Good morning. We're gonna continue to move down the medical devices track at the 43rd Annual TD Cowen Healthcare Conference. I'm Josh Torres from the Medical Devices team. We are very excited to have a West Coast visitor from Edwards Lifesciences, Chief Financial Officer Scott Ullem. Scott, great to see you in person and, thanks for trekking out to Boston. Oh, for sure. Nice, nice to be here. Thanks for having us. Absolutely. Maybe we can start off, I know it's been a little bit of time to digest the news. Your team was probably aware well ahead of the investment community, but that Mike's departure, stepping down as CEO and Bernard stepping in. Just any, just high level, anything you can share just in terms of how the company is reacting, how the executive team. I think you guys were probably all prepared, just wanted to throw that out there and get your response. This is, smooth sailing is how I would describe it. Bernard and Mike are really traveling and, working in tandem during this transition period until Mike formally migrates to Non-Executive Chairman in May. This is well-planned, going smoothly, and I think generally everybody's feeling very positive about the fact that Bernard was running two of our four business units over the last eight years and has been a very integral member of the team that has been setting and executing the strategy. This really is not gonna be any real change for Edwards, from a strategic point of view. Obviously, everybody has their own style, and Bernard has his, but, everybody knows Bernard well, and we think it's going just fine. That's good to hear. Maybe we could talk about the TAVR franchise, the TAVR market. I think there's definitely some optimism on the Edwards team side and the Cowen team. We're in that same camp that the TAVR market can reaccelerate back into close to double-digit territory or double-digit territory in 2023. One of the questions to start is just, are you able to talk about your market growth assumptions and just to make sure that are you expecting stable share and for Edwards TAVR to grow at the market in 2023? We're expecting that largely market shares are gonna be in the same neighborhood that they've been in. O ne of the questions we've gotten is, geez, have any lost share? What kind of share shifts have you seen over the last 6-12 months? There haven't been any real material share shifts in any major geography, and we're not expecting anything in 2023 either. We've got one new entrant that's gotten introduced here in the U.S., and we expect them to take some share. not sure where that's gonna come from. I think the bigger story is more about just market growth. Share shifts will move around a little bit over time, but the real story and the real growth driver for Edwards is going to be overall adoption, overall growth of the TAVR therapy, where we've been the leader and expect to continue to be the leader. If we think about the guidance range for the TAVR business, 9%-12% in 2023, is that equal-ish contributions from the U.S. unit and the international franchise as well? Well, we haven't really predicted what the composition of that 9%-12% growth is gonna be like in 2023. What we can say is in the second half of 2022, we had mid-single-digit growth from the U.S. and from Europe. We had, you know, higher than that growth rates from countries outside of Europe and Japan. Overall in 2023, we're expecting that we're gonna see, you know, nice contributions and nice growth from multiple different regions around the world, but we haven't really broken out what that's gonna look like. Understood. Maybe we could just talk about some of the growth drivers of this reacceleration that we are expecting. Maybe just focus on the U.S. market. There are soft comps, you know, just less challenging comps in 2023 versus 2022. For starters, there's resilient pricing premium that will contribute to a degree, depending on traction there and the adoption in your centers. Any other, I guess, tailwinds that you'd call out in terms of help us think through this reacceleration that's baked into your guidance? Well, you're right about the comps being a little bit easier in 2023 versus 2022 than they were last year versus 2021 when we grew, you know, over 20%. Just arithmetically that makes the bar a little bit easier. I think more importantly, what's really happening is that the healthcare system was so disrupted by COVID that staffing levels really suffered. It was staffing, not just at the point of care in the hospital, but staffing that supports the patient's journey through the referral chain. As patients get imaged, as they get pre-procedural screening anytime there's any kind of a staffing impact, it just delays that patient's journey to ultimately getting the treatment they need. We're expecting that to abate. We've seen already signs in l ate 2022, and as we mentioned in our call at the end of January, the beginning of 2023, staffing is improving. We've heard hospital CEOs and administrators talk about their focus and prioritization on getting staffing levels improved, and we think that's gonna benefit patients' ability to get treated and then by extension will benefit Edwards as well. We're expecting that positive trend to continue during 2023, and it's reflected in our guidance of 9%-12% growth. Excellent. Are there any buckets within the TAVR market, smaller segments within it, like TAVR and SAVR, maybe deeper penetration in the asymptomatic patient population, even though you