Edwards Lifesciences. Patient-Focused Innovations for Structural Heart Disease and Critical Care Monitoring

Transcription

1 Edwards Lifesciences Patient-Focused Innovations for Structural Heart Disease and Critical Care Monitoring

2 Cautionary Statement Presentations and comments made today by the management of Edwards Lifesciences Corporation will include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of These forward-looking statements can sometimes be identified by the use of words such as may, will, should, anticipate, believe, plan, project, estimate, expect, intend, guidance, outlook, optimistic, aspire, confident or other forms of these words or similar expressions. These may include, but are not limited to, the company s financial goals or expectations for 2018, 2019 and beyond (including sales, gross profit, earnings per share and its key components, free cash flow, SG&A, R&D, net interest expense, tax rate, operating margin, diluted shares outstanding, and other financial expectations, such as several of these measures expressed as percentages); expectations for our products (including, headwinds and tailwinds, the timing and results of clinical trials, regulatory approvals, and reimbursement coverage); industry growth projections, the ability to extend leadership positions; forecasted trends in patient treatment and demographics; strategies for the company s new and existing products; and the impact of foreign exchange, and special items on the company s results. Forward-looking statements are based on estimates and assumptions made by management of the company and are believed to be reasonable, though they are inherently uncertain and difficult to predict. Our forward-looking statements speak only as of the date on which they are made and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of the statement. If the Company does update or correct one or more of these statements, investors and others should not conclude that the company will make additional updates or corrections. Forward-looking statements involve risks and uncertainties that could cause actual results or experience to differ materially from that expressed or implied by the forward-looking statements. Factors that could cause actual results or experience to differ materially from that expressed or implied by the forward looking statements are detailed in the company's filings with the Securities and Exchange Commission including its Annual Report on Form 10-K for the year ended December 31,

3 Use of Non-GAAP Financial Measures Unless otherwise indicated, all figures are GAAP financial measures Underlying growth rates are non-gaap items and exclude foreign exchange fluctuations, sales return reserves associated with THVT product upgrades, the positive impact of 2017 THVT stocking sales in Germany, the negative impact of de-stocking, the conversion to a consignment inventory system for surgical heart valves ("SHV"), and other special items. Adjusted earnings per share is a non-gaap item computed on a diluted basis and excludes intellectual property litigation income and expenses, amortization of intellectual property, fair value adjustments to contingent consideration liabilities arising from acquisitions, realignment expenses, the positive impact of 2017 THVT stocking sales in Germany, and the negative impact of de-stocking, and other special items. Other non-gaap guidance may exclude special items on a similar basis. A reconciliation of non-gaap historical financial measures to the most comparable GAAP measure is available at The Company is not able to provide a reconciliation of future projections that exclude special items to expected reported results due to the unknown effect, timing and potential significance of special charges or gains, and management s inability to forecast charges associated with future transactions and initiatives 3

4 Our Credo At Edwards Lifesciences, we are dedicated to providing innovative solutions for people fighting cardiovascular disease Through our actions, we will become trusted partners with customers, colleagues, and patients creating a community unified in its mission to improve the quality of life around the world. Our results will benefit customers, patients, employees and shareholders. We will celebrate our successes, thrive on discovery, and continually expand our boundaries. We will act boldly, decisively, and with determination on behalf of people fighting cardiovascular disease. Helping Patients is Our Life s Work, and 4

5 Edwards Patient-Focused Innovation Strategy Singular focus on large unmet needs of structural heart and critically ill patients Focus Pioneer breakthrough technologies with superior evidence Innovation Lead groundbreaking standards of care through trusted relationships Leadership Create meaningful value by transforming patient care 5

6 Our Strategy has Yielded Consistent Growth and Global Leadership in all Product Categories 10+ years of underlying double-digit sales growth 10 year underlying sales CAGR E* Edwards Sales ($ in billions) $3.5 - $3.9* Europe 12% $1.2 $1.3 $1.4 $1.7 $1.9 $2.0 $2.3 $2.5 $3.0 $3.4 U.S. 15% Japan 9% E ROW 13% *Guidance as of 12/5/18; not an update 6

7 Innovating in Structural Heart Disease is Demanding, but an Ideal Focus for Edwards Heavy and Growing Disease Burden Breakthroughs are Therapies Achievable Triple Win Potential Deadly Consequences Prevalent Globally Expensive to Ignore Favorable Landmark Studies Positive Prospects in Mitral and Tricuspid are Emerging Improved Outcomes Enhanced Quality of Life Cost Effectiveness Edwards is uniquely and singularly committed over the long-term 7

