Edwards Lifesciences Corporation (EW) Earnings Call Transcript & Summary

Before we get into PASCAL, Ted, do you want to talk about the totality of the data that we're seeing beyond just IID?

Yes. Thank you. We do have an early feasibility study and we've reported and published at least 3-year outcomes and shown some small number of patients with 4-year outcomes. And in terms of the way the community accepts the results from this therapy, TR as a class is an established therapy. And I think we've understood for a long time that early successful outcomes with this therapy are generally durable. And if we see a patient who reaches 30 days with a stable outcome, that they're 1, 2, 3, out to 5-year, outcomes are pretty predictable. We did put a little bit of nuance into this with our registry, demonstrating that the more complex the anatomy is, however good the results are, they're a little less good than in the simpler anatomy, which is not a surprise. But I think we've quantified that to some degree with the registry.

And so if you look at -- to answer your last question, if you look at PASCAL overall, the PASCAL program in its entirety is not only a collection of clinical data, the different types we talked about. It's a collection of innovation, many generations of products. We're already on our second generation. We brought in ACE. And we're bringing out new technologies literally every -- almost every year for the next couple of years. And then it's a comprehensive high-touch model, where we love to work very closely with physicians to help with the pre-case plan to ensure that during the case we get the optimal results. So PASCAL to us is an overall program, and we believe that program and the results we see from the product are differentiated. And as a result, we do have a small price premium above our competitors. And we believe that's warranted by the differentiation we and we believe our physicians see from the PASCAL program, including the data.

Matt Miksic from Barclays. So there was one -- kind of a 2-part question around the reduction of TR and the potential correlation to mortality that came out of the TRILUMINATE data earlier in the year, that's without a mortality benefit, there was a lot -- quite a bit of debate as to whether we would see that. And if not, whether it was an important device without it, just to make patients feel better. And so first question is, where do you come down on that? If I could get your thoughts on the belief that, unlike MR, that we may get further down the road and see that there's just really not a super clear mortality signal from lower TR. And then I had just 1 follow-up.

Maybe I can say a couple of comments. So let's take the therapy out of it. We've [ been down to the data ], I mean for a long time, we ignored tricuspid disease. In the last decade, we've had a multitude of sort of papers. And when you adjust for other sort of confounders, more TR leads to worse outcomes, therapy aside. So patients with torrential TR had higher mortality than patients with severe TR. So -- and you account -- and that analysis is accounting for other confounders, for heart function, pulmonary hypertension. So TR is bad. In terms of question you're asking about is quality of life. How important is it? Well, from a patient perspective, most of the patients that were -- they're averaging 78, right? They're not looking for 20 years. Heart failure, whether it's left sided, right sided, it is a miserable way to go. It's a miserable disease. You're fatigue, you don't eat. And so the patients are coming because they want to feel better. So they're not coming to say, "I need you to make to live longer," because at that moment, that's not what they're thinking. They want -- I will say, from a patient perspective, it is probably the most important thing. The KCCQ, which is well validated, and this meeting is actually good because we got some presentations validating it in TR. The improvement of 21 points, minimally relevant improvement is 5 points. And then when you get to 20, it's a large improvement. It's comparable to what we saw in some -- in the TAVR study. So it's a large improvement. And then I take that in the context of everything else. If you have a large KCCQ, if other things, your ECHO parameters, your RV function, your stroke volumes are increasing, if we see the trends potentially in heart failure and mortality, those are all -- would be encouraging. I don't -- I think one of the things that I personally, and I'll just say this is, I think the TR trials, I think if we follow these patients longer, the difference in mortality may take some time. I mean, in some ways, like, COAPT, right? It was 2 years. But I think we're going to have to look at the totality of everything. I think we look at all the markers. But quality of life is important and that's what the patients are looking at. But I think alone, sure, maybe not. But that magnitude with other parameters and everything going in the right direction. And I think if we had a longer follow-up, because we've seen from every study TR is bad.