don't have a fully symptomatic label because we don't know the results yet. Any of those buckets that are meaningful growth drivers or altogether just every segment should pick up in 2023? Well, it's probably gonna be more of a combination, but you're onto an important point, which is TAVR has gotten big enough and aortic stenosis is becoming more well understood that things like valve-in-valve are important growth prospects over the longer term. We're pleased to see this continued label expansion and broader indications for TAVR. We think it gives patients a better alternative. As you think about the lifetime journey of patients who contract these structural heart diseases, having broader indications is really gonna benefit them. In terms of 2023, what the composition or contribution is from different parts of the label, it's probably difficult to isolate that. Understood, understood. We talked about this, the growing at the market, not assuming share shifts in 2023. Do you have a share calculation, an internal share calculation you can share with us just about where their share stood in the United States at the end of 2022? Was there 25 or 50 basis points of share loss over the course of the year? I t's tough to be that precise. T hat's certainly within the margin of error. B ecause it's really us and one other player it's pretty detailed to try to get to that level of precision. What I will say again is we haven't seen any material shift in share in any of our major regions, including in the U.S. We're positive about our position. W e've got a pretty good view as to what it looks like because we've got a majority of the share, in terms of making sure we're tracking what the different market positions are. Again, the bigger picture is not just market share, it's the fact that this is a growing market with a highly undertreated patient population suffering from severe symptomatic AS. Understood. If we think about some of the drivers of market growth, we talked about some, but one of the remaining questions in TAVR is durability. I guess Medtronic is pitching their hemodynamic benefits and then that potentially correlating with durability, potentially best in class durability. Hasn't proven out by any means, but they did present their 3-year low risk data over the weekend. That was head to head against surgical valves, and that looked pretty good. Maybe I wanted two questions in here. First is their hemodynamic marketing pitch seems I think some investors are thinking that that's gaining incremental traction in 2022. How does Edwards feel about the traction that hemodynamic advantage is garnering? It doesn't seem like it's impacting share, just by our just recent Q&A here back and forth. Any comments on that competitive angle within the TAVR market? Well, I'll focus more on us than on the competitive angle, but I will say we tend to separate the marketing message from the science. Our customers do as well. P hysicians care deeply about clinical trial data, and the data regarding durability reflects a whole bunch of different factors, not just any one particular element that might be in a marketing pitch. It relates to valve design, it relates to leaflet material. It relates to the patient's own blood chemistry, and a bunch of other factors as well. I think overall, in terms of durability, we care deeply about durability. We're the leading provider of surgical valves. We're the leading provider of transcatheter valves. We obsess over how to make these valves as durable as possible for our patients. One of the key elements is tissue technology. We've invested heavily over a decade in our RESILIA tissue platform, which is an anti-calcification treatment that we've just announced, five-year results for. In our COMMENCE study of RESILIA tissue, we saw zero structural valve deterioration after five years, which is pretty remarkable. It gives us even more confidence that this tissue is going to be an important part of the overall durability equation in our quest for increasing that durability. It's certainly a high focus area for physicians. It's a high focus area for patients as well. So that's sort of how we think about it more than just what's the marketing message and what happened last quarter. We feel really good about the technology of our platform and feel good about our leadership position. Excellent. Just thinking about any data that could accrue in the next 6, 12, 18, 24 months on durability of the SAPIEN platform. I mean, there's some RESILIA data, coming out from surgical valves, correct in the next 12 months. Could we see PARTNER 3 3-year data or longer at any point in the next 12 months? We haven't talked yet about when to see the next tranche of PARTNER 3 data, but we have said that we'll see the 7-year COMMENCE data later this year. I mentioned COMMENCE is our trial of the RESILIA tissue. We have 5-year results already. We expect to announce the 7-year results later on in 2023. Excellent. Maybe I could take a chance just because of this durability discussion. Edwards has a surgical valve business. They have a TAVR franchise, both leading market leaders, market-leading franchises. Any thoughts or can you share anything internally in terms of how your team views the durability potential of TAVR versus SAVR? Do you think there will be the age-old consensus view in the surgeon community is that surgical valves last longer than TAVR, maybe 15, 20 years. TAVR may last 8 - 10, is the ranges that we've heard. Could we ultimately