Edwards Lifesciences Corporation

Greetings and welcome to the Edwards Life Sciences second quarter 2025 results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow a formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, Mark Wilterding, Senior Vice President, Global Finance. Thank you. You may begin.

Thank you very much, Diego. And thank you all for joining us this afternoon. With me on today's call is our CEO, Bernard Zavigian, and our CFO, Scott Ullum. Also joining us for the Q&A portion of the call will be Larry Wood, our Global Group President of Taver and Surgical, Devine Chopra, our Global Leader of TMTT, Wayne Markowitz, our Global Leader of Surgical, and Dan Lippis, Corporate Vice President. Just after the close of regular trading, Edwards Life Sciences released second quarter 2025 financial results. During the call today, management will discuss the results included in the press release and accompanying financial schedules and 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 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 statements involve risks and uncertainties that could cause actual results to differ materially. 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. Edwards' guidance reflects its current estimates of the impact from tariffs that are in effect or have been announced to date and assume such tariffs remain in place for the remainder of 2025. Any modifications to such tariffs or any new tariffs could have a material impact on the company's future financial results and guidance. Finally, 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. Reconciliations between GAAP and non-GAAP numbers mentioned during the call are also included in today's press release. Quarterly and full-year growth rates refer to continuing operations. With that, I'd like to turn the call over to Bernard for his comments.