So there are 2 presentations today that I think are important in this discussion. One is Suzanne Arnold from Kansas City reported on the correlation between changes in KCCQ and mortality and heart failure hospitalizations in TRILUMINATE, where those clinical endpoints by themselves didn't reach a level of statistical differentiation. And she showed that, with larger KCCQ improvements, mortality appeared to be better and heart failure hospitalizations appeared to be better. So one of the challenges we have, we heard the term heterogenous used to describe this population, is figuring out in which part of the population can we get these more predictable, and we all like, harder endpoints. We also -- and so the whole business of patient preference, we reported in a moderated abstract today, with Colin Barker from Vanderbilt as the first author, a study on a patient preference survey in this tricuspid population. And there about a dozen variables that they ranked in order of importance for them. That is, if they're going to be treated, what's important to them to get out of it. And improvement in the ability to have regular activities of daily living and improvement in shortness of breath were the top 2. I don't remember exactly what was #3. Living longer was not rated as a priority. It is all, for the patient, all about the quality of life.

That's helpful. Ted, you almost kind of answer the second part of the question, which was just if we -- you mentioned earlier, Dr. Kodali, that you hope that this sustained reduction is going to show the mortality benefit. But if we get to that point, does this become -- obviously, you want the mortality benefit, does it become a disappointment and we kind of pack up and move on? Or does it become a discussion about all the other benefits to these patients and then a discussion of the way forward in terms of approval and coverage and all the other things we'd expect?

Yes. No, I mean I definitely don't think we pack up and move on. As I said, I think it's really about -- for me, I think these quality of life outcomes are important. I know it is not satisfying to have like a hard endpoint. But I think if the trends are in the right direction, it's reassuring. Now if the trends are not, or they're opposite, which I don't -- I have no reason to do, but yes, sure, we'll have to reassess and say, how does this mean? Is there -- Ted's point, is there a population that we need to select out that we treat better? There's a lot of what ifs. But I really feel strongly that we -- it is wrong to dismiss the quality of life as an important outcome. We do a lot of things to make patients feel better. And when we see patients in the office, that's all they're caring about, right? It's a miserable existence. And so as physicians, I may not see them in 2, 3 years, but I'll see them in a month. And if they're feeling better in a month, they're really happy.

There's another comparator that, it's not a fair comparison, and it puts a perspective on it. I've never heard anybody complain about hip replacement not providing a mortality benefit. There's a totally 100% quality of life intervention that we, as a society, have recognized is important because it's all about quality of life. And it's interesting to me that we have become overly focused on mortality and heart failure hospitalizations in our cardiovascular trials.

Right. I think it's -- I think we can't create harm, right? And that's what we're looking at. But I personally believe that if we go long enough, this leads to better survival. I mean, that's -- all these trials show TR is bad, right? So I got to assume. But I guess that's a dangerous thing.

Joanne Wuensch from Citibank. The data sets look great. Thank you for that. But I'm just curious about the uptake. I think some may think that the mitral market has not grown at the rate that was expected. And I'm sort of curious, how does these clinical data translates to patient usage and uptake? A part of that is my question on -- in tricuspid. Do you have wait lists for patients? How are they currently being treated today? Are we reaching a tipping point? Any of us.

Yes. I mean that's a very relevant question. And to be honest with you, you're right. I mean if you look at the growth in mitral procedure compared, for example, TAVR, it is not parallel. And part of it is, for the longest time, we had only 1 therapy and we're trying to fit everybody with 1 therapy. And I think right now we have more data coming out. We have more therapy that is available for the patients. We, for the first time, start seeing data saying that even in those not so favorable anatomy that you can treat them with TR and you can achieve a good outcome for those patients, with very low mortality and significant improvement in quality of life, as have been discussing for the last few moments. So I'm hoping that this will increase the confidence. It definitely increase my confidence as a treating physician, that we can treat those difficult anatomy where in the past we were shying away from them or not confident in treating them that we will be able to treat them and get good results and very, very low adverse events at 1 year. So it's safe and effective in a broader patient population with the data that was presented today for the both randomized and the registry confirming that. To your questions about tricuspid, I will tell you, in our clinic, and I live in an average midsized city, the clinics -- our clinic right now is, tricuspid, is we are thinking about opening a separate clinic for those patients because there are so many of them. And as more data coming, more patients are coming and asking for it. So I anticipate that after the data today, that will continue to grow as well. And I think we need to start thinking about care pathways for those patients so we can treat them promptly.

