Conference Transcript - EW 2026-05-12

Speaker 1

Next up, we have Edwards Life Sciences. Welcome, Bernard. Thanks for coming. Good to be here. Hi, everyone. Maybe I'll let you open. I know you want to make some opening remarks to get started. Let's go ahead and do that. Yeah, no, thanks.

Bernard Zovighian, CEO

Look, it is, you know, we feel good about, you know, where we are at, you know, as a company. and when I step back and I reflect the reason why, I think we have a great strategy, we have strategic clarity it's all about structural heart everybody in the company is focusing on that, we have a great culture the employees about 16,000 are fully engaged inspired by our patient focused culture execution is amazing across the end of a company. And the sale of critical care a couple of years ago helped us even further to be very agile, fast execution, and you have seen that. And all of this is resulting in, in my mind, a very differentiated performance, but also sustainable performance. We had a great year last year. You know, Q1, you know, was the same, you know, growing double digit, but also, you know, it is less about double digit, more about broad based across surgical, taver, mitral, and trache speed, also broad across, you know, regions. So this is, you know, what, you know, give us, you know, confidence. It is sustainable. People are behind us. Strategic clarity and great execution. So feeling good about, you know, the years ahead of us.

Speaker 1

Okay, great. And coming off Q1 results, obviously a strong TAVR quarter and beating two points and really strong across the board. I don't know if there's anything you'd like to kind of say kind of post-Q1.

Bernard Zovighian, CEO

Yeah, no, very pleased about Q1, obviously. Better than expected. You know, mainly driven by procedural growth, you know, so basically, you know, market growth. And all of that, I'm sure you heard me saying about it is this renewed focus on TAVR. In the last year or so, we have produced so much evidence on TAVR, you know, early TAVR, you know, long-term durability data, you know, part of 47 years, you know, part of 10 years. So all of this together, you know, gave a renewed focus on the community, on the clinical community about, you know, focusing on these patients. And so basically, you know, mainly, you know, market in Q1, but a little bit of share also, mainly in Europe from the exit of one competitor almost, you know, a year ago now, a little bit in the U.S. too. But you know us well, you know, what we care the most about is unlocking, you know, the opportunity that we have in TAVR, and we are very pleased with what we see.

Speaker 1

We'll dig into a lot of that in a bit, but maybe first, this announced a new CFO since last week, I guess. So maybe, you know, why did the board go with that decision? And, you know, how should we think about the new CFO announcement?

Bernard Zovighian, CEO

So I was looking for a very experienced CFO with comprehensive experience. And I'm very pleased that the writer accepted the job. You know, we have been talking a lot, you know, together. I was, you know, two decades, you know, in the banking industry, you know, leading banks, also a CFO of a large pharmaceutical company. And she studied a lot, you know, she knows, you know, the kind of strategy we are having differentiated, unique in medtech, where we go early. You know, we we have multiple bets. We take risk to create, you know, categories and to lead, you know, categories. So I think, you know, on board, a CFO is going to help us and help me, you know, take, you know, this kind of decision to create, you know, what we are, you know, creating, you know, differentiated performance in MedTech. So very pleased, you know, to have her. She's going to start with us June 1st.

Speaker 1

I'll save most of my margin questions for her. But maybe high level since you are here. You know, how do you think about margin strategies that kind of stay the same, the 50 to 100 basis points a year? and how to think about, like, this year is kind of above normal or at the higher end of that range. How should we think about kind of the longer-term margin outlook for Edwards?

Bernard Zovighian, CEO

Yeah, no, we are committed. We are committed, you know, first and foremost, to have, you know, differentiated, you know, top-line performance. And what we said is, you know, for the year, we increased the guidance, you know, 9 to 11. So basically, the midpoint at 10, we said, you know, 27 and beyond, you know, growing double-digit, about 10% with EPS leverage and 50 to 100, you know, basis points improvement on margin, you know, 27 and beyond. So we are still committed to that. You know, this year is more about, you know, 150. And this is what you can expect, you know, from us. You know, great top-line performance, EPS leverage, improving margin. We are very fortunate, you know, to be focusing on a space where, you know, there is a lot of opportunities. You know, we have a leader. And so, yeah, pleased about it. When I step back again, I don't believe there are many, you know, medtech assets with this kind of durable outcome in front of them.

Speaker 1

Sure. Makes sense. On TAVR, you saw an acceleration over the last year or so, and you obviously had a product come in from a competitor. But just even in the U.S., like, what do you think has kind of driven that acceleration, and how do you think we should think about TAVR growth, you know, against some of the tougher comps in the second half of the year?

