Q1 2024 Edwards Lifesciences Corp Earnings Call

Operator: Greetings and welcome to the Edwards Lifesciences first quarter 2024 results. At this time, all participants are in a listen-only mode.

Greetings and welcome to the Edwards Lifesciences first quarter 2024 results.

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

Operator: 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. It is now my pleasure to introduce your host, Mark Wilterding, Senior Vice President, Investor Relations. Thank you. You may begin.

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

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 Mark Walter Lang Senior Vice President Investor Relations. Thank you you may begin.

Speaker Change: Thanks, a lot Diego and good afternoon, and thank you all for joining US with me on today's call is our CEO Bernard.

Mark Wilterding: And good afternoon, and thank you all for joining us. With me on today's call is our CEO, Bernard Zovighian, and our CFO, Scott Ullem. Also joining us for the Q&A portion of the call will be Larry Wood, our Global Group President of TAVR and Surgical Structural Heart, Daveen Chopra, our Global Leader of TMTT, Wayne Markowitz, our Global Leader of Surgical Structural Heart, and Katie Szyman, our Global Leader of Critical, Just after the close of regular trading, Edwards Lifesciences released first quarter 2024 financial, During today's call, management will discuss these results included in the press release and accompanying financial schedules, and then use the remaining time for Q&A.

Speaker Change: And our CFO Scott all of them also joining us for the Q&A portion of the call will be Larry Wood, Our global group President of Teva in surgical structural heart Devine Chopra, our global leader of T. M. T T Wayne Markowitz, our global leader of surgical structural heart and kidneys Aiman, a global leader of critical care just after the close of regular trading Edwards life Sciences.

Speaker Change: As released first quarter 'twenty 'twenty four financial results during today's call management will discuss these results included in the press release and accompanying financial schedules 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 guide.

Mark Wilterding: Please note that management will be making forward-looking statements that are based on estimates, assumptions, and projections. 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 Fluctuation. Statements speak only as of the date on which they were made, and Edwards does not undertake any obligation to update them. Additionally, the statements involve risks and uncertainties that could cause actual results to differ materially.

Speaker Change: 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 date on which they were made and Edwards does not undertake any obligation to update them. After today. Additionally, the state.

Speaker Change: 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 may be found in the press release, our 2023 annual report on Form 10-K, and Edwards' other SEC filings all of which are available on the company's website at Edwards dotcom.

Mark Wilterding: Information concerning factors that could cause these differences and important product safety information may be found in the press release, our 2023 annual report on Form 10-K and Edwards' other SEC filings, all of which are available on the company's website at www.edwards.gov. Finally, 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 this call are also included in today's press release. With that, I'd like to turn the call over to Bernard for his comments.

Speaker Change: Finally, 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 this call are also included in today's press release with that I'd like to turn the call over to.

Speaker Change: Bernard for his comments Bernard thank.

Bernard J. Zovighian: Thank you, Mark. We are pleased with our total company performance, first quarter sales growth of 10% to $1.6 billion versus the year-ago period. As a result, we are raising our 2024 self-guidance to the high level of 8 to 10%. As we look ahead, I'd like to share some thoughts about the strategic direction of our company. Edwards is well positioned to extend its leadership and deliver sustainable growth driven by the strategic investments we have made across our transcatheter platforms to address the large and growing needs of patients impacted by aortic, mitral, and tricuspid disease.

Bernard: Thank you Mark we are pleased with our total company performance with first quarter sales growth of 10% to $1 6 billion versus the year ago period.

Bernard: As a result, we are raising our 'twenty 'twenty four sales guidance to the high end of 8% to 10%.

Bernard: As we look ahead I'd like to share some perspective about this partnership direction of the company.

Bernard: Edwards is well positioned to extend our leadership and deliver sustainable growth driven by the strategic investments. We have made across all fronts ketchup platforms to address the large and growing needs of patients impacted by aortic mitral and tricuspid does.

Bernard J. Zovighian: We remain confident in the many opportunities to grow TAVR over the long term. In addition, TMTT is becoming an increasingly significant contributor to Edwards' growth, and we expect this to continue. An important element in our valve innovation leadership is our advanced tissue technology. We have been an innovator in tissue technology for more than 50 years, and we are pleased with our latest technology innovation. With differentiated evidence of advanced durability, this technology is used across our comprehensive portfolio with a focus on lifetime management of the patients we serve.

Bernard: We remain confident in the many opportunities to grow with tavern will go on for a long time. In addition, TMT teams, becoming an increasingly significant contributor to <unk> growth.

Bernard: We expect this will continue.

Bernard: An important element.

Bernard: I will vote of innovation leadership is all advanced tissue technology.

Bernard: We have been and you know they dealing tissue technology for more than 50 years, and we are pleased with our latest cyclical resilience.

Bernard: We've differentiated evidence of advance your liability.

Bernard: Technology is used across all complaints if I've got a photo with a focus on lifetime management well the patience we sell.

Bernard J. Zovighian: We are pleased that half a million patients will benefit from this tissue technology by the end of 2024. As the global leader in structural art, we remain deeply committed to bringing the highest quality evidence, groundbreaking technology, and world-class physician support to advance science and meaningfully improve patient care. This year, we are already making significant progress on multiple clinical trials and next-gen technology. In January, we achieved an important milestone with the completion of patient treatment in progress. A pivotal trial studying the treatment of moderate aortic stenosis patients, a population estimated to be twice as large as severe aortic stenosis, began in February.

Bernard: We are pleased that how do you send me those patients will benefit from this tissue technology by the end of 'twenty 'twenty four.

Bernard: As the global leader, having talked to you in hot we remain deeply committed to bringing the highest quality evidence.

Bernard: Groundbreaking technology.

Bernard: World Class physician support to advance science and meaningfully improve patient care.

Bernard: This year, we are already making significant progress on multiple clinical trials and next Gen technologies.

Bernard: In January we achieved an important milestone with the completion of patient treatment in progress.

Bernard: People try and studying the treatment of moderate aortic stenosis patients.

Bernard: Population is estimated to be twice as large a severe aortic stenosis.

Bernard: In February.

Bernard J. Zovighian: EVOC became the first transcatheter therapy to receive US FDA approval for the treatment of patients with tricuspid regurgitation. Evoque is a groundbreaking treatment option that not only has the potential to improve quality of life but also has favorable clinical trends in all-cause mortality, re-intervention, and heart failure hospitalization. In March, at the annual CRT conference, we announced compelling results from two large real-world studies demonstrating continued excellent outcomes for patients treated with the Edwards Sapien Valve Platform and earlier this month at the American College of Cardiology conference.

Bernard: Evoke became the theft frustrated you feel happy to receive U S. FDA approval for the treatment of patients with tricuspid regurgitation.

Bernard: Evoke is a groundbreaking treatment options that not only has the potential to improve quality of life, but also show the favorable clinical trends in all cause mortality re intervention and heart failure hospitalization.

Bernard: In March.

Bernard: And you will see at your conference we announced compelling result from two large real World studies, demonstrating continued excellent outcome for patient twitchy Louise the Edwards SAPIEN valve platform.

Bernard: And what do you have the smallest of the American College of Cardiology Conference, we announced data from the huddle steady.

Bernard J. Zovighian: We announce data from the HEDL study. Initiated by Edwards in 2021 with our partner at NFL Alumni Health, the study examined the prevalence of structural heart disease among groups historically known to experience disparities in access to care. Edwards is committed to helping identify and dismantle barriers to access for communities that are underserved due to race, gender, and socioeconomic status.

Bernard: Initiated by EDA wells in 2021 with a partner like NFL health. The study examining the prevalence of talk doing heart disease. Among groups you still if you know do we experienced disparities in access to care.

Bernard: Ed walls, he's committed to helping you don't you fight and dismantle Darius.

Bernard: Access for communities that don't undersell due to race gender and socio economic status.

Bernard J. Zovighian: Each of these reflect our deep commitment to advancing patient care through our differentiated strategy and reinforce our confidence in sustaining the growth of transcatheter-based structural heart intervention. Now, I will provide some additional details on Q1 results by product group. Interview, The first quarter global sales of $1 billion increased 8% year-over-year when adjusted for billing days. Q1 marked the first quarter that Edwards' tavern sales exceeded $1 billion.

Bernard: Each of these reflect our deep commitment to advancing patient care through our differentiated strategy and reinforce our confidence in sustaining bugger off I forget to tell based talk to you about how can tell ancient.

Bernard: Now I will provide some additional detail on Q1 results by by product group.

Bernard: In Tahoe.

Bernard: First quarter global sales of $1 billion increased 8% year over year when adjusted for billing days.

Bernard: Q1 marked the first quarter, that's a dwarf sales exceeded 1 billion.

Bernard J. Zovighian: An exciting milestone for our team and a testament to clinicians' confidence in our leading technology. Performance was driven by growth in the U.S. and Japan, Edwards' global competitive position, and selling prices were both stable. In the U.S., our year-over-year first quarter Taversells growth rate was higher than our global constant currency growth rate.

Bernard: An exciting milestone for our team and a testament to clinicians confidence.

Bernard: We have leading technology.

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

Bernard: Global competitive position and selling prices were both stable.

Bernard: In the U S O the year over year felt quite well since its growth rate was higher than our global constant currency growth rate.

Bernard J. Zovighian: We estimate total procedure growth was comparable because procedure volumes increased as the quarter progressed. We remain pleased with the continued performance of our best-in-class TAVR platform, Sapien3 Ultra Resilient, which builds on Edwards' long-standing leadership in tissue technology and durability. This innovative technology now makes up the majority of our sales in the U.S. This platform is supported by robust real-world data from more than 10,000 patients in the TBT registry that demonstrated excellent outcomes across hundreds of centers. The technology's optimized tissue treatment is designed to extend the durability of a valve, a feature that will be increasingly important as the therapy continues to treat patients with longer life expectancy.

Bernard: We estimate total procedure growth was comparable.

Bernard: For cereal volumes increased.

Speaker Change: Do you have progressed.

Bernard: We remain pleased with the continued performance well if I were best in class platform sapiens free alcohol as Julia which builds on a dwarf long standing leadership in tissue technology, and you'll IBD T V.

Bernard: If you go back to you for technology now makes up the majority of our sales in the U S.

Bernard: This platform is supported by the robust real world data for more than 10000 patients in the TVT registry that demonstrated excellent outcomes across hundreds of fentanyl.

Bernard: But technologies optimized tissue treatment is designed to extend your liability of evolves.

Bernard: Sure that will be increasingly important as the.

Bernard: Therapy continues to treat patients with longer life expectancies.

Bernard J. Zovighian: We are also proud to continue our deep commitment to advancing science for AS patients in the Progress and Early TAVR Trial. As discussed in January, we completed enrollment and treatment of patients in progress, approximately two years ahead of expectation. We also expect to release the result of early coverage at the TCT conference this year. Symptom assessment is one of the most significant barriers to referral, and the early TAVR trial evaluates the impact of TAVR on asymptomatic patients with severe AS.

Bernard: We are so proud to continue our deep commitment to advancing science for E S patient.

Bernard: Our progress in early trials.

Bernard: As discussed in January we completed enrollment and treatment of patients and progress approximating two years ahead of expectation.

Bernard: We also expect to release the result of early tether at the TCT Conference Vichy.

Bernard: Symptom assessment is one of the most significant barriers to his family and the early tether trial evaluates the impact of tough here on is simply an asymptomatic patients with severely yes. We believe if data compelling early tether may have a meaningful input.

Bernard J. Zovighian: We believe, if data are compelling, early TAVR may have a meaningful impact on deciding when to treat patients, while also streamlining referral and patient care for all severe AS patients. Outside of the U.S., in the first quarter of 2020, our constant currency TAVR sales growth was slightly below our global TAVR growth. However, strong growth in Japan and the rest of the world was partially upset by slower than expected growth in Europe.

Bernard: Act on deciding when to treat patients while also seem like to get a feeling and patient care for all C V S patients.

Bernard: I'm sort of the U S. In the first quarter, our constant currency sales growth was slightly below our global caveat we're off.

Bernard: Strong growth in Japan, and the rest of the world was partially offset by slower than expected growth in Europe.

