Q1 2025 Edwards Lifesciences Corp Earnings Call
Greetings and welcome to the Edwards Lifesciences First Quarter 2025 Results. Welcome to the Edwards Lifesciences
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Keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce you to your host, Mark Wilterding, Senior Vice President, Global Finance. Thank you, Mark. You may begin.
Speaker Change: Thanks Alicia and thank you everyone for joining us this afternoon. Thank you.
Speaker Change: 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 head, global group president of TAVR and surgical, Daveen Chopra, our global leader of TMTT, and Wayne Markowitz, our global leader of surgical. Thank you very much.
Speaker Change: Just after the close of regular trading, Edwards Lifesciences released first quarter 2025 financial results. During today's call, management will discuss those results included in the press release and accompanying financial schedules, and then use the remainder of time for Q and A.
Speaker Change: Please note that management will be making forward-looking statements that are based on estimates, assumptions and projections.
Speaker Change: 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.
Speaker Change: Additionally, the statements involve risks and uncertainties that could cause actual results to differ materially.
Speaker Change: Information concerning factors that could cause these differences can be found in today's press release, and Edwards other SEC filings, all of which are available on the company's website at edwards.com .
Speaker Change: Edwards guidance reflects its current estimates of the impact from tariffs that are in effect or have been announced as of the time of this press release and assume such tariffs remain in place for the remainder of 2025.
Speaker Change: Any modification to such tariffs or new tariffs could have a material impact on the company's future, financial results and guidance? [inaudible]
Thank you.
Speaker Change: Unless otherwise noted, our commentary on sales growth refers to constant currency sales growth, which is defined in the quarterly results press release issued earlier today. Reconciliation between gap and non-GAAP numbers mentioned during this call are also included in today's press release.
Speaker Change: Quarterly and full-year growth rates refer to continuing operations and do not include discontinued operations.
Bernard Zovighian: With that, I'd like to turn the call over to Bernard for his comments. Thank you very much.
Bernard Zovighian: Thank you, Mark. Welcome everyone and thank you for joining us. Thank you for joining us.
Bernard Zovighian: Leopold, with a strong start to be here. That's COVID-19.
Bernard Zovighian: Total company sales grew 8% to 1.4 billion dollars in the first quarter, reflecting the benefits of our broad and differentiated portfolio therapies to treat patients with structural heart disease.
Bernard Zovighian: Collectively, this, my Listens, Mark, the significant progress we have made to unlock this large and growing opportunity.
Bernard Zovighian: to transform care for millions of structural heart patients around the world.
Bernard Zovighian: I'd like to thank our 16,000 global employees for their many contributions to advancing patient care.
Bernard Zovighian: Tavir Gross in the quarter was better than expected, as clinicians continue to adapt our best in class sapient technology.
Bernard Zovighian: Looking ahead to the rest of the year, we continue to believe that the results of the early Harvard trial represent a multi-year growth opportunity.
Bernard Zovighian: that will begin with the expected indication approval in the second quarter and expand with the evolution of policy and guideline changes in the US and globally.
Bernard Zovighian: And in late 2026, we look forward to the presentation of the results of the groundbreaking progress trial, which has the potential to further expand the therapy to many new patients with moderate AF.
Bernard Zovighian: I am proud of our commitment to TAVR innovation and high quality science that is increasing
Bernard Zovighian: and we are raising our 2025 TMTT sales guidance range to $5.30 to $5.50 million.
Bernard Zovighian: As a reminder of successful TMTT strategy, position has to be called the first.
Bernard Zovighian: to develop and launch a Transcanteter Traxistile Val with evoke in 2024.
Bernard Zovighian: Today, I am also very proud of the recent approval of our SAPNM3 in Europe , the world's first Transcated Thermal Value Replacement System.
Bernard Zovighian: which will benefit many patients with mitral regitation who have limited treatment options.
Bernard Zovighian: Edwards, with Ivok, M4E, and Pasquale, is uniquely positioned to meet the broad and diverse needs of patients with tricuspid and mitral valve diseases. [inaudible]
Bernard Zovighian: Edwards continues to invest in surgical innovation and evidence as we expand access to our therapies globally.
Last week, at the Heart Valve Society meeting,
Bernard Zovighian: Eightier data were presented, demonstrating the excellent durability of a company's novel Riziliati Shou, which is used in a wide range of Edward's surgical platform, as well as Sapien-Free, ultra-resilient.
Bernard Zovighian: The results represent the longest follow-up study on the durability of valves which highlights our dedication to pioneering unique innovation
Bernard Zovighian: With patience of all ages living longer and seeking higher quality of life, the importance of lifetime management has never been greater . . .
Bernard Zovighian: We also continue to make steady progress, advancing our portfolio of emerging opportunities which we discussed at our investor conference in December
Bernard Zovighian: Our team continue to build capabilities to reach the millions of patients around the world who suffer from structure and art failure. Thank you.
Bernard Zovighian: and in air, in aortic reorgetation, we are enrolling patients in journey, the pivotal trial for the Edwards JVALs air system.
Bernard Zovighian: and we have plans in place to offset the estimated impact of a currently announced tariff and the estimated delusion from the Yennavalva acquisition, which we are planning to close mid-year.
Bernard Zovighian: As a result of our plans, we are in the position to deliver on our original EPS guidance of 2.40 to 250 cents.
Bernard Zovighian: Our priorities continue to be serving the patients who count on us and maintaining the highest level of service and support to our physician partners around the world.
Bernard Zovighian: Looking ahead to 2026 and beyond, Edwards is positioned to transform care for the men's structure and health pressure he needs.
We are confident that our strategic focus. [inaudible]
Bernard Zovighian: Unique Innovation Strategy, and exceptional work of our employees around the world would deliver significant value to patients, the healthcare ecosystem and shareholders. Thank you.
