Edwards Lifesciences Corporation

Greetings and welcome to the Edwards Life Sciences second quarter 2023 results conference call. At this time, all participants are in a listen-only mode. A 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. Please note that this conference is being recorded. I will now turn the conference over to our host, Mark Wilterding, Senior Vice President, Investor Relations and Treasurer. Thank you. You may begin.

Thank you very much, Diego. Good afternoon and thank you all for joining us. With me on today's call is our Chief Executive Officer, Bernard Zavigian, along with our Chief Financial Officer, Scott Allum. Also joining us for the Q&A portion of the call are Larry Wood, our Group President of TAVR and Surgical Structural Heart, and Devine Chopra, our Global Leader of TMTT. Katie Zyman, our global leader of critical care, is out of town today, but she'll be with us on future earnings calls. Just after the close of regular trading, Edwards Life Sciences released second quarter 2023 financial results. During today's call, management will discuss those 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 aren't limited to financial guidance and expectations for longer-term growth opportunities, regulatory approvals, clinical trials, litigation, reimbursement, competitive matters, and foreign currency fluctuations. These statements speak only as of the date on which they are made, and Edwards does not undertake any obligation to update them after today. Additionally, the statements involve risks and uncertainties that could cause actual results to differ materially. Information concerning factors that could cause these differences and important product safety information may be found in the press release, our 2022 annual report on Form 10-K, and Edwards' other SEC filings, all of which are available on the company's website at edwards.com. Finally, a quick reminder that when using terms constant currency and adjusted, management is referring to non-GAAP financial measures. Otherwise, they're referring to GAAP results. Reconciliations between GAAP and non-GAAP numbers mentioned during this call are available in today's press release. And with that, I'd like to turn the call over to Bernard for his comments. Bernard?

Thanks, Marc. And hello, everyone. I am pleased to share with you the work that our team did to help more patients than even before with our life-saving therapies. Today, I'm going to talk about the strong second quarter performance across product groups our progress in advancing our patient-focused innovation strategy, and our confidence in the outlook for Edwards in the years ahead. In the second quarter, we achieved double-digit sales growth driven by increased adoption of our innovative therapies. Total sales of $1.53 billion grew 12% on a constant currency basis, slightly higher than our expectation. We experienced broad-based growth across University of Edward's portfolio. Given improving healthcare staffing and our first-half performance, we continue to expect strong results in 2023. As a result, we have lifted our full-year 2023 sales and EPS guidance. Longer term, we are confident in our focus and differentiated strategy given heart valve failure is largely underdiagnosed and undertreated. We remain committed to increasing awareness and providing innovative life-saving therapies so even more patients can benefit. Now, I will provide an overview of second quarter sales performance by product group. In TAVR, we continue to see strong demand For our leading Sapien platform, with sales of $992 million, up 10% year-over-year on a constant currency basis. Our U.S. and all U.S. sales growth rate were comparable. Local selling prices were stable. In the U.S., our second quarter TAVR sales were aided by improved hospital staffing levels, and the continued successful launch of SAPIEN3 Ultra Resilia. We estimate that total procedure growth was in line with our sales growth. Additionally, we will be restarting enrollment this quarter in our pivotal trial alliance designed to study our next generation TAVR technology, SAPIEN X4. Outside of the US, we had positive constant currency sales growth from all regions. In Europe, Edward's sales growth were driven by the broad-based adoption of our Sapien platform. Our sales in Japan grew sequentially and year-over-year on a constant currency basis, although our results continued to be impacted by lower-than-expected market growth and competitive trialing in the first half of this year. As a result, we estimate overall OUS TAVR procedure growth in Q2 was slightly higher than Edward's OUS TAVR growth. During the quarter, at the Euro-PCR Medical Congress, data on the benchmark study were presented on 2,400 patients treated with sapien valves across 28 European centers. It was very encouraging to note that patients experienced a 33% reduction in the median hospital length of stay while maintaining 30-day clinical outcomes. This study showed that by implementing best practices with the SAPIEN platform, centers can be more efficient without compromising patient outcomes. Turning to TMTT. We remain focused on three key value drivers to unlock this opportunity. A portfolio of differentiated therapies, positive clinical trial results to support approvals and adoption, and favorable real-world clinical outcome. TMTT's second quarter global sales of $48 million increased nearly 70% on a constant currency basis, versus the prior year. Growth was driven by continued strong overall procedure volumes, adoption of our differentiated Pascal precision platform, and activation of more centers across the U.S. and Europe. We continue to hire, train, and grow the field team to deliver on our high-touch model as we expand. Enrollment is ongoing in the class 2F pivotal trial for functional mitral patients. We are also pleased with the enrollment in the in-circle pivotal trial for the sapien M3 mitral valve replacement and remain on track to complete enrollment around the end of this year. In tricuspid, the class 2TR pivotal trial with Pascal continues enrolling well. With the completion of Tricin-2 enrollment, continued access for EVOC allows U.S. centers to continue to offer this therapy for trachycephalic patients. We remain on track for European approval by the end of 2023 and U.S. approval around the end of 2024. In surgical, second-quarter sales of $256 million increased 13%, on a constant currency basis, driven by the adoption of our premium Resilia products across all regions. Physicians and patients value the feature and benefit of this advanced tissue technology for both aortic and mitral surgical valve procedures. Patient enrollment continued in the second quarter for our momentous clinical study designed to demonstrate the durability of Resilia tissue in the mitral position. We expect that confidence from the recently presented seven year data of our Cummins clinical trial will continue to support adoption of our Resilia family of products. In critical care, second quarter sales of $200,035,000,000 increase 13% on a constant currency basis driven by contribution from all product lines. Growth was led by our smart recovery portfolio and healthy adoption of our Acumen IQ sensor. Sales momentum for our Hemosphere monitoring platform was also positive in the second quarter with a healthy pipeline of future opportunities. Before I turn it over to Scott, I also want to mention our expectation for the upcoming TCT conference in October. During the conference, we expect several important presentations regarding our trans-catheter technologies. In TAVR, we are expecting the presentation of five-year clinical data for the partner-free low-risk pivotal trial. In TMTT, we anticipate the presentation of a one-year full cohort of the class 2D pivotal trial results, Additionally, we anticipate a presentation of a planned interim analysis of a Trison 2 randomized cohort. I look forward to seeing many of you at the investor event we plan to host at TCT. Our investor relations team will communicate details as we get closer to the event. And now, I will turn the call over to Scott.