Bernard Zovighian, CEO

Yeah, that's a good question. You know, first and foremost, you know, where what gives us confidence is the durability of the SAPIEN platform, now proven at seven years and ten years, and we know it is very important, you know, for Valve. You know, the early TAVR is giving, you know, this confidence that, yes, treating patients early without symptoms makes sense also. So, you know, for the year, you know, we have increased the guidance. so think about you know the new range and you can model at the midpoint you know this is you know what you know the way we are thinking about you know guidance you know for the year we are trying always you know to give you a realistic guidance you know based on what we know and longer term what we said was you know basically an expecting mid to high single digit and this is a wider range to be able to accommodate any scenarios. And all of that together for TAVR will give us the opportunity as a company to go double digit.

Speaker 1

When you think about your competitor had six-year low-risk data, what are you seeing in the field when you're talking to doctors? Are you seeing physicians think differently about TAVR and the valve that they choose than low-risk patients?

Bernard Zovighian, CEO

Look, I'm not going to talk about you know competitive technologies we are very pleased obviously with our valve performance at 30 days at six months at one year and at 10 years and it is the benchmark you know by far so we are focusing on that you know we are focusing on patient care and we are focusing on physician having access you know to the best technology to the best ever technology out there You've been taking share, I guess, in the TAVR market already, though, right?

Speaker 1

And so I kind of expect that to continue.

Bernard Zovighian, CEO

We are selling Q1. You know, we have taken a little bit of share in the U.S. We are not focusing too much on that. You know us well, you know, the big opportunities about the market. I know that many people are talking about share. You know me. I've been saying that all the time. Share is a lagging indicator. I'm not looking back. I'm looking about, you know, the many patients that today, unfortunately, are undiagnosed. don't have access to care, and making sure that they can have access to care. And if we do so, we are going to have a great, you know, the next 10 years is going to be amazing, you know, for Tavern, for Sapien Tavern.

Speaker 1

On the Tavern CD proposal expected June 15th, I believe. I mean, the comment supported indication expansion, but there was some debate around the heart team requirements. Any sense for how you expect the Tavern CD to play out and how it could impact the marketplace?

Bernard Zovighian, CEO

You know, the TAVR NCD is going to be very important. It has been in place, you know, for a long time. You know, since then, you know, the TAVR procedure has evolved a lot. It is now, you know, the standard of care in the U.S. and in many locations around the world. We believe it is time to refresh that. You know, the heart team, though, is very important in evaluating, you know, the patient. We are looking forward, you know, to a more flexible NCD where the heart team can decide. what operator, you know, can be in the room. But it is obviously up to CMS to decide. The first draft, you know, mid-June, will give us an indication about, you know, the new NCD. And the new NCD will be in place, you know, by the end of the year.

Speaker 1

And then an increasing number of centers, how does that help? Does it help open up capacity even for TMTT? Or is it just more about TAVR?

Bernard Zovighian, CEO

I believe it is going to be about a number of things. You know, right now, you know, there are a number of patients in the U.S. who don't have access to care, you know, the way they should have access to care. So, this is going to help us having a greater and easier access to care. And everybody will benefit, you know, the patients, the physicians, and the healthcare systems because, you know, TAVR is a very effective procedure.

Speaker 1

Okay, makes sense. On early TAVR, the data presented in 2024, I'm curious how much of that's already helping drive momentum in 2025. Is this of a new indication that's mentioned for asymptomatic that's going to come through and help the TAVR market, or kind of what you're seeing on asymptomatic?

Bernard Zovighian, CEO

So what we have seen in Europe first is indication has been approved, but also the guidelines has been updated. And indeed, you know, the dogma of waiting for symptom has been eliminated, you know, in Europe with the new guidelines. In the U.S., you know, we don't have yet, you know, the new guidelines. And so we have, and obviously it is not yet covered, you know, by the NCD. So we have not seen any asymptomatic patient in the U.S. What we have seen, though, you know, CMS data is an increased number of echo alerts, an increased number of stress tests. So this is a clear indication that the heart teams across the nation are aware of the latest data and are paying close attention to these patients.

Speaker 1

Moderate data, I don't know if you've seen the data or not, if you'd say or not, but when the data comes, assuming it's successful, how do you think it impacts the market?

Bernard Zovighian, CEO

So the moderate patient population is a large patient population. we started a study four or five years ago because we had a belief that treating this patient will be beneficial for them we know that AS is a progressive disease so potentially that treating this patient is also a good idea but we don't know the data we are doing high quality evidence so with FDA approved studies all of that But I'm not going to see the data until the last few days. It is going to be presented in a high-quality fashion at TCT. And right after that, we are going to do an event for investors to go deep into the data and understand the implication of the data. But as of now, I have no more to add. Yes, we were having a belief that it is an important disease to study first and potentially to treat.

Speaker 1

And once the data is out, you have to kind of do what you did with asymptomatic change guidelines and kind of the same process?

