Edwards Lifesciences Corporation (EW) Earnings Call Transcript & Summary

Okay. And I think we're back live here at the Goldman Sachs Healthcare conference. I'm Amit Hazan, the medical technology analyst at Goldman. And we're really excited to have, as our next conversation in med tech, Edwards Lifesciences, and we've got coming back again this year, Scott Ullem, the Chief Financial Officer, to walk us through the conversation. So first and foremost, Scott, thanks so much for joining us again this year.

Yes, it's our pleasure. Good to be here, Amit.

Yes. Great. Great to see you. So Scott, we've been starting these conversations by kind of wanting to get the COVID piece out of the way. It's still important and top of mind for a lot of investors. And so I don't know what you can say, but just maybe give us an update, to the extent that you can, on the recovery since the first quarter or at least set us up and remind us where the first quarter was, especially for TAVR, both kind of around the globe, I know it's different in different regions, and here in the U.S., if you can do that?

Yes, sure. Well, in short, we continue to feel better about the recovery. And our expectation, as the year was starting, was that we'd have a difficult environment during the winter months. Things would gradually get better as we came out of the winter months as vaccinations became more widely administered and as hospitals continued in their efforts to be open for patients who needed to get treated and hospitals being, I think, more persuasive about getting patients to come into the hospital. So that was our expectation at the beginning of the year. We're seeing that play out. We're expecting an even steeper recovery in the second half, and we think that we're set up to be able to do that. But obviously, there's still a lot of room to run. I think we feel pretty good about how things look in the U.S. We realize that there are a lot of people suffering and struggling outside of the U.S., but there's certainly light at the tunnel really across the board. As you just do a walk around the world, in the first quarter, we had a really nice first quarter. It was better than what we expected in all of our segments, including TAVR and surgical aortic valve replacement. And we saw really encouraging signs of recovery even in the first quarter. We still think that there's going to be impacts, even in the U.S. as well, as we navigate through different society requirements. Social distancing requirements are different by state, by region; different hospitals and systems have different protocols. And we need for more of those, we need for more consistency and need more availability and accessibility for patients to be able to get into hospitals and get treated. In Europe, we saw a pretty big variation in treatment rates by country during the first quarter. And so for countries that had lower TAVR adoption, they tended to grow faster than countries that have been at it for longer and have higher treatment rates already. But we're encouraged by statements from health officials in various European countries that have given positive signals about the expectation of really opening up the health care systems for broader access by patients. In Japan, we talked about this a little bit beforehand, despite the fact that vaccination rates are so low and despite the fact that there's so much concern about the few cases that there are in Japan -- few COVID cases that there are in Japan on a relative basis, we still had a really good first quarter. And part of it was due to an easier year-over-year comparison, but part of it is the country is just showing signs of strength and more, I guess, awareness of aortic stenosis and desire to adopt the therapy. It's bolstered by the low-risk approval that we recently received in Japan. And so now the label for TAVR in Japan will look a lot like the label for TAVR in the U.S., which is it's available for patients who have severe symptomatic aortic stenosis. We don't have reimbursement yet in Japan, but we expect to get that during -- later on this year, and then we'll be able to really start serving those patients better. So maybe I'll just pause there after that quick walk around the world.

Yes, that's perfect. And we'll definitely come back to the Japan piece. I want to spend a few minutes on that. I want to come back to the U.S. piece. There's been, I'd say, in the last week or 2, a lot of conversation in the investment community about the pace of recovery and whether we're seeing the backlog of patients come through for certain procedures. And if I were to summarize it, I would say, investors feel somewhere along the lines of elective procedures not coming back as fast as they'd hope. Cardiology doing a little bit better actually. And maybe that's all relative. I'm not sure. There's a lot going on. When if you just think about the pace of recovery from the exit rates that you experienced in late March as you ended your quarter and what you're going through now, are things -- it sounds like you also, on kind of the cardiology side, are talking about this continued recovery as you would have expected perhaps within the range of the guidance that you set out for 2Q at the time?

