.

Speaker Change: Thanks, guys.

Speaker Change: Our next question comes from Matt Taylor with Jefferies. Please state your question.

Matt Taylor: Hi, thanks for taking the question. I wanted to ask you... Do you think that the delays that your competitors are having in the U.S. would have any impact on international markets? Does it provide you with an opportunity to gain any share? Does it change anything?

Matt Taylor: Hi, Thanks for taking the question.

Matt Taylor: I wanted to ask you.

Matt Taylor: You thought that delays that your competitors, having in the U S would have any impact on international markets does it provide you an opportunity to gain any share does it change anything.

Larry L. Wood: You know, we'll have to see what the impact is. We certainly have seen cases where U.S. data has impacted international share and international markets. I think it just depends on what the data is.

Matt Taylor: Hum.

Matt Taylor: Well that will have to see what the impact is we certainly we've seen cases, where where U S data has impacted international share in international markets I think it just depends on what the date is but I think the reality is there's been no data released.

Larry L. Wood: But I think the reality is there's been no data released. All there's been is just a signal that they're delaying their approval and waiting for additional data. So I don't know how much people are going to react to that.

Matt Taylor: The other thing is just simply a signal that.

Matt Taylor: They're delaying their approval and waiting for additional beta so I don't I don't know how much people are going to react to that the other thing is is there's more that goes into to the purchasing decision oftentimes, especially in Europe than clinical data and for the people that are purchasing on price because there's favorable pricing and it's a significant discount I dunno, how much battle.

Larry L. Wood: The other thing is there's more that goes into the purchasing decision, oftentimes, especially in Europe, than clinical data. And for the people that are purchasing on price because there's favorable pricing and it's a significant discount, I don't know how much that will be impacted. Gotcha. And can I ask one follow-up question? You mentioned the activation of patients a few times. I know you're doing a lot there. Are you doing anything new and different there, or is it kind of more of the same? I just was noticing the call-outs on this call.

Matt Taylor: That'll get impacted.

Speaker Change: Got you.

Speaker Change: Just one follow up on you mentioned the activation of a patient a few times.

Speaker Change: And doing a lot there are you doing anything new and different there or is it is it kind of more of the same.

Speaker Change: The only thing to call out on this call.

Matt Taylor: Oh, I think we continue to do a lot of new things. We're running a number of programs. I think one of the things that I talked about at the investor conference is, I know there's a lot of speculation on and skepticism, frankly, on the under-treatment rates and whether all those patients really are there. But I can tell you we've done enough work in major health systems where we've applied things like AI to the echo reports, and we can absolutely definitively say the patients are there. They're just not moving through the system for a variety of reasons.

Speaker Change: Oh I think we continue to do a lot of a lot of new things, we're running a number of programs I think one of the things that I talked about at the Investor Conference is I know Theres a lot of speculation on.

Speaker Change: Skepticism frankly on the under treatment rates and are all those patients really there I can tell you. We've done enough work in major health systems, where we've applied things like AI to the Echo reports and we can absolutely definitively say the patients are there theyre just not moving through the system for a variety of reasons. So the first thing you have to do is validate the second thing you have to do.

Larry L. Wood: So the first thing you have to do is validate. The second thing you have to do is get people to understand what to do about it, and then you have to move them through the process of getting treated. And we have multiple things that we're working on to drive those patients through, but we are literally continually evolving these programs to try to optimize them to activate patients off the sidelines and move them through the system in a streamlined fashion. Thanks a lot, Larry...

Speaker Change: Always get people to understand what to do about it and then you have to move them through the process and get treated and we have multiple things that we're working on to drive those patients through but we are literally continually evolving these programs to try to optimize them to activate patients off the sidelines and moving through the system industry wide fashion.

Speaker Change: Okay. Thanks, a lot Larry.

Speaker Change: [laughter].

Speaker Change: Our next question comes from Matt mixed sick with Barclays. Please state your question.