Bernard Zovighian: Now I will provide some additional details by Product Group for Q1.
Bernard Zovighian: when adjusted for billing days, which was a little higher than expected.
Groff was comparable in the US and all US.
Bernard Zovighian: Edward's strong competitive position and pricing remain stable globally with some regional variability.
Bernard Zovighian: I am proud of our team's commitment to leading with science.
Bernard Zovighian: supported by a decade of clinical research that set the standard for quality evidence and physician decision making. Thank you.
Bernard Zovighian: This significant body of high-quality science from rigorous FDA trials and, of course, the excellent clinical outcomes delivered by Edwards Premium Sapien Technology.
Blasmos, at the American College of Cardiology Conference.
Bernard Zovighian: New clinical data from the early tether, trials, studying patient with asymptomatic severe AS were released.
Bernard Zovighian: The data highlighted that delaying delayed heortic valve replacement in this patient population was associated with worst outcomes . . . . .
Additionally,
Bernard Zovighian: A new study using cardiac biomarkers revealed that the rapid and unpredictable progression of disease.
Both studies.
Bernard Zovighian: and her score of need for urgent referrals for treatment, evaluation for severe AS patients, regardless of symptoms. Also at ACC,
New groundbreaking data from the Detect AS30, we are presented.
for their patients with CVRS that meet treatment guidelines.
Bernard Zovighian: The study found that these echo alerts increase both treatment and survival rate for patients with severe areas.
In the US,
Speaker Change: Our leading sepian free alteracy platform continues to demonstrate strong performance.
Speaker Change: We are advancing initiatives to help hospitals treat structural and heart patient efficiently and manage increasing procedure volumes.
Speaker Change: We are encouraged by hospital that have demonstrated the ability to scale to accommodate posterior growth. [inaudible]
Speaker Change: We are encouraged by discussion with key clinicians on the long-term impact of early-tavoured data to streamline patient care.
on son of a U.S.
Speaker Change: We continue to focus on the value of our differentiated technology and increasing therapy adoption.
Speaker Change: especially in areas where TAVA remains underutilized and many patients go without care.
Speaker Change: In the first quarter, Cells Grove was supported by the continued expansion of Cepian Free, between RĂ©silia and Europe .
Sapien Free Ultra Resilient continues to deliver exceptional clinical results.
Reinforcing the differentiation of this best-in-class platform.
Speaker Change: We remain dedicated to addressing the significant under-treatment of A.S. among the substantial elderly population in Japan. Thank you very much.
Speaker Change: In February 4th, we are maintaining our full year sales growth guidance of 5-7%.
Long term, we are enthusiastic. Thank you.
about the durable, made to high single digit growth opportunity in TAVR.
Speaker Change: supported by the upcoming early-tever indication approval, guideline and policy changes, and the potential to serve patient with moderate AS.
Turning to TMTT C.
Speaker Change: Our unique and increasingly differentiated portfolio draws another quarter of an impressive growth, with a meaningful contribution to overall company performance. Thank you very much.
Speaker Change: We are pleased with first quarter sales of $150 million, representing growth of about 60%.
Speaker Change: and led by increased adoption and balanced contribution from Pasquale Niveauk in the US, Europe and globally.
Speaker Change: We continue to see strong therapy adoption and expansion across both nitrogen and like a speed.
Globally, Mitchell Tier procedures, continue to grow double digits.
Speaker Change: and the developing tricuspid opportunity is going even faster across both repair and replacement.
Speaker Change: Pasquale, continues to demonstrate its value for patient care. Its differentiated features are driving distinguished clinical outcome, and adoption is increasing at both new and existing sites around
Speaker Change: The EVOP commercial launch is progressing well in the US and Europe with continuing excellent patient outcome.
Speaker Change: At the end of March, we were pleased to see the finalization of the NCD for trans-KTTR-Trakisping value replacement for patient suffering from Trakisping disease.
Speaker Change: With the new NCD, Iraq is now covered for all Medicare beneficiaries who meet the criteria outlined in the final coverage policy, expanding patient access to this important therapy.
Speaker Change: We are pleased with the recent approval of the SAPNM-3-Mitral Value Replacement System in Europe . This revolutionary trans-caterpised therapy is built on the proven SAPN platform which has been used in more than
Speaker Change: We continue to expect that results from the in-circle pivotal trial, studying M3, will be presented at the TCT conference in October 2025. Thank you very much.
In addition,
Speaker Change: As part of our deep commitment to advancing science for patient with structural health disease, a European post-market fall-up study is planned to continue evaluation of Sapien M3, following patients out to five years.
Speaker Change: As previously shared, we expect U.S. approval of CPMM3 to follow in 2026.
Speaker Change: The launch plan for Sepion and Spring Europe is focused on creating a new category as we have done many times before and achieving excellent patient outcome.
Speaker Change: Without the case of experience, we are uniquely positioned to bring separated free to the many patients in need across Europe We will work with all stakeholders [inaudible]
Speaker Change: to ensure patient access to this novel therapy, providing physician training and working with policymakers to establish proper therapy coverage.
Speaker Change: Edwards is the only company that offers a trans-cated airport for you that includes both replacement and repair treatment option for both the mitral and flakasid valves, meeting the complex needs of underserved patients.
Speaker Change: We are committed to bringing this portfolio to patients in need around the world and expect meaningful impact from these advanced therapies in 26 and beyond.
Speaker Change: In our surgical part of the group, first quarter global set of $2.151 million in degrees, free person over a prior year. Thank you.
Speaker Change: We continue to see positive procedure growth globally for the many patients, best-tweeted with Edward's premier Marie Villia portfolio, including Mitres, Inspiris, and Connect.
