Edwards Lifesciences Corporation (EW) Earnings Call Transcript & Summary

Thank you all for joining us. We appreciate it. We're really happy you're here, and thank you for taking the time to get to know Edwards a little bit more. We've got a great session for you both for those of you here in person as well as those of you joining us online, we're going to hear from a number of our senior management team. We've got a number of physician cameos. You'll see our latest and greatest products as well as get updates on our clinical trials and our financial outlook. So with that, let me just flash up a couple of quick slides. I am Mark Wilterding, Head of Investor Relations for Edwards Lifesciences. As you know, the cautionary statement, at least take a minute to familiarize yourself with this. Very important. It's also available on our website, so you can take some time to read through that. We will be referring to non-GAAP financials unless otherwise noted during the course of this presentation. Reconciliations to those non-GAAP financials are available on our website at ir.edwards.com. And with that, let me turn it over to our CEO, Bernard Zovighian. Bernard?

Thank you, Mark. Good morning, everyone. Thanks for joining all of you in the room, people on the phone, we truly value your interest in our company. I am super excited to share with you our vision, our vision for next year and our vision for long term. You have seen the news this morning, we are entering -- it is a very exciting day. Let me start, a very exciting day for Edwards and all of our employees. We are entering a new era of structural heart innovation. So the new era means a number of things. It means a sharpened focus. We will have more agility. And you know us as a company, we have been an amazing innovator, and we do believe that with this sharpened focus, we could even innovate faster. This new era means also an expanded focus to serve a very large patient population, aortic patients, mitral patients, tricuspid patients and potentially more. Our foundation as a company remain the same. You have a company that you know very well. Our Credo, this is what guides us. Our special culture. We care and focus on patients. We give back to communities where we live and work where good citizen, sustainability and long-term value to society is important to us and our unique innovation strategy to be first, to be the leader, and it is working very well. So think about it. For most med tech companies, bigger and more diversified in so many segments is better. For us, we go deep in a very large and growing space, a space where no one match our deep experience, reputation, global leadership and this is why I feel like we are uniquely positioned for sustainable growth. I'm going to talk about Critical Care later. It is also a great news for Critical Care. So Katie will have a presentation. But for sure, also a great news for Critical Care and Katie will become the CEO at the time of spin. So now let's talk about how we will drive this sustainable growth. And we see the 4 big category of investments. Continuing to develop breakthrough innovation, breakthrough technologies, not just incremental technologies, developing science and evidence to expand indications. Patient activation. Given our great technology, we know it is important we created this new capability a few years ago, and we are going to accelerate on this one and exploring new segments in structural heart. I want to start with the patient. Structural heart disease is the leading driver of cardiovascular death. We know in the U.S. alone, one cardiovascular patient dies every 33 seconds. Our vision is to transform patient care where patients are diagnosed earlier, treated in a routine fashion, living longer and enjoying a better quality of life. So this new sharpened focus gives us visibilty to expand opportunities for aortic, mitral and tricuspid patients. In TAVR, we are a global leader and we are committed to bring new technologies, expand indication to treat many more patients in need. In mitral and tricuspid, we are the only company providing a portfolio of differentiated technologies, both repair and replacement to be able to unlock this very large patient population. Now within structural, there is also heart failure. And this is not the beginning for us in heart failure. We learned a lot over the last 60 years treating patients with heart failure due to valvular heart disease. So our vision is to leverage our experience, our leadership to impact patients with valvular and non-valvular heart failure altogether, aortic, mitral, tricuspid heart failure it is a huge opportunity. In the 3 big regions, U.S., Europe and Japan, there are more than 20 million of patient needs. So this is why we are so confident in our sustainable growth in the many, many years ahead. In the past 10 years or so, you have a TAVR adoption has doubled the treatment rate of AS patients. So we are at the same time very pleased. We are also very proud. We have a significant impact on society, if you think about it. However, we know that significant under-treatment remains. And our goal is to improve patient access to care, very similar to cancer screening for instance. So it is why patient activation is important to our strategy. And we have identified 2 patient group undertreated: in-system and out of system. The in-system patients are the patients diagnosed but not progressing in treatment. This group is more richer in hospitals, providers and clinicians, and we learned through several programs that hospital can double the treatment of these patients. So we are scaling many of our program over the next few years. But out of system patients now, it's very sad we are quietly dying and we are developing additional program to diagnose this patient in an easier and faster fashion to get them into the system. So if you think about it, in system is more of a near-term opportunity out of the system, more of a long-term opportunity. Larry will go way deeper into his presentation. I have talked about the patient. So now let's talk about our special company and our leadership vision. For 60 years, we have been the leading surgical innovator. 60 years ago, we created the first heart valve replacement. And today, we are the global leader and still very committed to innovate in surgical technologies. 20 years ago, we had a vision -- a crazy vision to transform AS treatment through TAVR. And today, we are the global leader. Our SAPIEN platform is by far the preferred TAVR technology with more than 1 million patients treated, 8 New England Journal Medicine publication, and we reinforced our TAVR leadership position with new clinical evidence earlier this year. So we are now focusing on expanding indication and transforming care for the millions more of untreated AS patients. Similarly, 6 years ago, we had a vision to add the millions of untreated mitral and tricuspid patients. And today, we are reaching an inflection point with the only portfolio of approved catheter-based mitral and tricuspid technologies. As discussed already, we see heart failure as a natural progression and a very large opportunity. So we plan to apply the same type of vision to expand our reach to treat the millions of heart failure patients. So I will share more updates as we progress on this journey. As a recap here, this is who we are as a company. Our strategy is to address large unmet patient needs, create markets, be first, be the leader, and we have a proven track record of success. So I'm very confident we will continue to expand and grow in surgical TAVR and TMTT and that heart failure will be an additional large opportunity for us. The result will be a transformation of the experience for patients. Most of these patients have a high mortality rate, very poor quality of life. They are desperate for solution. And our goal is with our breakthrough technologies is to treat them and give them their life back. So now let's talk about our results this year. We are on track to deliver 2023 sales and EPS in line with our latest guidance, which is solid financial performance. Beyond the numbers, we achieved important clinical and regulatory milestones, rapid enrollment of the alliance for next-generation SAPIEN X4, the completion of enrollment of the first ever transcatheter mitral pivotal with SAPIEN 3 and free, CE Mark for world's first transcatheter tricuspid replacement with EVOQUE, the approval of [indiscernible] study to evaluate heart failure patients, so as you can see, we are exiting '23 with -- in a very strong position. Let's look long term, we see a well-defined path to significantly expand the opportunity through 2028 and way beyond. So all of this is made possible by a few things. One, our new sharpened focus. Our commitment to innovation. We have -- we spent more than -- we invest more than $1 billion in R&D every year. We have 2,000 passionate engineers committed to bring breakthrough technologies and the use of our very strong balance sheet to fund strategic investments. No one is matching our investment, our commitment, our capability. Heart failure is not just an aspiration. We are getting more and more committed. We have one active internal clinical program, Apter and multiple external of which 2 to 3 or near term. Now let's talk about next year. And I am very excited about next year too. You are going to hear from each of the businesses. Let me give you some highlights. A big, big year for TAVR expanding SAPIEN 3 Ultra RESILIA globally, nice progress on the enrollment of the next-gen SAPIEN X4, learning about patient who can benefit from TAVR through our asymptomatic and moderate trial. But do you think that's big. In TMTT, we are reaching an inflection point with PASCAL Global expansion, launching the first ever tricuspid replacement valve, EVOQUE in Europe and in the transfemoral mitral replacement option for patients. In surgical, continuing to bring new technologies, new evidence and extend our global leadership in critical care continuing to innovate by adoption of smart recovery technologies. Financially, we are guiding to 8% to 10% sales growth, with EPS growing 9 to 11. So this next year will have solid financial performance and significant progress to unlock our bright future with new technologies, new indication and scaling our patient activation programs. Because of all of this, we are confident this will result in faster sales growth of 10-plus percent and double-digit EPS growth for '25 and '26. So I already discussed a lot about how have a strategic spin-off of critical care will enable a sharpened focus for Edwards. It also provides an increased focus and flexibility for critical care to improve the quality of care of millions of patients around the world. We do believe it is the right time. Critical Care today is a very successful business with plenty of opportunity to expand. It is a large business, nearly $1 billion in revenue, more than 4,000 very talented and passionate employees. So this spinoff is positioning Critical Care to be a successful independent publicly traded company. So this is all made possible by our 20,000 employees, led by our strong executive team. I have seen so many leadership teams throughout my career, and this is by far the best one in Medtech because of everyone, very impressive experience, but maybe even more importantly, how we can collaborate in a very effective manner to execute on our strategy. We have a very highly engaged Board of Directors. They are deeply committed, involved in [ kids ] strategic decision of a company. I am so impressed with our Board. They are talented, dedicated and very engaged. So this is a look at the agenda for today. You are going to hear from each of the businesses and then finance from Scott but we are going to start with Larry Wood talking about TAVR right after this video. Thank you so much. [Presentation]