Yes. Well, it's a tricky part of the quarter because we're not going to be able to update guidance or give a play-by-play on where we are here in June. But what I can say is the first quarter was pretty choppy. It was not as if every week was better than the prior week. In fact, while February is better than January and the first part of March was stronger than February, by the time we got to the second part of March, we started seeing what we think was some spring break effect. And so while we exited the first quarter stronger than we entered the first quarter, it's still not a completely stable environment as we got out into April. And so we still feel positive about the trend that we were on. We feel positive about our forecast and trend to be able to ramp back into a more normalized growth environment as we get into the second half. But that's about all I can say at this point.

Okay. Okay. Let's take it a few steps up just to make the conversation more comfortable in a way. So the backlog of patients. Our guess is in a counterfactual where there is no COVID, you're probably growing 20% last year. That's -- that would equate to about $400 million of missing revenue that didn't happen because of COVID. 14,000 patients or so, give or take, here; 1,000 or 2,000 here, one way or another. But a lot of patients that would have gotten procedures that didn't, ballpark numbers. Are you -- a lot of them are still alive. I know there's a mortality impact here, but that's a big number for you guys relative to the size of the market and number of -- volume of patients that get done every year. Where is your confidence level at that these patients are still out there and are going to make their way back into the system?

Yes. Well, unfortunately, we don't think there is a significant backlog of patients, but it's variable across centers, across regions, of course. And the unfortunate reality of COVID was that a lot of patients did, in fact, die as a result of not being able to get treated. And so there are certainly patients who didn't get treated and still need to get treatment -- treated and will get treated, but we don't think it represents a significant backlog that's going to contribute to our growth expectations for 2021.

Okay. Okay. I want to ask a question about the new patient funnel, kind of ties into visibility into the year. But you used to have this slide showing the treatment pathway and this kind of average of about 100 days or so that goes from a GC visit to treatment and 28% of patients taking more than 6 months between being diagnosed and the actual treatment that they need to get, the TAVR they need to get. They got to get screened, get imaging done, pre-case workup. And that might suggest that you see some level of continued recovery in screenings and diagnosis at this point as kind of your leading indicator. Are you able to follow that? Is that a metric that you're able to get your hands around and have evidence for? And are you encouraged by what you're seeing at this point?

Well, we don't have great evidence. We don't have great visibility. We have anecdotal reports that we get from the field about what the patient funnel looks like. And what we've seen is that it's still common for the screening process to take 2 or 3 months, for a patient from when they get diagnosed to when they actually get their valve replaced can take 2 or 3 months. Now in some cases, it's a lot faster. And one of the impressive things that happened as a result of COVID was that certain hospitals were better able to streamline the referral process. So the patients who needed to get treated could get imaged, could get their pre-procedural work done and actually get treatment a lot faster than historically has been the case. I don't know that that's normal, and I'm not sure that's a fundamental change that is going to benefit patients going forward. But it was certainly something that -- where there was some improvement in certain centers during the course of the last year. So overall, we think that there's a higher awareness now of aortic stenosis and of the treatment alternatives. And one of the things that we think can really be beneficial here is if the handoff from the general cardiologists to the heart team, including cardiac surgeons and interventional cardiologists, can be more efficient. And that's sometimes where patients get stranded or delayed from getting treatment.

Okay. And maybe we'll come back to that in a minute here. But just to kind of close up on guidance and just thinking about the year, I think about your TAVR guidance for the year, the 15% to 20%, I believe. And if I convert it to -- if I think about it versus 2019, just for -- to make comps -- to make things easier, it's like roughly, in our calculation, 21% to 26% growth over '19. You just grew 32% over '19 in the first quarter. It seems like there's potential for upside there that you guided conservatively just relative to how you did in the first quarter and the -- some of the recovery comments that we were talking about earlier. I want to make sure we're not missing anything. Is there anything else that you're considering, the kind of puts and takes of every year that you have in there that you would want us to consider for that TAVR guide for the year?