Bernard J. Zovighian: In Europe, our results were softer than expected in Q1, but we expect full year 2024 performance to normalize. We are actively preparing for the launch of Sapien 3 Ultra Brasilia in Europe, and we anticipate introducing the technology into the European market in Q2. In Japan, we continue to see strong caveral adoption driven by Sapien-free ultravazilla.

Bernard: In Europe, our results were softer than expected in Q1, but we expect food you have twenty-twenty fault performance to normalize.

Bernard: We are actively preparing for the launch of SAPIEN three ultra Brasilia in Europe, and we all we anticipate and tortillas seem to technology into the European market in Q2.

Bernard: In Japan, we continued to see strong adoption driven by SAPIEN, if weird how resilient, we believe yes remains significantly under treated disease.

Bernard J. Zovighian: We believe AS remains a significantly under-treated disease among the substantial elderly population and continue to focus on expanding the ability of evidence supporting this therapy. In closing, we are confident that Edwards is positioned for healthy and sustainable tavern growth well into the future, driven by our development of differentiated tether technology. Our deep commitment to advancing patient care based on high-quality clinical evidence and our investment in patient activation initiatives. Importantly, we are proud of our groundbreaking research into the treatment of AS through our early TAVR and PROGRESS trials, which could fundamentally change how AS patients are treated. We remain confident in our full-year TAVR sales growth of 8 to 10%.

Bernard: Among the substantial Italy.

Bernard: Population.

Bernard: Continue to focus on expanding the Vinnie ability of any have you done supporting these fair IP.

Speaker Change: In closing.

Bernard: We are confident that Eduardo is positioned for healthy and sustainable growth well into the future you.

Bernard: Driven by our development of differentiated technology.

Bernard: Our deep commitment to advancing patient care through high quality clinical evidence.

Bernard: And our investment in patient activation initiatives.

Bernard: Importantly, we are proud of our groundbreaking research into the treatment of E. S. Well every time here and progressed frying, which could fundamentally change how a S patient treated.

Bernard J. Zovighian: We expect a higher year-over-year second half growth rate than in the first and second quarters. Turning to TMT-T, we drove positive momentum with our unique and broad portfolio strategy for both repair and replacement therapies for mitral and tricuspid patients. We made significant progress in advancing important technologies, including the PASCAL wheeler system, the EVOC tricuspid replacement system, and the SAPIEN M3 mitral replacement system.

Bernard: Yeah.

Bernard: We remain confident in our full year sales.

Bernard: Sales growth of 8% to 10%, we expect our year over year second half growth rate that even first and second quarters.

Bernard: Turning to T N T T.

Bernard: We drove positive momentum with our unique and broad part of 40 years strategy for both repay at any replacement therapies for mitral and tricuspid patients.

Bernard J. Zovighian: We are the only company with multiple approved mitral and tricuspid valve therapies backed by world-class evidence to improve patient care. In Q1, we achieved positive results, with sales of 73 million, representing a 72% increase versus the prior year. The majority of our Q1 sales were driven by expanded adoption and new site activation of PASCAL supported by continued double-digit tier market growth in the U.S. and Europe. We are also pleased with strong physician feedback and excellent procedural outcomes with the Evoque tri-crystalline valve in both the US and Europe. With this replacement technology, patients experienced a unique elimination of tricuspid regurgitation, significant quality of life improvement for patients, and Favorable The increasing physician demand for EVOC is a clear indication of an unmet need and the potential for this therapy to treat a very large patient population.

Bernard: We made significant progress in advancing an important technologies, including the Pascal system, but evoked breakfast Peter replacement system, and the C P and M free mitral replacement system.

Bernard: We are the only company with multiple approved you know mitral and tricuspid therapies backed by world class events to improve patient care.

Bernard: In Q1, we achieved positive results with sales of 73 million.

Bernard: I think I said, 72% increase versus the prior year.

Bernard: The majority of our Q1 sales, we have driven by expanded adoption and new site activation of Pascal supported by continued double digit cheap market growth.

Bernard: U S and Europe.

Bernard: We're also pleased with strong physician feedback and excellent posted you're allowed to come with the evoke breakfast involved in both the U S and Europe.

Bernard J. Zovighian: We continue to invest in expanding our high-touch field organization globally to support this therapy in order to continue to achieve excellent outcomes for each patient. Given the strong adoption of our differentiated technology, PASCAL and EVOC, we are raising full year TMTT guidance to 340 million versus previous guidance, which was the higher end of 280 to 320 million euros. We are confident that our unique portfolio strategy with repair and replacement options for both mitral and tricuspid will offer clinicians the broad set of therapies necessary to effectively treat many patients in need.

Bernard: With these replacement technology, we see the unique could even they should've speed regurgitation.

Bernard: Significant quality of life improvement for patients.

Bernard: And for the other trend in all cause mortality in heart failure hospitalization.

Bernard: The increasing physician demand for evoke is a clear indication of the unmet need and the potential for this therapy to treat the very large patient population.

Bernard: We continue to invest in expanding how we are high touch field organization globally to support this therapy in order to continue to achieve excellent outcome for each patient.

Bernard J. Zovighian: This strategy positions us for global leadership, sustainable long-term growth, and an increasing contribution to overall Edwards growth. In Surgical, first quarter sales of $266 million increased 8% over the prior year. Growth was driven by strong global adoption of Edwards premium surgical technologies in SPIRIS, MITRESS, and CONNECT.

Bernard: Given the strong adoption of our differentiated technology as Scott any work, we are raising full year key MTT guidance to friends and in 'twenty, two to freedom and $40 million versus previous guidance, which was the higher end of 282 free 20 million range.

Bernard J. Zovighian: We continue to see positive procedure growth globally for the many patients best treated surgically, including for those undergoing complex procedures. We continue to expand the overall body of evidence for multiple technologies and multiple valves and now expect U.S. and Canada enrollment in our momentous clinical trials studying resilia performance in the mitral position to be completed in Q2 2024, one year ahead of expectations. The study will continue to open new sites in Europe and Latin America, with global enrollment continuing into 2025.

Bernard: We are confident.

Bernard: That's our unique portfolio strategy, we can repay or any replacement options for both mitral and tricuspid, we don't feel clinicians, but broad set of therapies necessary to effectively treat many patients in need.

Bernard: These strategies position us for global leadership sustainable long term growth and an increasing contribution to overall Edwards graph.

Bernard: And so as you can see.

Bernard J. Zovighian: We are now raising our full-year surgical self-guidance to 6% to 8% versus previous expectation of mid-single-digit growth in critical care. Variability of demand led to better than expected first quarter sales of $251 million, which increased 14% versus the prior year, driven by contribution from all product lines. Growth was led by our smart recovery technologies, including the Acumen IQ sensor. The man was also strong enough for a front-gaunce catheter and pressure monitoring devices used in the ICU.

Bernard: First quarter sales of $266 million increased 8% or do you have a prayer all year.

Bernard: Growth was driven by strong global adoption of <unk> premium surgical technologies in spirits, My friends and connect.

Bernard: We continue to see positive procedural growth globally for the many patients best twitches surgically.

Bernard: Clothing for volt and juggling complex for cereals.

Bernard: We continue to expand the overall body of evidence in multiple technologies and multiple valves and now expect U S and Canada enrollment off.

Bernard J. Zovighian: Critical care remains focused on driving 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. We are now confident in raising our full-year critical self-guidance to 8 to 10 percent versus previous expectations of mid-single-digit growth. Since announcing the spin-off of Critical Care in December, our team has made significant progress, and I want to thank all of them for their hard work and dedication. Scott will provide additional details. And now, I will turn the call over to Scott. Hey, thanks a lot, Bernard. Good afternoon, everyone.

Bernard: Our momentum momentous clinical trial studying a resilient performance in the mitral position to be completed in Q2, 'twenty 'twenty four one year ahead of expectation.

Bernard: The study will continue to open new sites in Europe, and Latin America with global enrollment continuing into 'twenty to 'twenty five.

Bernard: We are now raising our full year surgical sales guidance to 6% to 8% versus previous expectation of mid single digit growth.

Bernard: In critical care.

Scott B. Ullem: As Bernard mentioned, we are pleased with our first quarter total company sales performance and progress on our strategic milestones. In addition, we achieved 66 cents of adjusted earnings per share. Our GAAP earnings per share of 58 cents included one-time expenses associated with our planned spin-off of Critical. A full reconciliation between our GAAP and adjusted EPS for this and other items is included with today's release. For the second quarter, we're projecting sales of $1.62 to $1.70 billion and Adjusted Earnings Per Share of $67 to $71.

Bernard: Viability of demand led to better than expected first quarter sales of $251 million.

Bernard: Which increased 14% this is driven.

Bernard: Driven by contribution from all product lines.

Bernard: Growth was led by a small recovery technologies, including the two men IQ sensitive.

Bernard: Demand was also strong for one guy to sketch it didn't pressure monitoring devices used in the ICU.

Bernard: Critical care remained focus on driving growth through smart recovery and smart expansion.

Bernard: Which are designed to help clinicians make more informed decision and get patients home to their families faster.

Scott B. Ullem: And now I'll cover additional details of our P&L. In Q1, our adjusted gross profit margin was 76%, compared to 77.5% in the same period last year. This expected year-over-year reduction was driven by a more favorable impact from foreign exchange in the prior year.

Bernard: We are now we're now confident in raising our full year critical self guidance to 8% to 10% versus the previous expectation of mid single digit growth.

Bernard: Since announcing the spin off could you Gotta Kevin December of key must have made significant progress and I want to thank all of them for their hard work for their all the work and dedication.

Scott B. Ullem: 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. Selling general and administrative expenses in the quarter were $490 million, or 30.6% of sales, compared to $436 million in the prior year.

Bernard: Scott will provide additional details.

Bernard: Now I would turn the corner Walter Scott.

Scott: Hey, Thanks, a lot Bernard and good afternoon, everyone. As Bernard mentioned, we are pleased with our first quarter total company sales performance and progress on our strategic milestones. In addition, we achieved 66 cents of adjusted earnings per share.

Scott B. Ullem: This increase was driven by an expansion of transcatheter field-based personnel in support of our growth strategy. We expect full year 2024 SG&A as a percent of sales to be approximately 30% as we continue to invest in field-based personnel and patient activation and. Research and development expenses in the first quarter grew 9% over the prior year to $285 million, or 17.8% of. This increase was primarily the result of continued investments in our transcatheter aortic valve innovation, including increased clinical trial.

Scott: Our GAAP earnings per share of 58 cents included one time expenses associated with our planned spinoff of critical care are.

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

Scott: For the second quarter, we're projecting sales of 1.6 to the $1.70 billion and adjusted earnings per share of <unk> 67 to 71 cents.

Scott: And now I'll cover additional details of our P&L.

Scott: In Q1, our adjusted gross profit margin was 76% compared to 77.5% in the same period last year.

Scott B. Ullem: For the full year 2024, we continue to expect R&D to be 17 to 18% of sales as we invest in developing new technologies and generating evidence for our structural heart disease initiatives with the goal of treating even more patients. Turning to taxes, our reported tax rate this quarter was 14.3%, or 14% excluding the impact of special items.

Scott: This expected year over year reduction was driven by a more favorable impact from foreign exchange and the prior year.

Scott: We continue to expect our full year 2024, adjusted gross profit margin to be between 76 and 78% driven.

Scott: Driven by high value technologies that yield strong gross profit margins.

Scott: Selling general and administrative expenses in the quarter were $490 million or 36% of sales compared to $436 million in the prior year.

Scott B. Ullem: Our favorable non-GAAP rate in the first quarter includes a higher-than-expected benefit from stock-based compensation. We continue to expect our 2024 tax rate, excluding special items, to be between $14,000 and $17,000. Foreign exchange rates decreased first quarter reported sales growth by 40 basis points, or $5 million, compared to the prior year.

Scott: This increase was driven by an expansion of Transcatheter field based personnel in support of our growth strategy.

Scott: We expect full year 'twenty 'twenty four SG&A as a percent of sales to be approximately 30% as we continued to invest in field based personnel and patient activation initiatives.