Thank you, Bernard, and thank all of you for being here today. I know it's a trip out and for everybody online. It's always an honor and a privilege to talk about our transcatheter heart valve business. This year was an incredible milestone for us. To treat our 1 millionth patient with our SAPIEN technology is a huge milestone, and it talks a lot about how far we've come, but I'm going to talk a lot today about how far we still have to go. So we see the opportunity, the global opportunity to exceed $10 billion by 2028. So we continue to believe this is going to be a huge growth platform and it's going to be driven by many different things. It's going to be driven by expanding indications, but it's also going to be driven by advancing the technology. And we believe our technology is incredibly well positioned to maximize this opportunity. So we talk a lot about patient activation, and sometimes, I almost feel we get a little apologetic about it for the lack of progress that we've made because treatment rates remain so low. But when you look back in 2010, about 70,000 people in the United States got their aortic valves replaced. If you look today with the advent of TAVR, that's about 160,000 patients in 2022. So we have more than doubled the number of patients in the United States in about a decade who get the aortic valve replaced, which is a huge accomplishment. Aortic stenosis is a deadly disease. 1 in 10 patients may die within 5 weeks of being diagnosed with severe symptomatic aortic stenosis. That is a dismal number. It's worse than almost any cancer. Yet despite that, treatment rates are about 13 people out of 100, which is still incredibly low, and we need to figure out how to unlock these patients. But as Bernard talked about in his opening, it's -- patients are in different groups, and we need to understand the different segments and we're going to activate them and accelerate them through the process. So when we talk about the 13 out of 100, this is 13 out of 100 patients who have severe aortic stenosis, okay? We have tremendous confidence in that, and that's a prevalence member. That's all the people with the disease and it's backed up by numerous publications. Now where it starts to get a little bit more nuanced is looking at patients that are in the system. So when we define in the system, these are patients that have had an echo and the echo, if you read it properly and you look at guideline criteria that these patients have severe aortic stenosis, okay? But then there's another group of patients that have the disease but people haven't necessarily ordered an echo yet or they haven't connected the disease or maybe their echo is out of date, and they don't have the information of their medical record or the diagnosis yet that they have severe aortic stenosis, okay? So when we look at the in-system group and these are people with an echo that if you apply guideline criteria, there's no question they have severe aortic stenosis. Less than numerous studies, probably the most recent and timely one is Samuel Myra, who did this for the Mass General system. Now if this is true at Mass General, you have to project that it has to probably be worse when you go out into community hospitals and other hospital systems. Mass General is one of the top cardiac programs, one of the top systems one of the most integrated systems in the country, and it sort of probably ranks up there with about the best that we have to offer, and it's still less than 50%. And that's really perplexing when you think about the sophistication of the system and also the deadliness of the disease. So we've got a lot deeper on this and tried to really understand and really tease out what some of the challenges are. And when you look at the guidelines, it focuses on 3 primary criteria for diagnosing aortic stenosis. It looks at diameter. How big does your valve open and this is actually the criteria we used in the clinical trials. We said their effective orifice area has to be less than 1 centimeter squared, and that's what we pivoted off of. But then there's also pressure. As your aortic valve gets narrower, your pressure build up in your metric because it's having a difficult time moving past that narrow area. And so pressure, which we measure by gradient is another criteria that can determine whether somebody has severe aortic stenosis. And then there's actual flow, the blood velocity, and that's another criteria that can determine whether a person has aortic stenosis. So when we talk about severe aortic stenosis, it can be any of those criteria. But the guidelines are complicated, and it's difficult for everyone to remember all the complexity because remember, we're just talking about aortic stenosis, not valve disease broadly. So what people tended to fault to is pressure and they look at a gradient greater than 40. So if a patient has gradient greater than 40 and their heart is performing normally, their ejection fraction, the efficiency of their heart is good. That's just a very classical diagnosis, and those patients tend to move forward. So when you look at that group, if your heart speeding normally, you're working with efficiency, but you have a very high gradient, something greater than 40. More than 70% of those patients get referred for therapy. So 70%, I don't know that's a number we should be bragging on, but it's not so bad, right? There's still more work to be done there, but it's probably more than 70%. When you get into patients that have gradient greater than 40, but maybe their heart isn't as efficient, maybe their ejection fraction is coming down, it gets a little bit more muddied. Doctors start to question, is it their aortic stenosis or is it their ventricle, is maybe the heart just not working as well and it's other things. As you get into patients that have gradients between 20 and 40, but maybe their EOA is low or their velocity is high, that often gets missed and these diagnosis become more complex and require greater knowledge of the guidelines and applying the full guideline. The other question that happens though is people say, well, hey, maybe not all of these segments benefit from having their valve replaced, and that's why they don't get referred. Doctors are smart people, maybe they just don't refer people because they don't believe they would benefit. Well, this is where Samuel Myra went really deep and he looked at all the different segments. If you have normal heart function at a high gradient, you absolutely benefit from having your valve replaced, but the group the doctors sometimes question, they say, you have a lower ejection fraction, but you have a high gradient, maybe there's other things going on. That is the group that benefits more than any other group from having an intervention. And this isn't something that creates mortality late in the game at a year or 2 years. This is something that happens almost immediately. You can see that mortality curve. These are the patients that don't wait well that need an intervention and only about 50% of these people move forward to therapy. And this is a group that deserves more focus. Now when you get into more complicated diagnosis of lower pressure gradients and other criteria. If they have poor heart function, clearly, they benefit from an intervention. If they have low pressure with normal heart function, they also benefit from an intervention. So it doesn't matter which group you fall in for severe aortic stenosis, you benefit from having the intervention, but the diagnosis just gets more complicated. So as we start thinking about how we address these different segments, for patients with a more classical diagnosis with normal heart function with a high pressure gradient, we believe we can do a lot of this with education. We can -- we have many different work streams on this. We do television, we do digital. We do pretty much every digital platform that's available. We can target these to caregivers. We can target these to the patients themselves. We can target these to caregivers, we can target to referrals and we have different education work streams for each one of those segments. And we've actually got pretty good about targeting physicians based on their referral history. Some people don't refer any aortic stenosis patients who need more basic education. Other people refer but maybe they only refer to surgery. And so maybe they're not up to speed with the latest in TAVR developments or the indications that are approved. So we're much more sophisticated with our digital platform about how we target the different communities. But for patients with a less classical diagnosis, where it requires a little bit more complexity, it's a little bit silly when you think about it, that we require physicians to almost memorize all these guidelines to get an echo report, either paper one or electronically with all this data and all this information on it and apply something from memory in terms of all of the guideline criteria that's probably an unrealistic ask from the clinical community, but there are several work streams where we can improve this for the clinicians by applying AI and teasing all of those things out of the medical record. And there are some physicians that have started running pilots on this where a system goes in and it looks at the record and it looks for all those guideline criteria, and it just actually creates a prop where when it goes back to the referring physician, they can simply click a button and say, this patient looks like they have severe aortic stenosis, would you like them referred to a heart team. And when we see people implementing that, we see a dramatic change in the number of patients that flow through for evaluation from a heart team and the overwhelming majority of those patients are available to get therapy. That's always going to be TAVR in every case. Sometimes it will be surgical, sometimes it will be other criteria. But the important thing is that they get the right intervention from them, and there's absolutely things we can do with technology to ease the burden on the physician community to make sure their patients get treated properly, and this can streamline the workflow for patients. Now beyond that, there's this whole issue of symptoms because even if you have severe disease, you're supposed to also have symptoms per the guidelines. And that just adds another layer of judgment and another layer of complexity to the system. And this is an area where we feel evidence is going to be the critical criteria. We have our EARLY TAVR trial, and this is a trial that we designed where we randomized patients who have severe aortic stenosis without symptoms to therapy or to watchful waiting. And this is the first time that we've used protocolized stress test to determine whether a patient is truly asymptomatic. Now this trial, we've been working on it a long time. And you sort of start to feel like we're ever going to get to the finish line on this trial, but we've actually not only enrolled it, but we complete the follow-up early next year, and this data we expect to be presented at TCT. And this is going to answer a number of questions that right now, no one can answer. First of all, what percentage of patients are truly asymptomatic when subjected to a stress test. The data on that is very poor, and this is going to definitively answer that question. It's also going to answer the question about if somebody has the severe disease, but they haven't been referred and they don't have symptoms, how fast do they progress to having symptoms? And the third question I'll answer is, during that waiting time, do bad things happen. Do complications happen. Do they do damage to their heart. And we'll be able to definitively answer those questions from a very high-quality randomized trial. But if this trial is successful, the data is compelling, and we can take the symptoms out of the question. We can take that judgment out of the question and then using AI to refer patients will radically streamline how patients move through the system. So the combination of evidence and using AI can really work hand in hand in terms of streamlining this referral process for patients. The other thing that we have is we're working very closely with trying to create more urgency around this diagnosis. We show you those curves, and we show how fast the mortality creeps in for patients who don't get referred for therapy and how much better they do when they get definitive care. But it takes, on average, about 180 days for a patient from referral to actually getting their TAVR valve. And that's simply too long when we look at the disease this steadily. The sad part about this is this is not a metric that commonly gets measured within hospitals. So when you ask hospitals, what your referral time is and how does this work? Most people say, "Oh, we do it within a couple of weeks. Certainly, we do everybody within 90 days. Well when running this pilot with the AHA, we actually took, I think it was 11 premier centers in the country and we had them go back and look at their own data and very few patients actually move through in this 90-day criteria. So the goal is to create a quality metric that hospitals would be measured at based on moving patients through the system from diagnosis to referral within 90 days. The first benefit that we would get from that is just people tracking their own data because if people think they're doing a good job when they're really not, that's the first problem that we have to solve. The second thing though is if it's a quality metric and we've seen this work in things like door-to-balloon and other areas, where once there's a quality metric and people are paying attention to it, then they actually start making changes to the system to improve that. But this will also stop people from needlessly dying, but it will accelerate the referral process, which we think is super important. So when we talk about the in-system patients, which, again, as Bernard said, is more of a near-term opportunity for us because these patients have the disease, they are in the system. We have a number of different work streams from education to working on quality metrics to AI, to the evidence generation that we're working on. So a lot of different work streams that we think we can accelerate this, and we're very pleased with the progress that we're making. When you get to out of system, it's a little bit more complicated just because you don't have people who necessarily have the disease. And right now, we don't have an echo standard in this country. Unlike colonoscopy or breast cancer screening, there's no age that's automatic to go get a screening echo. And we don't think that makes a lot of sense, especially when you consider how noninvasive and relatively inexpensive an echo is. So one of the things we're working on is creating that guideline criteria through evidence generation about what's the sweet spot for age that a patient should have a diagnostic echo. But even beyond that, there's a large number of companies that are working on alternatives to echo for identifying aortic stenosis. Things like smart stethoscopes, there's a lot of people that are working on EKGs. My good friend, Katie Szyman is working on, can clear site identify aortic stenosis, and we're partnered with a number of institutions. The great thing about that is it's just not an Edwards activity. There's a number of companies that are working on it for their own reasons and their own motivations to make this happen. And once these start to come to fruition, once EKG can work, once other technologies can work on this, we can accelerate these patients out of the system to in the system. And if we've done a good job of fixing the in-system part of it, that as we get into the midterm in the later term, these out of system patients will start feeding our growth. With all of that, that I've talked about, that is just severe aortic stenosis. That's all we've covered so far. And we have a number of work streams and other things to work on it, but the next thing is moderate aortic stenosis. We have our progress trial. And I will tell you, when we modeled this trial, we modeled the involvement rates a little bit off of our learnings from early TAVR, and we've created enrollment criteria and we thought how long it would take us to enroll that trial and we were really surprised. We exceeded our enrollment expectations significantly. We expect to complete enrollment of that trial very early next year, and that's about 2 years ahead of what our expectations are. And I think it speaks to a couple of things. I think, one, it speaks to the clinician interest in really understanding is watchful waiting until people get severe, the right strategy for treating aortic stenosis patients. This is a high-quality, randomized trial with a 2-year endpoint. But if you look at the opportunity for every patient with severe disease, there's 2 patients with moderate disease. So when we think longer term and we think opportunities and indication expansion, this is a huge part of our long-term strategy to continue to add to the scientific base that can continue to expand indications, but most importantly, improve the care of patients with aortic stenosis. This concept of watchful waiting and thinking that we're not doing damage to a person's heart during this period of time, doesn't make a lot of sense. And frankly, a lot of that is a holdover from the old surgical paradigm. When surgery is your own new option, and this goes all the way back to the braunwald curve in the 60s. If surgery was the only option and surgery is very risky, it made sense to wait as long as you could. But now we have a procedure that 99% of our patients in our low-risk trial were alive and well at a year. Does it really make sense to wait and do damage to the heart or risk complications when we have a therapy that's so elegant. And honestly, we don't think it does. We believe our technology is best positioned to serve the patients. And the way that we think about it is lifetime management, but we break apart the components, life. Life starts with the index procedure. It's doing a great procedure, getting that patient out of the hospital a day, getting them home to the home that came from with minimal to 0 complications. Time, do we give them a durable valve? Do we give them a valve that's going to last? And then the third thing is everyone, if they live long enough, will I live their bioprosthetic valve. If they live that long, what can we do? And that's about management. And so to talk a little bit more about our 5-year data and how we think about the time element, we have a quick video from Marty Leon. [Presentation]