see in these low-risk trials, Probably, it's a crystal ball question, but how does your team think about the potential delta once the data hits the tape? Well, it'll be a really interesting journey that we're gonna follow here. We follow these patients in PARTNER 3 for 10 years. We'll get a lot more information about relative durability between TAVR and SAVR as time goes on. W e do all kinds of things internally and accelerated wear testing, lots of different analyses of surgical valves and TAVR and how they compare. Keep in mind, the tissue, especially now they're on the RESILIA tissue platform, is the same for TAVR and for SAVR. That particular element of durability should be comparable. In terms of the way the valves, you know, sit and react and perform inside of a patient, that's one that our time will tell. We're gonna look very carefully at this, and we're gonna take best technology, best practices, best learnings, and be able to use those on the other platforms, surgical and TAVR, as we learn. We're pretty excited about being able to follow these patients for the long term, really try to bring some data to the discussion. You're right, historically, it's been all around the presumption that surgical valves last longer. We're not certain that that's the case. Okay. Wanna just lastly, on TAVR piece of this discussion, ask about market growth drivers with asymptomatic and moderate indications on tap, with thinking about the TAM your team has put forward for 2028, the global TAVR TAM. I mean, how big of a slice of that TAM should we be thinking about asymptomatic and moderate? I think at the Investor Day, Larry may have shared that those were just coming on board and ramping. How would you answer that question? No, you're right. Just put some numbers behind it. Today, we think that the global TAVR market is something like $5 billion in sales. We expect that to be $10 billion in sales by 2028. Most of that growth is gonna be driven by continued adoption, more patients coming into the system and getting treated under the current label. We'll start to see some contributions from the EARLY TAVR trial, assuming that is successful before 2028, but if that's the case, it'll just be getting started. This is the patients who have severe aortic stenosis without symptoms, and we're testing those patients in our early clinical trial. The moderate trial, PROGRESS is the name of the trial, is probably not gonna have been to a position where we'll be treating patients and generating any meaningful revenues from that potential trial. It's a big opportunity, and it just goes, it reflects the fact, I think that while as exciting as it is to go from $5 billion to $10 billion in total addressable market for the next 6 years or so, it's even more exciting beyond that, where you say, geez, you add in a whole bunch of patients. The population of patients with moderate aortic stenosis is much bigger than the patients with severe aortic stenosis. It's the reason why we're investing heavily in this trial to really understand more what the right point for intervention is. Right. Maybe we could shift over to the TMTT business and mitral initially, because put a TMTT revenue guidance range of $160 million to $200 million now for 2023. I think investors are focused on the early U.S. PASCAL launch in the mitral TEER indication. Anything you can share just on the commercial strategy or early trends? I know we got a little bit of color on the fourth quarter earnings call back in late January. Sure. You know, we just started introducing PASCAL Precision in the U.S. late in 2022, and we're gonna continue that introduction during the course of 2023. We're really excited about it. I mean, it's our first indication for TEER, transcatheter edge-to-edge repair in the mitral position. We think that there are big growth prospects and opportunities ahead in the U.S. and outside of the U.S., which we can talk about if you'd like. You know, in the U.S., we think that it'll be a good opportunity to lift the revenue momentum that we're seeing in TMTT. Most of the revenue in 2023 is gonna come from commercial sales of PASCAL in Europe, where we're gonna start seeing meaningful contributions as we roll out this new technology in the United States. Keep in mind, we only have indication for treating degenerative patients. In the U.S., we have the other, 2 trials for PASCAL still continuing to enroll. Understood. Is there a, I guess thinking about the launch, I mean, our understanding is you're probably focusing on those investigator sites or the high volume centers, the high volume meaning that have experience with TEER, maybe with a competitor's MitraClip platform. Is that the right way to think about the launch in 2023 or with the ongoing early launch from late last year into 2023? For sure. I mean, whenever we run a clinical trial, it's the first place to start when we have a commercial indication is at those clinical trial sites. We'll be ramping up the sites that already have experience implanting PASCAL and then expanding beyond that. You know, we're we have deep relationships and a network of hospital systems that will benefit from PASCAL when we get introduced. Our biggest focus right now is on making sure that physicians and operators are well trained and that the outcomes from this therapy are spectacular. We wanna make sure that everyone has a phenomenal user experience and the patients perform well after receiving a PASCAL procedure. That's really gonna be our focus