Thank you, Marc, and welcome, everyone. Thank you for joining us today. Before getting into the numbers, let me highlight the many significant achievements we have made across the company. When we introduced our Sharpened Focus strategy, we did so in anticipation of an asymptomatic AS approval, the expansion of the EVOC launch, the expected introduction of the CAPNM3, and our strategic entry into structural heart failure and aortic regurgitation, which represent remarkable synergies to our 65 years of Valve leadership. These areas represent large and growing opportunities and we are just getting started. Our focus on structural heart has positioned the company for agile execution of our strategy and provides the foundation for sustainable growth. It is supported by our conviction in mid to high single digit TAVR growth over the long term given the under-treatment globally. The potential of our market-leading surgical valve franchise based on compelling 8-year resilient data. And finally, the significant patient benefits of our pioneering TMTT technologies. While TAVR is and will remain an important growth driver for our company, Edwards is increasingly defined by a balanced portfolio of differentiated therapies across aortic, mitral, and trachea speed that will position us for leadership for many years to come as we help even more patients around the world. During the call today, we will go into more details on the company's strong second quarter performance across product groups and geographies and our confidence in the outlook for Edwards in the years ahead. We are pleased to report double-digit sales growth in the second quarter, driven by broad-based growth across our unique portfolio of structural heart therapies. Total sales of $1.53 billion grew 10.6%, which was better than expected. Based on our strong first-half performance and the many catalysts across our portfolio, we are increasingly confident in our full year outlook and are raising our full year 2025 sales growth guidance to 9 to 10% and adjusted EPS guidance to the high end of our original range of $2.40 to $2.50. Now, I will provide some additional detail by product group for Q2. In TAVR, Our second quarter global sales of $1.1 billion increased 7.8% over the prior year. Growth was comparable in the U.S. and OUS. On a global basis, Edwards' competitive position and pricing remained stable. Tether growth in the quarter was better than expected, as clinicians continued to adopt our best-in-class sapient technology. We are encouraged by the renewed focus on TAVR across the clinical community since the early TAVR data released last October. We are pleased with the recent approvals that make the SAPIEN3 platform the first and only TAVR to receive US and European approvals for the asymptomatic indication. These two approvals enable all patients diagnosed with severe AS to be evaluated and considered for treatment with TAVR, regardless of symptoms. The evolution of policy and guideline changes, together with the potential of a new US NCD, will provide important catalysts, resulting in a multi-year growth opportunity for TAVR overall. And we remain focused on continuing our deep commitment to advancing evidence for AS patients with three important studies. In May, at the Europe ECR Conference, results of the Uptown Real-World Study of more than 24,000 patients demonstrated that intervening on aortic stenosis before symptoms develop reduces the economic and resource burden on the healthcare system and improves patient outcomes. Additionally, compared with asymptomatic severe AS, delaying treatment until the disease progressed resulted in a higher rate of death within one year after aortic valve replacement. Alongside data from the early TAVR trial, these results reinforce the value of early referrals and evaluation by a heart valve team for all patients with severe AS. Second, at the New York Valve conference last month, 10 years' outcome from the Partner 2 study were presented, underscoring the excellent long-term outcomes and durability of the Edwards TAVR platform. This is the first FDA-approved TAVR study to report 10-year follow-up and represent the largest TAVR patient cohort studied through 10 years. Finally, New data from the DETECT-AS study were also presented. The sub-analysis demonstrated that electronic provider notification, or echo alerts, increased both treatment and survival rates in all patients with severe AS. Looking ahead to TCT in October, we expect to be the first company to present seven-year data studying a low surgical risk cohort of TAVR patients. I am proud of our team's commitment to advancing robust evidence to improve outcomes for patients with severe aortic stenosis, supported by a decade of clinical research. This significant body of high-quality science underscores the excellent clinical outcomes delivered by Edwards' premium sapient technology which has benefited over 1 million patients around the world since its launch. In the U.S., we are pleased that the clinical conversations about the successful early TAVR trial have brought a renewed focus to streamlining the management of patients with severe AS, enabling closer follow-up and more timely treatment of patients with aortic stenosis. Outside of the US, we continue to focus on the value of our differentiated technology and increasing therapy adoption, especially in areas where many patients go without care. In Europe, the exit of competitors resulted in a rebalancing of market share and a modest contribution to our sales. In Japan, TAVR sales grew in the mid single digit, an improvement over last quarter and consistent with the company's total sales growth in the region. Rest of the world, growth remains strong. In summary, we are raising our full year guidance to six to seven percent, up from previous guidance of five to seven percent. Longer term, we are enthusiastic about the mid to high single digit growth opportunities in TAVR, supported by the recent early TAVR indication approvals, future guidelines and policy changes, including an updated NCD. And finally, you have a potential to serve patients with moderate AS. I also want to take this opportunity to share with you that Larry Wood, who has been leading the TAVR team, has made the personal decision to depart Edwards in early September and pursue a leadership opportunity outside of cardiovascular. We sincerely thank Larry for his 40 years of dedication to Edwards and our patients. During that time, Edwards TAVR has helped more than a million aortic stenosis patients around the world. As we heard today, TAVR is well-positioned for continued growth and success, and we are pleased to announce that Dan Lippis, will assume leadership of a TAVR franchise globally. We are fortunate to have a very well-prepared successor who has more than 15 years of deep TAVR experience in the US and Europe. Most recently, Dan has also been leading our JPEG region with responsibility for our full portfolio of technologies. I'm very confident that the TAVR leadership team will build on our momentum and deliver long-term success. Dan and Larry will work together on a smooth transition through early September. Now, let's turn to our TMTT product group. Our unique portfolio of repair and replacement therapies to treat mitral and tricuspid diseases drove another quarter of impressive growth, with a meaningful contribution to overall company performance. Second quarter sales of $133 million grew 57%, reflecting the strength and differentiation of our portfolio of repair and replacement technologies and demonstrating our team's long-term and steadfast commitment to solving large, unmet patient needs. Pascal and Evoke were both significant contributors to growth as they continue to scale. With the addition of CPNN3, Edwards is uniquely positioned to meet the broad and diverse needs of patients with mitral and tricuspid valve diseases. Mitral tear procedures continue to grow in the double digits globally, and the developing tricuspid opportunity is growing much faster across both repair and replacement. Adoption. of our differentiated Pascal technology remains strong in both new and existing centers around the world. We continue to see growing interest in the therapy, reinforcing the significant unmet needs of these patients. We are also pleased to announce the completion of enrollment in our 1,000 patients European MyClass post-approval study in patients with both DMR and FMR. Publications and presentation of data from this study continue to demonstrate the excellent clinical results delivered by the state-of-the-art PASCAL technology. The EVOC commercial launch is progressing well in the U.S. and Europe with excellent real-world outcome for patients in line with the successful TRICEN2 clinical trial results. Consistent with Edward's science-based approach to establishing categories for the many patients in need, we are continuing to generate evidence for EVOC. At the recent New York Valve conference, results from a real-world 176-patient study across 12 centers in five countries in Europe, demonstrated excellent clinical outcomes that were similar or better than the results shown in TRACEN2 patients receiving EVOC. And we look forward to an EVOC late-breaking sub-study at next month's European Society of Cardiology conference. We have also begun enrollment in the large TRACEN3 clinical trial in Europe. This prospective multi-center study of up to 500 real-world patients with TR disease will track clinical outcomes out to five years. In summary for EVOK, there is a great demand for the therapy, and we are continuing to develop important evidence to support expansion globally. We are pleased with the addition of our latest TMTT technology. the pioneering Sapien M3 valve, which received C-mark approval in Q2. Clinical feedback, while early, has been positive. We will deploy a differentiated high-value model to support therapy expansion with a continued focus on ensuring access and excellent outcome for patients. We continue to expect that results from the in-circle pivotal trials studying Sapien M3 will be presented at the TCT conference later this year. And we now expect U.S. approval of Sapien M3 to follow in the first half of 2026. In closing, with Pascal, EVOC, and the recent CMARC of Sapien M3, our vision for TMTT has developed into a growth portfolio of groundbreaking trans-catheter repair and replacement technologies, meeting the complex needs of underserved patients with mitral and tricuspid diseases. We are committed to bringing these impactful therapies to the many patients in need around the world. We are pleased with our year-to-date performance in TMTT and remain on track to achieve our full year sales guidance to $530 million to $550 million. In our surgical product group, second quarter global sales of $267 million increased 6.8% over the prior year. We continue to see positive procedure growth globally for the many patients best treated surgically with our premium Resilia technologies. including Inspiris, Mitris, and Connect. Our surgical team is making progress around the world, advancing important innovation for patients. We continue to see the impact across the clinical community from the recent presented Resilia 8-year data demonstrated excellent durability and better freedom from re-operation due to structural valve deterioration. compared to non-resilient valves. We are also pleased to have received C-mark approval for Connect in Europe during the quarter. For the full year, we continue to expect mid-single-digit sales growth in our surgical product group. And now, Scott will cover the details of the company's financial performance.