Edwards Lifesciences Corp at Wells Fargo Healthcare Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Larry Biegelsen - Wells Fargo - Analyst : Thanks for having us. This is our pleasure. So Bernard, let's start with the strategy, and I wanted to give you a chance to address the recent stock reaction. Were you surprised by the magnitude of the drop and what's your message for current and potential investors?

Question: Larry Biegelsen - Wells Fargo - Analyst : Thank you. So, Bernard, you recently announced the sale of critical care just fit just close and the acquisition for private companies. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 05, 2024 / 2:15PM, EW.N - Edwards Lifesciences Corp at Wells Fargo Healthcare Conference

Question: Larry Biegelsen - Wells Fargo - Analyst : What's your strategic vision for Edwards and how is the company going to look in three to five years yet of.

Question: Larry Biegelsen - Wells Fargo - Analyst : Understood. I think the timing of the four recent deals or three earnings call concerned investors because it didn't seem like a vote of confidence in your TAVR and TMTT businesses. So how do you respond to that concern?

Question: Larry Biegelsen - Wells Fargo - Analyst : Thank you, Scott absolutely. And end up building on that you talked about, but are building out an interventional heart failure franchise. I thought you said you're evaluating two to three heart failure deals up. And maybe I'm maybe I misunderstood but Endo Chronix is your first move into that area. Should we expect additional acquisitions in that franchise, call it in the next 12 months or so? And how should we think about deal size and dilution you're willing to accept?

Question: Larry Biegelsen - Wells Fargo - Analyst : But I think Thank you, Scott, you have this concept about being a pioneer, creating a category is so important, you have a different kind of trajectory. You have a different kind of impact impact to patient to physician to the space to innovators to payers to providers. Again, you'll remember the exact example I gave you Surgical, TAVR, EVOQUE, MITRIS RESLIA, a I would say, so far we're not running. And for PASCAL, it's more about [big coming]. Second, aiming for leadership with a fast innovation, clinical research budget of most of what we do is about being a pioneer. And if it is not about that, it's about you are aiming for linear leadership of your fast.

Question: Larry Biegelsen - Wells Fargo - Analyst : Okay. That's helpful. Maybe if we have time, we'll dig into electronics more later, but there's obviously other things to get to let's get the up the numbers that are out of the way first before I wanted to dive into TAVR and the boat excessive. But Scott, let's just say there's obviously, I know you know there's been a lot of focus there trying to figure out what '25 might look like. We published the other day when the critical care that critical care deal close we got to 255 for RemainCo call at Edwards for 2025. The pieces where we looked at the midpoint of the prior '24 guidance, it was about 275, we assume about $0.40 dilution from critical care. And so that's proforma '24 EPS 235. We assume you grow your '25 EPS by 10%. And we used a lower share count based on the recent repurchase that we guided 266. And then I think our deal dilution, we assumed about $0.14 and then interest income from the remaining $500 million in proceeds from critical care added about [$0.03]. I hate to go through all that math on the webcast, but I think that was the math that got us to about 255. Scott, of course, I'd love to get your reaction.

Question: Larry Biegelsen - Wells Fargo - Analyst : And that makes sense. Just a couple of follow-ups on the deal dilution. Two follow-ups on that. One is we saw the announcement yesterday about headcount reduction, 3% of the remaining workforce or 540 people, that's what mass device reported. So that should help, I would imagine. And then you spend about 19% on R&D. So where am I going with this the deal, the question we've been getting is that you spend a lot on R&D that we investors. Does it feel like you should offset dilution from these deals. And Scott, you alluded to that or to my dilution math of, call it $0.14. Maybe that's too high. I mean, are you kind of trying to at least offset that piece.

Question: Larry Biegelsen - Wells Fargo - Analyst : Okay, All right. Well I'm sure people have more questions later, but let's move on. So okay. The other big question is really on CapEx. And I guess I wanted to ask about the second half guidance. The guidance I think you lowered it from eight to 10 to 5% to 7% for '24 in the Q2 call. And I think you grew about 6% in the first half so the guidance it assumes basically this, however, similar in the second half to the first step up, why don't you think you know what, why don't you think your tablet growth will get worse in the second half or why how derisked is that? I guess it's not it doesn't give you any margin for error if things actually do get a little bit worse. So how derisked is updated copper guidance in your view?