Speaker Change: We continue to generate high quality evidence on our resilient tissue technology.
Speaker Change: As short in the eight year data presented at the recent Hardval Society meeting, Resilia Tishovalves had significantly improved freedom from structural valve deterioration and freedom from reoperation compared to non-resilia valves. [inaudible]
Speaker Change: Also in the quarter, our surgical team made progress advancing important innovation around the world.
Speaker Change: Mitrice, Lawrence in China, with positive surgeon feedback, and we anticipate receiving CMARC approval for the Connect Aortic valve conduit in Europe before your end.
Scott Ullem: And now Scott will cover the details of the company's financial performance.
Scott Ullem: Great, thanks a lot Bernard. As Bernard mentioned, we are pleased with our first quarter total company sales performance and progress on our strategic milestones which gives us confidence in our full year outlook.
Scott Ullem: We are raising our original sales guidance range for TMTT to $530 to $550 million, driven by more favorable foreign exchange and continued business momentum.
Scott Ullem: Total Company, Taver, and surgical sales growth guidance ranges remain unchanged but the company is increasing our original total company sales dollar guidance range by 100 million dollars to account for recent movement in FX rates. [inaudible]
Scott Ullem: So now I'll cover additional details of our Q1 results, starting with earnings per share.
Scott Ullem: We generated adjusted EPS of 64 cents in the quarter with solid operating performance.
Our Gap EPS for the quarter was 62 cents. [inaudible]
Scott Ullem: A full reconciliation between our gap and non-GAAP measures including adjusted EPS and other items is included with today's release
Scott Ullem: Moving on to other elements of the PNL. For the first quarter, our adjusted gross profit margin was 78.7%, compared to 78.5% in the same period last year. [inaudible]
Scott Ullem: We are maintaining our full year 78-79% gross margin guidance at this stage. However, we do expect some pressure from the weakening dollar, the impact of announced tariffs and the expected close of the Genevieve acquisition. .
Scott Ullem: Selling general and administrative expenses in the quarter were $466 million or 33% of sales, which was better than our expectation for the quarter driven by lower sequential spending and deferral of certain strategic investments originally planned for Q1. Thank you very much.
Scott Ullem: Research and Development Expense of $255 million in the first quarter was equivalent to 18% of sales, a reduction from 19.6% of sales in the previous quarter. [inaudible]
Scott Ullem: This lower ratio of spending reflects the company's prioritized investments in our structural heart portfolio in areas where we believe there are significant opportunities for breakthrough innovation and profitable growth. [inaudible]
Scott Ullem: Adjusted operating profit margin in the first quarter of 29.1% was driven by better than expected sales and favorable mix as well as some variable expenses delayed beyond Q1.
Scott Ullem: We expect pressure on our operating margin as a result of the weakening dollar, the impact of announced tariffs, and the expected mid-year close of the NFL acquisition, however...
Scott Ullem: We are implementing plans to mitigate these anticipated costs and we maintain our full year operating margin guidance of 27 to 28% and our EPS guidance of $2.40 to $2.50 Thank you so much.
Scott Ullem: We continue to expect our 2025 tax rate, excluding special items to be between 15 and 18 percent. Thank you very much.
Scott Ullem: FX rates positively impacted our first quarter of gross profit margin by 40 basis points compared to the prior year.
Scott Ullem: Relative to our February guidance, FX rates had a nominal impact on first quarter earnings per share.
Scott Ullem: At current rates, we now estimate no impact from foreign exchange on reported sales in 2025 relative to 2024, versus our investor conference guidance of a $100 million reduction. Thank you very much.
Scott Ullem: As a reminder, our hedging strategy is designed to mitigate the impact of foreign currency fluctuations on the original EPS guidance we provided in December .
Scott Ullem: Turning to the balance sheet, we continue to maintain a strong and flexible balance sheet with approximately three billion dollars in cash and cash equivalents as of the end of the quarter.
Scott Ullem: During the first quarter, the company entered into an ASR agreement and repurchased stock through a pre-established plan totaling $300 million.
Scott Ullem: Edwards has approximately $1 billion remaining under our share repurchase authorization. Thank you very much.
Average diluted shares outstanding during the quarter, or 588 million. [inaudible]
Scott Ullem: We continue to expect average diluted shares outstanding for 2025 to be between 585 to 595 million.
Scott Ullem: So I'll finish with one final guidance comment. For the second quarter we're projecting sales of 1.45 to 1.53 billion dollars and adjusted earnings for share of 59 cents to 65 cents.
Bernard Zovighian: And with that, I'll pass it back to Bernard. Hey, thanks Scott. Thank you very much.
Bernard Zovighian: Before I close this afternoon, I want to take a moment to acknowledge an important anniversary for the company.
Bernard Zovighian: It was 25 years ago this month that we rang the bell at the New York Stock Exchange and officially began our journey as Edward Lifesciences [inaudible]
Bernard Zovighian: Since then, we have transformed care for millions of structural health patients around the world, solving large and complex patient needs and pioneering therapeutic categories.
Bernard Zovighian: And our future is bright, our foundation remains strong, and we will continue to bring new innovation to the many structural health patients in need around the world. Thank you for your time.
with that, turning back to Mark. Okay.
Thank you very much, Bernard.
Bernard Zovighian: We are ready to take your questions. As a reminder, please limit the number of questions to one plus one follow-up to allow for broad participation. If you have additional questions, please re-enter the queue and management will answer as many participants as possible during the remainder of the call. Alicia, I'll turn it over to you. Thank you.
Speaker Change: Thank you. We'll now be conducting the question answers session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tool will indicate your line is in the question queue. You may press star 2, if you would like to remove your question from the queue. If you would like to ask a question, please press star 2 on your telephone keypad.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your headset before pressing the star keys. One moment please while we pull for questions in.