and we'll continue to expand, of course, the center footprint that we're serving as well as we continue to get established in the U.S. Are you able to leverage your TAVR presence in some of these high-volume TAVR sites that also perform mitral TEER cases? Is that something we should be thinking about? Does that give you an edge in the edge-to-edge repair segment? Well, I mean, certainly we have deep relationships with interventional cardiologists at major centers. We're in about 850 sites today in the U.S. with TAVR. We will not be in that many sites in the foreseeable future with TEER. That's just not part of the plan in the short term. Certainly Edwards' reputation, the relationships that we've developed, and our commitment to, you know, having a patients first and data-driven strategy is gonna serve us well as we introduce and roll out the PASCAL technology. Excellent. If we were to just think about CLASP IIF for a second, and I know that that trial's unrolling, there's more focus at the investigator sites now that CLASP IID has been completed. When could we hear maybe about the kinda, I guess, final pathway and maybe even the follow-up period requirement for submission? Could we hear that at the Investor Day later this year? Any details you can share today? Unfortunately, we're gonna have to wait until the Investor Conference in December, to talk more about the timeline for CLASP IIF and for CLASP II TR. Those are the other, those are the other two clinical trial studies involving PASCAL that are still underway. We just haven't announced the timeline for either one of those yet. Understood. But maybe back to CLASP IID. I forgot to ask about the final dataset. That's that TCT that we should be seeing it. In terms of the... I mean, a lot of buzz was generated at TCT. In the clinical community, we felt just, I mean, with anecdotal checks, but we felt like there was some nice momentum coming out of that conference. Did that translate into your, the OUS PASCAL mitral TEER franchise? Were they able to capitalize on that? Do you see some increased incremental traction at some of the centers that you're in? Maybe you could talk about plans to expand regionally now that you have that Class II dataset in hand. Well, you got a couple questions there. Let me try to take both of them. No, that's okay. Sure. First, in terms of CLASP II data, CLASP IID data overall. I t was impactful. We've heard physicians talking about it, reacting to it, digesting it in the U.S. and outside of the U.S. Remember, this is an area where there's a dearth of clinical trial data. There were two main clinical trials prior to this. CLASP IID is the latest one and the first one from a second player. We're really pleased to have been able to contribute evidence and especially positive evidence. That was for a cohort, though, of the overall study size. We're gonna see the full cohort later this year for CLASP IID at 1 year. It's gonna be an important incremental bit of evidence, and we're excited about the prospect as not just for the introduction and expansion in the U.S., but again, the contribution of clinical data that physicians are using outside of the U.S. to make decisions. Excellent. wanted to ask about clinical trial revenues within that TMTT guidance. Is that a tailwind or a headwind in 2023 versus 2022? Is it just so small in 2022 that there's nothing really to comment on? Probably the latter. It's probably gonna be smaller than the commercial sales. It's probably not a, probably not noteworthy. Okay. Okay. Well, maybe we can talk about tricuspid and you mentioned CLASP II TR and we just saw some initial tricuspid TEER data from the TriClip and the TRILUMINATE results over the weekend. You know, it was positive, but there were some little bit of controversy because the hard endpoints weren't met. There was a composite primary endpoint, but within that you, you didn't see a real benefit in reducing TR in hospitalization, rehospitalization or mortality. I know Edwards has prioritized replacement technology EVOQUE over PASCAL initially. I mean, just in terms of how the clinical trial was enrolled and, but maybe you can just help us think through Edwards' interpretation of that dataset and, whether that, you think that your strategy to prioritize replacement over edge-to-edge repair, is more sound. Do you think it's more sound now that you have that, those results out there? Right. Well, you know, I mentioned earlier that there's a dearth of data around mitral repair technologies. There's very little data about tricuspid, and so this incremental data is certainly a good thing for the field. It's important for physicians, and patients to have more scientific evidence to use in determining what the right course of treatment is for tricuspid regurgitation. Just the act of having more data is a really good thing for the field, and we're looking forward to Edwards making contributions to that data, to that data universe as well. I think certainly the quality-of-life benefits were important, right? In demonstrating that intervention can help patients who have tricuspid regurgitation. That was an important result of the trial. We know some people were disappointed about the mortality and rehospitalization rates. This is one where I think just more data and more time is gonna help address some of those open questions. You know, overall, we feel really good about where we, where we are. You know, we've got multiple different programs aimed at patients who are