Yes. The year-over-year growth rate is such an anomaly, at least in the first quarter and the second quarter, as a result of COVID that it's tough to read much into it. So while we were pleased with the first quarter performance, it was certainly better than what we thought it was going to be as a result of the strong March, it doesn't really change our outlook for the full year and expectation that we'll still see a 15% to 20% growth for 2021 versus 2020. The 20 -- the second quarter growth rate will also look like an anomaly just because of the year-over-year comparison, but we think that 15% to 20% is the right modeling assumption. I think big picture we're really enthusiastic about TAVR. I mean the data that's come out, the body of clinical evidence that exists from PARTNER III and all the earlier studies really is supportive of the importance of getting patients treated who have severe aortic stenosis and identifying opportunities to really make sure that the referral pathway is available for patients who have symptoms of the disease. We can talk about this more, if you like. But one of the things we're looking at is how we can also expand TAVR to potentially be available for patients who have asymptomatic aortic stenosis, and we're also going to be launching a trial here that studies patients who have a moderate form of aortic stenosis.

Yes. Yes. And I do want to get to that. If I think about some of the key drivers in my model of where upside could come, new TAVR centers is one -- is definitely one variable. And you did quite well despite COVID. It was quite interesting and I think encouraging to see. And so as we're opening up more, getting more comfortable, getting back towards normal here in the U.S., do you anticipate that's going to accelerate? And in your answer, I'd love to know, 850 is kind of a number you guys have thrown out there, but you've revised your past numbers in the past upwards over time. Why is 850 a good number? Why not more? There's clearly more centers out there that are doing these AVR procedures in total.

Yes. So you're right. Coming out of Q1, we are active in about 800 different sites, and we think that number can go to something like 850. It's not a hard and fast rule. It's really our estimate based upon which hospitals can self-certify under the new national coverage determination. So the new NCD that was established a couple of years ago led us to the belief that they're probably 850-or-so centers that could be eligible to be TAVR sites. We've been opening sites actually every quarter in the last year. So even in the depths of COVID, we were still helping sites get activated, get their TAVR programs launched, and our people in the field are standing ready to continue to do that and help the remaining sites that are eligible go live with the TAVR program. Our real focus at this point is on making sure that we've got great clinical outcomes at the existing sites and at the new sites, and we're confident that we're going to be able to help hospitals do that.

Okay. Let's come back to Japan. I want to spend a little bit of time there. That was -- that is clearly one of the key takeaways off of the first quarter call. And so the first question is really just to level set us. How representative was the first quarter of underlying dynamics in the country? You've got low-risk approval, as you mentioned. And how to think about growth here for the rest of the year, at least until you get reimbursement, so before reimbursement comes in?

Yes. Part of what benefited our results in the first quarter, as I mentioned, were just a year-over-year comparison that was favorable. So that helped boost the performance that we saw in Japan. But even notwithstanding that year-over-year comparison, we've seen pretty nice uptake of TAVR. And there's certainly increasing amount of interest in the therapy among clinicians and even greater awareness of the disease and the therapeutic alternatives among patients and their families in Japan. So we've been doing outreach activities. We've been trying to help with education and materials for referring physicians and patients and their families. It's tough to read too much into just that 90-day results for the first quarter, but our hope and our expectation is that treatment rates in Japan will continue to improve. They're well below, well behind the treatment rates that we've seen in the U.S. and Europe. And so there's no reason why there shouldn't be better adoption, there shouldn't be higher treatment rates over time in Japan. And so we've got a lot of confidence and high expectations for what comes from that region.

Okay. In terms of timing for reimbursement, any update there?

No, we don't -- we've not really put a pin in it. It's just a regulatory process that needs to run its course. And as soon as we know, we'll let everyone else know, of course.

Okay. And you did -- am I mistaken in thinking that you said it would be later this year?

We expect it to be later in 2021, yes.

Okay. And so Japan has been a target from our side and obviously just thinking it could be growth for the investment community and from your side. And in the past, maybe it hasn't grown as fast in past years. Obviously, a lot more opportunity now with low-risk and more reimbursement coming. But maybe we can help -- I can ask you to just help to clarify and talk to some of the bottlenecks that are very specific to the Japanese market, where you see those today. And how would those help you to kind of model out where you're expecting for adoption rates in Japan?

