The paragraph outlines the introduction to Edwards Lifesciences' Third Quarter 2024 Results Conference Call. It includes a greeting from the operator, who notes that the call is in a listen-only mode and will include a Q&A session. The call is hosted by Mark Wilterding, Senior VP of Investor Relations, with the participation of CEO Bernard Zovighian, CFO Scott Ullem, and other leaders for the Q&A segment. Edwards Lifesciences released their Q3 2024 financial results, which management will discuss along with forward-looking statements about financial guidance, growth opportunities, and various business aspects. It is noted that these statements are subject to risks and uncertainties, and Edwards does not commit to updating them after the call.

The paragraph discusses Edwards' financial performance and strategic initiatives. The 2023 Annual Report and SEC filings are available on their website. The company reported a 10% sales increase on a constant currency basis, exceeding expectations, with strong contributions from TAVR and TMTT. Edwards has advanced clinical research and product introductions for structural heart therapies. Upcoming presentations at the TCT conference will highlight important clinical evidence. The company focuses on long-term growth for TAVR through new technologies, patient outreach, and physician training programs.

In the third quarter, Edwards made progress in scaling its TMTT business and advancing key initiatives like the PASCAL launch and the upcoming introduction of EVOQUE and SAPIEN M3 in Europe. The company is expanding into new therapeutic areas such as aortic regurgitation and implantable heart failure management, aligning with its long-term vision for growth. The business underwent restructuring, including the sale of Critical Care, to focus on structural heart advancements. Despite some regional pressure, TAVR sales reached $1 billion, indicating stability and confidence in their technology and value to stakeholders. Future growth strategies will be detailed at an upcoming investor conference.

The paragraph discusses the ongoing commitment to advancing research for aortic stenosis (AS) patients, highlighting the positive outcomes of the RIA trial presented at the ESC meeting. This trial showed superior results for women using SAPIEN 3 valves over surgical replacements. The importance of valve selection for future procedures is emphasized. Upcoming results from an early TAVR trial studying asymptomatic severe AS patients are anticipated. TAVR sales in the U.S. and globally saw consistent growth, with U.S. hospitals addressing capacity constraints and planning for future expansion. In Europe, the market position strengthened with the launch of SAPIEN 3 Ultra RESILIA.

The paragraph discusses the company's satisfaction with their TAVR platform's patient outcomes and growth as more centers adopt it. They have received CE mark approval for their Alterra system to benefit congenital heart patients in Europe, with positive initial feedback from clinicians. Despite pressure from slower market growth in Japan, they are focused on addressing under-treatment of aortic stenosis among Japan's elderly population. Their Q3 TAVR results exceeded expectations, and while their annual growth guidance remains unchanged, they anticipate lower Q4 sales growth due to one-time items. The company is optimistic about sustainable TAVR growth, driven by their technology, clinical evidence, new indications, and patient activation investments. They have also acquired JC Medical and JenaValve to address untreated aortic regurgitation worldwide and reported the first implant in the Journey pivotal trial with the newly acquired J-Valve AR system.

The paragraph discusses the company's progress and future plans concerning its cardiovascular treatments, specifically mentioning their response to a regulatory review of the JenaValve acquisition, which is expected to close by mid-2025. Their innovations include the PASCAL repair system, EVOQUE tricuspid replacement system, and the forthcoming SAPIEN 3 mitral replacement system, driving a strong third-quarter sales growth of 74% from the previous year, led by global PASCAL expansion. The market for mitral and tricuspid therapies is experiencing significant growth, with expanding adoption of PASCAL technology. The text also highlights the successful completion of patient enrollment for a trial comparing PASCAL with optimal medical therapy for tricuspid regurgitation. Additionally, the EVOQUE system is being introduced to new sites in the U.S. and Europe, with efforts to increase field support teams to ensure successful implementation, emphasizing the substantial unmet need for these treatments.

