Edwards Lifesciences Patient-Focused Innovations for Structural Heart Disease and Critical Care Monitoring
Use of Non-GAAP Financial Measures Unless otherwise indicated, all figures are GAAP financial measures The Company uses the term underlying when referring to non-gaap sales information, which excludes discontinued and acquired products, foreign exchange fluctuations, and the THVT sales return reserves and excluding special items and adjusted net income and adjusted EPS to also exclude gains and losses from special items such as significant investments, litigation, amortization and business development transactions. A reconciliation of non-gaap historical financial measures to the most comparable GAAP measure is available at www.edwards.com 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 1/11/16 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 1934. 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 2016 and beyond; expectations for new products and the global TAVR opportunity; the timing and results of clinical trials and regulatory approvals; and opportunities for growth. 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, 2014. These filings, along with important safety information about our products, may be found at edwards.com. 1/11/16 3
Driven by a Passion to Help Patients Edwards partners with clinicians to develop innovative technologies in the areas of structural heart disease and critical care monitoring that enable them to save and enhance lives. 1/11/16 4
Global Leadership Over 95% of sales from products in #1 global positions Serving patients in more than 100 countries worldwide Surgical Heart Valve Therapy Critical Care Surgical Heart Valve Therapy Critical Care Transcatheter Heart Valve Therapy Japan ROW Europe U.S. THVT 2010 2015E 1/11/16 5
Edwards Strategy Patient-Centric Focused Innovation Industry Leadership Fulfilling unmet needs of structural heart and critically ill patients Transforming care drives enduring value creation Breakthrough therapies with superior clinical and economic evidence Active product portfolio management Pioneering legacy of establishing standards of care Trusted relationships with clinicians, payors and regulators Create Value with Therapies that Transform Patient Care 1/11/16 6
Industry Leadership 1/11/16 7
Edwards is Well Positioned to Maintain Global TAVR Leadership A beating heart alternative to traditional surgery for high risk aortic stenosis patients An increasing body of evidence is changing the treatment of aortic stenosis SAPIEN 3 has delivered superior clinical outcomes Continuing to build robust clinical evidence to expand patient access Investing to be the technology leader 1/11/16 8
Global TAVR Opportunity Could Exceed $5B in 2021 Observations For Severe, Symptomatic AS Patients Age plays a significant role in the diagnosis and treatment of aortic stenosis Additional risk factors not captured in STS score become more important with patient age Patients 14,000 12,000 10,000 8,000 SAVR TAVR 2015 Severe Symptomatic AS Patients in the U.S. 1 Untreated (estimated) A safe interventional procedure has the potential to lift treatment rates in older age group 6,000 4,000 2,000-50 55 60 65 70 75 80 85 90 95 100 Age (1) Nkomo 2006, Iivanainen 1996, Aronow 1991, Bach 2007, Freed 2010, Iung 2007, Pellikka 2005, Brown 2008, Thourani 2015, internal estimates. 1/11/16 9
Positive Outcomes and Expanded Indications Should Encourage Untreated Patients to Seek Therapy Intermediate Risk Low Risk Trial Early Trial Design Variables PARTNER II results expected to enable intermediate risk patient access Expect U.S. approval in late 2016 Intermediate Risk Low Risk Low risk: STS 0 to 4/5 Randomized 1:1 to surgery TAVR for tissue valve candidate High Risk Expect to start U.S. trial in 2016 1/11/16 10
The Edwards SAPIEN 3 Ultra System Further Streamlines the TAVR Procedure The Edwards SAPIEN 3 Ultra System On-balloon delivery system Next-generation sheath CE Mark approval expected in Q4 2016 Significant progress on Pulmonic indication expected in 2016 CENTERA design expected to be best-in-class self-expanding platform; CE Mark anticipated in 2H 2017 Pursuing indication expansion utilizing current platforms Edwards SAPIEN 3 Ultra System The Edwards SAPIEN 3 Ultra System and CENTERA are not approved for sale. 1/11/16 11
The Leader in a ~$1.8B Global Surgical Heart Valve Segment Differentiated, long-term evidence and highly trusted brand More long-term clinical publications than any other surgical valve Surgical AVR expected to continue to be the gold standard for younger patients and complex procedures Innovation planned beyond aortics, expanding treatment options in other valve positions Strategy is to differentiate surgical offerings with superior clinical and health economic evidence 1/11/16 12