Scott B. Ullem: Foreign exchange rates negatively impacted our first quarter gross profit margin by 160 basis points compared to the prior year. However, relative to our January guidance, FX rates had a nominal impact on first quarter earnings per share. At current FX rates, we now expect a $70 million dollar, or 1% negative impact on full year 2024 sales versus the prior year. Regarding the previously announced spin-off of Critical Care, preparations are ongoing. We anticipate completing the unaudited carve-out financial statements next month, and we are on track to obtain a tax-free ruling from the IRS by year-end.

Scott: Research and development expenses in the first quarter grew 9% over the prior year to $285 million or 17, 8% of sales.

Scott: This increase was primarily the result of continued investments in our Transcatheter aortic valve innovations, including increased clinical trial activity.

Scott: For the full year 2024, we continue to expect R&D to be 17% to 18% of sales as we invest in developing new technologies and generating evidence for our structural heart disease initiatives with the goal of treating even more patients.

Scott: Turning to taxes, our reported tax rate this quarter was 14.3% or 14%, excluding the impact of special items our.

Scott B. Ullem: We are currently assessing capital structure options for the spinoff company, and we plan to share details with investors later this year. During the first quarter, we incurred $41 million of one-time costs associated with the spinoff. Additional one-time costs will be incurred throughout 2024. Free cash flow for the first quarter was reduced by a $305 million deposit contingent upon the resolution of a tax issue and $20 million of payments associated with the spinoff of Critical. Excluding the impact of these items, adjusted free cash flow was $206 million.

Scott: Our favorable non-GAAP rate in the first quarter includes a higher than expected benefit from stock based compensation.

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

Scott: Foreign exchange rates decreased first quarter reported sales growth by 40 basis points or $5 million compared to the prior year.

Scott: Foreign exchange rates negatively impacted our first quarter gross profit margin by 160 basis points compared to the prior year.

Scott: Relative to our January guidance FX rates had a nominal impact on first quarter earnings per share at.

Scott B. Ullem: And we continue to expect full year 2024 adjusted free cash flow to grow to between 1.1 and 1.4 billion dollars. So, before turning the call back over to Bernard, I'll finish with an update on our balance. We continue to maintain a strong and flexible balance sheet with approximately $1.7 billion in cash, cash equivalents, and short-term investments as of March 31. We continue to expect average diluted shares outstanding for 2024 to be between 600 and 610 million.

Scott: At current FX rates, we now expect a $70 million or 1% negative impact to full year 'twenty 'twenty four sales versus the prior year.

Scott: Regarding the previously announced spinoff of critical care preparations are ongoing we anticipate completing the unaudited carve out financial statements next month and we are on track to obtain a tax free ruling from the IRS by year end. We are currently assessing capital structure options for the spinoff company and we plan to.

Scott: Share details with investors later this year.

Scott: During the first quarter, we incurred $41 million of one time costs associated with the spin off additional one time costs will be incurred throughout 2024.

Scott B. Ullem: We have approximately $1 billion remaining under our current sharer purchase authorization, and so with that, I'll pass it back over to Bernard. Thank you, Scott. We are pleased with the strong start of the year as we continue to focus on helping even more patients worldwide and driving growth with leading innovative technologies. We remain confident in our increased 2024 financial outlook and look forward to launching breakthrough technologies and progressing multiple important clinical trials, while aggressively investing in our future.

Scott: Free cash flow for the first quarter was reduced by a 305 million dollar deposit contingent upon the resolution of a tax dispute and $20 million of payments associated with the spinoff of critical care.

Scott: Excluding the impact of these items adjusted free cash flow was $206 million and we.

Scott: To expect full year 2024, adjusted free cash flow.

Scott: We'll grow to between 1.1 and $1.4 billion.

Speaker Change: So before turning the call back over to Bernard I'll finish with an update on our balance sheet. We continue to maintain a strong and flexible balance sheet with approximately $1.7 billion in cash cash equivalents and short term investments as of March 31.

Scott B. Ullem: We believe Edwards is uniquely positioned to deliver sustainable growth, driven by our significant investment focused on structural health to address the large and growing needs of patients impacted by aortic, mitral, and tricuspid disease. With that, I pass it back to Mark to open up Q&A.

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

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

Mark Wilterding: Thank you very much Bernard. We're ready to take questions now. In order to allow for broad participation, we ask that you please limit the number of questions to one plus one follow-up. 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. Diego, please go ahead with additional details on access during the Q&A portion of the call.

Bernard: And so with that I'll pass it back over to Bernard.

Bernard: Scott we are pleased with our strong start to the year as we continue to focus on helping even more patients worldwide and driving growth with leading innovative technologies.

Bernard: We remain confident in our increased 2024 financial outlook and look forward to launching breakthrough technologies and progressing multiple important clinical trials, while aggressively aggressively investing it back into our future.

Operator: Thank you. And if you'd like to queue up for a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the queue.

Speaker Change: In closing.

Scott: We believe it well he is uniquely positioned to deliver sustainable growth driven by our significant investment focused on structural heart to address the large and growing needs of patients impacted by aortic mitral and tricuspid disease with that pass it back to Mark to open it up to Q&A.

Operator: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. And once again, it's one question and one follow-up for each time you speak. And our first question comes from Robbie Marcus with J.P. Morgan. Please sit. Oh, great. Thanks for taking the question and congratulations on a nice quarter. Two from me.

Mark: Thank you very much Bernard we're ready to take questions now in order to allow for broad participation. We ask that you. Please limit the number of questions to one plus one follow up if you have additional questions. Please reenter the queue and management will answer as many participants as possible during the remainder of the call.

Robert Marcus: I wanted to start first with Evoque, but clearly, TMTT had a really strong quarter. It came in well above consensus and some of the most optimistic numbers I was hearing. So I wanted to get a sense of what you're seeing, how much of the TMTT was triggered, and, you know, clearly you raised guidance. So I imagine this is just the early stages of adoption. Thanks. Thanks. Thanks, Robbie. You know, this is a good question.

Mark: Please go ahead with additional details on accessing the Q&A portion of the call.

Speaker Change: Thank you and if you'd like to queue up for a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in 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 star keys and once again.

Bernard J. Zovighian: So we are obviously very pleased about, you know, the early physician feedback, which has been very, very strong on Evoque. You know, we were able to achieve an excellent, you know, procedural outcome. Now, you know, back to your question about our performance in Q1. Very little about Ivoque, you know; we have seen a very clear momentum on Pascal, you know, Pascal in Europe, Pascal in the US.

Mark: One question and one follow up for each time you queue.

Mark: And our first question comes from Robbie Marcus with Jpmorgan. Please state your question.

Bernard J. Zovighian: And, you know, we are very pleased about our expansion and adoption of PASCAL, you know, globally, you know, basically. But I'm going to ask, you know, Daveen, to add some details here. Yeah, and to follow up on Bernard's comments, obviously, the vast majority of our growth came from PASCAL just because Evoque is so new. And overall, though, we continue to be really pleased with the initial launch of Evoque, both in Europe and the U.S. You know, right now, we're just starting to steadily kind of activate sites. We've had really good clinical outcomes, very consistent with what we saw in the clinical trial, and we have really predictable times, and predictable procedure times is something that, you know, obviously, physicians really love to see.

Robert Marcus: Oh, great. Thanks for taking the question and congrats on a nice quarter.

Robert Marcus: Two from me I wanted to start first with folk are clearly T. M. T. T had a really strong quarter came in well above consensus and some of the most optimistic.

Robert Marcus: Numbers I was hearing.

Robert Marcus: Wanted to get a sense of what you're seeing how much of the TMT T was a folk and.

Robert Marcus: You raised guidance I imagine this is just the early stages of adoption here.

Speaker Change: Thanks, Robbie you know this is a good question. So we are obviously very pleased about.

Robert Marcus: Then the early physician feedback, which has been very very strong on evokes you know that we are we were able to achieve an excellent possibly all outcome. Now you go back to your question about our performance in Q1.

Daveen Chopra: And we see that both in old sites that we're integrated into, as well as new sites that we've opened up kind of in Europe. The only other comment I'll make is, you know, it's really early in our journey, but our experience in Europe, especially where we've had PASCAL approved for tricuspid since 2020, really reinforces the fact or the need that we want to have a portfolio of both repair and replacement technologies because tricuspid patients are so complex and so diverse. So I'll stop there.

Robert Marcus: They really thought about your book you know and you know we are.

Robert Marcus: We have seen a very clear momentum on Pascal Pascal in Europe Pascal in the U S.

Speaker Change: We are very pleased about Alex patent shouldn't adoption of fast Guy you know globally, you know basically but I'm going to ask you a devine to watch some some details here yeah. Thanks, so much Bernard thanks for the question Robby, Yeah, and a follow up with our Bernard's comments, obviously that the vast majority of our growth came from Pascal just because of OCA, so new and overall.

Bernard J. Zovighian: Great. Maybe a follow-up. I caught the comments that U.S. TAVR grew faster than the global organic TAVR growth rate and that procedures accelerated throughout the quarter. So, how are you thinking about TAVR growth for the rest of the year? And I feel like the U.S. has finally recovered after some of the setbacks you saw during the disruptive years of COVID. Thanks a lot.

Speaker Change: Though I mean, we continue to be really pleased with the initial launch of a vote both in Europe and the U S. You know right now we're just starting to steadily kind of activate sites. We've had really good clinical outcomes very consistent with what we saw in the clinical trial, and we see really predictable times and predictable procedure times, there's something that you know, obviously ER physicians really loved it.

Bernard J. Zovighian: Thanks Robbie, let me start and again I will ask Larry to add some insights here. So we knew that when we put together the guidance for the year, the TAVR guidance of 8 to 10, we knew that growth would ramp throughout the year and that Q1 would be our lowest growth quarter. So we feel, you know, confident about our 8 to 10. We feel confident about what's happening in the US. You know, our share and price are stable, so we feel good about all of that. Larry, do you want to add anything?

Speaker Change: And we see that both the old sites that were entered into as well as new sites that we've opened up kind of in Europe and the only other kind of make as you know it's very early in our journey, but our experience in Europe, especially where we've had Pascal approved for tricuspid since 2020 really reinforces the fact or the need that we want to have a portfolio.

Speaker Change: Of both repair and replacement technologies, because tricuspid patients are so complex and so diverse.

Larry L. Wood: Yeah, I don't have a lot to add. You know, we saw a good progression throughout the quarter. You know, it's always a little slow in January as we come out of the break, but we were pleased with how the quarter went overall, and we're really excited about the year. We have a lot of activities on patient activation. You know, we have a huge data set coming out at TCT that I think all of us are going to be excited to see what that says, what those data say, and how they inform the field.

Speaker Change: I'll stop there.

Speaker Change: Great.

Speaker Change: Maybe a follow up I caught the comments that the U S. A tavern grew faster than the global.

Speaker Change: Organic type of growth rate and that procedure has accelerated throughout the quarter. So.

Speaker Change: How are you thinking about <unk> growth for the rest of the year and you know do you feel like the U S has finally recovered after some of the setbacks you saw during.

Larry L. Wood: And so I, you know, I continue to believe we have a long runway for TAVR, and it is good to see the US kind of put COVID, I think, finally in the rear view mirror, and we can just focus on accelerating patient care. Thanks a lot.

Speaker Change: During the disruptive years of Covid, Thanks, a lot.

Speaker Change: Yeah. Thanks, Robbie let me stop there and again you know I will ask Larry to add some some insights here. So with you when we put together our guidance for the year of a tabular guidance eight to 10, we knew it at the graph we ramp throughout the year and that you know Q1 will be our lowest growth quarter.

Travis Steed: Our next question comes from Travis Steed with Bank of America. Please state your question. Hey, thanks a lot.

Larry L. Wood: So we feel confident about the eight to 10, we feel confident about your what's happening in the U S.

Travis Steed: Congratulations on a good quarter. Maybe on TAVR again. Curious why European growth was slower than expected. And on the billing days, were those US or OUS, and did those come back in any quarter?

Larry L. Wood: While our share in price off the table. So we feel good about all of that Larry you want to add anything yeah, I don't I don't have a lot to add you know, we you know sorry.

Larry L. Wood: Yeah, thanks. Overall, you know, we felt good about the quarter. And, you know, we just talked about the US, you know, we saw a lot of strength in Japan, but Europe was, you know, it grew year over year, and it grew sequentially.