Bernard Zavigian: Our next question comes from Matt Miksic with Barclays. Hi, thanks so much for taking the question. I had one on EVOKE and one follow-up on margins, if I could.

Matt Taylor: Hi, Thanks, so much for taking the question so I had one.

Okay.

Matt Taylor: Our margins are quite good so that's.

Matt Miksic: So not to put too fine a point on it, but moving from the middle of your PMPT range to the high end is like 10 to 20 million bucks. And so we think EVOKE came about five, six months early. Is that telling us, you know, what we need to know about your sort of expectations for the run rate this year? You know, knowing what we know now, I guess, and the brokers. We've just got started in the U.S. No, Matt, thanks so much for the question. It's Devine again.

Matt Taylor: Not to put too fine a point on it but moving from the middle of your D&C range to the high end.

Matt Taylor: 20 million Bucks and so if we think about Evo came about.

Matt Taylor: Six months early is that tell us what we need to know about your sort of expectations for the run rate this year.

Speaker Change: Knowing what we know now yes and.

Speaker Change: Brokers and you just get started in the U S.

Speaker Change: One follow up.

Speaker Change: No Matt Thanks, so much for the questions Devine again, yeah as.

Devine Chopra: Yeah, as you first look at the timing of it, right, we kind of said mid-year was kind of our initial estimation, and mid-year has got a couple-month kind of window, so this definitely was up by a couple months earlier than we kind of expected. And so based on what we know now, we continue to be confident in what we think Evoque can do. And obviously, we'll see as we get through adoption and start moving through centers, training, how fast the rate is. But that helped us bring this up just a little bit. I think the only other comment I'll make is things like new technology add-on payments, which are helpful for hospitals to help ensure that they're adequately kind of profitable and doing a good job when they go online October 1st. And that date doesn't really change whether you get early approval or late approval.

Matt Taylor: If you first look at the timing of it right. We've kind of said mid year was kind of our initial estimation in midyear. It's got a couple of month kind of window. So this definitely was up by a couple of months earlier than we kind of expected.

Matt Taylor: And so based on what we know now we continue to be confident in our and what we think of Oak can do and obviously, we'll see as we get through adoption and we start moving through centers training on how fast the radar, but that that help us bring this up just a little bit I think the only other comment I'll make is things like a new technology add on payments.

Matt Taylor: Which are helpful for hospitals to help ensure that there are adequately profitable and do a good job comes online October 1st and that date doesn't really change whether you get earlier approval or laser approval. So there are some factors like that but you know we'll continue to look at as we adapt over the course of the ear and how it grows and give updates as is.

Devine Chopra: So there are some factors like that. But, you know, we'll continue to look at as we adapt over the course of the year and how it grows and give updates as we go. That's great.

Matt Taylor: If needed.

Speaker Change: That's great and then the follow up on the margin question just now on the activities.

Matt Miksic: And then to follow up on the margins and Matt's question just now on the activity that you're getting after in the field. So you hired these folks, I guess, in the fourth quarter, which is part of the step up in spending there. First, did that have an impact in Q4?

Speaker Change: You're getting after the deal.

Speaker Change: So you hired folks.

Speaker Change: And I guess in the fourth quarter, which is part of the step up.

Speaker Change: And spending there just wondering first.

Speaker Change: Did that have any impact.

Scott B. Ullem: Can you talk a little bit about the benefits that you're seeing so far from those investments? And then, second, are you continuing those investments or, to your point earlier, Scott, about leverage against those investments? Are you kind of done, you know, and now it's about achieving leverage against sort of a set of additional spend that you've put into the field? Thanks for the question, Matt.

Speaker Change: Or can you talk a little bit about the benefits that you're seeing so far from those investments and then second.

Speaker Change: Are you continuing those investments or you.

Speaker Change: To your point earlier, Scott about like leverage against those investments are you kind of done.

Speaker Change: And now it's about about achieving leverage against that.

Speaker Change: Yeah.

Speaker Change: Additional spend that you've put into the field.

Speaker Change: Field.