So we're obviously very proud of our 5-year data. And I think we're even more proud that it's our eighth New England Journal of Medicine publication, which is pretty much unprecedented for one technology class to be able to drive that in about a decade's time. So I talked about Life, that index procedure. From our PARTNER III trial, 99% of our patients were alive and well at a year, a remarkable achievement. You think about Time in our PARTNER III trial at 5 years, 90% of the patients were alive and that's a remarkable achievement for patients that were 73 years old with severe heart disease at the time of the trial and management being able to do that valve and valve procedure, and this is the only platform with a valve and valve option. So to talk about lifetime management, what it means in the clinical community, we have a short video from Curtis Dennis. [Presentation]

So as excited as we are about our 5-year data from PARTNER III, something to remember, is that valve is 2 generations ago. That was our SAPIEN 3 valve. We moved on to SAPIEN 3 Ultra, which we knew had benefits for paravalvular leak. And now we've moved on to our SAPIEN 3 with Ultra RESILIA, so we continue to advance this therapy in ways that we think are very meaningful for patients. We see the adoption accelerating. It's now the majority of our procedures in the United States. In Japan, it's more than 95% of our procedures. And we're now expecting approval early in 2024, so that we can bring this technology to Europe. Beyond SAPIEN 3 Ultra RESILIA, we have our X4 platform. We continue to advance that in the clinical trial. We're actively enrolling. We're very pleased with how that's going. We think that this brings meaningful advances for patients and for clinicians. And so we're excited about that program. And so when you look at everything all together and you look at short term, midterm and long term, as it relates to patient activation, again, we're focused on those in-system patients now, but over time, we will increasingly move forward and bring the out of system patients into the system. When we look at indication expansion, pretty near term now we're -- next year, we're going to see the early TAVR data, and we believe if that trial provides a compelling data set that, that can be a real streamlining of the system and can accelerate patient activation. Just slightly longer, only a couple of years after that, we should be looking forward to the PROGRESS trial completing its follow-up and seeing that data set, which we're very excited about, which again, if that's successful, becomes another long-term driver for us and then technology. We continue to expand. We're just still in the launch process for S3UR. We expect the approval early next year. We have SAPIEN 4 or excuse me, SAPIEN X4 but then we also have future technology beyond that. So we're very excited about that. So when you look at our outlook, we're now projecting our growth rate to be between 8% and 10% on a constant currency basis. When we think about headwinds, there's just the overall health care spending, and there are some competitive product launches, which we modeled into our guidance. But we also see the health care system continuing to improve with staffing and creating a little bit more redundancy in the system. And then there's also the technology and the new evidence that we have over time, and we think our fundamentals remain incredibly strong. So with that, I would like to invite my good friend Daveen Chopra to talk about our transcatheter mitral and tricuspid therapies. Thank you. [Presentation]