8 Business Overview Strong Leadership Positions and Significant Growth Opportunities 8

9 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

10 Global TAVR Opportunity Expected to Double in Size by ~$7B 2021 >$5B 2018 ~$3.5B 4 Indication Expansion Increasing Awareness Technology 10

11 Post Low-Risk Approval, Patient Treatment Pathway Would No Longer be Determined by Risk for Surgery 100% Low Risk Int. Risk High Risk By STS Risk Score 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 Expect data to be presented at ACC 2019 A non-inferiority outcome is expected U.S. FDA approval anticipated in late

12 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 12

13 Our R&D Pipeline Continues to Strengthen Our Long-Term Position Edwards SAPIEN 3 Ultra System Further elevates the performance benchmark of SAPIEN 3 CENTERA Valve Feature-rich self-expanding valve with impressive initial clinical data Improved skirt design, on-balloon delivery system and next-gen seamless expandable 14F sheath Implementing a controlled rollout strategy in Europe and the U.S. Sustained clinical outcomes at 1-year U.S. IDE trial commenced Oct 2018 Controlled commercial rollout underway in Europe SAPIEN 3 Ultra is not available for commercial sale in Germany currently. CENTERA is not available for commercial sale in the U.S. 13

14 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 14

15 We Expect to Lead and Transform Treatment for Patients with Mitral and Tricuspid Diseases Mitral and Tricuspid Diseases are complex, varied and prevalent; patients are in significant need of safe and effective therapies Multiple therapy options are needed; our portfolio strategy positions Edwards for leadership Expect the Global Mitral & Tricuspid Transcatheter opportunity to reach $1B+ by 2021 and ~$3B by 2024 Commitment to innovate across therapies, build practicechanging evidence, and drive therapy adoption Expect strong cadence of transformational therapies; 3 commercially available in Europe in 2019 PASCAL and EVOQUE not available for commercial sale 15

16 Mitral and Tricuspid Patients are in Significant Need of Better Treatment Options Mitral and Tricuspid Regurgitation are prevalent and undertreated 1,2 Patients experience debilitating symptoms and high mortality rates U.S. Prevalence <2% Treated 4.5M Mitral and Tricuspid Regurgitation Painful symptoms Frequent hospitalizations Ineffective medical management <10% Treated 1.2M Aortic Stenosis 1 Sourced from internal models; 2 Addressable patient populations 16

17 Wide Range of Etiologies May Require Different Treatments for Optimal Patient Outcomes Tricuspid Regurgitation 1,2 Mitral Regurgitation 3 Annular Dilation Secondary (Functional) Tethering Primary (Degenerative) Leaflet Prolapse Rheumatic & Other Mixed Flail & Prolapse Primary (Degenerative) Tethering Secondary (Functional) Annular Dilation 1 Mutlak et al, J Am Soc Cardiol, 2007; 20(4): ; 2 Topilsky et al; JACC Cardiovasc Imaging, 2014; 7: ; 3 Marchena et al, J Card Surg, 2011; 26:

18 TMTT is Building a Transcatheter-Based Portfolio to Optimally Treat All Patients Tricuspid Mitral Annular Reduction Leaflet Repair Leaflet Repair Annular Reduction Transseptal Valve Replacement Cardioband PASCAL FORMA PASCAL Cardioband EVOQUE SAPIEN M3 Cardioband is approved for commercial sale in the EU. All other products not available for commercial sale. 18

19 Expansive Clinical Activity in 2019 to Build Evidence Across the TMTT Portfolio 5Early Feasibility Studies 4 Planned Pivotal Trials 3 EU Post Market Follow-Ups PASCAL Tricuspid EVOQUE Mitral SAPIEN M3 Mitral Cardioband Tricuspid FORMA Tricuspid PASCAL DMR PASCAL FMR Cardioband Tricuspid SAPIEN M3 Mitral PASCAL Mitral Cardioband Mitral Cardioband Tricuspid Cardioband is approved for commercial sale in the EU. All other products not available for commercial sale. 19