Larry L. Wood: Sorry, good progression throughout the quarter I'm you know, it's always a little slower in January as we come out of the break but we're pleased with how the quarter went overall and we remain excited about the year, we have a lot of activities on patient activation.

Larry L. Wood: Yeah, we have.

Larry L. Wood: Huge datasets coming out of TCT that.

Larry L. Wood: I think all of us are going to be excited to see what that say what that what those data, saying, how they inform the field and so I you know I continue to believe we have a long runway long term with tavern night. It is good to see the U S counterpart.

Larry L. Wood: And we lost a couple of billing days. But even with that, we were a little bit disappointed with our overall growth in Europe. We saw some pretty aggressive pricing from competitors that I think led to some trialing. But we're really excited that we're launching S3UR, which actually starts this month, and we're excited to bring that technology to Europe. And we expect these to normalize throughout the course. I can give a little bit more commentary on the billing days. So outside of the U.S. is where we really felt it. We saw two billing days difference in Europe and Japan.

Larry L. Wood: But I think finally in the rearview mirror and we can just focus on an accelerating patient care.

Speaker Change: Thanks, a lot.

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

Travis Steed: Hey, Thanks, a lot congrats on a good quarter, maybe on uncover again I'm curious why European growth was slower than expected and then on the billing days for those U S or O U S and it does come back in any quarter.

Larry L. Wood: Overall, globally, we saw one billing day difference. And so it had an impact. To your question about whether we see any more impact than later in the year, yeah, in Q3, we've got a billing day impact that goes the other way. Alright, that's helpful.

Travis Steed: Yeah. Thanks, Yeah. Overall, you know, we we felt good about the quarter and you know, we just talked about the U S.

Speaker Change: Saw a lot of strength in Japan by Europe was.

Speaker Change: Year over year, and it grew sequentially and we lost a couple of billing days, but even with that we were a little bit disappointed with our with our overall growth in Europe, we saw some pretty aggressive pricing.

Travis Steed: And then on TAVR and some of the things you've been doing with Ignite and kind of helping drive center growth and diagnosis. I'm curious to see how that's going, and at what point do you start to kind of scale those programs out and see the impact on TAVR growth? We have a lot of patient activation activities, where there's a lot of work that we do, we have multiple fronts, and Ignite is just one part of our strategy there, but we're excited about what these technologies can do, and there are so many patients. You know, if you look at the Samuel Ryra publication, and I know he's, I've spoken to you guys before. There's just a And I think there's a patient identification aspect, and there's a referral aspect.

Speaker Change: From competitors that I think led to some trialing, but we're really excited that we're launching S. Three you are that actually starts this month and we're excited to bring that technology to Europe, and we expect this to normalize throughout the course of the year.

Speaker Change: I can I can give a little bit more commentary on the on the billing days so outside of the U S is where we really felt it we saw it two billing days difference in Europe and Japan.

Travis Steed: Overall globally, we saw one billing day difference and so it had an impact to your question about do we see any more impact than later in their yeah. In Q3, we've got a billing days impact that goes the other direction as well.

Travis Steed: Alright, that's helpful and then on uncover and some of the things you've been doing with ignite and kind of helping drive center growth.

Larry L. Wood: So we have multiple work streams working on this, but I think appreciation and understanding for the undertreatment of aortic stenosis is growing, and I think as that grows and people start to understand the magnitude of the problem, I think it gives more opportunity for our patient activation strategy to take hold. And maybe, you know, Larry, I'm very proud about, you know, what we are doing. We are the only company, you know, basically having a deep commitment to advancing science for AS patients through the PROGRESS and EARLY TABOR trials.

Travis Steed: Diagnosis, but curious to see how that's going in and at what point do you start to kind of scale does those programs out and an impact on see the impact on top of growth.

Travis Steed: Yeah, we we have a lot of patient activation activities, where theres a lot of work that we do we have multiple fronts.

Travis Steed: It is just one one part of our strategy there, but we're excited about what these technologies can do and there are so many patients. If you look at the family of Rai Republication and it always.

Travis Steed: Welcome to you guys before Theres, just a lot of patients upstream that arent moving through the system at the speed in which they should and I think theres a patient identification aspect. There's a referral aspect. So we have multiple work streams working on this but I think the.

Larry L. Wood: So this is truly our commitment. We see that there is a ton of potential. These patients are underdiagnosed, undertreated, and we are committed to offering treatment for these patients. So as a company, we are very proud about how we do all of this. Great, thanks a lot.

Travis Steed: Appreciation and understanding for the under treatment of aortic stenosis is growing and I think as that grows and people start to understand the magnitude of the problem I think it gives us more opportunity for our patient activation strategy to take hold.

Larry Biegelsen: Thank you. And our next question comes from Larry Biegelsen with Wells Fargo. Please state your question. Good afternoon, thanks for taking the time to ask me. I just wanted, on TAVR, I wanted to confirm that Bernard said that Q2 TAVR growth would be better than Q1, in response to Robby's question, and why do you expect TAVR growth to accelerate in the second half, and how are you guys factoring in the SMART trial results? And I had one follow-up.

Travis Steed: And maybe in addition, you know Larry.

Travis Steed: Very proud of but you know what we are doing you know we are the only one you know basically having a deep commitment to advancing science for Es patients fruit of our progress in early time, well try and so this is you know truly are coming in but you know we see it accurately there is a ton of potential, especially now and you are diagnosed and treated and we are committed to a fifth treatment for these patients.

Larry L. Wood: Yeah, yeah, we do expect TAVR procedures to ramp up. That's always been a part of our plan. And so we continue to expect that to happen. I think it's a lot of things, Larry. I think it's a lot of our patient activation work, but it's also just that the market continues to improve. And, you know, we were very pleased with where we finished Q4 last year. We were happy with the ramp in Q1.

Travis Steed: So as a company very proud about how we do all of this.

Speaker Change: Great. Thanks, a lot.

Travis Steed: Thank you and our next question comes from Larry <unk> with Wells Fargo. Please state your question.

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

Larry L. Wood: I just wanted to Untap, a I wanted to confirm.

Larry L. Wood: Bernard said that Q2, <unk> growth will be better than Q1 in response to <unk> question.

Larry L. Wood: Why do you expect copper growth to accelerate in the second half and how are you guys factoring in.

Larry L. Wood: So I think, you know, we do expect to see an increase in Q2 over Q1. But even with that, we expect the second half to have a higher growth rate than the first half. So I think that that's good. And as for the SMART trial, I mean, you know, we talked a lot about it at ACC. I think it's just a reminder, and, you know, we've talked about this before, but the decision on what valve to use is multifactorial. It's never been about one criteria.

Larry L. Wood: Trial results and I had one follow up.

Speaker Change: Yeah, Yeah, we do expect them to EVAR procedures to ramp that's always been a part of our of our plan and so we continue to expect that to happen and I think it's a lot of things Larry I think it's a it's a lot of our patient activation work, but it's also just the the market continues to improve and you know we were very pleased with where we finished.

Speaker Change: Q4 last year, we were happy with the ramp in Q1. So I think we do expect to see an increase in Q2 over Q1, but even with that we expect the second half to have a higher growth rate than the first half. So I think that that's good and as it relates to the smart trial I mean, I know, we talked a lot about it at ACC I think it's just a reminder, and we've talked about this before.

Larry L. Wood: It's never been about one data point. And so we continue to have confidence in our platform and in the value proposition and with our ultra-resilient technology and all the other things that we're doing. You know, we always model in competition, but we feel very good about our platform and our goal. Larry, let me add something to that. I know that there were plenty of questions about that trial at ACC, but I was not at ACC.

Speaker Change: But there the decision on what Bobby uses multifactorial, it's never been about one criteria. It's never been about one data point and so we continue to have confidence in our platform and the value proposition with our ultra Rigo your technology and all the other things that we're doing that you know we we.

Bernard J. Zovighian: But our strategy to bring basically groundbreaking science, the highest quality of evidence to help the millions of patients who are not being treated today and being able to unlock this larger market potential is what we are doing. This is our strategy. So you know us very well.

Speaker Change: These modeling competition, but we feel very good about our platform and our leadership.

Speaker Change: So let me Larry let me add you know something about it you know I know that they're willing to have plenty of questions about that trial at the ACC.

Bernard J. Zovighian: In the last 10 years, we studied 12,000 symptomatic severe aortic patients across many FDA-approved studies. And today, again, we are the only company conducting groundbreaking research into the treatment of AS through early TAVR and progress. So again, I can tell you I'm very proud about who we are as a leader in circular heart disease. I think what happened at ACC with the SMART study, in my mind, was an interesting study, but more noise than anything else.

Speaker Change: I was not at ACC, but our strategy to bring basically you know groundbreaking science the highest quality of evidence to help you know the millions of patients well not being treated today.

Speaker Change: And being able to unlock this allows KBR market potential which is what we are doing this is our strategy.

Speaker Change: So you know as you know very well.

Speaker Change: Last 10 years, we studied it a 12000 symptomatic CVR youll Ah patients across many FDA approved studies and today again, you know we are the only company called <unk>.

Larry Biegelsen: Thank you. And Scott, if I understand correctly, you raised the revenue guidance, but you did not change the EPS guidance. Why is that?

Scott B. Ullem: Yeah, that's right. We brought revenue guidance up by nearly $115 million. And you're right, we kept our $2.70 to $2.80 range the same. There are a couple reasons.

Speaker Change: Groundbreaking research into the treatment of vascular flow out through you know early on progress. So again I can tell you I'm very proud of about you know who we are the leader in Tokyo, how disease I figured what happened you know at ACC was the smart in my mind is no easy to say it was an interesting study and it's more noise than anything else.

Scott B. Ullem: One was, you know, we ended up with a lower tax rate in the first quarter than we expected. Not sure that we're going to be able to maintain that low of a tax rate the rest of this year. But the other one is that it's just early in the year.

Speaker Change: Thank you and Scott.

Speaker Change: I saw it correctly you raised the revenue guidance that you did not change the EPS guidance why is that thank you.

Speaker Change: Yeah, that's right we brought our revenue guidance up a nearly $150 million and you're right. We kept our $2 70 to $2.80 range. The same there are a couple of reasons. One was you know we ended up with a lower tax rate in the first quarter than we expected I'm not sure that we're gonna be able to maintain that low the tax rate. The rest of this year. The other one is it's just early.

Scott B. Ullem: And so we'll talk more about how EPS is trending three months from now, but we decided at this point early in the year to just keep it the same. We think the top end of the range can accommodate multiple different scenarios that could play out the rest of 2024. Thank you.

Matthew Charles Taylor: Our next question comes from Matt Taylor with Jefferies. Please state your question. Okay.

Speaker Change: In the year and so we'll talk more about how EPS is trending three months from now, but we decided at this point early in the year would just keep it the same we think the top end of the range can accommodate multiple different scenarios that could play out the rest of 2024.

Matthew Charles Taylor: Thank you very much for taking the question. I did want to ask a more specific question about the TMTT performance. And you talked about the importance of the portfolio. And so I guess the first question I wanted to ask it was, is Evoque, I guess, helping to pull through or improve the performance of Pascal. And do you expect that as you go through time with even more of a portfolio across Mitre and TriCusted to be able to use that portfolio approach to gain even more share? I'll answer that. Yeah, this is Daveen.

Speaker Change: Thank you.

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

Speaker Change: Yeah.

Matthew Charles Taylor: Great. Thank you very much for taking the question.

Matthew Charles Taylor: <unk>.

Matthew Charles Taylor: I did want to ask more specific question about the <unk> performance and you talked about the importance of the portfolio and so I get the <unk>.

Matthew Charles Taylor: First of all I wanted to ask there was.

Daveen Chopra: I'll answer that. No, honestly, if you look at quarter one, no, I don't really think there was any significant kind of direct, you know, pull through from Evoque versus Pascal. But if you pull back, I think us having a portfolio of products, treating the maximum number of patients by having repair and replacement technologies for both mitral and tricuspid help show our leadership and that physicians would then want to continue to work with us as leaders in the space.

Matthew Charles Taylor: Evoke I guess, helping to pull through or improve the performance of.