Yes. Well, so some of it may be specific to Japan. Some of it is also just generally related to this low-risk indication, where historically, the conversation with patients gets a little tricky when you say, well, you're not sick enough to be able to be eligible for TAVR, which is how the conversation goes prior to a low-risk indication. And so sweeping that away to now where any patient has been diagnosed with severe AS has the -- is eligible for TAVR or SAVR results in a very different conversation and different set of alternatives that patients and their physicians can consider. So that's one of the elements that's been a headwind to adoption in Japan. Again, not specific to Japan. We saw the same thing in the U.S. and Europe. What is specific to Japan is hospitals have to be individually certified. So a proctor has to go to the hospital, evaluate their TAVR program and then ultimately certify that individual site for them to go live with TAVR. And it's one of the things that's caused the -- caused it to take longer to really have a network of TAVR centers to support the growth that we envision in Japan longer term. That's happening now. And we're opening new sites, of course, the way we are in the U.S. We do think there's critical mass of sites where patients can get TAVR. And now it's a question of just increasing the number of patients who are getting treated in those sites as well as opening new sites.

Okay. And are you able to put some numbers behind that, like you do in the U.S., how many sites you have?

No, we've intentionally not publicized how many sites we have. So we're not ready to go there yet. But know that we've got critical massive sites now. We're well positioned to really be able to grow off of the foundation of treatment centers in Japan.

Okay. Okay. Let's touch on the competitive landscape for a second. I was actually surprised, I think, on the last call, you said global share was stable. I know you've called this out before, you've said don't expect much benefit from Boston's exit. That wasn't -- you didn't see much loss on the way in, you didn't see much benefit on the way out. And I think I get that. Your other competitor, Medtronic, is talking about a point of share on their more recent call. Very hard for us in the investment community to get our hands on objective data. So how do you think about market share for you and that stable share? Is it a little bit of that gained a little from Boston, but last a little bit from Medtronic? Are your competitors describing the market correctly?

Well, keep in mind, we've got different reporting periods as well. So that was a very -- an extraordinarily precise number that they offered in a reporting period that's different than ours. And so I think we're still comfortable with our comment that there has not been a significant share shift. We certainly trade a point or 2 of share here and there in different regions, in different reporting periods, but not enough to draw any conclusions from our perspective. We feel really good about our leadership position. We think that the position that we've established as a leader in TAVR worldwide and in our major regions is really supported by a foundation of clinical evidence from multiple clinical trials. And we feel good about our leadership position. We feel good about having been disciplined and intending to continue to be disciplined in pricing these technologies. And so overall, we're positive.

Okay. Okay. So we have this interesting dynamic later this year, potentially, I guess, Abbott is probably going to get approval here in the U.S. And it feels a little bit different. I mean this one, the valve clearly seems like it's an kind of earlier generation valve. It just can't technologically be competitive with where you and Medtronic are today. I think a lot of us get that. But they're talking about a different pricing strategy. And I think for the first time, we're going to see, whereas Boston seemed to be pricing competitively, where you all were, this company is talking about a significant reduction in ASP. So introducing that factor into the U.S. market for the first time, how do you want investors to think about that? Is that going to resonate? What are you anticipating from Abbott given those dynamics of weaker technology but lower price?

Yes. Well, I think we saw Abbott a little bit in Europe because they've competed there with Portico for several years. And so we've got that experience where I think they did not end up in a position that was really a leadership position at all. They were one of multiple other competitors that never -- just didn't carve out a significant position. I think in the U.S., certainly, they'll establish some kind of presence. It's unclear how much. But it's not going to change the way we're operating as the leader, which is to continue to offer very high-quality therapies backed up with rigorous scientific evidence. And we'll price them based upon what we think is fair and the contribution they're making to the overall therapy that's being provided to patients. So it's not going to change our strategy, I guess, is what I'm trying to say. They'll operate however they want to operate, but it's not going to really influence what we're doing as we continue to grow our presence as the leader in TAVR.