So I may just add one thing. Your comparison of mitral to tricuspid is important. But there's significant differences, on the mitral, especially when we're talking about functional or mixed disease, the heart failure community, there's also a lot of other therapies for mitral disease, for medical therapy and other options that sort of delay the progression. And then also, a lot of those medical therapies improve outcomes. And so there's a long path of patients getting to -- before they get to us. And there's a lot of bias. Our heart failure physicians were aggressive LVAD transplant center, and they really are aggressive on that. But our heart failure physicians on the tricuspid side don't have other options. And so they, and I don't know how you feel, they're much -- I get much more referrals from heart failure for tricuspid disease than mitral disease, because they're stuck. They don't -- they treated their left-sided disease and they're not -- they don't have any other levers to pull, and they're more likely to send us a tricuspid patient. So I think -- the 2 -- I personally [ thing the 2 part ] are different and the uptake will be different. I don't know [ Firas ] want to comment.

Maybe you could each comment on the difference in how many referrals you get for mitral versus tricuspid from your surgical colleagues.

Right. Very little on the mitral side, almost 0, because they like to operate on mitral patients. And they -- no one really wants to operate a tricuspid. And then oftentimes, sometimes patients are not a candidate anatomically, and we had to send them back and they're like, "We'll look at another option." And there's a lot of that from the surgical side.

Yes. I mean I think one thing for sure, that the awareness of mitral disease and tricuspid diseases has increased significantly in the last year, and it will probably increase even more in the upcoming year. And I think the tools that are available and the confidence that is increasing with the available therapy, it is going to increase the confidence of the treating physicians to refer those patients for a center that they can get treated.

Well, I'll just make a comment on the market overall, right? To be fair, from our side, we received -- had our results yesterday, but we continue to be very pleased by actually by the overall market growth, right? We see overall TMTT market growth in both the U.S. and Europe well into the double digits. So we feel very confident in that. We see particularly in Europe that, relatively, tricuspid is probably growing at a higher rate than mitral. And so for us, we think that the uptake of -- the growth of these markets is happening. There are more patients being treated. There are more people come in the cycle and through the system. In Europe where we do have a tricuspid treatment available, we continue to see even stronger growth. So we're definitely pleased by the overall market growth that we see.

Dr. Kodali. So I think another mitral comparison. So we see better efficacy with replacement here, looks like more adverse events compared to repair. In mitral, we see TR has done well relative to replacement. Why is this market not going to evolve the same way? Who's going to get replacement? Who's going to get to TR in tricuspid? And secondly, the anticoagulation question, how long are these patients going to have to be on -- how do you know if they should be on a DOAC or Warfarin?

So in terms of the first question of TR and replacement, I think that's going to evolve over time. There are different factors. I mean, as we said earlier, there's a lot of anatomic factors that are going to dictate one therapy over another. There's also -- what your expectations are. If I can get it to mild, my thought process is different. If it's torrential, and I'm not going to get it significant, I'm not going to expect a clinical improvement. The TRILUMINATE data also shows, if you don't get a good result, the magnitude of improvement of KCCQ and the clinical event rates are higher. So in that patient, yes, the risk profiles of the different therapies, TR risk profile is different than replacement. Pacemakers being the main one and some bleeding issues. But if I want to really treat the patient, I'm going to go with replacement because it's a risk-benefit analysis. But if I feel very confident, obviously, that it would be mild, then it's 1 thing. So that's one clinical point that's going to make a decision because there's a lot of these patients that we see that I don't think I can get a good result with edge-to-edge. I'm not going to get the clinical improvement that I need, so I'm going to favor replacement. The other thing that's important and interesting. We talk often about the learning curve of a procedure. The learning curve of the procedure is not just for interventionalists like Firas and myself, it's for the imager. TR can be challenging and people are getting more experience, but TR has more limitations and more imaging challenges to be able to image the leaflets. One of the things with replacement, those same imaging -- yes, you have to image, but the degree of what you need to see and what you need to see is different. And that's borne out in this trial when you look at the procedure times. The mean device time of 65 minutes was not that big a confidence interval. These were initial trials, right? A lot of these centers hadn't done. So it was a trainable procedure that was reproducible, with support from -- excellent clinical support from the Edwards team and that really dictated it. But with preoperative screening, it was a more sort of procedure. And for a lot of physicians where those imaging challenges -- I have excellent imagery. I think I have -- I won't comment on Ted's and Firas', but I think ours is the best, right? And she -- Becky Hahn is all over place. She sees things really well. So -- but someone down the street may say, you know what, I'm not so confident I'm going to get good images. Where I might put a patient in edge-to-edge because she's confident, there's going to be a low threshold to say, I'm not sure I can see that well enough. And so replacement has that little -- that bar that is a little bit easier to go over. So there's a lot of things that are going to play a role in how people decide. Risk profiles are different. Efficacy in terms of TR reduction is different. But there's also procedural characteristics not only in the anatomy, but how the team and their learning curve and what their level of confidence that are going to dictate some of these things as well. Anti-coagulation. Yes. I think the reality is right now, I anticoagulate these patients lifelong, whether there's going to be options in whether we can understand. But the reality is 97% of these patients, I think all but 1 or 2 were in a pivot baseline. The vast majority are on anticoagulation at baseline. So it didn't really change. In the trial we didn't mandate Warfarin or DOAC. It was sort of patient physician preference. If they're on Warfarin, I generally continued it; if they are on DOAC, I generally continued it, sort of was sort of my attitude.