Speaker Change: Thank you. Our first question comes from the line of Larry Biegelsen with Wells Fargo. Please proceed.
Larry Begelson: Good afternoon, thanks for taking the question. Congrats on a good start to the year here. It's got you can probably anticipate the first question. You're maintaining the EPS guidance despite the tariffs and the Genevile acquisition and maybe even currency. So obviously people would love to hear you parse out how much each of those impact 2025 and how much lower. Thank you very much.
Speaker Change: Could the gross margin be relative to the guidance and I had one follow-up?
Speaker Change: Sure, so let's go through the three elements Larry, thanks for the question. On FX, you know, our hedging program is designed to...
Speaker Change: Mute the impact of foreign exchange changes on our EPS, so the real impact is from tariffs and the NFL acquisition. For tariffs, it's probably about five cents to EPS based upon the tariffs that are already in place.
Speaker Change: with our key business regions, and you know, we also already have a lot of production
in the U.S., and so...
Speaker Change: I think $5 associated with the 10% tariffs. Now that's just for 2025. The tariff impact is higher than that.
Speaker Change: But as you know, they get capitalized into inventory and recognized in our PNL as finished goods are sold. So the bigger impact is in 2026, but it's premature to be offering any guidance or speculation about
Speaker Change: What tariffs could look like when we get out there? For Yennevalve, we think the impact is probably in the range of five cents to ten cents. Now keep in mind, we don't have current information, we haven't closed the deal yet, but based upon our estimates and the preliminary plans we have for integration, that's probably a good modeling assumption at this point.
Speaker Change: That's very helpful. And follow up for Daveen, Anttrakuspid. Congratulations on the NCD for evoke. How do you see the NCD impacting the lab? Love you, Vogue. Thanks for taking the questions. Thank you.
Speaker Change: Thanks Larry, thanks so much for the question, right? We can be excited as a vogue as a new category for us, right? It's a great product, I'm in the NCD as you know, was effective now in March of 2025, and this is a trans catheter tricuspid valve replacement NCD.
Speaker Change: The NCD ensures that both the standard Medicare as well as the large Medicare Advantage patient groups have access to a vogue as outlined in the final coverage policy.
Speaker Change: This coverage policy was very much in line with our expectations, so it's kind of built into our guidance this year.
Speaker Change: So overall, it is in line with our expectations of 2025 being full steam with activating new sites and continuing to treat more patients with a vogue who are getting excellent outcomes.
Speaker Change: and this is the start of a great multi-year kind of growth opportunity for treating more patients.
Thank you so much.
Speaker Change: Thank you. Our next question comes from the line of David Rowan with Goldman Sachs. Please proceed.
David Rowan: Thank you, good afternoon. I want to just start on the tab, on the tab or business and maybe you could...
David Rowan: Talk us through a little bit what you're seeing on the ground has related to either referral patterns or...
David Rowan: Physician Engagement, Post-the-Presentation of Early Tavern, now that we're kind of six months-ish. [inaudible]
David Rowan: following TCT, and then maybe walk us through specifically what happens once you get the indication expansion approved and what the plan is to start to support market development effort and when we should see that show up in numbers then I have a one follow-up.
David Rowan: Thanks, David. Yeah, that's a great question. Well, first of all, I think the data set was very, very strong that we presented at TCT, but it does take position a little bit of time to work their way through the data and really understand the important nuances.
David Rowan: A very strong deep dive at ACC, and there was a few things that came out of that. One was the unpredictable nature of these patients that have asymptomatic aortic stenosis. [inaudible]
David Rowan: and I think one of the things that a lot of people have been utilizing and have been focused on is the use of biomarkers.
David Rowan: and the thought being that biomarkers would be predictive and would help...
Positions Understand, And,
David Rowan: What Atheon to medications they should refer and what patients they could...
David Rowan: Safely Wade-on, and I think the surprising data that came out at ACC said the biomarkers were actually not predicted. They did not predict which patients had more serious events versus which patients just had a progression to more mild symptoms.
David Rowan: So I think it just really stresses that these patients need to get referred, they need to get worked up by the hard team. And we've continued to work with the clinical community and our positions to make sure we amplify that message. But of course,
David Rowan: You know, all we can do right now is just educate people on the publications on the data. We can't actually promote in any way, shape, or form treating patients who are truly asymptomatic because we don't have the indication yet [inaudible]
David Rowan: We do expect that to come before mid-year, so we're on track for that, and the minute we get the indication approval, we have a very detailed education plan, we can then begin revert. [inaudible]
David Rowan: by reaching out to the referral base and doing all of the other things that we want to do to help amplify this message. But again, we expect the approval to happen in Q2.
Speaker Change: Got it, thanks for the detail there, and then on the TMTT side...
Speaker Change: as you kind of look 12 to 24 months forward, I believe you'll have...
Tri-Cuspit Repair and Replacement, Mitchell Repair and Replacement available.
U.S. and O.U.S. [inaudible]
Speaker Change: So can you maybe help us just think about market segmentation a little bit? [inaudible]
Speaker Change: in that category. How should we think about mixed between repair and replacement today and going forward? And whether this category is more of a sort of, quote, toolbox approach for physicians, or you think it converts to a one size fits all, be it in Michel or tricuspid? [inaudible]
Speaker Change: Thanks David, let me start them and I will ask David to add some additional details.
Speaker Change: You know, I want to start it where we were in a few years ago. [inaudible]
So, this is why we went in with the toolbox.
Speaker Change: But we know that many patients cannot be treated with tear, so therefore we are the first to launch evoke, which is going very well and we see we are treating more patient than just tear patient, participation with evoke.
