NEW YORK, Dec. 8, 2016 Edwards Lifesciences Corporation (NYSE: EW), the global leader in patient-focused innovations for structural heart disease and critical care monitoring, will discuss the company's strategy for longer term growth, provide an update on its technology pipeline and share its financial guidance during its annual investor conference today in New York City.
Highlights of today's conference include:
- Projected 2017 global sales of $3.0 to $3.4 billion, representing underlying1 growth of 10 to 14%
- Projected 2017 THVT sales of $1.7 to $2.0 billion, representing underlying growth of 15 to 20%
- Estimated 2017 adjusted earnings per share2 of $3.30 to $3.45
- Q4 2016 sales trending at the lower end of the guidance range driven by SHVT and FX
- TAVR opportunity expected to exceed $5 billion by 2021 with significant opportunity beyond
- 2017 a pivotal year of clinical experience in transcatheter mitral and tricuspid therapies
"We expect another year of strong performance for Edwards Lifesciences in 2017, led by growth in sales of SAPIEN 3 and continued leadership in all our core businesses," said Michael A. Mussallem, chairman and CEO. "We are projecting strong financial results next year while we continue to invest aggressively to provide breakthrough therapies for even more patients in need."
During the conference, Edwards' management will present the company's financial guidance for 2017. Edwards expects underlying sales growth of 10 to 14 percent, or $3.0 billion to $3.4 billion. Additionally, the company expects diluted adjusted earnings per share of $3.30 to $3.45. This includes estimated net dilution of $0.10 per share from the pending acquisition of Valtech Cardio, and an estimated $0.08 to $0.13 per share benefit from the accounting change related to stock-based compensation. The company also expects free cash flow3 of $575 million to $650 million, with all guidance excluding special items.
At the conference, Edwards will update its fourth quarter 2016 sales guidance. The company's fourth quarter 2016 sales are trending towards the lower end of the previously stated $750 million to $790 million guidance, driven by lower Surgical Heart Valve Therapy (SHVT) sales trending below October guidance and the impact of foreign exchange. Transcatheter Heart Valve Therapy (THVT) sales for the fourth quarter are expected to be in the range of $415 million to $430 million, consistent with its October guidance. Critical Care sales are trending consistent with guidance.
Among the topics to be discussed at today's conference are:
- Transcatheter Heart Valve Therapy – Edwards will discuss the company's growing confidence in its long-term TAVR outlook. Management will also discuss the various components that expand the TAVR opportunity, which it continues to expect to exceed $5 billion by 2021, and the additional global opportunity beyond 2021. Additionally, the company will explain its updated understanding of the much larger prevalence of severe symptomatic aortic stenosis (AS) and lower treatment rates, reflecting the under-diagnosis and under-treatment of the disease.
The company will also discuss its plans to address the three primary factors driving the expected growth including broader indications for the TAVR therapy, advances in the technology and greater therapy awareness. Edwards is investing aggressively in research and development to generate transformational new TAVR products to further distinguish its leadership position. In 2017, the company continues to anticipate European regulatory approval for its Edwards SAPIEN 3 Ultra System and Edwards CENTERA Valve System. The company is also initiating a groundbreaking clinical trial to expand TAVR therapy to treat asymptomatic severe AS patients.
Edwards expects to generate THVT sales of $1.7 billion to $2.0 billion in 2017, representing a 15 to 20 percent underlying growth rate.
- Surgical Heart Valve Therapy – The continued strong adoption of TAVR therapy has resulted in a less predictable outlook for surgical heart valve solutions in the U.S. and Europe, however regions with less TAVR penetration should continue to deliver strong growth.
Edwards is well positioned to extend its global leadership in surgical heart valves with a robust pipeline of innovative new products including the Edwards INTUITY Elite Valve System and the Edwards INSPIRIS valve, which are launching in 2017.
Edwards expects to generate Surgical Heart Valve Therapy sales of $750 million to $790 million in 2017, representing a 1 to 3 percent underlying growth rate.
- Critical Care – Edwards continues to expand Enhanced Surgical Recovery (ESR) programs, with the aim of establishing ESR as the standard of care, through the launch of its Hypotension Prediction Indicator and Acumen software. The company is also strengthening its core hemodynamic product portfolio with the 2017 launch of HemoSphere, its new hemodynamic monitoring platform, which received CE Mark in December.
Edwards expects to generate Critical Care sales of $560 million to $600 million in 2017, representing a 5 to 7 percent underlying growth rate.
- Structural Heart Initiatives – Edwards will discuss the opportunity to transform care for the many patients suffering from mitral and tricuspid regurgitation. Transcatheter therapies for these patients represent a multi-billion dollar opportunity requiring long-term investment and involving multiple risks. Edwards will detail its structural heart disease investments, which have produced multiple promising early clinical-stage mitral and tricuspid therapies. The company expects 2017 to be a pivotal year of additional clinical experience.
Edwards will highlight the early human experience with its new transseptal delivery system for the Edwards-CardiAQ mitral valve. The company is planning for a CE Mark for this valve in 2018. The company will also discuss in more detail the pending acquisition of Valtech Cardio, which is expected to close in early 2017. A CE Mark study is continuing to enroll for the tricuspid application.
Edwards will also introduce its new PASCAL transcatheter mitral valve repair system. The first patients have already been treated with this system, and the company plans to initiate a CE Mark study in 2017. In addition, the company will highlight the early promising patient experience treating tricuspid regurgitation with the Edwards FORMA tricuspid spacer, and is planning for a CE Mark in 2018.
