Edwards Lifesciences Corporation

Greetings and welcome to the Edwards Life Sciences third quarter 2025 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, Diego, and thank you, everyone, 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 Dan Lippis, our Global Leader of TAVR, and Devine Chopra, who has global responsibility for TMTT and Surgical. Just after the close of regular trading, Edwards Life Sciences released third quarter 2025 financial results. During this call, management will discuss the 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 speak only as of the date of 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. Unless otherwise noted, our commentary on sales growth refers to constant currency sales growth, which is defined in the quarterly press release issued earlier today. Reconciliations between GAAP and non-GAAP numbers mentioned during the call are also included in today's 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.

Welcome everyone for joining us today. We are pleased with the year-to-date performance of the company, including the most recent third quarter. Our focus on structural heart has positioned us to execute our growth strategy with agility this year and also give us confidence in 2026 and beyond. These strong Q3 results represent another quarter of double-digit sales growth. Sales in the quarter grew 12.6% to $1.55 billion, driven by our comprehensive portfolio across multiple therapeutic areas, aortic, pulmonic, mitral, and tricuspid, as well as an established presence in countries around the world. We were pleased with the better than expected results, reflecting the performance of our talented employees. Based on our strong performance in Q3, we are raising full-year sales growth guidance to the high end of the previous 9% to 10% range and are also raising our EPS guidance range to between $2.56 and $2.62. As we look ahead to 2026 and beyond, the company is in a good position with multiple growth drivers to deliver sustainable top-line growth. While the composition and contribution from product lines and regions could vary, you could expect Edwards to grow sales and profitability in line with our commitment from last year. We look forward to talking more about this at the upcoming investor conference in December. This week was an important week for Edwards. And this quarterly call comes on the heels of TCT, where I was pleased to see many of you. At the conference, physicians featured a significant amount of compelling data on Edwards' groundbreaking trans-catheter therapies, including Sapien, Evoke, and Sapien M3. Our unique leadership commitment to high-quality evidence was once again showcased by the multiple late-breaking clinical trials, as well as concurrent publications in the New England Journal of Medicine and Lancet. On Monday at TCT, physicians presented seven-year data for the PARTNER III pivotal trial, which represents the most extensive clinical follow-up to date for low-risk TAVR and surgical patients. The results confirmed that rate of all-cause mortality for TAVR remained low and comparable to the surgical control arm. Additionally, sapient performance and durability indicators were excellent and comparable to SAVR. Also, during the TCT conference, 10 years, of follow-up on multiple generations of Sapien was featured. Long-term data from the Paraner 2A and the Paraner 2S3I studies demonstrated sustainable performance, excellent durability, and consistent clinical outcomes of Edwards TAVR matching the performance of SAVR. So overall, when taken together, the Sapien platform has been the most studied valve with more than 15 years of world-class clinical trials involving over 10,000 patients, 10 New England Journal of Medicine publications, and 1.2 million patients treated around the world. It is clear that in addition to offering an early clinical benefit with superiority at one year for low-risk patients, The excellent performance of TAVR Recipient 3 is now proven at 7 years. This impressive durability is further supported by the 10-year result of the Parler 2 trials. At the end of the day, this groundbreaking evidence sets a new global benchmark, one that is exceptionally reassuring for both patients and physicians. and set the stage for continued long-term adoption of sapien to treat patients suffering from aortic stenosis. TCT also featured multiple important studies focused on Edwards' portfolio of mitral and tricuspid replacement therapies, including the largest real-world registry data on EVOC and the one-year result of a first-ever pivotal trial for any transfemoral mitral replacement therapy, the ENCIRCLE trial for CPNM3. Just over two years ago, Tricin-2 six-month data was presented at TCT 2023. To date, more than 5,000 patients have benefited from this novel therapy, solving the large unmet patient needs. and the 1,000-plus patients. The real-world data presented at this year's TCT demonstrates that the clinical community is embracing this technology broadly across many centers and is excelling at caring for these patients with consistent procedure times and high-quality results for both safety and efficacy. The TBT data of 30 days shows consistent TR elimination in 98% of patients, a very low major or life-threatening bleeding rate of 1.3%, a new pacemaker rate of 15%. To put this evoked pacemaker rate into perspective, it is now competitive to the pacemaker rate seen today in self-expanding TAVR valves available in major regions. It is inspiring to see the practice of medicine progressing for improved patient care. Turning to mitral replacement, we know that there are many patients who cannot be treated with by today's existing technology, including TEAR. And at TCT, the in-circle study demonstrated meaningful early benefits for these patients on all important measures like mortality, quality of life, and reinforced the growth potential of this therapy in the years ahead. The introduction of sapienin-3 marks the beginning of increased physician awareness and referrals to the heart team to support treatment for these many patients in need. Over the past decade, we built a comprehensive portfolio of TMTT technologies. These ensure physicians have an opportunity to select the optimal treatment for their mitral and tracheal spill patients, whether replacement or tear. This is creating compounding value across the care continuum for all stakeholders, especially patients. And in terms of the impact to Edwards, while the contribution to growth from our portfolio of repair and replacement therapy could vary by quarter or year, we know Pascal, EVOC, and M3 will be key contributors as TMTT grows to an estimated $2 billion by 2030. I am proud of the Edwards team and our physician partners for advancing each of these important clinical trials. Edwards is the world-only company to provide physicians with a complete portfolio of therapies addressing aortic, mitral, pulmonic, and tricuspid-like diseases, built on the foundation of our unique strategy and an unprecedented body of evidence. Leveraging our 65 years of deep expertise, we are also extending into heart failure and aortic regurgitation, which are next-generation contributors to patient impact and growth. We have aligned our internal resources to support growth across these multiple therapeutic