And so just the last piece on this competitive side is just the data. And so you've got -- on the low-risk side, Medtronic puts out quite good outcomes at 2 years. And actually, I found myself just looking at the data, thinking through what you guys have presented. And just wondering if it's really all noise at this point, which is just to say that the market share is there. It's kind of more solid these days than it used to be. And that clinical data alone is probably not going to drive much share difference. Do you agree with that? I mean, is that where we are now? We're just at a point where you both have very good products and you both have your customers, and that's kind of how it's going to be? Or do you see data still being a driver of share between the players?

Yes. No, we think it's a very dynamic situation where it's not just data, although data will continue to be an important part of it, it's new technology. And so if you look at we're now offering SAPIEN 3 Ultra in most of the centers that are performing TAVR with SAPIEN. So we've gone from SAPIEN to XT to SAPIEN 3 to SAPIEN 3 Ultra. We'll introduce our next generation of improvements in the future, and we've got a whole pipeline of other technology enhancements behind that. And some of these are meaningful changes, like revolutionary changes in the way these valves and delivery systems work. And so we're really excited about the ability for technology to continue to benefit patients and to continue to distinguish Edwards along with clinical evidence that will be associated with those new technologies.

Okay. Yes, that's a good answer. Let's move just to kind of just thinking about the longer-term TAVR market and a couple of the drivers we like to talk about. I've asked you this before, but SAVR conversion for us is still something we try to model out, successfully or not, and trying to figure out where we are. And some of the numbers from the STS database are out there, they're public, [indiscernible] numbers that folks have seen before. I mean it suggests there's like 45,000 SAVRs in the U.S. annually, 25,000 isolated. I've wondered if there's any reason to think those numbers are incorrect, first of all, just to kind of level set us here.

Yes. I think there are different studies that all get to similar neighborhoods as the one you just said. So I don't -- I think from a modeling perspective, those are reasonable assumptions. We look at other numbers as well. But I think the bigger point is that there are still a lot of patients who are eligible for and will get surgical aortic valve replacement, some of whom have isolated AS, some of whom have concomitant needs as well. And they're going to be, just by definition, surgery candidates.

Okay. Okay. But when I think about that 25,000 isolated, there's not much that -- I feel like that whole bucket is going to eventually be converted to TAVR. Is that a fair way to think about it?

Our expectation is that most patients in the future who have isolated aortic stenosis will be great candidates for TAVR and will likely end up getting TAVR. But there is also a large population of patients who has concomitant needs, and some of those may not be eligible for TAVR or may choose surgery. So for example, some physicians recommend to younger patients that they get surgical aortic valve replacement instead of TAVR. So that's another example of a patient who may end up getting surgery instead.

So the other piece I want to touch on is awareness. And you mentioned this earlier, and I do want to get to the efforts that you all have going on because they seem so important to the story and potentially important to the growth that we'll see here. But I want to give you a hypothesis kind of looking backwards and then have you correct me. So I could think about it looking backwards and one hypothesis could be that awareness for younger, low-risk patients was already very high, even before TAVR got low risk approval. Just given that SAVR has been available for many years and that actually it was a pretty attractive option. It was -- you guys were in that business. I mean it was a good procedure. You had very good mortality rates for doing a SAVR. And so it was being offered to patients who needed it. So that would make me think in one hypothesis that awareness was actually pretty high among cardiologists and interventional cardiologists that this was a good solution for low-risk patients. Why would awareness not be high already in that category of younger patients that were eligible for SAVR?