The TRISCEND II pivotal study's full 400-patient cohort results will be presented at TCT, along with the recent approval of a larger EVOQUE valve size in the U.S. to expand patient access. EVOQUE qualifies for Medicare's new technology add-on payment for three years, boosting accessibility for U.S. patients. With global adoption of PASCAL and EVOQUE, the company expects full-year TMTT self-guidance at the upper end of $320 million to $340 million. Surgical sales grew 5% in Q3 to $240 million, driven by the adoption of technologies like INSPIRIS, MITRIS, and KONECT, and increased complex procedures. The body of evidence for RESILIA continues to expand, with favorable outcomes reported, including for younger, complex patients. The company projects a 6% to 8% growth in surgical sales for 2024. Additionally, the acquisition of Endotronix marks their entry into implantable heart failure management (IHFM).

The paragraph outlines the progress and future direction of IHFM's heart technologies, focusing on the Cordella system's benefits demonstrated in a trial and its recent U.S. approval. It highlights plans to grow through physician training and commercial team expansion, aiming for improved patient outcomes and steady revenue growth. Additionally, financial results for the third quarter showed sales from continuing operations at $1.35 billion, a growth of 9.6%, and adjusted earnings per share of $0.67, which were slightly better than expected. The paragraph also mentions the impact of divesting critical care services and recent acquisitions, noting that the original sales guidance for Q3 included critical care, which was sold in early September, affecting the quarter's financial presentation.

The paragraph discusses Edwards' financial updates, including the plan to discontinue certain operations not focused on implantable medical innovations for structural heart disease, impacting critical care and a non-core product group. It mentions the limited expected contributions from recent acquisitions to sales in 2024 and 2025, along with the accounting impact of critical care transition services on the profit and loss statement. For the third quarter, the adjusted gross profit margin increased to 80.7%, with the fourth quarter margin expected to align with the high end of the annual guidance range. Selling, general, and administrative expenses rose due to increased field personnel for transcatheter therapy growth, while research and development spending also increased to support innovations and clinical trial activities.

In Q3, Edwards experienced an elevated adjusted operating profit margin of 31.4% due to unusual benefits from variable expense timing, but expects this to decline to the mid-20s in Q4, leading to a full-year 2024 margin of around 27% to 28%. The adjusted tax rate for Q3 was 12.4%, with a similar rate expected for Q4, benefiting from one-time tax events this year, while the originally guided range was 14% to 17%. Foreign exchange rates reduced Q3 sales growth by 70 basis points ($7.9 million). GAAP earnings per share were $5.13, aided by a one-time gain from a critical care sale. The quarter included a restructuring charge, a gain from an Endotronix investment, and a $30 million donation to the Edwards Life Sciences Foundation. After the critical care sale, the company's cash and cash equivalents totaled $3.5 billion as of September 30. Edwards repurchased $1 billion in stock during Q3, with $1.4 billion remaining for repurchases. Average diluted shares for Q4 2024 are projected between 590 million and 595 million. Full-year sales growth guidance remains at 8% to 10%.

The paragraph discusses the financial guidance and outlook for the fourth quarter, expecting TAVR growth to be slower than the annual range of 5% to 7%, due to factors like hurricanes, a China distributor rebate adjustment, and fewer selling days. Despite these challenges, daily TAVR procedure volume is expected to increase compared to Q3. The company anticipates Q4 sales of $1.33 billion to $1.39 billion and earnings per share of $0.53 to $0.57. The paragraph concludes with confidence in long-term growth through innovative therapies and invites questions, excluding those about specific trials, with details on how to join the Q&A session.

During the question-and-answer session, Larry Biegelsen from Wells Fargo asked about the company's fourth-quarter guidance and how it translates to an annual EPS. Scott Ullem explained that the adjustments were due to the elimination of Critical Care, affecting EPS by about $0.35, and additional expenses from recent acquisitions impacting Q4. Bernard Zovighian added that there is an expectation of growth and EPS leverage from ongoing operations in 2025, with a full guidance to be provided in December. Larry sought clarification on projecting 2025 EPS based on current figures, and Scott acknowledged the considerations mentioned.