areas. This focus on structural heart has positioned the company for agile execution of our strategy and provide a foundation for sustainable multi-year growth. When I reflect on all of this, I am proud of our impact. When Edwards leads, everyone benefits, physician, provider, payers, and most importantly, patients, who can enjoy a restored quality of life and live longer. Now I'd like to provide an overview on the third quarter sales performance by product group. In TAVR, our third quarter global sales of $1.15 billion increased 10.6% over the prior year. TAVR growth in the quarter was better than expected, as clinicians demonstrated a renewed focus on prioritizing treatment for patients suffering from aortic stenosis. During the quarter, sales growth increased in multiple regions, supported by new evidence, guideline updates, and expanded education. Growth was comparable in the U.S. and all U.S. On a global basis, Edward's pricing and competitive position remain largely stable. We are pleased that aortic stenosis management is experiencing significant transformation, supported by the combination of evidence of superiority in low-risk patients in one year, unprecedented data on long-term valve performance and durability, expanded asymptomatic indication, and updated ESC, ESCTS guidelines, combined with the Global Expert Consensus publication. These guidelines for valvular heart disease establish a simplified care pathway for severe AS patients and enable a proactive approach to disease management. They underscore that timely intervention should be considered for all severe aortic stenosis patients, regardless of symptom and heart function, which is a meaningful step forward from the prior practice of watchful waiting. In the US, strong third-quarter procedure growth was driven by a continued focus within the clinical community on the importance of timely intervention and streamlining the management of patients with severe AS. We were encouraged by the release of the updated American Society of Echocardiography Guidelines, which categorized severe AS as a critical finding that should be communicated with urgency and encourage echocardiologists to actively participate in patient management. 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 US data. Outside of the US, we continue to focus on increasing therapy adoption, especially in areas where many patients go without care. In Europe, Edward's sales growth was driven by the broad-based adoption of our sapient platform in addition to the exit of a competitor, which resulted in a rebalancing of the market and a modest contribution to our sales. In Japan, TAVR sales growth continued to improve, reflecting a gradual recovery in market growth. Rest of the world, growth remained strong. In summary, Due to our strong Q3 results, we are raising our full-year TAVR guidance to 7 to 8% from our previous 6 to 7% range. Longer term, we continue to expect mid to high single digit growth in TAVR, supported by proven long-term evidence, new indication, further guidelines and policy changes, and finally, the potential to serve patients with moderate AS. Now let's turn to our TMTT product group. Our differentiated Pascal mitral and tracheal speed repair system and our unique replacement portfolio of Evoque and Sapien M3 delivered another strong quarter of growth. Third quarter sales of $144 million increased 53% year over year. Fueled by the strong performance of both Pascal and EVOC. Globally, we observe a continued trajectory of double-digit global procedure growth for Mitral and significantly higher growth for TrackerSpeed. The new ESC-ESETS guidelines released in the third quarter also including updates related to the management of patients with mitral and tracheal speed diseases, which further supports increased global use of trans-catheter therapies for these patients. Continued global adoption of PASCAL and EVOC in new and existing centers fueled additional substantial growth. We've observed physician excitement and support of the differentiation of PASCAL and the strong predictable outcome of EVOC, including consistent tricuspid regurgitation elimination. Over the last quarter, we released several new groundbreaking clinical evidence updates. Presented at the ESC Congress, Trisyn 2 outcomes now show a hard endpoint benefit of EVOC versus optimal medical therapy. The data show that the most severe TR patient experienced a combined reduction in mortality and heart failure hospitalization, which is a meaningful advancement. In addition, as previously mentioned, at TCT, we were pleased to share the largest real-world data set of the EVOC early commercial experience from the STS-ACC-TVT registry. The data showed excellent outcome with consistent elimination of TR, and a positive safety profile. We also presented additional TRICEN1 and TRICEN2 sub-analyses at ECT. And the totality of this new evidence strengthens confidence in tricuspid replacement therapy with EVOC and the impact it can have on this greatly underserved patient population. Moving to SAPIEN3 and 3, Our early introduction in Europe is off to a great start, providing exceptional clinical outcome to patients in need and supported by our dedicated field team. The one-year result from the in-circle pivotal trial studying CPNM3 showed excellent outcome for this first approved transeptal mitral valve. The data show that in critically sick group of patients, who were unsuitable for tear and surgery now had an option to eliminate their MR while drastically improving their quality of life with a high survival rate. We now expect U.S. approval by early 2026. In closing, with PASCAL, Evoque, and now CPNM3, We are advancing our vision to meet the complex needs of underserved patients with mitral and tricuspid disease with a differentiated portfolio comprised of repair and replacement technology. We are pleased with our year-to-date performance in TMTT and remain on track to achieve our full year sales guidance of 530 to 550 million. In our surgical product group, Third-quarter global sales of $258 million increased 5.6% over the prior year. Growth was driven by continued adoption of our Resilia therapies. In addition to positive procedure growth for the many patients best treated surgically, Our Resilia portfolio achieved double-digit growth with contribution from Inspiris, Connect, and Mitrease therapies. We continue to generate evidence on the Resilia portfolio and expand access globally. With CMARC approval for Connect in Europe at the end of the second quarter, we have been able to expand this therapy to patients across European countries during the third quarter. I think it is also important to highlight the strong Edwards surgical valve performance in the recent partner-free seven-year data. The majority of patients in the control arm were treated with Edwards surgical valves, and the results were comparable to TAVR at seven years. This performance reflects over 65 years of valve leadership and innovation. In summary, we continue to expect that our full year 2025 surgical global sales will be in the mid-single digit, driven by resilient portfolio adoption across our key markets and growth in heart valve procedures for patients best treated surgically. And now Scott will cover the detail of a company financial performance.