20 Surgical Structural Heart: Transforming Patients Lives by Advancing Surgical Structural Heart Innovations Our new name, Surgical Structural Heart, reflects our expanded vision to advance and transform cardiac surgery Focusing on the multiple growth opportunities in surgical structural heart Extend leadership in $1.8B+ global surgical structural heart opportunity Extending our leadership position as the partner of choice for cardiac surgeons and their teams Delivering a leading pipeline of surgical innovations Partnering with cardiac surgeons to continually enhance surgical outcomes for patients 20

21 INSPIRIS Paves the Way with its Success as the First in a New Class of Resilient Valves Trusted Platform New Resilient Valve Class Magna Ease Proven PERIMOUNT Platform RESILIA Resilient Tissue Technology Average Patient Age is 60 Years 1 Leading Surgeons are Adopting INSPIRIS Active patients can avoid anticoagulation required with mechanical valves VFit TM technology Designed for potential future valve-in-valve procedures Princeton Woman First in Nation to Receive New Heart Valve Ordinarily, she may have had to have a mechanical valve, which would have been riskier and required blood thinners and medications. - Bluefield Daily Telegraph Innovative technology merits a premium 1 Average age of U.S. and European INSPIRIS patients as of 12/5/18 21

22 Leading Pipeline of Surgical Innovations Remains Consistent with our Strategy INSPIRIS INTUITY Elite KONECT AVC Next Gen MitraI Next Gen MitraI EIE 1 SIZER Physio Flex HARPOON SUTRAFIX HARPOON 1 EDWARDS INTUITY Elite 22

23 Critical Care: Driving Growth and Leadership with Innovation We are pioneering smart monitoring to benefit more patients and expand leadership HemoSphere platform builds the foundation for growth and enables our artificial intelligence capabilities Critical Care Products Benefit Millions of Patients per Year Acumen IQ technology expected to expand adoption in Enhanced Recovery We are the global leader in hemodynamic monitoring 1 1 Includes pulmonary artery catheters and pressure monitoring products, excludes capital. 23

24 Shifting Trends Favor Smart Patient Monitoring Trends in patient care and advanced technologies are enabling: > Impact on Patient Monitoring Shifting care outside of the hospital Less invasive H Data-enabled HOME HEALTH HOSPITAL OUTPATIENT AMBULATORY AI technologies LOW ACUITY HIGH ACUITY LOW ACUITY Connected Sicker patients within hospital AI Artificial Intelligence 24

25 HemoSphere Builds Foundation for Growth ClearSight Connectivity Suite Phased rollout to replace legacy platforms Swan-Ganz FloTrac and HPI* Phase I Advanced Swan-Ganz Catheter VIGILANCE II REPLACEMENT Phase II FloTrac Sensor Acumen Hypotension Prediction Index (HPI) EV1000 REPLACEMENT Phase III HemoSphere All-in-One Platform ClearSight HPI Connectivity Suite EV1000 REPLACEMENT 25

26 Financial Highlights and Outlook Strong Organic Growth 26

27 2018 Delivering Results to Drive Value Double-digit growth continues Important progress on clinical innovations Significant improvements in our operations TAVR therapy growing mid-teens globally Critical Care exceeding expectations Gained early patient experience in multiple breakthrough therapies Multiple EFS trials in progress Increased global supply chain capacity and redundancy Strengthened global team Guidance as of 12/5/18; not an update Total underlying sales growth at 10% YTD Q3 Estimated adjusted EPS growth >20% 27

28 2019 Expected to be a Year of Continued Growth and Investment in Our Future Increased growth in the treatment of AS through Transcatheter Aortic Valve Replacement Momentum in breakthrough Transcatheter Mitral and Tricuspid Therapies (TMTT) Innovation in our core leadership franchises of Surgical Structural Heart and Critical Care Focused investments: - Clinical trials - Disease Awareness - EU TMTT field team - Capacity and talent Guidance as of 12/5/18; not an update Underlying sales growth of 9-12% R&D 17-18% of sales to drive value creation Adjusted EPS of $ $

29 An Exciting Year Ahead Pursuing Large Unmet Needs 2019 Expected Progress Platform Launches Clinical Trials* Early Feasibility Studies *Includes CE, Pivotal and Registries 29

30 Edwards is Poised for Long-Term Success Unwavering patient-focused culture motivates and guides our global team Differentiated strategy based on focus, innovation and leadership Innovative R&D to produce breakthrough therapies Credibility and trust with clinicians, regulators, payors and patients Nimble and adaptive business model Sustainable organic revenue growth, strong profitability and disciplined capital allocation yield exceptional shareholder value 30

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