Speaker Change: You know, it's the beginning of a same journey here. It is going to take us multiple years to train physician expand.
Speaker Change: So to give you a sense about segmentation, right now it is a little bit early, but David is very close to that, so maybe I should bring some color here. Yeah, as Bernard said, it's hard to give exact segmentation, but I'll try to give you some thoughts we have. Thank you very much.
Speaker Change: Today in Europe now, as Bernard said, we have, we have now repair and replacement for each microtry carpet, so we believe with the two technologies together, we can treat a larger group of patients.
Speaker Change: Clearly in the mitral side again in Europe , M3 has just gotten approved. And for M3, it will be over time to really build out this category.
Speaker Change: to train physicians to get appropriate payment, etc. over time. And for that we see, we remember that the M3 that this is a product of the gear toward the tear and mitral surgery unsuitable patients. So it's for patients who don't have tear or surgery options. Thank you very much.
Speaker Change: So over time we still believe Keir for coming years will be the largest part and then eventually over time, Mitchell will continue to grow on Mitchell replacement will continue to grow in its treatment of people offering that new option. [inaudible]
Speaker Change: in Tricuspid in Europe . Again, it's a little different than the US, than the US where Tricuspid tears have been around for many years, and now the new category of evoke has been recently created in Europe . [inaudible]
Speaker Change: where we're now adding more patients to the pool who are both tricuspid surgery and tricuspid tear ineligible. So now we're adding you patients who don't have an option in producing these amazing results. [inaudible]
Speaker Change: And so that's how we see the European market progressing in this couple of years. The US will have a little bit different dynamics, but you'll still see that because tears have been very well established in the micro space [inaudible]
Speaker Change: We see Michael replacement as an additive therapy, bringing patients off the sideline and offering a solution that they didn't have before
Speaker Change: and the Tricossus base, as you know, both repair and replacement entered the US market at similar times. So the clinical community right now is learning together about here which is the best repair patient and which is the best replacement patient. Thank you very much for your time.
Speaker Change: We've seen from experience in Europe so far that having a repair and a replacement solution is really important for treating the maximum number of patients. But the exact ratio, we're going to figure that out together with clinicians in the coming years.
Great, thanks so much.
Speaker Change: Thank you. Our next question comes to the line of Travis Steed with Bank of America. Please proceed.
Travis Steed: Hey, congrats on the quarter. First question I wanted to ask on TAVR capacity constraints and the potential for the TAVR and TB to loosen some of the requirements are potentially broadened some of the number of centers available to treat. And it determines some of the ways that some of the capacity constraints can be eased over time. Thank you very much.
Travis Steed: Sure, thanks for the question. Yeah, you know, we certainly feel. Thank you.
It's the time to reopen the NCD. Thank you.
We think there's a number of things that...
Need to be updated, you know, the first is the MCDs to specifically cover asymptomatic patients. [inaudible]
Travis Steed: just to ensure national coverage is standardized for all the patients that need that therapy. I think the second thing is we know that adding hospitals that could offer this therapy would improve care and give more people access. Thank you very much.
Travis Steed: Ed Capabilities, and we try to partner really closely with them. [inaudible]
Travis Steed: You know, we offer about clinic coordinator training courses, so if that's the constraint, you know, we can certainly help them train their staff. Some places, you know, it's more about anesthesia, and so we can, you know, bring in experts to help them adopt conscious sedation, you know, if they're just, you know, limited to
Mark Zovighian, Scott Ullem, Mark Wilterding
Travis Steed: We have a lot of new technology, we have a lot of new indications coming I think hospitals realize that and I think they are investing and we've seen that and they'll continue to do so but the reality is they need to keep doing that because the indications right now it's going to be...
Mark Zovighian, Scott Ullem, Mark Wilterding
Speaker Change: Great, that's helpful, and then I'd like to follow up with a modeling question on Q2 Taver, I think the street is 5.8% I'm just curious if there's any color you want to provide on how to model Q2 Taver and the remainder of the year and the second half and any days benefit to kind of call out over the course of the year for the remaining portion of the year. Thank you very much.
I'm going to give you a little bit of
That growth in the first quarter.
Travis Steed: and to get to the midpoint of our five to seven percent growth rate guidance for the year, it tells you we need something in that six percent range for each of Q2, 3 and 4. Obviously, there's going to be some differences. We've got some changes coming during the course of the year, including the symptomatic indication, but probably the right place to model, Travis is in that six percent range with some expected variability quarter to quarter. We've got some changes coming during the course of the year, including the symptomatic indication, but probably the right place to model, the right place to model,
Great, thanks a lot.
Robby Marcus: Thank you. Our next question comes from the line of Robbie Marcus with JP Morgan. Please proceed.
Robby Marcus: Oh great, good quarter. Thanks for taking the questions. Two from me.
Speaker Change: Scott, maybe just on the EPS Offset, Offsetting, 10 to 15 cents for Edwards. .
Speaker Change: It's a big move and really impressive, maybe speak to sort of the undertaking you're doing to be able to offset that kind of headwind between tariffs and Yennevalp delusion. Thank you very much.
Thanks for the question, obviously we've been...
Speaker Change: Anticipating the approval of the NFL and running a bunch of scenarios in the event that were successful getting it closed which we think we will.
Speaker Change: Our guidance for the year did not anticipate an impact from Yineval, but we've had plans to be able to take action.
Speaker Change: when we got some confirmation and more confidence that we're going to get it closed. So, we're ready to go. We do think that spending will step up a bit in the second quarter because it was lower than we originally planned and expected in Q1, and that's really the reason why we ended up with 64 cents a share in EPS in the first quarter.
Speaker Change: You know, we're going to be looking at things like investments that we are planning to make that are...