Yes. I guess I'd just challenge the presumption that awareness was high. When you're talking about a disease that's got about a 10% treatment rate right now. And so I know we can get into the details about what the prevalence of the disease is, but we think that the treatment rate is about 10%. And part of that is reflective of the fact that the disease is not well understood and the disease is not well diagnosed. And one of the reasons for that is that the symptoms of the disease oftentimes get confused with old age. So a patient may say, "I'm just low on energy or sometimes I feel faint or light headed or just don't have the same kind of energy I did to walk down to the mailbox and back." And so as awareness and diagnostic tools have continued to improve and as referring physicians are more aware of the disease and the treatment alternatives, that it's not just open-heart surgery as an option, that's really what's been helping to lift treatment rates. But they're still at a 10% rate, which is so much lower than other diseases with comparable mortality curves.

Okay. So let's talk about that. I mean you've mentioned a few things here. But I want to kind of give you the floor, just to talk a couple of minutes about Edwards' efforts at the cardiologist level, at the patient level, from that diagnostic standpoint, from just the pure awareness standpoint. What is a company like Edwards able to do to try to expand that addressable market by just getting people more aware of these options?

Yes. It's a great question. It's the right question. And I'd say, we're not doing it alone. So there are other organizations of -- and efforts underway right now to increase awareness, increase diagnosis and increased treatment rates. For example, hospitals are now a little more forward-leaning in some cases in making patients aware of the fact that this disease exists, and that the hospital is capable of treating them through TAVR or SAVR. So you'll see billboards, radio advertisements, that kinds of things, just doing outreach. We funded recently a study and an effort that the American Heart Association is undertaking. It's a multiyear study to try to improve treatment rates for patients who have severe aortic stenosis because right now, so many diagnosed patients go untreated that that's an easy way to try to help these patients and to improve overall treatment rates. So Edwards is supporting multiple of these efforts financially. We're also doing a lot of things directly. So we've got outreach efforts in place to patients and to their families. So if you type in TAVR or aortic stenosis in your search engine, you are likely to end up finding sites that would have content provided by Edwards. And this isn't content to try to sell Edwards or SAPIEN. It's content to provide education and awareness of the disease, the symptoms and sites where a patient can go and get evaluated. We're also talking directly to general cardiologists and to the hospital systems where those general cardiologists practice because the referral rates among general cardiologists vary widely. So in the U.S., there's something like 24,000 GCs today, some of whom refer patients with AS regularly to get treated, some of whom are not referring commonly and their referral rates are very low. So just making that comparative data available and making general cardiologists aware of the fact that their patients do have treatment alternatives is a really important focus of ours as we try to continue to break down barriers to these patients get treated. We're also working with hospitals and tracking where patients can fall through the cracks, so to speak, and not end up getting the treatment that they need. So those are just sort of a set of examples of different activities that are underway. I'd say we're still in pretty early days, right? We're learning a lot about how to get to patients, how to get to referring physicians. But we're still early on in the journey of those outreach efforts really inspiring higher treatment rates. And it's one of the big reasons why that we think there is going to be continued growth in TAVR, why we think that these 10% or so treatment rates go to a higher level as we go from the current TAM to something like $7-plus billion in 2024.

Yes. Yes, Scott. So I listened to you talk about this stuff. Obviously, this is going to have a lot of implications for moderate, asymptomatic, where finding these patients is arguably going to be as hard or harder. And the cardiologist is not your primary call point now. Does this suggest that you need to have a stronger call into the cardiologist to build those relationships further in one way or another, selling products there or somehow further building on your existing relationships there to drive this awareness?

Yes. I think we're not intending to offer new products to try to develop a direct channel into general cardiologists. I'd say it's more of the same. I'd say it's more learning about how to communicate, learning what information is valued by general cardiologists and being a facilitator of that, helping to provide it to them, whether it's directly from Edwards or from a partner. We'll continue down this journey, and I think that will continue to be a source of growth for this therapy overall.

Okay. Okay. Let's shift gears a little bit and talk about SAVR for just a minute, at least. If we look at your guide this year, $800 million to $900 million, it's still a very wide range 1 quarter in the books, and it's a little bit wider than we see with TAVR. So is there more uncertainty here than there is with TAVR? Anything we should understand about that range on a low and high end?

