Transcatheter Aortic Valve Replacement. Larry L. Wood Corporate Vice President

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1 Transcatheter Aortic Valve Replacement Larry L. Wood Corporate Vice President

2 Leader in ~$3.5B Global Transcatheter Aortic Valve Replacement Market Primary global growth drivers: indication expansion, therapy awareness, and technology advances We believe the diagnosis and treatment rates of Aortic Stenosis (AS) remain low Expect the Global TAVR opportunity ~$7B by 2024 We continue to invest in groundbreaking trials beyond severe symptomatic Aortic Stenosis patients We expect the global TAVR opportunity to grow at a double digit CAGR through

3 2018 THVT Highlights Underlying sales growth expected to be ~12.5% SAPIEN 3 strong real-world outcomes confirms best-in-class clinical trial results Two new innovative product approvals CENTERA CE marked; enrolling in U.S. pivotal Trial SAPIEN 3 Ultra CE marked; U.S. FDA review underway EARLY TAVR trial ~30% enrolled, potentially helping patients with severe AS before they develop symptoms 3

4 Global TAVR Opportunity Expected to Double in Size by ~$7B 2021 >$5B 2018 ~$3.5B 4 Indication Expansion Increasing Awareness Technology 4

5 Strong Global TAVR Growth Driven by U.S. and Supported by OUS Growth Edwards Sales Potential Key Contributing Factors U.S.: Double-digit procedure growth rates expected OUS: OUS U.S. OUS U.S. EU Under-penetrated countries growing faster; aging population drives patient demand JAPAN Large elderly population with high undertreatment rates CHINA Significant future opportunity 5

6 Indication Expansion Enables Us to Reach More Patients Indication Expansion Increasing Awareness Technology Allows us to reach more patients Bringing treatment to patients is our primary focus moving forward Our R&D Pipeline continues to strengthen our long-term position 6

7 PARTNER 3 Low Risk Trial Summary Expect data to be presented at ACC 2019 Nested sub-studies are important to indication expansion Sub-Studies Aortic ViV (n=125) Mitral ViV (n=50) Bicuspid (n=75) Severe, Calcific Aortic Stenosis Patients at Low Operative Risk Heart team agrees the patient has low risk and STS < 4% TAVR (SAPIEN 3 valve) CT Imaging Sub-study Assessment by Heart Team: Transfemoral access Yes 1:1 Randomization No Surgical AVR (surgical bioprosthetic valve) CT Imaging Sub-study Alternative Access TAVR Actigraphy/Quality of Life Sub-study Actigraphy/Quality of Life Sub-study Primary Endpoint: Composite of all-cause mortality, all stroke, and re-hospitalization at 1 year post procedure. Follow-up: 30 day, 6 months, and annually through 10 years U.S. FDA approval anticipated in late

8 PARTNER 3 Data and Expanded Indication are Expected to be Catalysts of TAVR Growth Global Edwards TAVR Sales $ SAPIEN 3 ULTRA Approval 2019 guidance FDA Approval (Aug) Intermediate risk indication CENTERA CE Mark SAPIEN 3 Approval High-risk indication 2016 ACC (Apr) PARTNER II data presented 2019 ACC (Mar) PARTNER 3 data expected FDA Approval (late 2019) Low risk indication Expect positive results from PARTNER 3 study to stimulate adoption and expand indication 8

9 Indication Expansion into the Severe Asymptomatic AS Patient Population Underway ~30% Patients enrolled to date Target N = 1109, up to 65 U.S. sites Treating Severe AS before symptoms may:* Prevent irreversible myocardial damage Reduce risk of sudden death without preceding symptoms Offer an even safer procedure than after developing symptoms and advancing age Enrollment completion estimated in 2020 We believe patients could benefit from early intervention * Genereux P. Natural history, diagnostic approaches and therapeutic strategies for patients with asymptomatic severe AS. JACC 2016:

10 In the Past Years, We Have Looked at Severe AS Opportunity Primarily with Two Lenses First Lens: 100% Second Lens: ~1.2M SAS Patients in U.S. Low Risk Asymptomatic SAS ~1/2 Int. Risk High Risk ~1/2 Symptomatic SAS By STS Risk Score By Symptoms in Patients 10