Like the patient Steve in the previous video, millions of patients are suffering for mitral and tricuspid regurgitation. These are patients that are not living the life they want to lead. For these patients, surgical and medical treatment options for them are just suboptimal. And for many of these patients, they can't do things that just make their life what they want it to be. They can't often walk up the stairs, play with their grandkids, take care of themselves. And we believe that Edwards' transcatheter repair and replacement technologies together can help really transform patient care for many, many of these patients. As we look at the market first for transcatheter tricuspid repair and replacement, we see that tricuspid care is now the start of a revolution where previously, many years ago, tricuspid was the forgotten valve, where people didn't really give it a lot of notice, didn't really treat it. But now today, we're starting to see more and more contemporary data, where not only patients, referring physicians and heart teams are starting to realize that treating the tricuspid valve actually can have a great benefit for patients. As we move forward to 2024, we see that we're going to have both repair and replacement, contemporary transcatheter technology available in both the U.S. and Europe. Very exciting. And then to grow in many markets afterwards. And we also see that into the future, past 2024, that we'll continue to have new innovations. We'll continue to have changes to all of our products, we'll continue to have new evidence that will grow this therapy of transcatheter tricuspid care for the many patients. So that in the future, starting with the first technology, we'll continue to expand to more and more patient groups with both repair and replacement technology. But what about the mitral patients? So if you look at the mitral market today, mitral repair, transcatheter edge-to-edge repair, TEER technology continues to grow. We see that there have been more recently large contemporary data sets that are showing that TEER is a great solution for many, many patients. As a result, we are continuing to see increased disease awareness, increased disease diagnosis and referral to heart teams for treatment. As we move forward in 2024, we'll continue to see our TEER technology grow not only in the U.S. and Europe, its first -- some of its first markets, but we'll see it grow globally with new centers around the world continue to open and use this technology and more centers having patients flow through them as we have increased disease awareness, diagnosis and treatment. But as you move into 2025, we see that there, there's an inflection point where replacement mitral replacement, transcatheter transfemoral replacement will come to the market and treat a whole new group of patients. While TEER is a fantastic technology, there's still many patients for which transcatheter technology does not make sense for anatomical other reasons. So we believe that replacement will add a whole new group of patients and extend transcatheter treatment to a group of mitral patients who are looking for solutions. And we believe that our portfolio strategy of both technologies is really going to help drive this future market opportunity in the TMTT space. And with us, it's our portfolio strategy, our 3-pronged strategy that we think is really going to help the market grow. And our strategy to success starts with innovation. For [indiscernible], as I've talked about, we believe we need both technologies, repair and replacement for both the mitral and tricuspid valve to really treat the maximum number of patients. Secondarily, after you have a great technology, you've got to have lots of evidence. This does not only include the pivotal studies you see on the slide, many of them randomized, but also includes first-in-human studies, other single-arm studies, large post-market studies. It's a variety of data that is going to continue to grow the marketplace for these technologies. And finally, it takes real-world outcomes. It takes amazing data in the day-to-day as patients get treated. And this is actually the collaboration of the Edwards high-touch model, where we work very closely with the physician on each and every patient, not only in the pre-case planning, but being in the room for the procedure to help make sure we get maximum outcomes and post procedure. So we think it's those great real-world outcomes are really going to help drive this marketplace into the future. So as I mentioned, it's going to take both repair and replacement technologies. So let's first drive a little bit into repair technology. We believe that the PASCAL repair system is a different build, a huge database, a huge data set of different clinical evidence to help show this. Most notably, as we've talked about before, we have 3 very large pivotal studies around the PASCAL system. For 3 different kinds of therapies. The first one is the class 2D system for degenerative mitral regurgitation. This is study that helped drive U.S. approval that we presented 1-year follow-up clinical results and safety, efficacy and durability of the PASCAL system with 1-year follow-up. We also are currently enrolling the randomized Class II F. That's a trial that we continue to roll for functional mitral regurgitation. And we also have the Class II TR study. That's a randomized study of PASCAL versus Optical Medical Treatment in patients. And we believe that this study will finish enrollment in 2024. So this is the OMT versus PASCAL tricuspid study. And so we're very excited to finish enrollment by the end of 2024 with this study. Beyond premarket studies, we also have a variety of post-market studies that continue to show great real-world outcomes for PASCAL. Most notably, among them, we have 2 large European studies, the My Class study and the trial class study for both degenerative, functional patients with 1-year follow-up showing great results in all 3 different kinds of etiologies. And so together today, the PASCAL program clinical evidence program is now already well over 2,000 patients who are already under trials and in follow-up, and we're still enrolling more patients. Beyond just great clinical evidence, you also have to have fantastic innovation. And for our innovation, it means we've got to keep innovating. So with PASCAL only out for now barely 5 years, we've already had 4 different iterations where we've brought out not only systems that are more precise to really get great outcomes, we brought for working on many more future products, where we continue to innovate to ensure that TEER products will not only be easier to use, but have great better clinical outcomes. Outside innovation, we see that PASCAL Precision is really going to continue to grow globally in 2024 We see that we started originally in Europe. And in Europe, we launched almost 5 years ago, where we continue to actually still can open up new sites in new centers throughout Europe. We're actually going to just launch in France, where are in the process of finally gaining reimbursement and expect to start cases in France, Europe's second largest TEER market in just the coming weeks. Additionally, we've only launched in the U.S. a year ago. And in the U.S., we continue to train new centers. We came to expand usage of PASCAL. We continue to hire new reps, new field clinical specialists in the field and continue to grow the market in the U.S. And recently reimbursement and expect to actually start first cases, initiating our launch in the next 2 weeks or so. So very close to entering the Japanese market for commercial cases, which is very exciting. So now moving from the repair side, let's move to the replacement part of our portfolio. And a replacement part of the portfolio starts with Evoke, and Evoque believe that Ed Gord is going to pioneer transcatheter tricuspid valve replaced with EVOQUE. This is an amazing, exciting technology. This is a technology where we believe that it's applicable to a large number of tricuspid patients through multiple valve sizes, all going through a sub-30 French delivery system. Through our clinical program to date, we've treated almost 1,000 patients. And we've learned from these 1,000 patients that we're confident. We're confident in this device and how it can help patients. We've also learned that it is a very predictable, repeatable procedure where physicians can consistently treat a patient in about an hour, so it's fantastic for throughput where people can really get the predictability where they know what happens in each case. And we've also now started to present some of the data and support this. Some of those 1,000 patients obviously come from clinical trials. We're continuing to present more and more data. Most recently, at TCT this fall, we presented the first 150 patients from our TRISCEND II randomized study of EVOQUE versus medical therapy. And in this study, which has already enrolled its full 400 patients, the first 150 patients had excellent outcomes where patients met their safety end point. They also had obliteration of TR. 94% of patients had mild or less TR in this study, fantastic results. And we had huge quality of life improvements, 22 points. And these are kind of hard to get with numbers like KCCQ, what does that mean? 5 is fall, 10 is moderate. But this is 22. This is the same levels as the original TAVR trial. This is the same level of partner in terms of improvement in quality of life for patients. Most recently, even at London Valves, again, a couple of weeks ago, we actually started to present some 2-year data from our TRISCEND I study. This is the first study we did the EVOQUE study now out to 2-year follow-up in 90 patients, a single-arm study. We're getting out to 2 years, we continue to see durable great results in both TR reduction as well as quality of life improvement. And it's hard to always fully understand quality life improvement and what this means. So let's hear from one of our EVOQUE patients [indiscernible] about what quality of life meant for her. [Presentation]

So we are so excited in its initial commercial launch in Europe, where we're starting to roll it out to our initial centers and treating patients. Also, more excitingly, we are excited to bring this technology to the U.S. in mid-2024, where we've had a great collaborative back and forth with the FDA around this technology. Beyond U.S. and Europe approval, we see that in the fall of 2024, we'll present the full cohort of data, the 1-year follow-up on the 400 patients with its primary endpoint at TCT. Additionally, we have been working on a larger valve size, a 56-millimeter valve size that would add a significant number of patients to the treatable pool and we expect to bring this technology out in 2025. So a lot of work happening there. And we've also learned from those first 1,000 patients that we've already treated in EVOQUE that we can continue to make iterations and changes, and we are already working on our next generation technologies to make this product even more adaptable, more applicable to more patients. So we're excited to continue to work on that. Moving from tricuspid replacement to mitral replacement SAPIEN M3 is really going to extend care for a whole new group of mitral patients. This is an exciting product that is on track to be the first transfemoral transseptal sub-30 French product to come to the market, very exciting. And the amazing thing about this technology is that it's built off SAPIEN 3, an amazing platform of TAVR that's already been treated in over 6,000 patients generally in previous surgical repairs or replacements, over 6,000 patients. And then this product on its own has already been treated in over 500 patients, not quite the million number yet, but we're getting there on our way, and it's very exciting. And what we love is that this product can really treat a whole group of patients that are commercially unsuitable for other technologies today. And the key data set that's going to help bring us to commercial approval is our in-circle trial. And I think as we previously mentioned, we finished the pivotal cohort in enrollment of 300 patients. And with that data set and you kind of work forward, we expect to bring this to European approval by the end of 2025 and soon after to the U.S. So an amazing technology and inflection point of TMTT. We're at the point now where repair and replacement is coming to the marketplace for both the mitral and tricuspid patient. On the tricuspid side, we really believe that PASCAL and tricuspid as well as EVOQUE together are going to drive Edwards leadership forward. On the mitral side, we'll continue to see that PASCAL for mitral will continue to accelerate, will continue to gain above-market growth while SAPIEN M3 with this launch in 2025 will really help us establish leadership in that new space. So if you think about the ways of technologies right now, PASCAL is really going to help us continue growth right now in the repair space. Then in now and in 2024, we bring EVOQUE, which we're going to launch and gain adoption for both the U.S. and Europe with this amazing transcatheter tricuspid technology. And by the end of '25, SAPIEN M3 now adds in the mitral replacement option to add more patients to the pool. So with all this, if you look at kind of how we look at 2024, we believe that we'll have a range of between $280 million and $320 million of revenue in 2024, with headwinds of overall health care spending pressure, as kind of Larry mentioned, that's in the marketplace today. And we're bringing out a new therapy with Evoke. We're training people the first time. So that always takes time, and we've got to work through that. There are a lot of good tailwind opportunities, right? The contemporary mitral data is showing that Tier today is an amazing opportunity that's continuing to grow. And we see that as we start getting more tricuspid real-world outcomes, we'll see probably more referrals coming that will help be potentially a tailwind for us. But overall, if you look at where we are in this inflection point, we see that there are millions of patients out there with a mitral and tricuspid disease. They're looking for better options as the current ones are suboptimal. And we believe that by having both repair and replacement, we can treat a maximum number of patients for both mitral and tricuspid disease and really transform their care. So with that, I'd like to introduce a good buddy of mine, Wayne Markowitz, the General Manager of our surgical business, a business that's very near and dear to my heart. [Presentation]