Speaker Change: Thanks for the question, Matt Yeah, We're just getting started with building out our field force both for evoke but as long as we continue to expand the presence of our overall T. M. G. T portfolio. So this is the beginning of an investment in building a foundation of the team in the field not the and you should expect that.

Scott B. Ullem: Yeah, we're just getting started with building out our field force, both for Evoque, but as well as we continue to expand the presence of our overall TMTT portfolio. And so this is the beginning of an investment in building a foundation for a team in the field, not the end. You should expect that we're going to continue to grow our resources and invest in the field team. And, by the way, that's not limited just to TMTT.

Speaker Change: Going to continue to grow our resources and invest in the field team.

And by the way that's not limited just to tee MTT to ever continues to grow aggressively and we're investing more resources to support that growth as well one of the things we're doing those as looking carefully at general and administrative expenses globally and as Edward says put down a broader global footprint. It gives us an opportunity to.

Scott B. Ullem: TAVR continues to grow aggressively, and we're investing more resources to support that growth as well. One of the things we're doing, though, is looking carefully at general and administrative expenses globally. And as Edwards has put down a broader global footprint, it gives us an opportunity to get some leverage from scale. And so we're going to be continuing to look closely at that and making sure that we're being as efficient as we can be on the P&L. Okay, and then on the TAVR side, did you see any results that you felt from these field activations and patient activation efforts in QPOR, or is that something that's still to come? Thanks.

Speaker Change: Get some leverage from scale and so what we're gonna be continuing to look closely at that and making sure that we're being as efficient as we can be on the P&L.

Speaker Change: Okay, and the tower side or did you see any results from these deals activations.

Speaker Change: And activation efforts in Q4 or is that does that.

Speaker Change: It's still to come thanks.

Matt Miksic: Matt, I think we saw some benefit from the patient activation initiatives that we have in place. It's tough to isolate those from the other efforts that we have underway to continue to support the growth of TAVR, but no, that's certainly helping drive growth in the fourth quarter and beyond. Just to add on to this, I mean, I...

Speaker Change: Yeah, I think Matt I think we saw some some benefit from our patient activation initiatives, we have in place it's tough to isolate those.

Speaker Change: The other efforts we have underway to continue to support the growth of tougher, but no. That's it certainly.

Speaker Change: Helping drive growth in the fourth quarter and beyond just add on to this I mean I.

Larry L. Wood: I think it would be incorrect to say our patient activation efforts are just starting to pay dividends now. We've been doing patient activation for the last, I don't know, five or six years through our digital campaigns, through some of our website stuff, some of our patient resources, some of the general cardiology awareness events we do, and a number of other things that have been driving this. So I think patient activation has been contributing all the way along the way. I think what we're talking about now, though, is a much more sophisticated approach and program to really tapping into these untreated patients that are in the system, but hospitals don't really realize that they're there and how do we bridge those gaps. And that's really where our activation now is because we know the patients are there. We know they're diagnosed with an echo, but they're not moving.

Speaker Change: I think it would be it would be incorrect to say our patient activation efforts are just starting to pay dividends now we've been doing patient activation for the last I don't know.

Speaker Change: Five or six years through our digital campaigns through.

Speaker Change: Some of our website some of our patient resources some of the the general cardiology awareness events, we do it in a number of other things that have been driving it. So I think patient activation has been contributing all the way along the way I think what we're talking about now though is a much more sophisticated approach and program to really tap in to these untrue.

Speaker Change: Patients that are in the system, but hospitals don't really realize that they are there and how do we bridge those gaps and that's really where our activation nowadays because we know the patients are there we know they're diagnosed with an echo, but they're not moving and so it's just a matter of tapping into those patients in the right way and getting an accelerated through the system, what what's fair to civil.

Bernard Zavigian: And so it's just a matter of tapping into those patients in the right way and getting accelerated. What's fair to say, though, is that in the past years, you know, we have done many pilots, many initiatives. You know, we have extracted so many learnings. What we are doing right now is scaling. We are scaling, you know, spending resources in Q4 last year, this year, and the next few years. So you are going to see more and more because we believe there are so many patients in need not receiving treatment. Super helpful, thank you.