In the paragraph, Scott Ullem addresses Vijay Kumar's questions regarding Q4 guidance assumptions for Edwards. He explains that the financial impact from China is due to a one-time rebate adjustment for a distributor and is not linked to sales operations or growth in China. Additionally, he notes that there are three fewer selling days in Q4 compared to Q3, which affects sales figures. However, he emphasizes that the average daily procedure volume is expected to grow sequentially from Q3 to Q4.

The paragraph discusses a Q&A session during an earnings call. Scott Ullem addresses a question about operating margins, indicating that the company expects mid-20s percentage operating margins for Q4, with an increase to 27-28% in the next year, aligning with their full-year 2024 expectations. Regarding selling days, Ullem mentions that the number was consistent year-over-year for Q4. The conversation then shifts to Robbie Marcus from JPMorgan, who inquires about the performance of a medical device, specifically tricuspid repair and replacement products. Daveen Chopra responds positively about the introduction of the EVOQUE product in both the U.S. and Europe, expressing satisfaction with its performance.

The paragraph discusses the strong demand from physicians and patients for EVOQUE, highlighting unmet needs for tricuspid patients. Clinical outcomes for EVOQUE have been consistent with trials like TRISCEND II. In the U.S., there's an emphasis on having both repair and replacement technologies to address the complexities of tricuspid patients. The company is expanding to new centers, enhancing training and clinical support. It's still uncertain which patients benefit more from repair or replacement, but having both options is considered essential. While EVOQUE is expected to grow within the portfolio, PASCAL remains the largest growth driver currently. The paragraph concludes with a brief mention of TAVR and the ongoing evaluation of market capacity.

In the paragraph, Larry Wood discusses the capacity issues faced by large players in the structural heart lab market. He notes that their company is more affected by market growth constraints than smaller competitors, who don't experience these limitations as acutely. The influx of new technologies, including their own products, is putting pressure on structural heart teams to prioritize and manage patients efficiently. Hospital administrators see this area as a long-term growth opportunity, indicating a need to expand capacity rather than just reallocating existing resources to meet patient demands.

The paragraph discusses the current challenges hospitals face in managing their structural heart programs, particularly concerning the treatment backlog for TAVR patients due to physical and staffing constraints. Despite these issues, hospitals and administrators are working together to share best practices to overcome these obstacles. Bernard Zovighian acknowledges the role their company, a leading innovator in the space with products like PASCAL, EVOQUE, and TAVR, plays in contributing to the demand. The integration of new devices like EVOQUE requires significant resources and adaptation from heart teams. Nevertheless, there is confidence in the healthcare system's ability to efficiently scale these profitable procedures for tricuspid, mitral, and aortic stenosis patients.

In the paragraph, David Roman from Goldman Sachs asks about the future steps for asymptomatic patient population efforts and tricuspid valve procedures post-TCT (Transcatheter Cardiovascular Therapeutics conference), including label expansion and patient activation strategies. Bernard Zovighian suggests waiting for detailed discussions at an upcoming event next week. Daveen Chopra explains that they are currently in the process of national coverage analysis with CMS (Centers for Medicare & Medicaid Services) for EVOQUE, a tricuspid valve device. They anticipate a draft National Coverage Determination (NCD) by year-end and plan to have it finalized by the end of Q1, supporting expedited patient access.

The paragraph involves a discussion about a company's operating margin, anticipated to be 27% to 28%, which reflects the impact of acquisitions and company restructuring. This margin serves as a foundation for future growth, with plans to expand post-2025. The conversation also touches on two payment structures: NTAP, which provides additional payments for Medicare cases involving EVOQUE, based on hospital costs; and NCD, which defines coverage criteria for patient reimbursements. Travis Steed from Bank of America inquires if the operating margin includes cost savings and the impact of the JenaValve deal, which has not yet closed.