We established a wide range intentionally at the beginning of the year. Just because of COVID, there are so many uncertainties that we just -- we put some pretty wide bookends there. I think that, like I said, first quarter was positive. We felt encouraged by a 7% growth rate for SAVR. We'll certainly keep everybody apprised about that trends in the quarters ahead.

Okay. Okay. Let's touch on mitral and tricuspid too here as we run the clock down. And your guide for the year, $80 million there, a doubling of sales, that is encouraging to see, of course. So maybe give us a sense here, too, of just whether the recovery that you're -- obviously, you're talking about mostly Europe here and there's a slower, different pace of recovery there, given what's going on with COVID. But otherwise, are you anticipating similar kind of recovery dynamics for mitral and tricuspid as we think about the rest of this year?

We are. And I'd say that both mitral and tricuspid really faced pretty severe interruptions in the early days of COVID last year. And we saw it both in our commercial sales and as well in our clinical trial enrollment in the U.S. So we're positive now relative to where we felt like in, say, second quarter last year. We saw a good first quarter. We feel like we're on a nice ramp to doubling sales in 2021. And at the same time, continuing to enroll patients in these 5 pivotal trials that we have underway and building clinical evidence that's going to provide a foundation for growth longer term.

Right. Right. Certainly a lot invested there. And the tricuspid side gets kind of swept in there and maybe it's getting discussed more nowadays, but it wasn't in the past. Can you talk to -- is the contribution from tricuspid material at this point to that number?

It's not material to the $80 million, but we think it will be. And in fact, by the end of next year, we expect that we're going to have approval to sell PASCAL for patients with degenerative mitral regurgitation in the U.S.; and we'll also have approval to sell EVOQUE, our tricuspid replacement technology, in Europe. So we think that tricuspid is going to play an increasingly important role, both in repair with PASCAL and Cardioband as well as in replacement with EVOQUE.

Okay. So you talk about a $3 billion market opportunity by 2025. Is tricuspid a material part of that yet or is it too soon?

By the time we get out to 2025, tricuspid will certainly have a position. It's too early to predict what the ratio is going to be between mitral and tricuspid and between repair and replacement.

Okay. Okay. I want to try to consolidate some of these different segments into your long-term guide. And you talk about, I think, wanting to grow -- exceed the med tech sector, I think, as you say. And med tech grows 5%, 6%. So not a hard target for you all at all, I think, to do. So it seems conservative. I'm curious why the company doesn't take a slightly more aggressive stance on your aspirations for top line growth?

Yes. Well, maybe I can say this. For over a decade, we've grown double-digit on the top line, constant currency, organic sales growth. We really like that track record. We like that trajectory, and we would like to keep it going. So without issuing formal guidance beyond just saying, we'll exceed med tech, know that that's a number that's clearly on our radar screen.

All right. All right. You're daring me to print informally growing double digits, but I'll maintain my urges here and not do that. But that's good to hear. And maybe just close the last minute here on margins and just very quickly, what you'd like us to think about for operating margins. I think pre-COVID op margin guide was in the low 30s for 2020. That was pre-COVID. Revenues are going to normalize, hopefully, into next year. What are the headwinds and tailwinds that we should be thinking of to get back to that old guidance or above?

So it turns out our operating margins were pretty similar even during COVID as they were pre-COVID because our expenses came down significantly. And so we've done a pretty good job, I think, of trying to manage our expenses through this pandemic. At the same time, not taking the pedal off the accelerator at all and continuing to enroll clinical trials and invest in research. But I think in the foreseeable future, like in the near term, you'll still see the operating margins and the growth -- and the operating margin guidance that we've put out there of, call it, 29% or 30%. But we think that the operating margins will be able to expand gradually over time as our base of research and development spending and our SG&A is more scalable and more leverageable. So we're expecting to see operating margins expand over time.

Good stuff, Scott. And I'm going to give you the last word on that. That was a lot to cover, and I appreciate you sticking with it. I appreciate you coming again to the conference and hopefully, in your backyard next year, very close to you and live. So we look forward to that, but good luck with the rest of the conference today.

Thanks a lot. We appreciate it, Amit. Take care.

Take care.

Bye.