2023 has been an exciting year for surgical. Double-digit growth and well outpacing the global market. Our premium and differentiated RESILIA portfolio combined and backed by our clinical evidence has been leading the charge for these gains. And looking forward, we're confident that we will continue to deliver above-market growth with our innovation strategy. We expect the global market to exceed $2 billion by 2028. And combined with our robust portfolio in development, we will continue to bring life-saving therapy to patients who are in need and untreated today. Now for 2023, there were 3 critical factors that were fueling our growth. First, it was RESILIA aortic adoption within INSPIRIS and Connect. Physicians are now recognizing the value RESILIA tissue technology can offer to their patients. Next, it was MITRIS sales acceleration, doubling the revenue year-on-year. And third, the revenue we're generating in the emerging markets is growing at a clip 3x that of the developed markets. Now these 3 factors combined with the Edwards TAVR patient activation initiatives are identifying and bringing new patients into the system to receive treatment. Now a decade ago, we were confident in saying surgery would continue to be compelling and prominent. And if you look at today, our prediction has come true. Over the last decade, we've seen the market evolve and significant opportunities now exist for patients who are best treated surgically. This is becoming evident to us in 3 key areas: First, we're seeing a shift in the mean age of the average SAVR patient, a shift from 71 years old to 66 years old. And while we're seeing some older populations of patients shifting to TAVR, we're also seeing younger patients now receiving SAVR. Next, we're seeing an increase in the complexity of the SAVR procedures with more pronounced growth in the concomitant and nonsevere symptomatic AS etiologies, procedures where patients can be best treated surgically. In fact, today, over 80% of the SAVR procedures are in areas untreated by TAVR. And nearly 2/3 of the market is now comprised of concomitant SAVR as well as mixed disease and AR. Moving forward, we expect to see continued growth in these non-TAVR patient segments. Third, tissue valves continue to be the dominant therapy in the developed world. Within the U.S., tissue valve procedures have increased 30% in the 50- to 65-year-old patient segment where U.S. guidelines allow a choice between tissue and mechanical valves. Interestingly, even in the less than 50-year-old segment, where guidelines would suggest to mechanical valve, we're seeing a 50-50 split between tissue and mechanical. This demonstrates that both physicians and patients are seeking optimal lifetime management with future valve and valve options. With our RESILIA portfolio, we are pioneering new standards of care for patients today and into the future. And starting with aortic. We have INSPIRIS. It's our flagship product. It features a resilient technology for enhanced durability and it's the leading SAVR valve globally. It's the only valve in the world with VFit that enables future valve and valve expandability for patients' lifetime management and Connect, it's an optimal solution for complex Bentall procedures to the only ready-to-implant tissue valve conduit available. And moving on to MITRIS and our mitral products. MITRIS brings all of the great benefits of RESILIA tissue technology. It's differentiated features for greater ease of use, like foldable stent posts and a low profile. We're seizing opportunities that we've identified in specific geographies, opportunities for conversion, conversion from mechanical and porcine valves to bovine ones. With the European approval, we now have MITRIS commercially available in greater than 50 countries. And recently, we achieved a significant milestone with our RESILIA portfolio exceeding 250,000 patients that have now benefited from our RESILIA innovations. Now as MITRIS continues to expand its global footprint, we're excited about the impact it will have for surgeons and patients. Let me share a story about Gary, one of our MITRIS patients. [Presentation]

It's so inspiring to see Gary back to the activities and the life that he enjoys after getting his MITRIS valve. So in addition to our innovative portfolio, we are committed to generating clinical data to support the RESILIA value proposition for patients with commence aortic 7-year and COMMENCE mitral 5-year results being published earlier this year. In addition, we have Momentis featuring our MITRIS valve, it's the largest MVR study to date, and it's currently enrolling. We're not done, though. We're continuing to invest in meaningful clinical evidence, 28 post-market studies ongoing with over 13,000 patients. We're thrilled about the 7-year outcomes of the COMMENCE aortic trial. It's presented at AATS and published in JTCVS, it showed 99.3% freedom from SVD at 7 years. This is fantastic, truly amazing, and it's outperforming previous generations of surgical tissue valves. At Surgical, our future is extremely bright. We have substantial growth opportunities where we could help patients receive the therapies they need. And in both developed and emerging markets, there is more progress we can make to bring these therapies to patients. Our RESILIA portfolio, it's best-in-class, and we're so proud of that. We're pioneering new standards of care across the globe, and we remain committed to innovation, building our robust pipeline and backing it up with meaningful clinical evidence. Now as we look into 2024, while every business has its headwinds, let's turn our attention to our tailwinds. Global RESILIA aortic adoption global RESILIA aortic adoption and MITRIS penetration, will lead our way to above-market growth in 2024. Overall, we set sales guidance to $1.0 billion to $1.1 billion, and we're very optimistic and confident for the coming year and what we can do to further expand our impact to patients. Thank you for your time. And with that, I would like to introduce Katie Szyman, our CVP of Critical Care. [Presentation]

Good morning, everyone. It was so great to get a chance to hang out with many of you last night at the tech showcase and get a chance to see all of you today. So let me start by sharing why I'm so excited and why the entire Critical Care leadership team is excited, we're honored and we're really grateful for the opportunity to spin out Critical Care into our own independently traded public company. Why are we excited? We're excited because the spin-off is going to give us an opportunity to actually impact the care and improve care for millions more patients. We're going to be able to increase the speed of innovation, and we're going to be able to expand into new areas and that's actually going to help us to increase our long-term growth potential. So every year, I share with you our core strategies for growth of technology evidence and innovation. So this year, I'm going to go a little bit deeper. I'll give you an update on that, but I want to share with you more about smart recovery and a new concept, which is called Smart expansion because everything we do in critical care is focused on getting patients home to their families faster. And I'm also going to get to share with you a little video with the story of Cynthia and her daughter, Hanna, and her high-risk obstetric birth situation where we were able to monitor and improve her care. So I often get asked, what is Smart Recovery? No one understands what it is. So let me explain it for you. So Smart Recovery is taking smart monitoring technology combining it with faster recovery for patients, and that's what we call smart recovery. We are the leader in the OR and the ICU environment, and there's approximately 20 million patients that can benefit from our technologies. Smart expansion is a new concept for us this year, where we're taking continuous noninvasive blood pressure monitoring and we're looking at the highest clinical need in the lower acuity patient areas and saying we can actually expand in a smart way by taking our core technologies into these new areas. We see great opportunities in all the patients that have moved to outpatient surgery situation since COVID. We see great opportunities in pediatrics and obstetrics. We estimate there's approximately 30 million patients that could benefit from our continuous noninvasive blood pressure technologies in these areas. So if you're going to pay attention to any slide today, you want to pay attention to this one. This very quickly summarizes our entire business. And basically, you see that we are 80% a disposables business and 20% capital, so easy to understand. In the disposables side, we have our classic monitoring technology, which is about 50% of our revenue and has 14 million patients per year. Then we have our 30% of our revenue coming from our Smart monitoring disposables, and that impacts about 2 million patients per year. So if you want to understand what is Smart recovery, it's basically trying to improve the quality of care for millions of patients. The 2 million patients that get Smart monitoring today should actually be the 14 million that currently get classic monitoring. So if you think about what's our market potential, it's really to shift all of the patients over to Smart monitoring technologies. We're doing that by adding advanced algorithms and adding continuous less invasive, predictive and prescriptive technologies to the smart side. What does that mean from a business perspective? If you take a step back, you say, on the disposable side, today, classic monitoring is about 50% of our revenues. About 5, 6 years ago, when I presented to you, I told you that it was about 60% of our revenues at that time. So we've been very successful in moving this shift, and we see that continuing. And then we have the solid foundation of our classic monitoring technologies that we believe will never go away. Very strong gold standard. Everybody uses them and recognizes our brand in that area. So now I'll give you the update on adoption and clinical evidence. We have over 75 studies that show the importance of smart recovery. Why is that important? If you go in for a high-risk surgical procedure, you have about a 25% chance that you're going to have some kind of complication to your surgery. And if you use Smart monitoring technologies, we can actually reduce your complication risk, reduce morbidity and actually reduce the length of stay, which makes hospitals more efficient by up to 1 to 2 days. On the kind of predictive analytics or artificial intelligence side, a few years ago, we launched Hypotension Prediction Index, or HPI, for short. With Hypotension Prediction, we were the first company to get FDA approval for an AI algorithm, and we predict up to 15 minutes in advance when a patient is going to have a dangerously low blood pressure event. So your mean arterial pressure is basically the average of your systolic and diastolic blood pressure levels. So if you have a mean arterial pressure that goes below 65 for more than 10 minutes, it's been associated with very negative clinical outcomes. And so when we show here that if you use our predictive algorithms, we can actually reduce that from 28 minutes on average to 12 minutes, and we have recent data coming out that says they can get it all the way down to 0 minutes using our predictive technologies in Europe. So it's great to hear all of this from me, but let's hear it from one of our top physicians, Dr. Maxime Cannesson. [Presentation]