The paragraph discusses a conversation between Scott Ullem and Travis Steed about financial aspects of a company. Scott Ullem mentions that their 27% to 28% operating margin includes three of four acquisitions, without providing specifics on the impact of one acquisition, JenaValve. Ullem refrains from detailing future earnings per share, emphasizing a comprehensive growth picture will be presented at an upcoming investor conference. Travis Steed inquires about the company's 5% to 7% TAVR growth rate, to which Ullem expresses optimism due to positive catalysts but deems it premature to specify growth rates. Bernard Zovighian adds that the company is focused on cost optimization and resource allocation to ensure sustainable and profitable growth. Matt Taylor from Jefferies is introduced as the next questioner.

The paragraph is a segment from an investor conference call where different analysts ask questions regarding financial and operational aspects of the business. Matt Taylor asks Bernard Zovighian about the potential impact of upcoming trial results on TAVR and TMTT products, but Bernard defers detailed discussion until an event on Monday due to the study's embargo. Another analyst, Matt Miksic from Barclays, inquires about gross margins and receives a response from Scott Ullem, who provides guidance that gross margins should reach the high end of the original range by the fourth quarter and suggests similar assumptions for 2025. Joanne Wuensch from Citibank asks about the one-time impacts on TAVR for the fourth quarter, hinting at some confusion regarding its sequential progress.

The paragraph discusses updates on the SAPIEN M3 mitral valve replacement system, anticipating a European launch in mid-2025 and a subsequent U.S. launch following data collection and regulatory review. The company remains excited about the product and is currently in a 1-year follow-up phase in the U.S. Additionally, it addresses a $5 million impact due to a China distributor adjustment and notes some unquantified issues, including those related to a hurricane. However, these issues are anticipated to be resolved, with expectations of increased average daily cases in Q4 compared to Q3.

Danielle Antalffy from UBS asks about competitive dynamics in the U.S. heart valve market, including the potential introduction of a fourth valve and its impact on market share and pricing. Larry Wood responds, highlighting their premium pricing for the SAPIEN 3 Ultra with RESILIA tissue, citing its best-in-class technology and performance backed by clinical evidence, such as high survival rates from the PARTNER 3 trial. He emphasizes the importance of demonstrating the value their product brings beyond its cost.

The paragraph discusses a company's leadership and innovation in the medical field, particularly focusing on surgical valves and Transcatheter Aortic Valve Replacement (TAVR) programs. Bernard Zovighian emphasizes the company's history of pioneering innovation and its position as a global leader with premium pricing for their surgical and TAVR valves. He highlights their successful strategy, breakthrough technologies, and the value they bring to the healthcare ecosystem. Despite increasing competition in the structural heart space, the company is confident in its ability to maintain sustainable, profitable growth across various areas like surgical, TAVR, transcatheter mitral and tricuspid therapies (TMTT), and heart failure. The section ends with a segue to a question from Patrick Wood at Morgan Stanley regarding growth in larger versus smaller centers.

The paragraph discusses the rollout and adoption of new therapies, EVOQUE and PASCAL, in medical programs, highlighting differences between smaller and larger programs. Larry Wood notes that larger academic centers are more likely to adopt new technologies early but face capacity challenges. With around 850 centers in the U.S., each has unique challenges. The larger academic centers, as early adopters, feel significant pressure from these rollouts. The conversation then shifts to Adam Maeder asking about the impact of the NTAP reimbursement for EVOQUE, which started on October 1, and the approval of a 56-millimeter valve size. Daveen Chopra responds, noting that the improved reimbursement through NTAP serves as an incentive for adoption of EVOQUE, as some centers had delayed fully embracing the technology until NTAP was implemented.

The paragraph discusses the strong demand for opening new centers and the positive impact of the approval of a larger size, referred to as the 56, which increases applicability by 20%-25% based on previously screened patients. Bernard Zovighian expresses appreciation for the interest in Edwards and invites further questions via phone, mentioning an upcoming event at TCT. The operator concludes the conference call.

This summary was generated with AI and may contain some inaccuracies.