Matthew Charles Taylor: Pascal and do you expect that as you go through time was even more of a portfolio of cross mitral and tricuspid to be able to use that portfolio approach to gain even more share.

Daveen Chopra: Oh, Yeah. This is devine I'll answer that no I honestly, if you look at quarter. One no I don't really think there was any significant kind of direct pull through from a vote versus Pascal, but if you. If you pull back up I think us having a portfolio of products to treat the maximum number of patients by <unk>.

Daveen Chopra: I think, you know, I think there's always going to be a continued kind of link in that way. But when we look at kind of growth opportunities and what's happening for growth overall, if I look at Pascal, right, in Q1, we continue to open up new centers. We continue to grow in the centers that we work with, and then we continue to gain, you know, work with physicians more deeply in that way, which I think is fantastic.

Matthew Charles Taylor: The repair and replacement technologies for both mitral and tricuspid.

Matthew Charles Taylor: <unk> helps show our leadership.

Matthew Charles Taylor: And that physicians would then want to continue to work with us as leaders in this space.

Matthew Charles Taylor: I think that you know I think so theres always going to be a continued kind of link.

Matthew Charles Taylor: In that way, but when we look at kind of growth opportunities and what's happening for growth overall, if I look at Pascal right. In Q1, we continue to open up new centers, we continue to grow in the centers that we worked with and then we continue to gain.

Matthew Charles Taylor: Gain are you know work with physicians more deeply in that way, which I think was fantastic. Additionally, we as we move and we think that will continue for our quarters going into the future. Additionally, we continue to grow geographically right. There are all sorts of countries in the world, where we're just kind of bringing Pascal for the first time. We're in the new are kind of a you know in the initial stages of where it'll be a pascal. So we think that's going to be an important opportunity.

Daveen Chopra: Additionally, as we move, and we think that will continue for quarters going into the future, additionally, we continue to grow geographically, right? There are all sorts of countries in the world where we're just kind of bringing Pascal for the first time.

Daveen Chopra: We're in the new kind of, you know, the initial stages of where we'll be with Pascal. So we think that's going to be an important opportunity. And then, clearly, that's Pascal.

Matthew Charles Taylor: And then clearly that's Pascal number to evoke evoke is just starting right, we see about being a long runway for us of growth across the board and then we've talked about in the future. We will also then bring our M. Three SAPIEN three transcatheter mitral valve to the market, which will add another layer of kind of growth for us in the future and I think having all these technologies together really provides a leader.

Daveen Chopra: Number two, Evoque. Evoque is just starting, right? We see Evoque being a long runway for us of growth across the board. And then, as we've talked about in the future, we will also bring our M3, Sapien M3 transcatheter mitral valve to the market, which will add another layer of growth for us in the future. And I think having all these technologies together really provides a leadership role that we can have. Thank you very much.

Matthew Charles Taylor: Chip ball that we can have.

Speaker Change: Thank you very much.

Joanne Karen Wuensch: Our next question comes from Joanne Wuensch with Citi. Please state your question. Good evening, and thank you for taking the question and a very nice quarter.

Speaker Change: Our next question comes from Joanne Wuensch with Citi. Please state your question.

Joanne Karen Wuensch: Good evening and thank you for taking the question than there are in each quarter I want to spend some time on critical care.

Joanne Karen Wuensch: I want to spend some time on critical care. I can't remember the last time I saw over 14 percent revenue growth in that segment, and particularly as a sort of preparation to go out on its own. What drove that growth? How sustainable is it?

Joanne Karen Wuensch: I can't remember the last time I saw a 14% revenue growth.

Joanne Karen Wuensch: That segment.

Joanne Karen Wuensch: And particularly as it sort of prepping to go out on the town what drove that growth how sustainable is it and Wow. Thank you.

Katie Szyman: And wow. Thank you. Katie, do you want to take it?

Joanne Karen Wuensch: Katie do you want to take the question.

Katie Szyman: Yeah, thanks, Joanne, for the question. So for critical care, as you know, we have capital sales as part of the mix. So we just see high variability of demand really every quarter across all our product lines. We also have distributor sales that kind of come up and down. So it was a great quarter for us overall. It's still early in the year.

Katie: Thanks, Joanne for the question so for critical care as you know we have capital sales as part of the mix and so we just see high variability of demand really every quarter across all our product lines. We also have distributor sales it kind of will come up and down. So it was a great quarter for US overall, it's still early in the year.

Katie Szyman: So you saw us raise guidance to eight to 10 percent, and we're very confident in that eight to 10 percent range. But we don't want to bring it up too much more at this point just because of that variability in demand. This is a session where you can comment on profitability during the quarter, or should we just hang tight on that one? And thank you. How about profitability for the company, Joanne? No, but critical care if possible.

Speaker Change: So you saw us raise guidance to 8% to 10% and we're very confident in that 8% to 10% range, but we don't want to bring it up too much more at this point just because of that variability in the band.

Speaker Change: This is some way you can comment on profitability during the quarter or should we just hang tight on that one and thank you.

Speaker Change: That was good profitability for the company Joanne.

Speaker Change: No critical care if possible. Thanks.

Katie Szyman: Thanks. Yeah, well, let's hold off on product line profitability. Suffice it to say, it was a good top line quarter, and that's helping our bottom line as well.

Joanne Karen Wuensch: Yeah, well, let's hold off on on product line profitability suffice it to say it was good it was a good top line quarter and and that's helping our bottom line as well.

Unknown Attendee: Thanks. And our next question comes from Shagun Singh with RBC. Please stay. Shagun Singh, your line is open, please go ahead.

Speaker Change: Thank you.

Speaker Change: And our next question comes from Shotgun Singh with RBC. Please state your question.

Shotgun Singh: Checking Singh your line is open. Please go ahead.

Katie: Yeah.

Unknown Attendee: All right, we'll move on to the next question. And our next question comes from Matt Miksic with Barclays Police. Hey, thanks so much for taking the question. So just one question on on sort of TAVR and transcatheter valve growth, and, and I'll just keep it to one, if you could maybe talk a little bit about, You know, the the launch of of evoke and the activity that that drives in some of your major centers, you know, and I guess how you're you're you and the team in the field is kind of managing those activity levels or the bandwidth of those centers, you know, versus the versus the continuing volumes that they perform in TAVR, you know, just maybe any color or thoughts on how that, you know, might play into the total transcatheter business.

Shotgun Singh: All right, we'll move on to the next question.

Shotgun Singh: Next question comes from Matt makes such with Barclays. Please state your question.

Matthew Miksic: Hey, Thanks, so much for taking the question. So just one question on <unk>.

Matthew Charles Taylor: The tavern in Transcatheter valve growth.

Matthew Charles Taylor: And I'll just keep it to one if you could maybe talk a little bit about.

Matthew Miksic: Sure.

Speaker Change: The the.

Speaker Change: Launch of of evoke and the activity that that drives and some of your major centers.

Speaker Change: And I guess, how you're you're you and the team in the field is kind of managing those activity levels or the bandwidth of those centers versus the versus say continuing volumes that they perform.

Unknown Attendee: And then, and Scott, I don't know if you'll be willing to do this, but if you can possibly quantify the impact on SG&A that you've mentioned about the field resources and sort of patient activation resources that you plan on executing on this year. Thanks. Yeah, so I'll start, Matt, and then I'll hand it over to Daveen. This is kind of like what Daveen and I do every day.

Speaker Change: <unk>, just maybe any color or thoughts on how that.

Speaker Change: Might play into the total Transcatheter business and Scott I don't know if you would be willing to do this but if you can possibly quantify the impact on SG&A that you've mentioned.

Matthew Miksic: The field resources and.

Matthew Miksic: Patient activation resources that you're you've planned and are executing on this year. Thanks.

Matthew Miksic: You know, we partner very closely on these sorts of things. And clearly, as we roll out these new therapies, we want to make sure that people do it at the right volume. And so it's a key part of when we start centers, making sure that they have a whole program that encompasses their entire structural heart patient population. And so our teams work closely together. We have this unique environment where we have very dedicated teams because we want to bring that detailed procedural knowledge and knowledge of all things related to it. But it still requires a lot of coordination between Daveen and me. And we've been doing this for a while. This was true of Pascal and the launches there, and it remains true of Evoque. Daveen?

Scott: Yeah, So I'll start, Matt and then I'll hand, it over to <unk>.

Scott: This is kind of like what do you mean and I do every day, we partner very closely on on these sorts of things and clearly as we roll out. These new therapies, you know we want to make sure that people do it with the right volume and so it's a key part of when we start centers, making sure that they have a whole program that encompasses their entire structural heart patient population and so our teams worked closely together.

Matthew Miksic: We have this unique environment, where we have very dedicated teams because we want to bring that detail procedural knowledge in.

Matthew Miksic: And the knowledge of all things related to it but it still requires a lot of coordination between Devine and iron and and we've been doing this for a while this is true of Pascal and the launches there and it remains true of a bulk domain yeah ill just add maybe some comments about the you know might be the capacity question that you kind of asked the rallying in mitral Roe.

Larry L. Wood: Yeah, I mean, I'll just add maybe some comments about the capacity question that you kind of asked. The reality is in mitral repair, right, interior technology that's been around for several years and continues to grow with more and more patients being treated, the number of patients being treated and kind of mined through Evoque is relatively small in quarter one and for the future, just based on these very large, more established numbers of procedures.

Matthew Miksic: <unk> interior technology, that's been around for several years and continues to grow with more and more patients being treated there.

Matthew Miksic: Ah patients being treated in kind of mindshare revoke is relatively small and in quarter, one and for the future. Just based on these very large are more established numbers of procedures. So for us overall.

Larry L. Wood: So for us overall, I don't necessarily believe that the Evoque procedures are going to affect overall capacity at any time in the near future. But I also, and to carry on to Larry's point, we collaborate very well together to ensure that when we're opening up a center or working with a center for the first time, we work with that center to ensure that they do have the capacity to then add these.

Matthew Miksic: I don't necessarily believe that the vote procedures for anytime in the near future going to affect overall capacity, but I do also interpret to carry on to Larry's point, we collaborate very well together to share that when we're opening up a center working with us and for the first time, we are working with that center to assure that they do have the capacity to then adding these incremental procedures, but what did you.

Larry L. Wood: But what it is fair to say is that, you know, so far, we have not faced a big challenge in terms of, you know, the centers having a lack of capacity to be able to tweak, you know, patients, whether they are TAVR patients or EVOC patients. Matt, it's Scott.

Matthew Miksic: Fair to say is that you know so far we have not faced a big challenge in del Mar Centel's.

Matthew Miksic: I think a lack of capacity to be able to tweak it to patients where there's no tabular patients or evoke patients to your patients.

Matthew Miksic: Yes, Matt It's Scott to your question about SG&A, you heard us say in the opening remarks that we're expecting SG&A as a percentage of sales to be around the top end of our original range of 29% to 30% and that move up a little bit was largely based upon the increased investments that we're making in field resources and patient access initiatives and.

Daveen Chopra: Your question about SG&A. You heard us say in the opening remarks that we're expecting SG&A as a percentage of sales to be around the top end of our original range of 29 to 30 percent. And that move up a little bit was largely based on the increased investments that we're making in field resources and patient access initiatives. And it also kind of gets to Larry Biegelsen's earlier question about why we didn't move the EPS guidance range up yet. We've been waiting to see how sales trend here at the beginning of the year before deciding how aggressively we want to go after some of these investment initiatives.

Matthew Miksic: It's also kind of gets to Larry Biegel sincerely earlier question about why we didn't move EPS guidance range up yet we've been waiting to see how sales trended here at the beginning of the year before deciding how aggressively we wanted to go after some of these investment initiatives and based upon first quarter sales were going to move forward with some of those and Thats. The reason were moving up.

Scott B. Ullem: And based upon first quarter sales, we're going to move forward with some of those. And that's the reason we're moving up our spending outlook. Thanks so much.

Matthew Miksic: Our spending outlook.

Unknown Attendee: And our next question comes from Shagun Singh with RBC Capital Markets. Please state your question. Great, thank you so much. I'm sorry about earlier. It just sounds like US TAVR growth was in the high single digits. Is that fair?

Speaker Change: Thanks, so much.