Speaker Change: Is the past few years, we have done many pilots many initiatives.

Speaker Change: We have extra.

Speaker Change: Extracted so many learnings what we are doing right now is scaling we are scaling it spending we are spending resources in but in Q4 last year. This year to the next few years. So you you are going to see more and more because we believe there are so many patients in need not receiving a treatment.

Speaker Change: Super helpful. Thank you.

Speaker Change: Thank you and our next question comes from Chris Pasquale with Nephron Research. Please state your question.

Chris Pasquale: And our next question comes from Chris Pasquale with Nefron Research.

Chris Pasquale: Thanks, I think I heard you mentioned patient activation not just with regard to tableau, but also as an important part of the evoke rollout.

Devine Chopra: I think I heard you mention patient activation, not just with regard to TAVR but also as an important part of the evoke rollout. I was encouraged to hear from a lot of physicians back at CCT that they're actually seeing many more of these tricuspid patients in their practice. So, as you think about the initial launch here, do you expect to have to do a lot of work establishing referral channels? Or do you think there are already a large number of these patients identified and waiting for treatment? Yeah, hey, Chris, this is Devine.

Chris Pasquale: I was encouraged to hear from a lot of physicians back at CCT is actually seeing many more of these tricuspid patients in their practice so.

Chris Pasquale: As you think about the initial launch here do you expect to have to do a lot of work establishing referral channels or do you think there are already a large number of these patients identified and waiting for treatment.

Chris Pasquale: Yeah, Hey, Chris This is Devine no I appreciate it I think at least my reference to word in patient activation and how we think about in TMT T is more over the longer term right and we're thinking about there's so much learning the tavern happening where yeah. We're doing some things right now we're testing some things, but it's really about over the mid <unk>.

Devine Chopra: No, I appreciate it. I think at least my reference toward patient activation and how we think about TMPT is more over the longer term, right? And we think about, there's so much learning that TAVR is doing where, yeah, we're doing some things right now, we're testing small things, but it's really about, over the midterm, how do we kind of help scale patient activation in a way that TAVR has been doing and really helps drive kind of organic growth and the number of patients being diagnosed and being referred to heart. Well, the other point I'd kind of make is that, you know, right now, I think that most of our time or a lot of our energy is really about building capabilities for getting centers up and running. There are a lot of patients in the center.

Chris Pasquale: Term, how do we kind of help scale pay patient activation in a way that kind of <unk> been doing in and really helps drive kind of organic growth and number of patients being diagnosed and are being referred to heart teams well what are the other point I'll kind of make is that you know right now I think that most of our time or a lot of our enter.

Chris Pasquale: <unk> is really about building capabilities for gainers getting centers up and running so there are a lot of patients in the center. If you look at how our trials enrolled especially the <unk> two trial enrolled really fast in a role very quickly. So we know there's definitely groups of patients who now are looking for options they've been diagnosed I'm looking for.

Devine Chopra: If you look at how our trials enrolled, especially the TRISEN-2 trial, it enrolled really fast; it enrolled very quickly. So we know there are definitely groups of patients who are now looking for options. They've been diagnosed and are looking for options. But as we grow over time, we're going to continue to try to build off that and leverage a lot of those kinds of TAVR kinds of patient activation. That's helpful, thanks. And then there's a lot of focus, and rightly so, on the new U.S. products, but you've got a couple in Europe, Sapien 3, Ultra Resilia, and Mitra's Resilia, both rolling out there. Are the price premiums for those products in Europe the same as what we see in the U.S., and do you think you can get similar adoption in what is a more price-sensitive market? Yeah, I'll start, and then if Wayne has anything to add, he can

Chris Pasquale: For option, but as we grow over time, we're going to continue to try to build off that and leverage a lot of those kind of a have or kind of patient activation efforts.

Speaker Change: That's helpful. Thanks, and then a lot of focus and rightly so.