So Dr. Cannesson is one of our trusted partners who's actually worked with us to develop some of our smart algorithm technologies. In fact, this year, we're actually launching an artificial intelligence algorithm called our assisted fluid management that actually is a closed -- semi-closed loop algorithm that makes recommendations to physicians about the amount of fluid that they should be giving to their patients. And it does those calculations for them. And it's been shown that the computer, if you will, or our algorithm is able to do it more accurately than physicians have always done it the way they do it today, which is in their heads. So now I'm going to switch and start talking about capital and also our smart expansion strategies. So in capital, we actually launched the HemoSphere in 2018, and I'm proud to say that this year, we're going to be launching the seventh generation of our platform. So if you do the math that was 6 years ago, and we're on the seventh generation of software, so we kind of think we're innovating a little bit faster than Apple, but we don't like to brag. But anyway, we are now about 50% into the conversion cycle. So at the end of '23, we'll be just over 50% of that conversion cycle. And by the end of '28, we should be fully through that conversion cycle of our existing installed base. So what does that mean for us? Well, it means that we've got to start focusing on ways to expand the installed base first of all. And then second, we've got to come out with the next-gen platform. And I'm happy to say that where next-gen platform is under development. It's got amazing cool technology on it, and it will be launching full launch in 2025, and we're going to be doing some pilot launches with the technology here this year. It has some cool things like voice, gesture, things that you would expect by taking tech into med tech. So we're very excited about sharing more about that with you next year. So what is smart expansion? And why are we excited about going into some of these lower acuity or lower-risk patient environment? So this past year, we kind of took a step back and said, if you actually go in for a surgery. So a couple of years ago, I actually had shoulder surgery. And during the approximate 2 hours that I would have been under anesthesia, the current standard of care is at every 5 minutes, they're required to blow up an arm cuff on me as a patient and then they record that every 5 minutes, and then that goes into the electronic medical record. That's how it works today. There's a couple of problems with that. First of all, arm cuffs, oftentimes, especially in low blood pressure below 65 are often less than 50% accurate, not 15% accurate, 50% accurate. So they're inaccurate. And then the second thing is during that intermittent period between the 5 minutes, something can be happening to the patient and there's no visibility to that. So we are both continuous and more accurate. And so we are going to be launching what's called the Vita-wave finger cuff, which is taking a lot of our complex algorithms simplifying it only displaying blood pressure and launching that on a new platform and the new platform is called HemoSphere Vita. So that is smart expansion with HemoSphere Vita, and it's saying that with the Vita-wave finger cuff on a monitor that is just focused on blood pressure and cerebral oximetry noninvasive technologies, we're going to be launching into the new markets. And we have a great quote here from a good friend of ours, Dr. Thomas Fogarty, who back in 2003, said that one of the things that he was said about and all the innovations that he's done in his life was he was never able to solve this continuous noninvasive blood pressure solution. And we have it, and we are going to be launching it this next year. So I want to show you a really great patient story where you're actually going to hear about how this happens. [Presentation]

I love the baby stories. So now I'll kind of transition and explain how that translates to our market. So today, we estimate our market to be about $1.2 billion of the Hemo-dynamic marketing segment. And as the global market leader, it's really on us to drive growth in the market. So we estimate that with the smart recovery strategy, we would see the market go to $1.8 billion by the year 2028. And that's above the market growth rates that you see in your kind of standard patient monitoring segments. Then with these additional new patient segments, we don't have estimates. We just know there's lots of patients out there that we have the technology solution, and we're going to start to pilot into those markets this next year. So in conclusion, as we look at 2024, we anticipate, again, that above-market growth rate of mid-single digits, we also are excited because we think that we have momentum in Smart Recovery and Smart Expansion. And the headwinds that we faced have started to calm down a little bit in patient monitoring, where you see hospital budget constraints and supply chain risks that have kind of plagued the industry since COVID, we see that coming down quite a bit. So in summary, let me end where I began, which is that we are thrilled about this opportunity and the entire Edwards critical Care leadership team is excited and thrilled about the opportunity to stand up our own company and spin out or we think of it as a graduate leadership team. We have 4,000 employees dedicated to our critical care patients and clinicians. We have the size. We have the scale. We're focused on our patients and our clinicians, in our space. And we are ready, and we promise you the best is yet to come. Thank you so much, and you now have a 15-minute break. Thanks, everybody. [Break]