Speaker Change: And our next question comes from Shanghai, and sing with RBC capital markets. Please state your question.

Shanghai: Great. Thank you so much I am sorry about earlier.

Shanghai: It just sounds like U S. Debit growth was high single digits is that fair or was it about 10% and other drivers that can get you to consistent double digit growth in the foreseeable future.

Unknown Attendee: Or was it about 10%? And other drivers that can get you to consistent double-digit growth in the foreseeable future? Just, you know, what's your confidence level there? And then I wanted to get your take on AHA's aortic stenosis initiative. It seems like they're expanding that to additional centers, and some of our checks have suggested that that has a positive impact on TAVR volumes. So just, you know, anything you can share on that program, the scope of expansion and potential volume impact on TAVR. Thank you for taking the questions. Yeah, I'll take the first part of that about US TAVR growth. You know, we try not to be too specific about breaking down every region.

Speaker Change: What's your confidence there and then I wanted to get your take on AE jeans aortic stenosis initiative. It seems like they're expanding that to additional centers and some of our checks have suggested that that has a positive impact on toddler ER volumes. So just anything you can share on that program the scope of expansion in <unk>.

Speaker Change: So while you went back to tablet. Thank you for taking the questions. Yeah I'll take the first part of that about U S to have a growth you know we try not to be too specific about breaking down every region, but what we can say is that <unk> in the U S grew faster than our global underlying growth rate for cover for Teva in the first quarter.

Larry L. Wood: But what we can say is that TAVR in the US grew faster than our global underlying growth rate for TAVR in the first place. Larry, do you want to talk about the other pieces? Sure. So the AHA program, you know; we're very excited to partner with the AHA on this. If you're looking for an analog, you know, years and years ago, the whole door to balloon drive, where they created a quality metric that was based on time.

Speaker Change: Do you want to talk about the other pieces are so the H a program, where we're very excited to partner with the H E. On this if youre looking for an analog.

Speaker Change: Years and years ago, the whole door to balloon drive where they created a quality metric that was based on time and because we know the faster when a patients having an MRI.

Larry L. Wood: And because we know the faster when a patient's having an MI, they get a balloon across that lesion, the survival rate rises dramatically, and it's critical that they do that. But for AS, we really don't have any quality initiatives around the time from diagnosis to treatment. And I will say most centers sort of start the clock when the patient ends up with the heart team. And they think they can do it pretty quickly.

Speaker Change: They get a balloon across that lesion survival rate rises dramatically and it and it's critical that they do that but for US we really don't have any quality initiatives around the time from diagnosis to treatment and I will say most centers sort of start the clock when the patient ends up with the heart team and they think they do a pretty quickly, but the part of the store.

Larry L. Wood: But the part of the story that they miss is the upstream component. From the time that the patient gets that first echo and finds out they have severe disease, sometimes there's a long journey before the patient actually gets referred to the heart team. And what we're trying to do is work on a time metric like door to balloon, where every patient has to get treated within 90 days of diagnosis. And one of the first things that it does is centers have to go back and look at what their own data say. And most centers think they're doing a good job, but when they actually dig deep and find their own data, they find out they're not doing nearly as well as they thought they were.

Speaker Change: That they Miss is the upstream component from the time that patient got that first echo that they have severe disease, sometimes theres a long journey before the patient actually gets referred to the heart team and we're trying to do is work on a time metric like door to balloon where every patient has to get treated within 90 days of diagnosis and one of the first thing is that it.

Speaker Change: Does the centers have to go back and look at what their own data Fay and most centers think they're doing a good job on when they actually dig deep and find their own data. They find out they are not doing mirrors, while if they thought they were but if we can get this quality metric implemented then it would completely change the urgency around patients move through the system it would be a quality.

Larry L. Wood: But if we can get this quality metric implemented, then it would completely change the urgency around patients moving through the system, and it would be a quality metric they would have to report on. We continue to expand this initiative, but the real goal is to make a guideline or quality metric be part of the system where centers would have to report on it. And we think if we do that, it could dramatically improve patient care because we know these AS patients do not wait well. They have very high mortality rates.

Speaker Change: Metrics they would have to report on them. So we continue to expand this initiative, but the real goal is to make a guideline or quality metric be part of the system, where centers would have to report on it and we think we do that it could dramatically improve patient care because we know these patients do not wait well they have very high mortality.

Larry L. Wood: If you go all the way back to partner one, which was the higher-risk patients, they had a 50 percent mortality rate at a year when left untreated, and that mortality rate starts very quickly in the process. So we're very excited to partner with AHA, and they're a great partner for us because they have demonstrated expertise in getting these sorts of things put in place. Thank you so much.

Speaker Change: Yeah. If you go all the way back to partner, one which was the higher risk patients better 50% mortality rate of the year when left untreated and that mortality rates starts very quickly in the process. So we're very excited to partner with H, a N and they're a great partner for us because they have demonstrated expertise in getting these sorts of things put in place.

Speaker Change: Thank you so much.

Christopher Thomas Pasquale: Our next question comes from Chris Pasquale with Nefron Research. Please state your question. Thanks.

Speaker Change: Our next question comes from Chris Pasquale with Nephron Research. Please state your question.

Christopher Thomas Pasquale: Thanks first of all though youre launching a pretty meaningful price premium to the other technology out there do you see the implementation of the untapped in October as a gating factor for commercialization or do you think you can make significant progress over the next six months prior to that incremental reimbursement kicking in.

Christopher Thomas Pasquale: First, on evoke, you're launching a pretty meaningful price premium over the other technology out there. Do you see the implementation of the NTAP in October as a gating factor for commercialization, or do you think you can make significant progress over the next six months prior to that incremental reimbursement kicking in? Yeah, thanks for the question, Chris. Appreciate it.

Speaker Change: Yeah. Thanks for the question Chris appreciate it yeah. So first just a couple of comments you know we believe really believed that evoke offers exceptional clinical and economic benefits to both patients and health care system. So we think that's a key fact and we've seen.

Daveen Chopra: Yeah. So, first, just a couple of comments. You know, we really, really believe that Evoque offers exceptional clinical and economic benefits to both patients and healthcare systems. We think that's a key fact.

Daveen Chopra: And we've seen a great increasing interest and demand from physicians to help have this technology treat their patients. So as a result, I think we're going to see continued centers opening up and continued patient growth each quarter. If you think about NTAP, what you mentioned about NTAP, we're psyched that, you know, CMS is actually proposing to move forward with NTAP. And then we hope that it starts, as you said, on October 1st.

Speaker Change: Great increasing interest and demand from our physicians to help have this technology treat their patients. So the result, I think we're going to see continued centers opening up and continued kind of patient growth each quarter. If you think about the end tap what are what you mentioned with tap that we're psyched that.

Christopher Thomas Pasquale: CMS is actually proposing to move forward with and tap and then we hope that exactly as you said to start October one and that helps make up any incremental costs between the cost of an about procedure versus the existing DRG, which is that D. R. G for tavern tier. So we think that'll continue to to add to it but between now and that we continue to see a lot of interest from physicians.

Daveen Chopra: And that helps make up any incremental cost between the cost of an Evoque procedure versus the existing DRG, which is the DRG for TAVR and TIER. So we think that'll continue to add to it. But between now and that, we continue to see a lot of interest from physicians and healthcare systems because we think this technology does so much. It's probably fair to say that NTAP will have a big impact next year and the year after, but not necessarily this year.

Christopher Thomas Pasquale: And as well as sensor system, because we think this technology does so much for patient pulp.

Christopher Thomas Pasquale: Probably fair to say that at the top you will have a big impact next year do you have to but not necessarily the VCR.

Christopher Thomas Pasquale: Thank you, Okay, and then it sounded like there was a purposeful mentioned of the commitment to fielding both replacement and repair technologies, where both tricuspid and mitral and tricuspid early consensus from physician seems to be the replacement is going to lead the way.

Daveen Chopra: It sounded like there was a purposeful mention of the commitment to fielding both replacement and repair technologies for both tricuspid and mitral valves. For tricuspid valves, the early consensus from physicians seems to be that replacement is going to lead the way. How are you thinking about which patients might be best served by each technology and what that means for evoke today and, then, longer term, what Pascal could do in tricuspid as class TR gets closer to completing enrollment? No, yeah, this is Daveen again.

Christopher Thomas Pasquale: How are you thinking about which patients might be best served by each technology and what that means for a vote today and then longer term, how Pascal could do and tricuspid as class TR gets closer to completing enrollment.

Daveen Chopra: No. Yeah. This is devine again I'll make a couple of comments on this one generally yes. We all we are believers that both repair and replacement technology for each valve really helps treat the maximum number of patients. These patients in these disease states are really heterogeneous there's no one magic bullet there.

Daveen Chopra: I'll make a couple of comments on this one. Generally, yes, we are believers that both repair and replacement technology for each valve really helps treat the maximum number of patients. These patients and these disease states are really heterogeneous. There's no one magic bullet.

Daveen Chopra: There are a lot of patients that continue to need different types of technologies. I think all of us, the physician community, the medical community, ourselves, we're all continuing to work and figure out which product, repair or replacement, is right for what patient. Do we have a clear answer today?

Christopher Thomas Pasquale: A lot of patients that continue to need different types of technologies I think that all of US are the physician community. The medical community yourself, we're all continuing to work and figure out which product repair replacement is right for what patient do we have a clean answer today no but are we continuing to to work on it and have some idea is definitely so with <unk>.

Daveen Chopra: No, but are we continuing to work on it and have some ideas? Definitely so. With technologies like Evoque, we see this unique elimination of TR, big quality of life improvements, and we see these favorable trends in all-cause mortality and heart failure hospitalizations, along with a very predictable procedure, very clean kind of times. In Europe now, we already have PASCAL for a couple of years in Europe, PASCAL tricuspid, where people really love it, where it has some really great features for the tricuspid valve, really atraumatic clasping, etc.

Christopher Thomas Pasquale: <unk> like evoke we see like this unique elimination of T. R. B quality of life improvements and we see these you know favourable trends in all cause mortality in heart failure hospitalizations, along with a very predictable procedure very clean kind of times in Europe. Now we started to have a little we started it we already.

Christopher Thomas Pasquale: Half Pascal for now a couple of years in Europe, Pascal Tricuspid, where people really love Pascal where it has some really great features for the tricuspid valve really atraumatic clasping et cetera, but physicians are starting to see how evoke makes a lot of sense for certain segments of their patient. So no we haven't quite figured out the exact.

Daveen Chopra: But physicians there are starting to see how Evoque makes a lot of sense for certain segments of their patients. So, no, we haven't quite figured out the exact mix of these patients, but we know both are really important for treating. That's great, David. Maybe I will add something.

Christopher Thomas Pasquale: A mix of these patients, but we know both are really important for treating the most patients.

Speaker Change: No that's great and maybe.

Bernard J. Zovighian: About six, seven years ago, we believed that having a repair and a replacement for both Mitra and TrackSpeed was going to be important. Today, we are confident that, indeed, this is the case, and this will give physicians options to treat many patients and to best select what therapy for what patient. So if you're asking what exactly technology is best for what patient, I think it is still early. We still probably need more time, more research to do that.

Speaker Change: I will add some figure about six seven years ago.

Speaker Change: We believe that I think repair and replacement for buff mitral and tricuspid was going to be important.

Speaker Change: Today.

Speaker Change: We are confident that indeed is the case and this will provide you a physician option.

Speaker Change: Two or three to the many patients and to best select you to what therapy for what patient. So a shock keno what exactly you know technology for what patient I think is teed up pretty well.

Speaker Change: We need you know probably both times, you know more or we fail to do that but the two for.

Bernard J. Zovighian: But for sure, I think this portfolio... And I'll even jump on your comment about, you know, kind of the clinical data, right? And that's why it's so important that we continue to enroll in trials like class two TR, such as tricuspid trials, right? It's a randomized study where getting more data and understanding how these different technologies can really help patients is super important for us all. So not only post-market studies for evoke but also these other randomized studies, and pre-market studies are so important to collect this data to continue to understand where these technologies can work best. Great, thanks.

Speaker Change: For sure I think this portfolio.