INTUITY and INSPIRIS Should Extend Our Leadership in Surgical Valves EDWARDS INTUITY Elite Facilitates MIS AVR Trusted platform, rapid deployment, and smaller incision U.S. launch expected mid-2016 INSPIRIS RESILIA tissue has demonstrated reduced calcification 1 and improved hemodynamics VFit technology could improve hemodynamics following future TAVR valve-in-valve procedure EU and U.S. launches anticipated in 2017 INTUITY not approved for sale in the U.S. INSPIRIS not approved for sale. (1) Flameng W, et al. J Thorac Cardiovasc Surg. 2015;149:340 45 1/11/16 13
Edwards Unmatched Portfolio of Market Leading Hemodynamic Products is a Competitive Advantage Core Hemodynamic Products Enhanced Surgical Recovery Products TruWave Transducers Swan-Ganz Pulmonary Artery Catheter EV1000 Clinical Platform FloTrac Sensor ClearSight Finger Cuff 1/11/16 14
Enhanced Surgical Recovery is an Underpenetrated Global Opportunity Enhanced surgical recovery is focused on reducing complications and length of stay ClearSight noninvasive sensor expands benefits of ESR to a broader patient population Innovating to drive future ESR growth Next generation hemodynamic monitor Integrated semi-closed loop system for standardized management of patient fluid levels Large Opportunity Exists to Reduce Complications from Surgery Unpenetrated $550M Penetrated $150M Size of ESR Opportunity 1/11/16 15
Innovation Fuels Long-Term Growth 1/11/16 16
Edwards is Investing Aggressively to Lead Transformational Structural Heart Therapies Selected Programs Description Adjacent Valves Heart Failure CardiAQ-Edwards FMR Program Harpoon FORMA CardioKinetix HF Programs Mitral Replacement Functional Mitral Repair Degenerative Mitral Repair Tricuspid Repair LV Reduction LV Restoration 1/11/16 17
Combined CardiAQ-Edwards Platform Can Drive Leadership Focus on building clinical experience in TMVR CardiAQ platform complements the FORTIS program One valve, multiple delivery systems Unique anchoring mechanism Early patient experience is encouraging An integrated, dedicated team Planned clinical timelines: CE Mark trial to begin mid-2016 U.S. EFS enrollment to start soon Near-term product additions: Lower valve profile, additional valve sizes, delivery system improvements, Edwards tissue The CardiAQ-Edwards valve is not available for sale. 1/11/16 18
Other Structural Heart Initiatives Focused on Significant Unmet Patient Needs FORMA Harpoon CardioKinetix Implantable spacer that reduces regurgitant tricuspid flow 1.6M U.S. patients suffer from moderate-to-severe TR 1 Early human clinical experience is promising CE Mark trial and U.S. EFS to begin in 2016 Transcatheter approach to chordal repair 1.6M U.S. patients 45-85 years old 2 Investment and option to acquire Harpoon Medical Expect to begin CE Mark enrollment early 2016 Treatment for left ventricular dysfunction 1.4M U.S. Class III patients underserved 3 Investment and option to acquire CardioKinetix U.S. pivotal trial 50% enrolled; CE Mark as of 2011 (1) Stuge and Liddicoat. Emerging opportunities for cardiac surgeons within structural heart disease. J Thorac Cardio Surg 2006;132:1258-1261 (2) Singh et al., Prevalence and Clinical Determinants of MR (Framingham), Am J Cardiology 1999 (3) IMPROVE-HF Registry, Nursing Home Survey 2004, NHANES 2009-12, CVRG 2015. FORMA, Harpoon and CardioKinetix are not available for sale. 1/11/16 19
Financial Highlights 1/11/16 20
Edwards is an Attractive Investment Strong organic topline growth Disciplined SG&A expense control Successful long-term track record Robust free cash flow Commitment to returning capital to shareholders Net Sales ($ in billions and underlying growth rates) 11% 13% ~15% 7-11% $1.90 $2.05 $2.32 $2.30 2.50 $2.50 2.75 2012 2013 2014 2015E 2016E Guidance provided on 12/9/15; Actual results to be reported on 2/2/16 1/11/16 21
2016 Guidance (Excludes special items) ($ in millions, except EPS) 2016 Guidance Total Net Sales $2,500 - $2,750 Gross Profit Margin 74% - 75% Free Cash Flow $400- $440 EPS $2.30 - $2.40 1/11/16 22
Edwards is Poised for Long-Term Success Patient-centric culture Leading edge research and development Industry leading competitive positions Trusted relationships with clinicians, regulators and payors globally Strong geographic diversification Nimble, adaptive business model Focused strategy to deliver patient benefit and shareholder value 1/11/16 23