Speaker Change: More discretionary in 2025 that will not impact our sales guidance for this year, but at this point we're not going to get into a lot more of the detail about where those items are.
Speaker Change: I mentioned in the prepared remarks that we're really focusing hard on prioritizing our R&D investments and really focusing on things that can drive...
Mark Zovighian, Scott Ullem, Mark Wilterding
Speaker Change: So just to add, I'm not Scott, well said, I would say, we are very pleased about the way we are starting the year. Strong to one, sales, slightly better than expected, EPS, top end of a range.
We are
Speaker Change: You know, we are, you know, we have achieved, you know, so minimalistic in Joanne, you have seen, you know, all of them where we are going to be able to create, you know, new category for us. Think about, you know, the multi-year growth opportunity ahead of us, based on this, you know, new medicines. Then, you know, you know, full year outlook, confident 8 to 10, raising of a TMTT guidance. [inaudible]
Speaker Change: and being able to offset Yenna Val's delusion and basically the tarish impact. We feel good about the year, we feel good about how we are running the company. [inaudible]
Um.
Speaker Change: You know, first quarter was good, but still pretty much in line with the street. How are you thinking about the split between FX and underlying and sort of the key drivers of progression in the race guide through the rest of the year? Thanks a lot. Thanks a lot.
Speaker Change: TMTT Guidance comes from FX and the other half from Operational, and then the balance of that $100 million would be spread across the other businesses. Of course, Taver would be the biggest place for that to go. Devin, you want to talk about the other half of the Guidance infrastructure? Yes. So on the operational side of things, as you can imagine, we continue to see great momentum on both Pasquale as well as evokes. So both are kind of key drivers, both in Q1 and going forward as we just treat more and more patients. Thank you very much.
Speaker Change: from maybe even, I'll give you just a geography component, so it's good to look at that way as well. We see both coming from both the US and Europe . In both these markets, Pasquale continues to show it's a differentiation.
Speaker Change: and Evoke as a new category continues to create new patients who don't have great outcomes, so we see a continued grow popping from that side as well. Thank you very much.
Appreciate it, thank you very much. Thank you.
Speaker Change: Thank you. Our next question comes from the line of Vijay Kumar, with Evercore IFI. Please proceed.
Hey guys, thank you for taking my question.
Speaker Change: Scott, I had a couple of guidance clarifications, if you will.
Speaker Change: or should we be perhaps looking at the bottom half of the guidance room and maybe walk us through on what the assets are? [inaudible]
Yeah.
Speaker Change: and the reason is because we haven't clothed Diana Valviet, so part of this depends upon the timing of that clothes and when we start picking up some of that burn. [inaudible]
Speaker Change: and part of it depends upon what the integration plan looks like and what we're actually going to execute. That's why we gave a range and that's why we think that the 240 to 250 range NPS can accommodate different scenarios.
Speaker Change: Minister, and maybe one on International Japan was a little late, Mary Cockwood, you know, Lawrence within Japan.
Speaker Change: Yeah, thanks, you know, VG for the question. So for sure, you know, our result in the quarter, and you know, the last quarter was, you know, less than expected, a little bit disappointing for us, but we are very optimistic about Japan. You know, what we have seen is a couple of things happening. We hear procedure growth environment. [inaudible]
Speaker Change: and we need to better understand that, you know, what's happening there, and also some competitive pressure. So, you know, what we are doing is, you know, a couple of things is, one is enhancing our capability in the region in Japan to accelerate market growth. [inaudible]
Speaker Change: One, and better position of technology. You know that when our technology is a very different city, you know, when we bring our technology to our to patients. [inaudible]
Speaker Change: Evidence Demonstration that we live longer, better quality of life, there are more, you know, hospitalization, complication, so this is the kind of value we bring, we have a good story to tell, and I believe, you know, we are going to have, you know, all of the Japanese, you know, physicians responding very well to this. [inaudible]
Speaker Change: We are also announcing a capability in Japan to address the situation. So overall, you know, long-term in Japan, we see a big potential, aging population,
Speaker Change: There is a lot of as-patient, mitral patients, like as-patient, so clearly an opportunity for us, an opportunity to change your patient care there.
Understood, thank you.
Speaker Change: Thank you. Our next question comes to the line of Matt Taylor with Jeffries. Please proceed.
Matt Taylor: Hi, thanks for taking the question. I did want to follow up on TMTT. I heard your comments and I guess I just wanted to confirm that none of the guidance trade was really around M3.
Matt Taylor: and also just wanted to think about how to maybe compare and contrast the launch of the mitral replacement versus what you've seen with evoke and try touch stage. Should we expect it to be similar and can you talk about when the European launch will start to contribute and what to expect from the US?
Speaker Change: Yeah, sure, this is Daveen, Matt, I can take that question. So, first of the first part of your question, yes, you're correct that we had built in M3 into our original range for the year already, and the change in guidance did not have to do with the specific CE mark or the timing of the CE mark. We'd already kind of built it in.
Speaker Change: The indication, though, of mitral replacement in Europe is different. It is more similar to Vokin, Europe is different than what we see in the U.S., meaning, as I mentioned, mitral replacement is for patients who are unsuitable for mitral surgery or for care.
Speaker Change: So for that, yeah, we expect a gradual build up and in Europe , as you can imagine...
Speaker Change: We're drawing on our therapy and our experience in how to create categories because each country in Europe is very unique. There are different ways of getting incremental payment and coverage for our therapies and we've got to work on that one at a time and that takes time.
Speaker Change: Additionally, we got to train physicians, train our own team, and build it up. So we really see, see for them, through in Europe , being more of a gradual, long-term, important category of adding new patients with micro disease to be treated. Thank you very much for your time.
And, yeah, hopefully that's helped.