Bernard Zovighian, CEO

You know, potentially, it will depend on how the new NCD is written. So we will have to wait for that. But so let's wait, you know, the guidelines and NCD. They know that all of the people in charge are leading, you know, societies. They know that this is a study coming. So let's see, you know, what's coming out from the NCD.

Speaker 1

Okay, fair. Sure. And then TMTT, you're still talking about $2 billion in revenue by 2030, which is about $300 million a year of revenue growth. The midpoint this year, I think around $210 million. How are you thinking about the acceleration in the TMTT line to get to that $2 billion in 2030 and the drivers there?

Bernard Zovighian, CEO

Yes. We feel good about it. Let me first bring some context here. You know, we started TMTT about eight, nine years ago with the vision of having a portfolio to be able to realize, you know, this large market potential, you know, my strength and strength speed. And today, you know, eight years later, you know, we have this unique portfolio that nobody has, which is helping physicians select the right technology for, you know, their patients. This year, we are on track to achieve, you know, three quarters of a billion in revenue, growing 40% at the midpoint. So doing well, the right pace. And we have a number of catalysts, you know, coming in TMTT. We have a next-gen Pascal coming end of the year. We have a new indication, Pascal tracker speed in the U.S. coming end of the year. You have, you know, new geography for Pascal also that we are expanding, new centers. For Evoque, we have now a growing body of evidence with, you know, mortality benefit, you know, eliminating, you know, the crossover patient. We presented that at ACC. So all of that together, together with M3, is going to be additional catalysts to move from three quarters of a billion, you know, this year to 2 billion in 2030. The true vision, though, is not 2030. We believe that mitral and tricuspid are going to be probably as big as aortic stenosis 10 years from now. So that's the opportunity there. And I think this kind of portfolio is going to be very important to grow TMTT to this kind of big numbers.

Speaker 1

On Sapien M3, CE mark in April 25, FDA approval December 25, how do you see the rollout of that going, and kind of feedback from physicians and any differences between U.S. and Europe launches?

Bernard Zovighian, CEO

It's going very well. It's still early, granted. Very well, you know, patient love, you know, the technology. Again, it is not impacting, you know, Pascal or, you know, any kind of tier devices. It's really about, you know, non-eligible tier patients. So it is expanding, you know, the patient population who can be treated. And this is why, you know, patients like it. It's effective. It is safe. and it is expanding, you know, the patient they can impact. So it is going very well, still early, but we get great feedback.

Speaker 1

And on Pascal, you've been taking share there. Even your competitor was expecting share to stabilize, and now they're saying it's going to continue to be share loss for them, share gain for you. How much opportunity do you see on the Pascal side to continue that growth?

Bernard Zovighian, CEO

Yeah, I will make, you know, the same comment on share, you know, lagging indicator, let's don't talk about that. Let's talk about the potential. Many patients, mitral and tracheal patient, you know, need a treatment. We believe that Pascal is a great technology, highly differentiated, and physicians love it. They achieve a great outcome for their patients. So important, we have seen that the mitral tier procedure now is increasing double digit, quarter over quarter, which is great to see. And it is the same playbook. When you bring best technology, great evidence, you support physicians, you know, automatically you are growing the category. That's an important playbook, you know, for us to remember. What I love about this playbook, it is a sustainable playbook. It is not like, you know, a few quarters. It is very sustainable long term.

Speaker 1

How do you think about replacement versus repair in the module and drug hospital market?

Bernard Zovighian, CEO

We see different patient population, so they complement each other, and it helps us, you know, grow the pie and grow, you know, the potential.

Speaker 1

And then kind of Catalyst and TMTT, some of the new products, like NextGen Evoke plan introduced second half 27. How meaningful is that? Kind of what are the big changes there?

Bernard Zovighian, CEO

Yeah, all of the NextGen are important. You will see, you know, the NextGen Pascal, you know, this year, end of the year, the NextGen Evoke, you know, by, you know, the second half of next year. We have also in the planning of the next gen M3. We didn't talk too much about it. All of them are going to be meaningful improvement for obvious competitive reasons. I don't want to get into the detail before we launch it. But yeah, I'm very pleased. So that's like not only we are the only one with this kind of comprehensive portfolio, but also we are bringing in the next gen. So this portfolio is evolving too to better technology.

Speaker 1

And then clasped to tricuspid regurgitation data later this year as well, right? At TCT, yes, yes, yes.

Bernard Zovighian, CEO

We'll be presented at TCT, and we expect an approval in the U.S. thereafter.

Speaker 1

That probably expands the market quite a bit for Pascal, right? And I assume there's not been a lot of off-label use there in those two markets?

Bernard Zovighian, CEO

No, I don't think so, because there is an approved device in the U.S. So it is all incremental. It is all an upside to the kind of revenue you see, you know, from TMTT today.

Speaker 1

Okay, that's helpful. And then next year, Pascal, anything you'd call out on that product?