Christopher Thomas Pasquale: Pucillo basically the physician in a driving driver seat to make the best decision for their patient, which is you know what we want it initially and as a result this has been to unlock into this very large opportunity and we are going to see the sustainable growth from GMT Tito for years to come and I'll, even show up on your comment about kind of the clinical data.

Christopher Thomas Pasquale: And that's why it's so important that we continue to enroll in trials like class two T. R. Such our tricuspid trial right. It's a randomized study, we're getting more data and understanding how do these different technologies can really help patients. It's super important first of all so not only post market studies for evoke and but also these other randomized studies <unk>.

Christopher Thomas Pasquale: Studies are so important to collect this data to continue to understand where these technologies can work best for patients.

Unknown Attendee: Our next question comes from Peter Chickering with Deutsche Bank. Please state your question. Hey there, a follow-up to Chris's question, I just want to make sure that I heard you expect limited evoke sales until the end tab kicks in on October 1st, and with G&A at the high end of your previous guidance to 30%, how many centers do you think will be ready to perform the procedure by that date? And so this is Daveen.

Speaker Change: Great. Thanks.

Speaker Change: Our next question comes from Peter Chickering with Deutsche Bank. Please state your question.

Unknown Attendee: Hey, there if all of the critical question I, just want make sure that I heard that you expect limited Vogue sales until the untapped kicks in October one and with G&A at the high end of your previous guidance to 3%. How many centers do you think will be ready to perform the procedure by that date.

Speaker Change: So this is devine on the on the untapped comment we believe.

Daveen Chopra: On the NTAP comment, we believe, right now, each quarter, we continue to open up new centers, we continue to train physicians on it, and it's a steady state, nice growth in providing this technology to more patients. And we've seen a lot of demand from physicians for this technology from this patient. I think to Bernard's point, NTAP adds a continued allowance of growth as it gets to more scale that'll really help in 2025 and 2026.

Christopher Thomas Pasquale: Right now each quarter, we continued to open up new centers, we continue to train physicians on it and it's a steady state nice growth in providing the technology to more patients and we've seen a lot of demand from physicians.

Christopher Thomas Pasquale: This technology for these patients I think to Bernards point and tap adds a continued allowance of growth as it gets to more scale that'll really help support 2025 and 2026 growth.

Larry L. Wood: And then the second question was how many centers do you think will be ready to do procedures once the NTAP is active? And I think what we can say is certainly the sites that have been involved in clinical trials are going to be ready to activate. Beyond that, we're just going to be strategic and deliberate about where we activate sites, and we're going to focus on centers that are already the higher volumetricuspid centers that have their infrastructure set up, and have their right-side imaging set up.

Speaker Change: And then the second question was I missed the second part of your question I mean, I think the question was how many centers do you think will be ready to to do procedures. Once the EM and tap is active and I think what we can say is certainly the sites that have been involved in clinical trials.

Christopher Thomas Pasquale: <unk> are going to be ready to activate beyond that we're just going to be strategic and deliberate about where reactivation and we're going to focus on centers that are already the higher volume tricuspid centers that have their infrastructure setup have their right side imaging set out so it's going to be it's just a steady kind of growth of twice in two centers then moving to other high volume tricuspid centers.

Larry L. Wood: So it's going to be just a steady kind of growth of Tricin II centers, then moving to other high-volume tricuspids. Okay, and on the asymptomatic indication, if that trial is positive and you get FDA approval, is that going to be exclusive to SAPIEN, any color of how much creep you've seen, if any, for docs treating asymptomatic patients today? Yeah, thanks. Well, none of us know the trial results as yet. That won't happen until later this year,

Christopher Thomas Pasquale: Okay.

Christopher Thomas Pasquale: Is it demand indication if that trial is positive to get FDA approval is that can be exclusive to SAPIEN and.

Christopher Thomas Pasquale: And any color on how much <unk> seen if any for docs treating asymptomatic patients today.

Speaker Change: Yeah, Thanks, well, none of US know the trial results as yet that won't happen until later this year. So the after trial is positive and obviously the more possibly to trial as the the more benefit that you get from it but I think it's really about how patients get referred for therapy.

Larry L. Wood: So, um... The after trial is positive. And obviously, the more positive a trial is, the more benefit that you get from it. But I think it's really about how patients get referred for therapy, and I think that that's gonna be the key thing. So I think it speaks to treatment and referral for aortic stenosis and the time point at which we should do that more than a specific therapy. Now, that being said, this is a randomized trial against the Sapien platform. And so if you're gonna think about treating patients earlier, you're gonna have to have a platform that delivers outstanding clinical outcomes, right? You're gonna have to have those low mortality rates.

Speaker Change: And I think that that's going to be the key thing. So I think it speaks to the treatment and referral for aortic stenosis in the timeframe, we should do that more than a specific therapy now that being said it is a randomized trial against the SAPIEN platform.

Christopher Thomas Pasquale: And so if you're going to think about treating patients earlier youre going to have to have a platform that delivers outstanding clinical outcomes right youre going to have to have those low mortality rates and this is why we think our our platform really shines because if you look at again, our our partner III low risk data, we had 99% survival at a year.

Larry L. Wood: And this is where we think our platform really shines because, if you look again at our partner three low-risk data, we had 99% survival at a year, we had 90% survival at five years, and very low complication rates. And that's probably more in line with the patient population that would be asymptomatic, which is probably more toward a lower risk patient population. And we're the only ones who have made the investments in that trial at this point.

Christopher Thomas Pasquale: Here, we had 90% survival at five years.

Christopher Thomas Pasquale: And you know very low complication rates and that's probably more in line with the patient population that would be asymptomatic is probably more toward the low risk lower risk patient population and you know and where they only want to make the investments in that trial at this point, so but I do think it speaks to the deadliness of disease broadly.

Larry L. Wood: But I do think it speaks to the deadliness. Great, thanks so much. Our next question comes from Richard Newitter with Truist Securities. Please state your question.

Speaker Change: Great. Thanks, so much.

Christopher Thomas Pasquale: Yeah.

Christopher Thomas Pasquale: Our next question comes from Richard <unk> with <unk> Securities. Please state your question.

Richard: Hi, Thanks for taking the question.

Richard Newitter: Alright, thanks for taking my questions. Going back to the trend in Europe and your confidence and visibility of a recovery there for your business, I guess, is it more that you just think the price discounting is going to ease? And because you have Brazil coming into that region, you know, it'll offset, and that's the acceleration?

Richard: Going back to the.

Richard: The trend in Europe, and your confidence and visibility to our recovery there for.

Richard: For your business I guess.

Richard: It more that you just you think the price discounting is going to ease and because you have brasilia coming in that region.

Richard: It'll offset in that the acceleration or is there.

Larry L. Wood: Or is there, What else can you tell us that gives you confidence there? Yeah, you know, I We had a good Q4 in Europe, and so I, you know, this does feel like it. It's probably more temporary, and it's something that we're going to need to put a little bit more focus on. We do sell at a premium in Europe, and some people are pretty aggressive with discounting, and I think we have to beat that back with our value proposition and with new technology. We're super excited. While S3UR feels old to the U.S. at this point and to Japan, it's a brand new product for Europe.

Richard: Is this what else can you tell us what gives you confidence there.

Speaker Change: Yeah, you know I.

Speaker Change: We had a good Q4 in Europe, and so I you know this does feel like it's it's probably more temporary and it's something that we're going to we're going to put a little bit more focus on we do sell at a premium in Europe, and some people were pretty aggressive with with discounting and.

Richard: I think you know we have to beat that back with our value proposition and with new technology and we're Super excited you know well as three year, our feels old you know to the you asked at this point and go to Japan, It's a brand new.

Larry L. Wood: We have no experience with it, so we're excited because it's the only platform anywhere that has the DRY Resilient technology. And again, this is something that's been in our market-leading surgical valves for, we're probably approaching a decade now. So it's a huge milestone for us to be able to get this technology into Europe, and we do think that physicians still are going to make their long-term... Product decisions are based on what's best for their patient. Okay, thanks.

Richard: Product for Europe, they have no experience with it. So we're excited because it's the only platform and in anywhere that has the dry reside your technology and you know again. This is something that's been on our market leading surgical valves for.

Richard: Are we approaching a decade now so it's a it's a huge milestone for us to be able to get this technology into Europe, and we do think that physicians still are going to make their long term partner.

Richard: Product decision based on what's best for their patients.

Speaker Change: Okay. Thanks.

Scott B. Ullem: And following up here on just the selling days, I think you said, Scott, in 3Q, the billing days go the other way, positive for you. Order of magnitude similar to 1Q and same geographic impact, or anything you want to add there? Sure, and the third quarter, order of magnitude, same thing, it's about a day globally, and geographically, very similar. Europe, or Eastern Europe, O'Day, It's really a day across the board in the third.

Speaker Change: Following up here on just the selling days I think you said, Scott and <unk>. The billing days go the other way positive for you.

Speaker Change: Order of magnitude similar to <unk> and same geographic impact or anything you want to add there.

Scott: Sure in the third quarter order of magnitude same thing, it's about a day globally.

Speaker Change: And geographically.

Speaker Change: Very similar.

Speaker Change: We're up or eastern Europe, a day or two days everybody else's a day. So it's it's it's really a day across the board in the third quarter.

Scott B. Ullem: Okay, so more evenly split by region. Yeah, it's more. Most of the regions are one day in the third quarter, whereas in the first quarter, we had Europe and Japan at two days, but I'm not sure.

Speaker Change: Okay, so more evenly split by region.

Speaker Change: Yeah, it's more.

Speaker Change: Most of the regions are one day in the third quarter, whereas in the first quarter, we had Europe in Japan in two days.

Scott B. Ullem: I'm not sure that level of precision is that important. Suffice it to say, in aggregate, in total, it's a day in the first quarter and a day in the third quarter. Okay, thank you. Our next question comes from Danielle Antalffy with UBS. Please state your question. Hey, good afternoon, everyone.

Speaker Change: But I'm not sure it's I'm not sure that level of precision is that important suffice it to say in aggregate in total it's a day in the first quarter.

Speaker Change: Saturday in the third quarter.

Speaker Change: Okay. Thank you.

Speaker Change: Our next question comes from Danielle <unk> with UBS. Please state your question.

Danielle: Good afternoon, everyone. Thanks, so much for taking the question congrats on a good start to the year.

Danielle Antalffy: Thanks so much for taking the question. Congratulations on a good start to the year. Larry, I was hoping, you know, I appreciate this whole initiative, the patient acquisition initiative, and working to get patients treated. You guys talked about your analyst day and on the Q4 call about the AI, the utilization of AI, piloting this at some centers. And I was wondering if you could give any color on how much faster you're seeing growth at those centers, if at all, yet, if you can quantify that, just to get a sense of, like, if this does get implemented more broadly, what it could, you know, what we could see from a growth perspective.

Danielle: Larry I was hoping you know I appreciate this whole initiative the patient acquisition initiatives and.

Danielle: Working to get patients treated and you guys talked about at your analyst day and on the Q4 call the AI.

Richard: Allocation of AI at some piloting some centers and I was wondering if you could give any color on how much faster are you seeing growth at those centers. If at all yet if you can quantify that just to get a sense of like if this does get implemented more broadly what it could.

Richard: What we could see from a growth perspective.

Larry L. Wood: Yeah, it's, you know, I appreciate the question, Danielle, it's a little hard to quantify, you know; we're still putting some of these systems in place. And remember, it's not just identifying the patients; people have to start rewiring the way patients get referred and the way they come in. And so I think we're really, really pleased with the pilots that we've run in the places that we've gone. We barely clearly identified that there is an upstream population that many of the centers didn't even know. And now how we tap into those, how we move those patients through the system, how they add capacity to address these patients, that's where the pilot centers are kind of in that phase now. But we, you know, and I We've done it at enough centers with enough different people.

Speaker Change: Yeah I. It's you know I appreciate the question Danielle it's a little hard to quantify you know we're still.

Speaker Change: Putting some of these systems in place and remember it's not just identifying the patients you know people have to start rewiring or the way patients get referred and the way they they come in and so I think we're really really pleased with the pilots that we've run in the places that we've gone we very clearly identify that there's an upstream population.

Speaker Change: There are many other centers didn't even know existed.