Speaker Change: That's great, and maybe you can just finish with the US, how that will be different.
Speaker Change: Yeah, so in the U.S. from different than a vote in the U.S., as you imagine, Michael Replacement, again, the U.S. will also have an indication unsuitable for Kira and Michael's surgery.
So again, it's...
Speaker Change: These patients are already in the funnel. They might need to be appropriate for surgery or tear. They don't have any other option and now for many of those patients and through will be an option. [inaudible]
Speaker Change: Evoke, as you know, when we launched it, had a different broader indication for people, for health status improvement for people with tricuspid disease. So there's not this layer of first, are you appropriate for tear or surgery? I'm sorry.
Speaker Change: So with that we would expect that the US micro launch in general would be a slightly slower rate probably that would be a slower rate than we think we saw with a vote.
Speaker Change: But either way we really see that the great news about this is that this technology replacement is really complementing tier and adding patients to allow us for that kind of multiple years of growth as we add more patients with this new treatment.
Great, thank you so much.
Joanne Wonsance: Thank you. Our next question comes from the line of Joanne Wuensch, with Citibank. Please proceed.
Joanne Wonsance: Good afternoon and thanks for taking the question. I just hit pause on the early tavern, label expansion, and NCD because I think there's a couple of different things that are happening here.
Joanne Wonsance: And correct me, if I'm wrong, one is the label expansion, the second one is the NCD. The NCD would expand the number of centers, it could expand.
Joanne Wonsance: May be something else, and I've also heard from some physicians, maybe in expectations that I might eliminate the need for a cardiac surgery team in the in the OR. So could you just sort of like. [inaudible]
Joanne Wonsance: Clarify what you think may happen, and then how long after all of that starts to layer on do you think, you know, procedures start to round. Thank you. Thank you.
Joanne Wonsance: Yeah, thanks, Joanne. You know, I think there's a multitude of developments here. The first thing is the label expansion, you know, which obviously is under FDA control. [inaudible]
Joanne Wonsance: and again we expect that to happen in Q2 so that's kind of step one. [inaudible]
Joanne Wonsance: The National Coverage decision, that's under the purview of CMS and they'll decide when they want to reopen that and when they want to reevaluate it.
Joanne Wonsance: and given the safety of TAVR that's been demonstrated in the national registry that we have that really confirms the outstanding results across all of the centers that we've opened. We do expect there to be an expansion in the number of centers. [inaudible]
Joanne Wonsance: How many will that be? That's going to be up to how they write the policy and how that plays out. And we'll see how they decide to streamline the team and try to make the healthcare system more efficient.
Joanne Wonsance: The third big element is guidelines, which fall under the society purview, and how do they take this data? How do they update the guidelines? The guidelines?
Joanne Wonsance: with what the data suggests. And I think, you know, we're still in that education process with with a lot of folks. [inaudible]
Joanne Wonsance: You know, there are sometimes people think that asymptomatic patients are automatically younger patients, but what we saw in the trial, as I think the average age was 76, where for a low-risk trial it was 73. So these aren't necessarily younger patients, you know, we're not necessarily treating them at a much younger age. [inaudible]
So I think these things are all important. [inaudible]
Joanne Wonsance: The shackles off of being able to really advance our education platform and advance our ability to promote this. But until we get the FDA approval, we're just, you know, we're just kind of at a standstill beyond what the physicians themselves, the investigators and people do at the big medical meetings. Thank you very much.
Very helpful. Thank you. Thank you.
Speaker Change: Thank you. Our next question comes in line with Peter Chickering, with Deutsche Bank. Please proceed.
Speaker Change: Is that, you know, CMS is actually in sort of final discussions with the societies and health systems about relaxing this entity to, you know, to be certified to Irish senators and that this change to actually becoming in May or in June . Is this timing something that you guys have heard as well?
There's no predetermined timing. [inaudible]
It opens whenever CMF decides that they...
Speaker Change: that they want to open it, and that is completely within their purview.
Speaker Change: with their rum of control. So, anybody that provides specific timing, they're simply speculating as to when they think, you know, when they think that that could happen. So, I don't have any insights beyond what I've already stated. Thank you very much.
Speaker Change: and it's going to be up to them. Again, you know, we do expect that...
Speaker Change: You know, a new policy. I think we have plenty of experience with this technology now. I do think the new policy will reflect the safety that we've demonstrated. Thank you very much.
and I do expect...
that at some point the policy is going to reopen.
Speaker Change: and I think one of the catalysts in front of CMS is going to be the asymptomatic approval.
Speaker Change: and one of the things we've seen historically when we first got approval for Fabian. [inaudible]
Speaker Change: It was under local coverage and it did lead to some inconsistencies with how things were done and that really drove CMS.
to open the NCD because they wanted to make sure.
that patients across all of their constituents could be treated. . . .
Speaker Change: under a national policy. So I expect that to happen again. Win exactly is going to be completely up to them. But when they do, then we get to engage with them. We get to start that process and hopefully end up with a policy that is going to allow more patients access to life saving therapy. Thank you very much.
Speaker Change: Alright, great. I then follow up here. Can you guys give us an update on how the demand for training for a focus going on any color on how many sites have been trained and or in a process to be trained? Thanks so much.
Bernard Zovighian: Now, sure, this is D'Vene again. Yeah, so first, in terms of evokesites, as you can imagine, as I think I mentioned before, we start our version of those first 50 or 60 clinical
Trialsites, and then from that make continuing to invest in. [inaudible]
Bernard Zovighian: New sites that are work with sites that are investing in tricuspid disease, so that number is a growing number.
We continuously are booking.
Bernard Zovighian: are trial fights out for several months in advance. So right now, if you're interested in a trial fight, it's at least a couple months away. And it's been consistently like that where the demand...