Bernard Zovighian, CEO

No, the same for competitive reason. Now, you know, all of this, you know, this is already, you know, contemplated into the current guidance that we have, you know, for TAVR, for TMTT, and for the company.

Speaker 1

Okay.

Bernard Zovighian, CEO

And with regards to 2027, we will provide a guidance at Investor Conference in December.

Speaker 1

Okay. Helpful. And then the pipeline, maybe InnoValve, I don't know if there's anything you'd say on InnoValve or kind of the aortic regurgitation opportunity.

Bernard Zovighian, CEO

Yeah, InnoValve, you know, mitral valve, trans-catheter mitral valve is very complex, you know, to do. You have seen, you know, the space, you know, for 20 years, you know, companies, including ourselves, have tried to bring a trans-catheter mitral valve. You know, many have failed. You know, finally, you know, we had a great one with M3, and we are already thinking about the next gen. And not just, you know, the next gen M3, but the next gen, you know, mitral replacement. And it is why, you know, we have InnoValve here. You know, the thinking is, can we further expand the patient population that physician can treat with a mitral replacement? So it is all about incremental. It is not about, you know, impacting each other. So that's on InnoValve. On AR, you know, our technology, Sojourn, you know, that's the name of it, is doing well. You know, we are doing a pivotal study, and we are enrolling in the study, you know, well. And we will talk more, you know, when we know more about, you know, when we are going to finish enrollment, when we are going to present the data. Our vision for AR is very simple, the same that what we discussed, you know, in the past. We believe that there are many patients who need a treatment, a solution. The only solution available today is surgical. There is one just approved, you know, trans-catheter AR technology. And our vision is to bring, you know, the best technology, innovate with the best valve for these patients.

Speaker 1

And then left actual appendage where you've talked about a product there. What can you update us on the timing and process there? And, you know, what's the unmet need in that space?

Bernard Zovighian, CEO

Yeah, we still believe it is a big and main need. There are trans-catheter solutions. There are some surgical solutions. We are looking at this one as a nice opportunity in surgical, and this is why the team has developed a very competitive technology. We believe we are going to bring it by the end of the year. As soon as we will bring it, you will see more of the future of this technology.

Speaker 1

And then I do want to touch on the international just a bit and improved a lot this past quarter and grew 12%. if I remember correctly. And you've always been taking share internationally from your competitor that left the market, but it's underlying the outlook in the international market. Yes.

Bernard Zovighian, CEO

As a matter of fact, international in Q1 grew faster than the U.S., so even faster. The U.S. did very well, and Europe did even better than the U.S. In Japan, we did very well also. Now, to tamper a little bit of the Japanese result, Q1 2025 was a very low Q1, so the comp was favorable. But nevertheless, we see Japan as an important market for us. We know that AS is the disease of the aging, and there is one country where the aging is very prevalent in Japan. So we are spending a lot in terms of awareness, training the team, hiring the best people to make sure that Japan is going to be very successful. So please about Q1, double digit. I don't believe you should expect Japan being double digit in the next few quarters, but nevertheless, good performance expecting from Japan.

Speaker 1

Okay. And then on heart failure, like you've been making a big push into heart failure. How do you see that space kind of developing over the next few years? Yeah.

Bernard Zovighian, CEO

So, you know, before I answer, you know, directly your question for this, you know, let me offer a little bit about, you know, how do I see it over our core businesses, you know, TAVR, surgical, mitral, and fecal speed. Over the next, you know, four to five years, you know, we are in a leading position with best technology, world-class evidence, many catalysts, like we discussed, and I feel very good about having sustained performance. What I mean by that is growing the top line around 10% with EPS leverage. We are also thinking about long-term, beyond that, beyond four or five years, and expanding into a field close to us, which is a natural progression, and heart failure is a good one. We have many of these patients, we see them already. Many of them have mitral disease, tracheal disease, so it is why we are investing in many of the different modalities to treat, you know, heart failure patients. They are more, you know, for long-term than short-term. But, yes, you know, we are bullish over here. The same way we did it in TAVR, the same way we did it in TMTT 10 years ago.

Speaker 1

That's helpful. And I don't know if there was anything else you wanted to touch on. Those are kind of listed questions. And I think you had some closing remarks you wanted to make, too. So thanks for that.

Bernard Zovighian, CEO

So, look, you know, you have seen, you know, again, you know, Back to my introduction, you know, strategic clarity, great execution. You know, we have an amazing culture in the company. Everybody is dedicated. Everybody wants to win. And you have seen that in 2025. You have seen that in Q1. We increase our guidance for the year. And we have a great outlook, you know, for the years to come. So thank you so much for your interest in the EOOs.

Speaker 1

Thank you. Thanks for joining us.

Bernard Zovighian, CEO

Thank you.

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