Speaker Change: And now how we tap into those how we move those patients through the system, how they add capacity to address. These these patients that's where the pilot centers are kind of in that phase now, but we you know and I spoke about this in the Investor Conference. We have in our minds, 100% validated the under treatment of aortic stenosis, we done it.

Speaker Change: [noise] enough centers with enough different people, it's been backed by enough publications really it even leading academic programs now it's a matter of going through all of the steps to get these patients off the sideline to get appropriate therapy, and but this is going to be something it's not a day and one day theres going to be this massive step function, it's going to be discontinued.

Larry L. Wood: It's been backed by enough publications, really at even leading academic programs, and but this is going to be something - it's not a day, one day. There's going to be this massive step function. It's going to be this continued effort over time, but again, it's going to be the thing that drives our growth over, I think, a very extended period of time. And I guess just one quick follow-up on that plus asymptomatic.

Speaker Change: Effort over time, but again, it's going to be the thing that drives our growth over over I think a very extended period of time.

Speaker Change: Sure.

Speaker Change: Just one quick follow up on that plus eastern genetic I mean, you talked a little bit about this at the analyst day, but haytham genetics almost more about.

Larry L. Wood: I mean, you talked a little bit about this at the analyst day, but asymptomatic's almost more about easing workflow and decision-making processes. I mean, asymptomatic, assuming the trial's good and you get the guidelines plus this initiative, should we see growth acceleration specifically in TAVR in 2025? I know you're not going to give me 25 guidance, but I thought I'd try. Yeah, I'm not. I'm not going to get into that.

Richard: Using workflow and decision making processes I mean.

Richard: Symptomatic assuming the trials go ahead and you get the guidelines plus this initiative I mean should we see growth acceleration specifically in cover in 2025, I know youre not going to get 25 guidance, but I thought I'd try [laughter], yeah, I'm, not I'm not going to get into guidance and I really want to be cautious not to speculate.

Danielle Antalffy: And I really want to be cautious not to speculate on trials that are in flight. You know, we'll see the data from TCT. And, and, you know, after we see that data, then, you know, I'll be happy to talk about what I think the repercussions are and how I think it plays out. What I can tell you is the patient journey right now is a complicated one. Patients get diagnosed with severe aortic stenosis. And then they add this whole layer on top of it, which is, do you have symptoms? Are the symptoms attributable to your aortic stenosis? Are the symptoms enough to, to refer you for care?

Richard: On trials that are that are in flight, we will see the data at TCT and and you know after we see that data then I'll be happy to talk about what I think the repercussions are and how I think it plays out but I can tell you is a patient journey right now is a complicated one patients get diagnosed with severe aortic stenosis and then they had just hold on.

Richard: The way it on it later on top of it which is do you have symptoms are the symptoms attributable to your aortic stenosis are the symptoms are enough to to refer you for care and there's a number of patients even though the guidelines say any symptoms or cost for referral.

Larry L. Wood: And there are a number of patients, even though the guidelines say any symptoms or cause for referral, there's a large number of patients that are being held upstream because somebody has decided the symptoms aren't significant enough. So instead of this being a mathematical equation, it sort of turns into almost Olympic figure skating with all this judgment. And when you end up with older people that have more comorbidities, that gets even more confusing and more challenging.

Richard: Large number of patients that are being held upstream because somebody has decided to symptoms aren't significant enough. So instead of just being a mathematical equation it sort of turns into almost Olympic figure skating with all this judgment and when you're getting up with older people that have more comorbidities that gets even more more confusing and more challenging.

Larry L. Wood: If asymptomatic is successful and we have a powerful trial there, then it should simply move to track and field. It should just be a matter of if your aortic stenosis goes below 1.0, you should immediately be referred to a heart team for care.

Richard: Dramatic as is successful and we have a powerful trial. There then it should simply moved to track and feel that it should just be a matter of if your aortic stenosis goes below 1.0, you should immediately be referred to a heart team for care and I think that streamlining of care is gonna be widened what makes the difference and takes a lot of the noise out of the system.

Larry L. Wood: And I think that streamlining care is going to be what makes the difference and takes a lot of the noise out of that. Thanks so much. I love those analogies.

Speaker Change: Thanks, so much loved those analogies.

Joshua Jennings: And our next question comes from Josh Jennings with T.D. Cowan and Company. Please state your question. Hi, good evening. Thanks for taking the questions. I was hoping to ask about SAPIENx 4 and just thinking about the design and the ability to provide, I think, 16 different deployment diameters.

Speaker Change: And our next question comes from Josh Jennings with TD Cowen <unk> Company. Please state your question.

Joshua Jennings: Hi, good evening, thanks for taking the questions I was hoping to ask about SAPIEN X four and just thinking about the design and the ability to.

Joshua Jennings: Provide 16 different deployment diameters.

Joshua Jennings: I mean, should investors be optimistic and clinicians that we could see lower gradients and a lower prosthetic base and mismatch rate with the Sapien X4 relative to the Sapien 3 Ultra or Sapien 3 system? Or is it really just the benefit for future TAVR and TAVR that that sizing action will bring? Yeah, that's a great question, Josh.

Joshua Jennings: Should investors be optimistic and clinicians that we could see a lower gradients and a lower prosthetic patient mismatch right with the SAPIEN X for relative to the SAPIEN, three ultra where SAPIEN three platform system.

Speaker Change: And.

Speaker Change: Or is it really just the benefit for future Taborin tavern that that sizing action.

Speaker Change: Right.

Speaker Change: Yeah.

Speaker Change: That's a great question, Josh and clearly your deep deep on our on our platform in the detail I think the concept of this variable sizing is really being able to tailor our bound to the patient rather than driving the patient to a nominal we can we can adjust our valve and make a difference as it relates to human dynamics, we presented data at <unk>.

Larry L. Wood: Clearly, you're very deep in our platform and the details. I think the concept of this variable sizing is really being able to tailor our valve to the patient. Rather than driving the patient to a nominal, we can adjust our valve and make it. As it relates to hemodynamics, you know, we presented data at CRT that showed the improvements that we made with S3-UR with the resilia tissue. We saw a pretty significant reduction in gradients.

Speaker Change: T that show the improvements that we made with US where you are with the resilient tissue, we saw a pretty significant reduction ingredients and so if you need a copy of that presentation and I'm sure Mark can get it to you. So we've already made a lot of those enhancements to our U R platform and X for us a resilient platform as well so we would expect those benefits to be there.

Larry L. Wood: And so, if you need a copy of that presentation, I'm sure Mark can get it to you. So we've already made a lot of those enhancements to our UR platform, and X4 is a resilient platform as well. So we would expect those benefits to be there as well. Great.

Speaker Change: As well.

Speaker Change: Yeah.

Joshua Jennings: And then just to follow up on just the TAVR and TAVR replacement cycle, you know, I think the time when that really fully kicks in is TBD based on durability, but I would love to just hear your thoughts on TAVR and TAVR as the, I guess, more prominent choice for a second procedure in this lifetime management of pterodactyls. Thank you, and I think you're right on. You're right on target, Josh.

Speaker Change: Great and then just just a follow up on just the tavern. However.

Speaker Change: So replacement cycle.

Speaker Change: I think that when that really fully kicks in.

Speaker Change: Is TBD based on on durability, but would love to just hear your thoughts on.

Speaker Change: <unk> and <unk> as the I guess more.

Speaker Change: Prominent choice for a second procedure in this lifetime management, a trader extensive patients.

Joshua Jennings: Our platform, with its frame design and its coronary access, really is the ideal platform for that second procedure, but it's also the ideal platform to use in that second procedure. You know, I think a valve needs to be a good host, but it needs to be a good guest, and that's, I think, going to be critically important. You know, if you go all the way back to the Partner 1 trials that are older now, those patients were 83 years old at the time of implantation.

Speaker Change: Yes, Josh.

Speaker Change: The or platform with its but its frame design and its coronary access really the ideal platform for that second procedure, but it's also the ideal platform to use and that second procedure. You know I think about needs to be a good host, but it needs to be a good guests and that's I think going to be critically important.

Speaker Change: We if you go all the way back to the partner one trials that are that are older. Now those patients were 83 years. All the time of implantation, we're just sort of probably getting into that range now where tap in tap is just going to probably start hitting a little bit of an inflection point in the next couple of years and I think as time goes by that that is going to be.

Larry L. Wood: We're just sort of getting into that range now, where tab and tab are just going to probably start hitting a little bit of an inflection point in the next couple of years, and I think as time goes by, that is going to be a bigger part of the story. But again, you know, we think our platform is very well suited for that, and it's good for patients. You know, the idea that, you know, if you have a valve that had, you know, I'll make up a number, 10 years of durability, but they can get a second procedure and get another 10 or 15 years of durability out of it, you have the equivalent of 25-year durability without a patient having to have an open-heart procedure, and I think that's incredibly powerful.

Speaker Change: Bigger part of the story, but again, we think our platform is very well suited for that and.

Speaker Change: And it's good for patients you know the idea that you know if you have a valve that had you know I'll make up a number 10 years of durability, but they can get a second procedure and get another 10 or 15 years of durability out of it you have you know a equivalent of twenty-five your durability without a patient having to have an open heart procedure and I think that's incredibly powerful for patients.

Speaker Change: And just to just to finish the the piece where you're just on.

Larry L. Wood: And just to finish the piece, Larry, just on if surgery becomes kind of, I guess, the more prominent second procedure option, if using our first segment, I mean, your positioning on the surgical side is very strong, too, with connect resilient, but maybe just, Transcripts provided by Transcription Outsourcing, LLC. For sure, I think our surgical platform plays well into that as well. Thank you. And, ladies and gentlemen, we've run out of time for questions. I'll now hand it back to Bernard Zovighian for closing remarks. Yeah, no, thank you so much.

Speaker Change: Surgery becomes kind of I guess, the more prominent second procedure option, if using ever first segment I mean, your positioning on the surgical side is very strong too with connect brasilia, but maybe just two.

Speaker Change: And your thoughts there thanks.

Speaker Change: For sure I think our surgical platform plays well into that as well.

Speaker Change: Thank you.

Speaker Change: Ladies and gentlemen, we've run out of time for questions I'll now hand, it back to Bernard So Vicki and for closing remarks.

Bernard J. Zovighian: So thanks, everyone. You know, I want to close by offering some big picture comments about, you know, the course. Obviously, we are very pleased about the strong performance of the company, growing 10%. And truly, when you think about it, this is the result of a strategy we put in place years ago. What we have today is a diversified portfolio with TAVR, Mitral, Tricuspid, and Surgical, all of them contributing to the performance of the company.

Speaker Change: Hello. Thank you so much thanks, everyone I want to to close we as offering some deep is your comment about the quarter. Obviously you know we are very pleased about the strong performance from our competing growing 10%.

Speaker Change: And what do you what do you think about it. This is a result of a strategy we put in place years ago.

Speaker Change: What we have today is a diversified portfolio with Teva my towards like a speed and surgical all of them contributing to the performance of the company.

Bernard J. Zovighian: You know, TAVR, for sure, it is the largest business for us. It's still our number one focus. TAVR has a lot of growth potential, but Mitral and TrackSpeed are now contributing in a very meaningful manner to the performance of the company. So it is why we are so confident in the longer term that we are going to deliver sustainable growth, you know, quarter after quarter, year after year, with all of the catalysts we are having.

Speaker Change: Teva for sure. It will just be this for US is still our number one focus.

Speaker Change: A lot of growth potential, but my taught them to like a speed I'll now contributing.

Speaker Change: If we're not able to vote.

Speaker Change: <unk> of our company, so which is why we are so confident longer term that we have.

Speaker Change: We're going to deliver the sustainable growth quarter after quarter here, yeah, two year with all of the catalyst we're having.

Bernard J. Zovighian: Again, thanks for your interest. If you have any additional questions, please do not hesitate to reach out to Scott and Marco and myself. And have a great day. Thank you. Thank you. That concludes today's call. I'll pardon you and disconnect. Have a good day.

Speaker Change: Again, thanks for your interest.

Speaker Change: If you have any additional questions. Please do not hesitate to reach out to Scott Mark and myself and have a great day. Thank you.

Speaker Change: Thank you that concludes today's call pardon me just may disconnect have a good day.