One of the reasons the protocol doesn't specify exactly how to manage the anticoagulation comes back to the heterogeneity of the population. So these are patients who have a history frequently of other chronic illnesses, including bleeding episodes. So the choices to anticoagulate with Warfarin versus a DOAC may depend a lot on whether the patient has a history of bleeding, whether they have permanent atrial fib or not, antiplatelets, for whether or not they have coronary disease or stents or other vascular problems. So it's really a broad spectrum of patients. At this stage we don't have enough experience to really lay out a decision tree for anticoagulation therapy.

Time for one more question, then I'll ask Bernard to come up and close this out. Anything else, Chris?

So you talked about new pacemaker implants being one of the main complications we see. It's somewhat of a unique challenge, we're already treating the tricuspid valve. Any special considerations about being able to effectively pace these patients, whether that could compromise the effectiveness of the valve you just put in?

Yes. No, great point. So -- and that's an important consideration. And for these tricuspid trials, we always talk about the heart team. In tricuspid disease, the heart team gets bigger. Not only do we add the heart failure specialists, but we also add an electrophysiologist to sort of make -- and so before we go to a procedure, we have a pacing plan if there's any conduction issues. And so because you raised the point, you don't want to put a lead across your fresh valve because that may impact the valve durability. In TRISCEND II, there were 14 new pacemakers. And it was about a 50-50 split between patients -- we avoided putting a lead across the valve. About half got a coronary sinus lead and half got a leadless pacer with mitral. And there was one patient that got epicardial lead. The reality is whatever the EP is, there are [ EP docs ] that are really familiar and really facile with mitral and leadless and they want to do that. There are EP docs that do coronary sinus all the time. We sort of have a plan with our docs. Our institution, our EPs prefer the coronary sinus lead. So that's what we did. But we try to avoid going across the lead for the reasons that you stated.

Well, it's a great discussion and a great place to stop. Bernard, if you would do the honor of closing us out. Thank you, Ted.

Yes. So thank you so much for spending so much time with us this week. I know it was not typical, as a team, we thought about it and we said, are we going to have four investor events this week? And we did it. So we really appreciate the fact that you all came to all of the events until late Thursday. What I want to do now is offering some closing thoughts. I'm going to be short for -- I'm conscious of time here for all of you. So one on TAVR. After 20 years of us bringing a ton of science, evidence, more than 1 million patients, 8 New England Journal of Medicine, and this year, partner 5-year results and in addition, I think it is an important point, the many patients underdiagnosed, undertreated around the world. We believe that TAVR is very well positioned. Our TAVR platform, franchise is very well positioned for short-term, midterm and long-term growth. In addition, our 2 strong businesses, core businesses, surgical and clinical care, are doing extremely well. They are getting big. We have a pipeline of innovation. And we know that they are going to produce durable growth. In TMTT, we moved from having a vision to now having a portfolio. We have achieved many milestones, like you have seen here this week. And we believe TMTT is becoming -- it is not just will become, but is becoming an important growth engine for our company. It will help many patients and will continue to be a growth engine for the company. So altogether, we see a tremendous opportunity. We are going to remain focused the only company being a pure play. We believe about this patient focus, bringing breakthrough technologies and our leadership to be this kind of leaders where we are going to deliver sustainable growth, again, short, midterm and long term. So thank you so much for having been with us all week. And I'm very much looking forward to see you in December. Thank you.