Bernard Zovighian: from physicians to get trained has been always a little bit greater than maybe our ability to open sites just on the ramp. And this really as you know has to do with the value proposition where people are seeing how the elimination of TR with the vote is really changing. Thank you very much.
Bernard Zovighian: Patience Lies, and there's all both physicians and patients are asking for the technology.
Larry Begelson: And so in general, though, as you can imagine, as Larry just mentioned, they're what 850 tavern centers or so, I mean, it's a very big number. And our goal is some number of those would be great for tricuspid treatment, including a vote. And we continue each year just to keep opening and training new centers for many years to come. Thank you very much.
just like Tavred it over the course of many years. [inaudible]
Great, thanks so much.
Speaker Change: Thank you. Our next question comes from the line of Chris Pasquale with Neffron. Please proceed.
Speaker Change: Thanks. The 2.6% surgical growth is quarter was as low as we've seen from that business in a while. I know selling days had a bit of an impact but you just talk about it.
Speaker Change: Your confidence in being able to sustain mid-single-digit growth in that segment, especially now that the resilient platforms have really become dominant in many of your big markets that you don't have as much of a tailwind from MIX.
Speaker Change: Chris, thanks for the question there. In Q1, we did have some challenging comps when we considered our compare to prior year when the business was growing in the high single digit range.
Speaker Change: I think looking forward in 2025, as you heard from Bernard, we're launching Mitris in China, we've got some other potential tailwinds later on this year with the approval of Connect in Europe , and so we are remaining confident in our current guidance in the mid-single digit range for 2025.
Speaker Change: Great, that's helpful, and I know that this may be a bit difficult to answer given that the deal isn't closed yet but we saw some updated data from the Align AR trial at ACC, continues to look solid. We're about 18 months out now from the original data presentation.
Speaker Change: Just any help you can give us in terms of what we should expect for a regulatory pathway and approval timing for that product.
Speaker Change: Yeah, actually, we don't have anything that we can talk about on that, you know, we're-
sort of pencils down until the deal closes.
Speaker Change: So we don't have any direct knowledge, you know, we're not in conversation with them. Until the deal closes, you know, we're sort of on the outside looking in. So I don't have any more information than what you saw presented at ACC.
All right, thanks [inaudible]
Speaker Change: Thank you. Our next question comes from the line of Patrick Wood with Morgan Stanley .
Please proceed.
Patrick Wood: Beautiful. Thank you so much, guys. I guess maybe on Pasquale, doing pretty well. You know, where are we at in terms of, you know, accounts sort of breadth versus depth? I'm thinking like, is the utilization sort of where you would like it to be? I'm trying to work out how wide you are versus how deep within individual accounts? [inaudible]
Patrick Wood: Yeah, sure. If you think about Pasquale overall, we continue to see that this product has feature differentiation that we believe is leading to really predictable and positive outcomes for patients.
Patrick Wood: and that and you see that in accounts who currently have access to Pasquale that as they use Pasquale more and more they see those great patient outcomes and then they want to use it more. [inaudible]
Patrick Wood: and then as you can imagine they then tell their friends through different types of programs that it congresses so that sites who today who don't use Pasquale are interested in trying to use it. And so that's how we see it spreading in both increased depth in certain centers as well as opening new centers. [inaudible]
Patrick Wood: In terms of the number of centers, maybe specific, I'll just speak to the U.S. Again, I'll maybe I'll use the generic boundary. If they're 850 tavern centers, give or take in the U.S. or so, our goal is to grow into many of these that make sense, but today we're definitely less than fewer than 50% of them. [inaudible]
Patrick Wood: So there's still a lot of opportunity for growth, both in new accounts as well as increasing penetration and seeing those great patient outcomes in the sites that currently use Pasquale. Thank you very much.
Speaker Change: Thanks, Ben, that's helpful. And then very quickly, there's been a lot of sort of shuffle around at the FDA overall, and people five rehired that side of things. Is there any expectation from you guys that approval timelines, long time could be affected or anything like that, or is this just short term noise that we can ignore?
Speaker Change: Yeah, obviously the other situation is a fluid one, and we are all watching, but so far we don't see any change, you know, with the FDA.
Speaker Change: Approval timeline, response to any submission, all of that. We feel like people at VFD are very professional, they are very committed to the space.
Speaker Change: and we don't see an impact and we don't believe we will see an impact but obviously it is a fluid situation that we need to monitor.
Wilson, thanks for the love.
Speaker Change: Thank you. At this time, this concludes the allotted question and answer session time.
Speaker Change: I would like to pass the call back over to management for any closing remarks.
Yes.
Speaker Change: So, you know, thank you everyone for your interest, you know, so beyond, you know, the strong start of the year.
Speaker Change: You know, I'm very excited about, you know, what we were able to achieve, you know, in Q1, with this, you know, very strong, you know, catalyst [inaudible]
Speaker Change: If you step back and you look at them, you know, we are on track to get an early tether indication of proven in Q2.
We are the NCD for EVOC.
Speaker Change: Sapion M3C Mark, which basically represent the start of a new category for us. Resilia, ATMs, amazing outcome. So all of that together give us confidence in what we told you in December at our investor conference.
Speaker Change: We believe we are very well positioned to transform care for the many structural heart patients.
Speaker Change: and we are continuing to target a total company sales growth of 10% annually on average.
Speaker Change: So, again, very pleased about the year, the numbers, all of the catalyst, I think, all of our people, 16,000 employees are doing amazing work and I want to thank them for that.
Speaker Change: Thank you for your interest in the company, and if you need any questions, do not hesitate to call CD Mark Scott on myself. Have a great rest of your day. Thank you.
Speaker Change: That concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.