Speaker Change: So on the new U S products, but you've got a couple in Europe, SAPIEN, three ultra Australia, and nitrous Brasilia, both rolling out there are the price premiums for those products in Europe. The same as what we see in the U S. And do you think you can get similar adoption in what is a more price sensitive market.

Speaker Change: Yeah, I'll start and then has anything to add he can.

Larry L. Wood: You know, the price premiums are different in the different markets because it all depends on kind of where the starting price was. So we went for larger premiums in Europe than what we did in the U.S. And so in more price-sensitive markets, obviously, that's more of an issue. So we've seen more rapid adoption of our resilience-based therapies in the U.S., but we continue to see this growing in Europe. And I think we're really gaining momentum on our resilience platforms. I don't know, Wade, did you have anything to add?

Speaker Change: Price freedoms are different in the different markets because it all depends on kind of where the starting price was so we went for larger premiums in Europe and then what we did in the U S and and so a more price sensitive market, obviously that that's more of an issue. So we've seen more rapid adoption of our resilient based therapies in the U S. But we.

Speaker Change: Continue to see this growing in Europe, and I think we're really gaining momentum on our resilient platforms and in total on a way to do you have anything to add.

Speaker Change: Maybe just a couple of things I'd add was just if you think about our global adoption of the resilient premium technologies. We're also seeing tremendous growth out of emerging markets.

Larry L. Wood: https://www.youtube.com Global Adopt, The Bulletproof Executive 2013, A lot of those emerging markets. It's certainly been a global effort. Strong Group. Great, thanks.

Speaker Change: And a lot of those emerging markets are finding and identifying patients that can be best treated surgically with a resilient portfolio. So it's been a it's been certainly a global effort, but strong strong growth out of the emerging markets, even with premium technology, which is encouraging to see here.

Speaker Change: Great. Thanks.

Chris Pasquale: Thank you. And our final question for today comes from Danielle Antalffy with UBS. Good.

Speaker Change: Yeah.

Speaker Change: Thank you and our final question for today comes from Daniel <unk> with UBS. Please state your question.

Danielle Antalffy: Thanks so much, guys. Thanks for taking the question. Larry, just a quick question for you on the PROGRESS trial in moderate aortic stenosis. I mean, I know this isn't the first time we've heard about the speed of enrollment in that trial, but it's certainly a positive signal. And I guess my question for you is, is there anything to read into the potential opportunity there based on the speed of

Daniel: Great. Thanks, so much guys. Thanks for taking the question.

Daniel: Larry just a quick question for you on the progress trial in moderate aortic stenosis I mean I know this isn't the first time were hearing about the speed of enrollment in that trial, but its certainly a positive signal and I guess my question for you is is there anything to read into the offer the potential opportunity there.

Daniel: Based on the speed of enrollment was there anything unique about the trial that allowed us to enroll so much faster than you guys expected and what.

Larry L. Wood: Was there anything unique about the trial that allowed us to enroll so much faster than you guys expected? And what could this mean, number one, for potential approval, number two? But number two, just more broadly, once we see this data uplift across the market? Yeah, thanks, Danielle.

What could this mean.

Daniel: You know for potential approval number one but number two just more broadly once we see this data uplift across the market.

Speaker Change: Yeah, I think thanks, Danielle you know I think clinical trial enrollment I think is always an important marker for the opportunity and I think having rapid clinical trial enrollment I think that certainly certainly speak to that opportunity I think it also speaks to the fact that everything we've done in the <unk>.

Larry L. Wood: You know, I think clinical trial enrollment is always an important marker of opportunity, and I think having rapid clinical trial enrollment does certainly speak to that opportunity. I think it also speaks to the fact that everything we've done in the partner series of trials has still been just isolated to severe aortic stenosis, and most of that work is, is it better to do surgery, or is it better to do TAVR? What I think there's a lot of enthusiasm and excitement about now is actually attacking the disease in a different way and saying, should we be waiting until patients are literally at the end stage before we even consider doing anything, or should we be evaluating those patients sooner? And I think that could have two benefits.

