Former senior manager at Edwards Lifesciences Corp
- Recent trends and developments within the cardiovascular device industry, focusing on Edwards Lifesciences (NYSE: EW)
- Migration to transcathater technologies, non-invasive monitoring and data-driven decision-making patterns
- Edwards Lifesciences’ product portfolio, including remaining growth runway and potential downwards pressures in TAVR (transcatheter aortic valve replacement)
- Competitive landscape analysis of key players such as Abbott (NYSE: ABT) and Medtronic (NYSE: MDT) across aortic and mitral
- Q4 2022 outlook, featuring innovation opportunities and strategic assessments
Could you frame Edwards Lifesciences’ current operating environment, highlighting any key drivers or trends that may better inform our discussion?
Edwards noted some volume headwinds in the core TAVR [transcatheter aortic valve replacement] business, leading to a Q2 2022 miss on revenue estimates of USD 1.37bn vs the street guidance of USD 1.4bn. The company cited health systems’ staffing issues and lingering coronavirus volume hits as likely reasons for the slowdown. However, its surgical valve business actually outperformed estimates. Why might have surgical volumes been more resilient than TAVR? What might that mean for Q3 2022 TAVR volume outlooks and into 2023?
How are you viewing the efforts to treat the asymptomatic TAVR population? As the symptomatic market plateaus and saturates, how much could the asymptomatic population buoy overall market growth?
Looking at Edwards’ offerings, what justifies Sapien 3’s more premium pricing position against alternative devices? Could you elaborate on its outcome or innovation moat?
What erosion to ASPs could we see as the market saturates and cutting-edge technology becomes more commoditised? Could you quantify any downward pressure on Sapien 3’s ASP over the next couple of years?
What are you excited about in regards to the prospective Sapien 4? What further improvement or innovations could Edwards make to the device in future iterations to increase patient outcomes and maintain that premium pricing position?
How sustainable do you believe the Sapien 3’s market position in the US will be over the next year or two against Abbott’s new Portico offering as well as its largest competitor, Medtronic’s CoreValve? How would you juxtapose the aforementioned clinical benefits of the Sapien vs health system budgets potentially becoming increasingly strained in the US? Could we see them opting for lower-priced options due to existing profitability pressures?
How do you assess Edwards’ positioning in the European TAVR market? What would you attribute the company’s stronger overall Q2 2022 performance in Europe to, irrespective to Fx headwinds?
Could you help us better understand the delineations between tricuspid regurgitation and mitral regurgitation disease indications, perhaps in terms of treatment complexity and/or target patient?
In mitral, from what I understand, there are some complex, precise angles that the device needs to be navigated through within the mitral chamber. Could you expound on those dynamics and why that might fuel the need for a more precise or innovative device to ensure no adverse complications?
You touched on repair vs replacement. Are there any notable side effects or outcome differentials between repair and replacement for mitral or tricuspid regurgitation, respectively? It appears that repair is currently favoured over replacement. Do you see that changing over time and, if so, why?
Do you see full replacement becoming more prominent over time? How do you see repair vs replacement trending and why?
How would you size Edwards’ market opportunity in TMTT [transcatheter mitral tricuspid therapies], perhaps using TAVR as a reference point?
How do you think the growth runway and pace of mitral regurgitation adoption will trend? Will this be a slow, steady market, or might we see more of an acceleration to an inflection point?
Why has transcatheter mitral repair adoption lagged the TAVR market? What have been some of the main reasons we haven’t seen further adoption for mitral and/or tricuspid regurgitation?
Could you discuss the recent FDA approval of Edwards’ Pascal transcatheter repair system to treat mitral regurgitation? What’s your assessment of this product and its anticipated commercial traction?
Could you expound on Edwards’ go-to-market strategy for the Pascal? How is the company going to leverage product bundling, historical health system relationships and clinician education to maximise the uptake of this device?
How difficult do you think it will be to train up clinicians on the Pascal? How do you think those efforts will unfold?
What are your main takeaways from the CLASP IID trial results released at the September 2022 TCT Conference in Boston? The trials show that the transcatheter mitral edge-to-edge repair with the Pascal system is non-inferior to Abbott’s MitraClip for major adverse events among patients with DMR [degenerative mitral regurgitation] and prohibitive surgical risk. How much of a game-changer were these studies in terms of winning over clinicians or even garnering pricing power for this new offering?
How much market share could Edwards feasibly gain against the MitraClip, despite Abbott’s first-mover advantage? Where do you think the market share dynamics will plateau?
How are innovations such as predictive analytics, remote patient monitoring and AI helping to detect potential patients earlier and improve health outcomes? How might these developments accelerate adoption and market growth for the structural heart industry over the next few years?
Where do you see the next frontier for innovation in the structural heart market? What are you excited about, perhaps considering heart failure or new minimally invasive breakthroughs for patients?
What are your thoughts on Edwards’ historically lofty R&D spend? You mentioned it was around 17-18% of total sales. How would you assess the company’s ability to stay ahead of the curve innovation-wise? Do you think it would cut R&D spend in a recessionary environment or if macro headwinds worsen?
Could you expound on Edwards’ upper management and company culture? How do you think the company is differentiated from other medtech behemoths, perhaps noting its focus on innovation or other important cultural factors?
What do you think is a realistic US TAM for TMVR [transcatheter mitral valve repair]? Is USD 3bn a realistic metric by 2025? Why or why not?
Is there anything we haven’t discussed about Edwards that might be especially important to highlight?
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