In addition to Mr. Mussallem, other members of Edwards' management team presenting at the conference include:
Donald E. Bobo, Jr., Corporate Vice President, Strategy & Corporate Development;
Katie M. Szyman, Corporate Vice President, Critical Care;
Scott B. Ullem, Chief Financial Officer;
Larry L. Wood, Corporate Vice President, Transcatheter Heart Valves; and
Bernard J. Zovighian, Corporate Vice President, Surgical Heart Valve Therapy.
Guest Speakers to Provide Clinical Perspective
Also speaking at the conference are: Philippe Généreux, M.D., Co-Director of the Structural Heart Program, Morristown Medical Center, in New Jersey, and Wilson Szeto, M.D., Chief of Cardiovascular Surgery at Penn Presbyterian Medical Center at the University of Pennsylvania.
The Edwards Lifesciences 2016 Investor Conference can be accessed via live webcast at http://ir.edwards.com/ beginning at 9:00 a.m. Eastern Time on December 8, 2016. The webcast will also be live streamed via the Edwards conference app available for free download at the Apple App Store or Google Play. The webcast will also be archived on the Edwards Web site after the conference concludes.
About Edwards Lifesciences
Edwards Lifesciences, based in Irvine, Calif., is the global leader in patient-focused medical innovations for structural heart disease, as well as critical care and surgical monitoring. Driven by a passion to help patients, the company collaborates with the world's leading clinicians and researchers to address unmet healthcare needs, working to improve patient outcomes and enhance lives. For more information, visit www.Edwards.com and follow us on Twitter @EdwardsLifesci.
This news release includes 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 and may include, but are not limited to, Mr. Mussallem's statements; the Company's 2016 and 2017 financial goals or expectations for sales, underlying sales growth, adjusted earnings per share (including estimates for components related to acquisitions and a change in accounting standards), free cash flow and other financial expectations; expectations regarding the size of the TAVR opportunity; strategies to maintain leadership positions and lead in the development of new structural heart technologies; and expectations regarding the development and introduction of new products, indications and technologies (including expected timelines and outcomes of feasibility studies, clinical trials, and regulatory approvals). 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 include unexpected changes or developments in opportunities for the Company's products and the ability of the Company to continue to develop safe and effective new products and therapies; uncertainties associated with the timing and extent of regulatory approvals, expanded indications and reimbursement levels for our products; unexpected quality or manufacturing issues; unexpected costs or impacts from litigation; the impact of competitive products; changes in currency exchange rates; changes to variables incorporated into financial results which are outside of the company's control; actions by the U.S. Food and Drug Administration and other regulatory agencies; and other risks 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, 2015.
To supplement the consolidated financial results prepared in accordance with Generally Accepted Accounting Principles ("GAAP"), the Company uses non-GAAP financial measures. The Company uses the term "underlying" when referring to non-GAAP sales information, which excludes discontinued and acquired products, sales return reserves associated with THV product upgrades, and foreign exchange fluctuations, and "excluding special items" and "adjusted" to also exclude gains and losses from special items such as significant investments, litigation, amortization of intangibles, THV sales return reserves and related costs, and business development transactions. Guidance for sales and sales growth rates is provided on an "underlying" basis, and projections for diluted earnings per share, gross profit margin, and free cash flow are also provided on the same non-GAAP (or "excluding special items") basis due to the inherent difficulty in forecasting such items. Management does not consider the excluded items part of day-to-day business or reflective of the core operational activities of the Company as they result from transactions outside the ordinary course of business. Management uses non-GAAP financial measures internally for strategic decision making, forecasting future results and evaluating current performance. By disclosing non-GAAP financial measures, management intends to provide investors with a more meaningful, consistent comparison of the Company's core operating results and trends for the periods presented. These non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP and reflect an additional way of viewing aspects of the company's operations that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting the company's business. These non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with generally accepted accounting principles. Non-GAAP financial measures are not prepared in accordance with GAAP; therefore, the information is not necessarily comparable to other companies. The Company is not able to provide a reconciliation of projections for underlying sales and sales growth or projected gross profit margin, projected earnings per share guidance and projected free cash flow, excluding 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 foreign currency changes and charges associated with future transactions and initiatives.
Edwards, Edwards Lifesciences, the stylized E logo, EDWARDS INTUITY Elite, Edwards SAPIEN 3, Edwards SAPIEN 3 Ultra, Edwards INSPIRIS, Edwards CENTERA, CardiAQ, PASCAL, HemoSphere and FORMA are trademarks of Edwards Lifesciences Corporation. All other trademarks are the property of their respective owners.
 "Underlying" amounts are non-GAAP items and in this press release exclude foreign exchange fluctuations and other special items.
 "Adjusted earnings per share" is a non-GAAP item and in this press release excludes amortization of intellectual property, gains and losses from significant investments, impairments, litigation, business development transactions and other special items on a diluted basis.
 "Free cash flow" is defined as cash flow from operating activities less capital expenditures.
 Guidance for underlying sales growth and adjusted earnings per share is provided on a non-GAAP basis, adjusted for special items due to the inherent difficulty in forecasting such items. The Company is not able to provide a reconciliation of the non-GAAP guidance to comparable GAAP measures 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.
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SOURCE Edwards Lifesciences Corporation