Speaker Change: Partner series of trial is nobody just isolated to severe aortic stenosis and most of that work is is it better to do surgery is it better to do tavern, what I think theres a lot of enthusiasm and excitement about now is actually attacking the disease in a different way of saying should we be waiting until patients are literally be in stage before we even consider doing anything.

Speaker Change: Or should we be evaluating those patients sooner and if and how do you think that could have two benefits. The first is <unk>.

Larry L. Wood: The first is, if we showed that treating moderate patients is important and has real advantages for those patients, then I think it could provide a real accelerant for those severe patients that aren't moving today. And I think we saw that when we went from high risk to intermediate risk. We got the intermediate risk approvals. One of the biggest accelerations we saw was in the high risk space, because people were like, if we're having a debate in the intermediate, then high risks are automatic at this point. But I think the other thing about it is, if we can show a benefit in these moderate patients, there are literally twice as many moderate patients as there are severe patients. And so when we think about long-term and just continual opportunities to drive the market, I think this steady cadence of data with early TAVR coming later this year at TCT, and then we're talking about a couple years, you know, two and a half years later That makes sense.

Speaker Change: If we showed the treating moderate patients is important and it has real advantages for those patients then I think it could drive a real accelerant for those severe patients that arent moving today and I think we've seen that when we when we went from high risk intermediate risk. We got the intermediate risk approval is one of the biggest acceleration that we saw was in the high risk.

Speaker Change: This because people are like Oh, you know parameter debate in the intermediate and high risk is there are automatic at this point, but I think the other thing about it is as if we can show a benefit in these moderate patients theres literally twice as many moderate patients is there are severe patients and so when we think about long term and just continual.

Speaker Change: Opportunities to drive the market I think there's a steady cadence of data rich early time are coming.

Speaker Change: Later this year at TCT and then we're talking about a couple of years, two and a half years later, we get the progress trial that steady cadence of data, we think it's going to be important for informing patients and improving treatment rates.

Speaker Change: That makes sense I'll leave it at that thanks, so much guys.

Danielle Antalffy: I'll leave it at that. Thanks so much, guys. So in closing, I am very proud of what we did last year. 2023 was a great year. Strong performance across our four product groups globally. When I think about this year, 2024, I'm super excited. You know, we are going to have multiple breakthrough technologies, clinical trials in TAVR, TNTT, and surgery. Here we have a chance. The same way we did it in Taverner 20 years ago, shaping the TMTT space with Evoque and providing basically a toolbox to physicians to treat so many patients. So that's a very unique opportunity that we are taking very seriously... The spinoff of Critical Care, we are executing on this one also in 2024, so I'm super confident that this year is going to be a super exciting year, and we are going to be very well positioned to accelerate growth in 2025 and beyond. So with that, thanks for your continued interest in Edwards. Scott, Mark, and I welcome any additional questions by telephone. Thank you, everyone. Thank you. This concludes today's conference. All parties may now participate.

Speaker Change: So in closing I am very proud about what we did last year 'twenty 'twenty free was a great year strong performance across our four product groups globally.

Speaker Change: I think about VCR twenty-two default I'm Super excited.

Speaker Change: We do have multiple breakthrough technologies critical trial integrity TNT T cells you can.

Speaker Change: We have a chance the same way we did it in there. It was 20 years ago to shape, a TMT space with evoke and providing basically on a toolbox to physician to treat you to so many patients. So when I see very unique opportunity that we have taking it very seriously but.

Speaker Change: The spinoff of critical care, we now because he could take on these one off sooner than 'twenty 'twenty four so I'm confident that this year is going to be a super exciting year, and we are going to be very well positioned to accelerate the graph in 'twenty 'twenty five and beyond.

Speaker Change: So with that thanks for your continued interest in Nols, Scott Mark and I welcome any additional questions by telephone. Thank you everyone.

Speaker Change: Thank you. This concludes today's conference all parties may now disconnect.