Okay. Let's get restarted again, everyone. Please take your seats, and we'll keep the program going. All right. Welcome back from the break. Thank you. You've had a chance to see this morning why we are so enthusiastic and passionate about the opportunities that lie ahead for Edwards. And for those of you who got to attend the product showcase yesterday afternoon, you saw that this isn't just enthusiasm shared by the presenters today, it's nearly 20,000 employees across the world at Edwards, who have a mission to try to increase the impact that this amazing company can have on the way patients get treated. So now I'm going to talk a little bit about how that translates into value for shareholders as well. So our goal is to generate 10% or more sustainable organic sales growth on average over time and at the same time, generating healthy earnings margins and deploying the cash flow that results from that in high returning investments internally and externally. And I'll talk more about that in a couple of minutes. We always hold ourselves accountable for what we plan to do. And I'll tell you know what we said last year about 2023, which was to expect sales growth of 9% to 12%, gross profit margins of 76% to 78% and EPS of $2.45 to $2.60. Now during the year, last year and during the year of 2023, we increased our sales guidance to 10% to 13%. And we're on track to achieve that sales guidance. Quarter-to-date, things are turning out to be about as we've guided at our October 3rd quarter earnings call. And so we expect to be in the range of 10% to 13%. For TAVR specifically quarter-to-date, we're in line with our guidance expectations, which would put us for the full year at the low end of 10% to 13% full year growth. For gross profit margin, still in the same range, earnings per share, we increased our guidance during the year to $2.50 to $2.60, and we now expect the same thing that we guided to in October, which is $2.47 to $2.53 in earnings per share for the full year 2023. So turning to future financial goals. You saw in our press release this morning that our sales guidance for next year is 8% to 10% for the company and for TAVR, operating margins of 29% to 30% and earnings per share of $2.70 to $2.80. Over time, our aspiration and our goal is to generate more than 10% sales growth on the top line, excluding critical care and the separation of critical care from Edwards will result in some top line and operating margin accretion. Earnings per share, we're expecting double-digit growth. In fact, in 2024, the 9% to 11% is a little bit understated because of the impact that foreign exchange has on our earnings. So our earnings would be in the mid-teens. We're not for FX headwinds that flow from sales through the P&L, part of which is relating to our hedge program, which I'll talk about in a minute. So our financial objectives really fall into 3 categories. The first one is addressing in terms of sales growth, addressing large and growing patient populations. And our sales growth is fueled by investments that we make in research and development. We also do acquisitions, but the real engine behind our sales growth is in R&D programs that we invest in over long periods of time. The reason Edwards has been performing well now is because of investments that we made over the last 5 and 10 years and the investments we're making now are going to benefit our top line growth rate in the years ahead. In terms of sales by product group, you heard Larry talk about 8% to 10% growth expectation for TAVR, driven by continued -- the continued launch of SAPIEN 3 Ultra RESILIA around the world and increased focus activation initiatives for patients. You heard Daveen talk about $280 million to $320 million of sales in TMTT driven by the introduction of EVOQUE in Europe and the continuing expansion of our PASCAL platform in Europe and in the U.S. and beyond. Surgical Structural Heart, Wayne talked about what's going on with this amazing business that just continues to grow and distinguish itself based partly on this RESILIA tissue platform that's really changed the way surgical patients are getting treated. And finally, Katie talked about advancing the next generation of predictive sensor technology in connection with driving our Smart Recovery platform. So the second pillar of our value creation strategy is around profitability and profitability, of course, starts with gross margin. Our gross margins are relatively high and reflect the value that our therapies provide to health systems to patients and to payers. In addition, we are really focused on trying to drive value through our global supply chain. So at Edwards Lifesciences, we've got about -- we've got investments in 5 different structural heart plants today in Europe, in the Americas and in Asia. And we drive that production volume through those different supply chains. And together with our partners, our suppliers, end up in a very favorable position in terms of cost and redundancy and resiliency of our supply chain. In terms of research and development, we continue to stay focused in research and development. And we couple our internal investment initiatives with other acquisitions in the areas of intellectual property, which I'll talk about in just a minute. And finally, in terms of spending, this is an important focus of ours. So we invest heavily in research and development. And at the same time, we try to be very efficient in the way that we're achieving scale advantages for running this global company, especially in areas like general management support and administrative overhead that we are driving to support the company's growth. In terms of earnings per share, our guidance for this year, as I mentioned, is $2.47 and $2.53. That reflects FX headwinds of $0.19 to $0.21. And so FX has hit us pretty hard in 2023, we expect it to be less of a factor in 2024 and to end up hitting us by about $0.08 at the midpoint of the range against the $0.24 to $0.30 of improvement from operations and earnings per share. Overall, it's going to be a pretty healthy year for earnings growth for Edwards and we're pleased with the setup going into 2024. So Critical Care. Critical Care will be a part of Edwards for all of 2024 and the results will be reported the way we always do. There are not going to be any separation activities that happen until the event of the actual separation, which is planned for year-end or more specifically the beginning of 2025. We do expect that we're going to incur special charges associated with separation and typical and 100% tax-free spin-offs. We'll be reporting those during the course of the year as carve-outs to our adjusted earnings per share, and we'll talk more about what those look like as we get into the period of time when we are preparing to file our Form 10 with SEC, which is expected to be around midyear in 2024. It's too early to provide any estimates of the onetime expenses that we're expecting to incur to stand up the business, but expect there will be typical types of things that are connected with spinoffs like this. So the third pillar of our financial value creation strategy is robust cash flow and smart deployment of capital. So we expect another good year of cash flow in 2024. We are -- today, in 2023, aiming for nearly $1 billion in cash flow. Remember, there was a tax law change that started last year that ended up spreading out the benefit of tax deductions that we get from our research and development investments and as a result, our tax -- our free cash flow declined a little bit from 2022. This is the same issue that other public companies have been managing. But in 2024, we're expecting $1.1 billion to $1.4 billion in free cash flow, which is greater than 70% yield versus net income for 2024. We're also expecting shares outstanding again to be 600 million to 610 million in 2024. So share repurchase continues to be an important focus of capital allocation for Edwards Lifesciences. We think there's real value in buying back stock. This year, we're expecting 600 million to 610 million shares outstanding and you saw in our press release this morning that we just received authorization for another $1 billion of share buyback. That's par for the course, normal practice for us is when we reach below a level of the prior authorization, then we seek no authorization and it was time and so we just reloaded and we're -- you should expect that we're going to continue to be an active buyer of the stock opportunistically over time when opportunities present themselves. We're also committed to buying back stock to soak up dilution from employee shares and incentive option programs. So in terms of CapEx, most of our CapEx goes into manufacturing resiliency programs and research capacity. So I think laboratory space like what you've seen walkaround campus here yesterday and today. This year, CapEx, we're expecting to be over $300 million, which is somewhat consistent, a little bit elevated compared to 2023 and 2022. So portfolio management. We've been and will continue to be active strategic investors in external growth opportunities. Our focus is on early-stage companies that can complement our internal programs, but really focused on structural heart. We have options to purchase several companies, as Bernard mentioned, and we'll determine whether to exercise those options based on established performance milestones that we entered into when we originally negotiated these transactions. We're also committed to portfolio management. And Edwards has a history of exiting product lines that are not aligned with our strategy or have a profitability profile or a growth profile that no longer fits. So for your reference, here's a summary of all the guidance statements you saw in our press release this morning and that are in your books for those of you in the room, I won't go through all the numbers, but this is just a collection of the key guidance metrics. Longer term, in summary, we expect that 10% plus top line growth is achievable as our technologies and our indications for structural heart innovations benefit even more patients in the years ahead. There are no structural constraints on expanding our operating profit. So a lot of times, we'll get a question. What are the opportunities? What are you doing to expand profit margins. We've got lots of leverage to be able to do that. But we're also very deliberate about choosing when we're going to extract more margin benefit versus invest in our top priority, which is generating long-term sustainable organic growth. There are -- if there are no new changes to tax laws, we're expecting that there's going to be some upward pressure on tax rates. We're seeing it with the pillar -- the OECD Pillar 2 changes, and that's impacting our tax rate. So next year, we're expecting 14% to 17% tax rate, and there's upward pressure on that beyond '25 and '26 without any additional tax law changes. Overall, we feel really good about how the company is positioned competitively, how the company is positioned in terms of innovations behind our product portfolio and how we're positioned just having our employees lined up with the mission and the patient populations that we're trying to serve. And ultimately, we have a lot of confidence that's going to result in very attractive shareholder returns over the long term. So with that, Bernard, over to you to close, and then we're going to take a quick break and set up for Q&A and give us a couple of minutes. Go ahead, Bernard.

Thank you, Scott. So as you have seen this morning, we are very confident. We are entering this new era of structural heart innovations with this sharpened focus, which is going to give us more agility and allowing us even a faster pace of innovation, expanded opportunity. You heard a lot from the [ GM ]. We believe that we are well positioned to serve a very large and growing patient population. We are the only company, global company, solely focused on structural heart disease, uniquely positioned that you think to deliver sustainable growth and extend our leadership. We have been the pioneer in structural heart disease for more than 60 years and in our mind, it is just the beginning. This future direction will enable us to expand opportunity, extend leadership in surgical, TAVR and TMTT where there are plenty of opportunities. In addition, we will use our expertise, reputation and leadership to progress in heart failure. So let me summarize our bright future. 2024 will be an exciting year, building momentum with key milestones and strong financial performance, 8% to 10% top line growth, 9% to 11% EPS growth. In '25, '26, we are well positioned to deliver even faster growth, 10-plus percent, driven by new indication, asymptomatic TAVR, new technologies, EVOQUE entry and the impact of a patient activation program that Larry talked about, to be able to serve the many more patients that TAVR can do. Long term, we will expand opportunities and continue our healthy momentum. At the end of the day, this all it is about that you think we are proud to have helped millions of patients who are now enjoying life, and there are millions more to be treated. Let me leave you with this. Edwards is best positioned to transform patient care for those with structural heart disease in the most impactful way. So with that, we will take a very short break, and we are going to be back for Q&A. Thank you. [Break]

All right, everybody. We've come to Q&A. We've got about an hour allotted for this session. So we'll go until about 11:30 our time to try to get as many questions as possible, please limit them to one and one follow-up. [Operator Instructions] So with that, I'll kick it off. Maybe first question from Robbie Marcus.

Great. Robbie Marcus, JPMorgan. I appreciate you hosting us today. Maybe we could start with the long-term guidance, the '25, 2026, 10% plus for TAVR in the overall company. You're guiding to 8% to 10% this year. You have some new indications in products coming, but it's still an acceleration versus 2024. So maybe just walk through the thought process behind it and why that's a good starting point that you hope to exceed over time?

Thank you, Robbie. Good question for sure. So let me start with how do I feel about 2024, solid fundamentals. I'm sure we are going to talk more about it and 8% to 10%. Now if you think about you summarize what we discussed with you this morning. What we are kind of coming is more patient activation, SAPIEN Ultra RESILIA being by far of preferring a platform which is where we have an expansion globally in 2024. And then we are going to enter into 2024 with asymptomatic for TAVR and this one has the potential to be a big new indication for us and for TAVR. Now a technology like EVOQUE, think about EVOQUE like TAVR. It is not the day you launch that you see all of the benefits, correctly, we are going to see a gradual benefit of EVOQUE in the next 5 years, maybe more. We will have to build other market, train the physicians, building referring network. So every year, we are going to see a healthy benefit from EVOQUE. So altogether, and that in 2025, late 2025, you have M3 where we are going to do the same. So we have plenty if you think about of fundamental are strong and great catalysts, asymptomatic, EVOQUE, M3. So this is what gives us confidence that next year is going to be great, the years after even better, even faster.

I'll just add to that. The separation of Critical Care is an automatic mathematical 50 to 100 basis point benefit to top line growth. So you already -- the bridge from 8% to 10% in 2024 to the goal of 10% plus beyond that, if that's the consideration, there's a pretty straightforward bridge to get you there. In addition to all the fundamentals that Bernard mentioned, around new indication expansions, new technologies coming online and new geographies that we're serving that are really going to grow top line.

Just on the indications, I think, next year, we don't expect asymptomatic to contribute because if it's presented at TCT, it's very late in the year. But one of the things I think it's underappreciated when we get a new indication is we not only get the benefit of the new indication, but we tend to get some pull-through from the previous indications. So for example, when we only had a high-risk approval, high-risk was still a debate, but once we got intermediate risk approval, it sort of ended all the discussion on high risk and all those patients started tarted to flow through. And so when we get things like asymptomatic and longer term, when we get things like progress, we think it's not only going to be those new opportunities, but we think it accelerates even the existing opportunity. And that's why I think we feel really good about the longer term after 2024.

And maybe a quick follow-up. As I think about the 10% plus TAVR growth during the '25, '26. How do we think about the building blocks of that. There is U.S. versus faster OUS growth. You have some new competitors coming into the market. You have some new products launching with price and mix. How should we think about the building blocks that equal up to that 10% plus?

Do you want to take it, Larry?