suffering from tricuspid regurgitation. You're right, we ended up prioritizing, just from a timing standpoint, enrollment in our TRISCEND II trial, studying the EVOQUE replacement platform in tricuspid patients. We are continuing to enroll CLASP II TR, which is the TEER, our PASCAL TEER clinical trial as well. We think that both will have an important role for patients suffering from these diseases. You know, it's still early days. We're not, we don't have as much information as we will in the future about which of these different therapies may be most effective and most safe. It's one of the reasons why we're running these clinical trials and investing heavily in ongoing R&D. Understood. Let me ask about the TMTT TAM that you guys have put out there, I think $5 billion in 2028. I believe Abbott is, after the TAVR data was put forward, I think they believe that tricuspid repair/replacement could be a billion-dollar market around that timeframe. Is Edwards Is that an appropriate way to think about that $5 billion? Is it 20% TR, 80% MR or replacement, both repair and replacement? Something you're willing to break out? Well, we've seen a flurry of estimates of what the size of tricuspid could be just in the last, you know, 48 hours, in breaking down repair and replacement. We don't know yet. I mean, we're not far enough along to really have a precise estimate of what the contribution's gonna be between mitral and tricuspid, and within those, between repair and replacement. We do think that there are important roles for multiple different therapies. Again, it's the reason why we're investing so aggressively in research and development, because we do wanna make sure that we're providing therapies and providing solutions for patients who fall into different groups by need in terms of the therapies. We're intending to be the leader. We're excited about the 2028 and beyond, potential and it's the reason why we're continuing to invest in these clinical trials and continuing to invest in fundamental research behind them. Excellent. Maybe just two follow-up questions on the TAVR business in the last couple minutes here. I did not ask about any comments on recent trends since your fourth quarter call. I think I was assuming you may not share any commentary, but just might as well just ask and see if there's anything in February, early March. I think you talked a little bit about trends on staffing getting a little bit better early in 2023. But is there anything on the TAVR volume side that you can comment on? Your assumption is good. We're not gonna be in a position to comment on trends since our fourth quarter call. We'll certainly talk a lot more about that next month when we talk about first-quarter results. As we mentioned back in January, we do expect staffing to continue to improve during 2023, and it's the reason why we have confidence around that 9%-12% growth estimate for the full year. Great. Just on X4 in the ALLIANCE trial, any updates just in terms of that trial getting back on track and I think the delivery system being optimized? No updates yet. We'll certainly talk about that next month, though. Great. Maybe back to tricuspid. I'm just thinking about the PASCAL design versus the TriClip, and this may be a little bit of an engineering question. I'm definitely not an engineer. There could be some of the merits or the advantages of the PASCAL design in the mitral space. Do you think that they could actually be more impactful in tricuspids in terms of having the spacer maybe a little bit more gentler on the leaflets when traction's applied and those leaflets close? Anything you can share just on that theoretical advantage of the PASCAL design over TriClip in tricuspid? Right. Well, I mean, you gave an example of one of the things that physicians talk about and look at. I think it's premature for us. You know, again, we look more at the science and the results of our clinical trials than we do about some of the surface observations. I don't disagree with your observation, but we'll probably hold off on drawing any kind of distinctions between PASCAL and other alternatives until we have more data to look at. Great. Well, we have time for one question from the audience, if there is a question. Yes. A quick question on the TAVR Medtronic SMART trial. I know it's only for the more annualized patients, but the percentage it ended up reaching could be 20%-40% of the total TAVR patients. First question, what's the likelihood that SMART results will show inferiority of the primary end outcome but superiority of the secondary outcome and endpoints? If that's true, first is the likelihood, second is if that's true, would that affect the adoption rate Yes, among physicians with new patients? I mean, I don't have a view as to the first part of the question. Josh, maybe you do. N o, that it's a great question. I don't know we can predict the outcomes of the trial yet. I think Medtronic is hoping that they can show they can meet either the primary or the second end-endpoint and show an advantage for their platform. My understanding that there'll be a number of years follow-up before you could see real outcomes benefit in that study is what some of our clinical consultants have told us. We can catch up offline and maybe talk about a little bit more. Well, Scott, thank you so much. Thanks to the Edwards team for coming out east and helping us and putting up with all of our questions. Our pleasure. Thanks for having us. Thanks, Scott. Thank you, Josh.