Question: Larry Biegelsen - Wells Fargo - Analyst : Sure. Yeah. I would first ask about the near term headwinds you take you called out on the Q2 call about crowding out of procedures. People or so any indicate anything new in that regard? Some of the issues you called out on the Q2 call?

Question: Larry Biegelsen - Wells Fargo - Analyst : So Bernard, usually when the data comes out, it has a pretty fast impact on the market that's before like guidelines or anything, the NCB., then you have to file for the indication and then it goes into the entity automatically. You think there's something different here where the data itself will.

Question: Larry Biegelsen - Wells Fargo - Analyst : And the other thing I just want to follow up on, I have heard you talk publicly about new indications having a kind of a halo effect on the prior indications. So like with low risk came in yesterday, it made me a little concerned to hear you say that because it almost sounds like a symptomatic itself is not an attractive opportunity because there is some debate does in asymptomatic patients want to get a procedure is how easy it is to diagnose these patients. Right? So I just want to clarify, you're not saying that that you don't think the eight symptomatic population itself is an attractive opportunity.

Question: Larry Biegelsen - Wells Fargo - Analyst : Okay. I guess one other one. It was interesting to see on the TCT program preemptive treatment of aortic stenosis as a session that I guess we'll all have to wait and see. Yes, what that is, but it's definitely provocative.

Question: Larry Biegelsen - Wells Fargo - Analyst : I wanted to get to tricuspid any both. But just two other tougher questions, I feel like we need to answer. One is Boston Scientific. If they come to the US next year, how you're thinking about that into Abbott's low price strategy?

Question: Larry Biegelsen - Wells Fargo - Analyst : Okay. I want to make sure we get that you collected that. Scott, did you want to add anything to that, but Bernard, obviously you ran TMTT before you became the CEO. So I'm sure this is near and dear to you yet on the launch of the vote. Just love to hear an update on how that's progressing and talk about the kind of catalyst path pathway there. There's a lot, right. We have data at TCT. We have an end to the US. What are the catalysts that really drive adoption?

Question: Larry Biegelsen - Wells Fargo - Analyst : And then also we have the endcap going into place in October and the NCD would be March of next year. Yes. And then trace tend to I guess you've been asked this many times how important is a statistically significant mortality benefit to adoption.

Question: Larry Biegelsen - Wells Fargo - Analyst : We have heard that actually demand is outstripping supply, but it's to supply that your ability to have the clinical support people say what are you doing to? Is that a fair statement? And what are you doing to add people that can that could support the cases? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 05, 2024 / 2:15PM, EW.N - Edwards Lifesciences Corp at Wells Fargo Healthcare Conference It is fair to not just support. It is also training physicians. It is on how many teams could you train. We have approved in U.S. and in Europe. So we are hiring and staff to transition to support physicians. There is an imaging company in total. So we are adding people, which is all of that together. We are scaling the TMTT organization to be able to scale the EVOQUE procedure in the US and in Europe and finger. So about geography expansion, we are doing also you know that our goal is to bring EVOQUE. It'll have everywhere, globally. So the scaling just started, Bernard, I agree with you, PASCAL, for tricuspid, it's important to have a two year option. What's the status of the pivotal trial in the two products approved. My concern has always been that it is difficult to complete that trial because patients are being randomized to medical therapy.

Question: Larry Biegelsen - Wells Fargo - Analyst : Okay. I wanted to ask you about Endo, trying to quickly get out what attracted you to the asset, given what we've seen with the incumbent CardioMEMS about $130 million in sales relatively flat while Is this an attractive asset? And then secondly, you don't call on heart failure doctors say, I don't believe you need to build a referral sales force.

Question: Larry Biegelsen - Wells Fargo - Analyst : Got it, but that you will need to add people.

Question: Larry Biegelsen - Wells Fargo - Analyst : I know we're out of time. I wanted to give you the last word, feel free to make any closing remarks that we can. We can go over a little bit. Is there anything we didn't cover today that you wanted to highlight already you want to just kind of summarize for us?