11 STS Risk Score is Limited for Many Reasons as it Only Captures Patients Who Received Surgery First Lens: 100% Low Risk As TAVR therapy has evolved: 100% Low Risk PARTNER 3 Trial STS Risk score has adjusted downward in the past few years Other factors important in assessing patients for AVR not factored in the scoring Int. Risk PARTNER II Trial PARTNER I Trial Int. Risk High Risk This is potentially a source of confusion for patients and providers in the treatment pathway High Risk By STS Risk Score By STS Risk Score Value of low-risk approval is that it eliminates the risk criteria in patients AVR assessment 11

12 Post Low-Risk Approval, Patient Treatment Pathway Will No Longer be Determined by Risk for Surgery 100% Low Risk Int. Risk Multiple factors used in determining AVR treatment plan: TAVR outcomes vs. Surgical outcomes Anatomical considerations of individual patients Patient s age Patient s lifestyle and preferences High Risk By STS Risk Score We expect Shared Decision Making (SDM) to be part of future NCD 12

13 Our Second View Based on Symptoms Divided the Severe AS Patients into Two Equal Sized Groups Second Lens: ~1.2M SAS Patients in U.S. ~1/2 Asymptomatic SAS Asymptomatic patients are largely undiagnosed (Out-of-System) ~1/2 Symptomatic SAS Under-diagnosed and under-treated (Mix of In-System and Out-of-System) By Symptoms in Patients This prompted us to start EARLY TAVR study aimed at understanding Severe Asymptomatic AS 13

14 Our Historical View of Severe AS Patient Population May be Flawed ~1.2M SAS Patients in U.S. ~1/2 ~1/2 Asymptomatic SAS Symptomatic SAS By Symptoms in Patients Key learning points from recent clinical experience and internal research: Asymptomatic" patients often have some combination of symptoms Labored breathing Loss of consciousness Chest discomfort Providers fail at connecting the symptoms to AS and thereby don t recommend echo-screening Symptoms go unnoticed, ignored or are associated with general aging and not a concern Regional and demographic treatment disparities ~1.2M SAS Patients in U.S. Asymptomatic SAS Symptomatic SAS By Symptoms in Patients <10% Treatment Rate Improved diagnosis of Severe AS disease could increase treatment *Edwards Internal Research, based on big data analysis and machine learning of Electronic Health Records (EHR) 14

15 Our Experience Has Driven Us to Establish Effective Programs Aimed at Increasing Awareness Indication Expansion Increasing Awareness Technology Allows us to reach more patients Bringing treatment to patients is our primary focus moving forward Our R&D Pipeline continues to strengthen our long-term position 15

16 We are Focused on Increasing Disease and Therapy Awareness to Improve Diagnosis and Treatment Rates Key Stakeholders Patients / Families Referrer / General Cardiologist Regional / Local Outreach Resources for patients and their families to learn about disease and treatment options Experienced clinical educators educating referring physicians on therapy guidelines Targeted programs customized by geography to increase provider awareness in treating to guidelines We are increasing investments to raise awareness at each stakeholder level 16

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18 County % 1.9% 58% 42% Nat Avg % 3.3% ~50% ~50% 18

19 Capability to Understand Differences in Treatment of Patients Groups 19

20 We are Initiating New Registry to Study TAVR in Underrepresented Populations PURPOSE: To study diverse ethnic and/or cultural patient base that perform a limited number of TAVR procedures/year SCOPE (n = 100): Patients who are unable/unwilling to travel to the existing TAVR centers Sites that do not have a referral base for reaching these patients to provide access to TAVR as a treatment option Populations that are underrepresented in conventional TAVR clinical trials and commercial usage Sub-Studies Aortic ViV (n=125) Mitral ViV (n=50) Bicuspid (n=75) Underrepresented Populations Registry(n=100) Severe, Calcific Aortic Stenosis Patients at Low Operative Risk Heart team agrees the patient has low risk and STS < 4% TAVR (SAPIEN 3 valve) CT Imaging Sub-study Actigraphy/Quality of Life Substudy Assessment by Heart Team: Transfemoral access Yes 1:1 Randomization Surgical AVR (surgical bioprosthetic valve) CT Imaging Sub-study Actigraphy/Quality of Life Substudy Primary Endpoint: Composite of all-cause mortality, all stroke, and re-hospitalization at 1 year post procedure. Follow-up: 30 day, 6 months and annually through 10 years No Alternative Access TAVR 20

21 Technology Continues to Strengthen Our Long-Term Position Indication Expansion Increasing Awareness Technology Allows us to reach more patients Bringing treatment to patients is our primary focus moving forward Our R&D Pipeline continues to strengthen our long-term position 21

22 Edwards SAPIEN 3 Ultra System Further Elevates the Performance Benchmark of SAPIEN 3 On-balloon delivery system design streamlines the procedures Improved skirt design intended for superior leak performance Next-gen seamless expandable 14F sheath for all valve sizes SAPIEN 3 Ultra CE Marked in November and implementing a controlled rollout strategy U.S. approval expected around the end of the year SAPIEN 3 Ultra is not for commercial sale in the U.S. or Germany currently 22

23 CENTERA Valve with Unique Valve Geometry Shows Sustained Clinical Outcomes at 1-year CENTERA US IDE Pivotal Trial Design Single arm study; N = 750 patients; up to 65 US Sites + up to 10 international sites Inclusion: Intermediate-risk Patients CENTERA 750 Patients Control: PARTNER 2A SAVR as historical control Registry: Bicuspid Aortic Valve; N = 100 Primary Endpoint: 1- year Endpoint Non-hierarchical composite of all-cause death and/or all stroke mortality Follow-up: 10 year follow-up Low incidence of cardiovascular mortality, disabling stroke and permanent pacemaker rates No moderate or severe total aortic regurgitation U.S. IDE trial commenced Oct 2018 Controlled commercial rollout underway in EU CENTERA: feature-rich self-expanding valve with impressive initial clinical data CENTERA is not available for commercial sale in the U.S. 23

24 Edwards Pulmonic Platforms Expand Therapies for Congenital Heart Disease (CHD) Patients SAPIEN 3 Valve - Pulmonic Adaptive Prestent for pulmonic patch patients Expands treatable population - THV therapy could cover up to 85% of CHD Patients Alterra Adaptive Prestent Expanded indication for Pulmonic RVOT in conduit and patch CHD patients SAPIEN 3 Pulmonic + Alterra system expected to move into pivotal clinical trial phase in Q SAPIEN 3 Pulmonic and Alterra is not available for commercial sale. 24

25 Expected Milestones in Our Innovative Product Portfolio Extends Patient Reach and Drives Growth SAPIEN Evolutionary Device Revolutionary TAVR Device CENTERA U.S. IDE Trial enrolling EU CE Marked SAPIEN 3 Ultra EU & U.S. Launches Indication Expansion PARTNER 3 Low risk approval in U.S. EARLY TAVR enrolling Alterra Pre-market approval submission EARLY TAVR Approval Programs under active development: Evolutionary product Revolutionary product Dedicated to providing innovative solutions for our patients CENTERA and SAPIEN 3 Ultra are available for sale in Europe. All devices listed except CENTERA and SAPIEN 3 Ultra are not available for commercial sale in the U.S. 25

26 Global TAVR Opportunity Beyond 2024 is Significant 2024 ~$7B 2018 ~$3.5B 4 Indication Expansion Product Launches Market Development Continued Major Markets Growth Breakthrough Technologies Moderate AS and Future Indications OUS Therapy Awareness Emerging Market Growth 26

27 2019 Underlying Global Sales Growth Outlook Tailwinds 11% 15% Increasing awareness that drives therapy adoption Feature-rich new product launches that drive growth Improving diagnosis and referrals PARTNER 3 Low-risk FDA approval in late 2019 Improving TAVR economics 2019E Underlying Global TAVR Estimated Sales Growth Headwinds Increasing competition Increasing global reimbursement pressures 27

28 Executive Summary Primary global growth drivers: indication expansion, therapy awareness, and technology advances We believe the diagnosis and treatment rates of Aortic Stenosis remain low We continue to invest in groundbreaking trials beyond severe symptomatic Aortic Stenosis patients 28