Sure. Well, we modeled all that in. We have places like the U.S., which we talk a lot about the penetration rates in the U.S., and we think there's big opportunities there. But Japan is much less penetrated. So we think there's a lot of opportunity in Japan for us to continue to do more. There's a lot of -- pretty much all the competitors exist in Europe, so we're familiar with all the competitors and the strengths and weaknesses of their platforms. And we remain really -- tremendous amount of conviction around our platform and its ability to compete. And I walked through a lot of the outcomes that we really drive. But as we move to younger and younger patients and even less symptomatic patients, it's not about just that index procedure anymore. It's about what happens when those patients outlive their valves. And we think our platform just gives us a huge strategic advantage for being able to maximize that over the long term. And that's why we feel really good about the present and the future for us.

Joanne?

Can we spend some time on the Critical Care Spin-off? Up until now, it's been critical to Edwards. Why now? What makes this the right thing -- and I get the idea of it increases [ RemainCo's ] revenue, operating margins and stuff like that, but is there a way to start getting us to think about how much, why and what is going to look like when it's standing on its own?

So maybe let me start and maybe Scott and Katie, you can add a few things. The first is Critical Care became a large successful business, have reached scale and size to be independent and be very successful as an independent company. So that's the first set of things. The second one is, if you look at or structural heart disease businesses, TAVR, TMTT and Surgical and Critical Care. We -- the technologies, the innovation process, the regulatory process, the business model are very different. So for a leadership team like ourselves, usually give us a sharpened focus on structural heart disease, and there are so many opportunities in front of us with TAVR, TMTT and Surgical and maybe more. So we will have this expanded opportunity. So this is a strategic thinking behind it. Scott, do you want to add anything?

I know everyone is eager to understand what the margin profile looks like for Critical Care on a stand-alone basis and Edwards post spin-off, and we'll be able to provide that, but not now. So what we can say is, and I think everyone knows, Critical Care gross margins and operating margins are lower than Edwards consolidated. And so just mathematically, Edwards remain -- the remaining Edwards should go up and Critical Care will present a different -- a lower margin profile than it looks like inside of Edwards. But we're not going to quantify any of that right now. It's just very early stages of getting this structured announced and getting a project team kicked off. Our plan is that over the next 6 months, we'll do a lot of work around the numbers and putting together pro formas and then ultimately culminating in a submission of a Form 10 with SEC mid-year next year. And that's a point at which we'll be able to give you a lot more detail about what this looks like.

Katie, do you want to add anything about the kind of opportunity that you see ahead of you after you become independent?

Yes. So it's a little bit like what we talked about before. But I mean if you talk about like why now? As we've looked at the patient populations, I mean, Critical Care originally was like cardiac surgery or an intensive care unit patients. Now we're really broad OR intensive care for all types of patients, and now we're looking to go even beyond that. So the patient groups are kind of diverging more and more, the pathways to innovation, whether it's 510(k)s that we live in, the 510(k) [ LAN ] versus implantable devices that take a lot longer. So we just kind of continue to see this divergence in the focus of both 2 great market leaders. So -- and as we look to the future for Critical Care, there's a lot of things happening in monitoring, there's remote monitoring. There's artificial intelligence, there's the idea that all patients should be monitored while they're in the hospital. So as we want to pursue those types of opportunities, we're going to be able to, I think, get access in different ways to those types of expansion opportunities, and that's what we're excited about.

Mark?

Chris Pasquale, Nephron. Daveen, I had a couple of questions for you on the Transcatheter, Mitral and Tricuspid businesses. So one, just a clarification on M3. You talked about CE Mark in 2025. Encircle is my understanding basically a U.S. pivotal trial. So why the lack of definition around the U.S. approval timing for that?

So thanks for the question, Chris. It's just more of a logic that we know that it's going to follow the CE Mark just based on the timelines, we think for submissions how long everything is in the FDA process. We assume things like advisory panels and that kind of process. So from our timelines, we think it's just going to be a little bit after. It wasn't meant to purposely vague or anything like that, but we think it's more '26, so we just got to the -- the guidelines through the end of '25.

Got you. Okay. And then a lot of focus on the replacement technologies today, which are very exciting. Curious just to get an update on the status of the U.S. TEER market as it stands right now. It's been slower over the last couple of years. I think we would have expected, in particular, functional, there's some mixed feedback in terms of the different outcomes in the trials, they're COAPT positive, Mitra-FR, not. Just latest thoughts there and why Class IIF has taken quite a while to finish?

Yes, sure. So if I look at overall the TEER market, if we look at Mitral TEER in the U.S. that's obviously just one segment in the broader TMTT market. So I'll dive into that, which is the only one in the U.S. today, but obviously, Tricuspid is going to be, we think, revolutionary, Mitral Replacement will also be an amazing part of the overall TMTT market but deep diving into Mitral TEER. We definitely saw that during COVID, those couple of years of COVID, we saw definitely slowed down quite a bit, even more so probably than aortic stenosis to a greater extent. And then as we've gotten out of COVID, we've kind of seen staffing get back to not perfect but more normal levels, we've seen that the market, we believe, has gone back to kind of that double-digit growth, and it's -- it's a healthy market where -- and now with the most recent new data sets, we're still having more data and more competitors and more innovation, you get more referring physicians, more patient knowledge, more heart teams involved and you start seeing better flow of the patient. So we've kind of seen I think today that there's very healthy double-digit growth kind of growing in the Mitral TEER market in the U.S. If you look at etiology of -- you talked about 2 [indiscernible] for a second about that, that, obviously, our indications right now are for degenerative MR, and that's where we see our growth coming from. When you have an existing indication already for functional as we saw with the COAPT study, it took a long time to enroll that study. And with 2F, where we're also talking about patients that have to go through pretty strong GDMT, we're seeing that it is a little bit slower to enroll than we like. I wish it was definitely enrolling faster, but we do see enrollment continuing to move along. But we think that we continue to see very strong functional data coming out of studies like our MiCLASP study that we just presented in Europe. We had an amazing functional arm. So I feel confident that PASCAL for functional patients is doing fantastic, and we've got great 1-year clinical data to help support that. Hopefully, that helps answer.

Danielle?

Danielle Antalffy from UBS. If I could, just a question on the split and how to think about capital. So Scott, you did spend time on this, the capital deployment side of things. But just trying to think about this will make Edwards more focused, more nimble, you could deploy capital in a different way. You mentioned the interest in interventional heart failure and expanding into that -- we didn't get into that a ton today. So just curious about what you could say on where Edwards focus could move to over the next few years once the spin is complete?

Maybe I can start and then you can continue here, Scott. So the capital deployment for us will be focusing first on TAVR opportunity, TMTT opportunity and Surgical opportunity. This will remain the priority of the company. Now we see heart failure as a natural progression. We have some options. I told you 2 to 3 in the near term. So we will make some decisions in the near term for sure. And we are going to look at in a very opportunistic manner, if there is any opportunity within structural for us. But Scott, anything to add?

The -- our overall capital allocation priorities have not changed at all. So #1 priority is always to invest in the business, invest in our physical infrastructure required to keep production capacity up with demand to make sure that we're funding internal programs. And as Bernard just described, the external investments that we make as well. And then finally, buying back stock. As I mentioned before, we always want to, at a minimum, cover the dilution from option exercises, but as well work that overall net share count down over time. It wasn't long ago when we had 700 million shares outstanding on a split-adjusted basis, now we're down closer to 600 million shares outstanding. And so that will be an important part of our capital return strategy as well.

Rick?

Rick Wise, Stifel. Question, Larry, for you. I was really intrigued, it's hard not to be these days by your comments on AI, and the AI algorithm potentially accelerating or more accurately, nudging patients along. I was hoping you could just expand on what are the initiatives that you're implementing? Where are you with that? And I'd like to ask, it's going to help next quarter, but when does it seriously start kicking in and helping.

Yes. Well, we're running a number of pilots with a number of different institutions, and there's some people that are working on their own, but we're trying to pilot with them and really focus on the end of treatment. I think one of the things that's been a big learning for us is we've done -- there's been so much research that come out, whether it's Sammy Elmariah's paper or whether it's [ universities ] and other places that -- trying to think of the recent that came out from HA. They're really focused on this massive undertreatment of Aortic Stenosis. But for whatever reason, many hospital systems, they think that's everybody else. And they think in their system, they do a really good job. And so it's become increasingly important to us that for some of the large hospital groups, we're going to have to show them their own data. So what we're really focused on is running pilots where they're going to get to see their own data. and they're going to see what it really looks like. But with electronic medical records and with more automation in the echo side, there is ability to put overlays where we can go in and extract the data out of the echo and apply the guideline criteria to it and pick up all those things that are being missed today. And we have a number of those pilots that are running. We do believe it is scalable. It does take time. It does take effort. It does take energy, but we're -- from the pilots that we've got, I can tell you, we are more convinced than ever. There is a zero doubt in our mind that the patients are there and the incredible work that's been done identifying the in-system patients and where they're falling through and where they're happening. That is definitive. And so for people who think, hey, the reason is slow down is just because you're so deeply penetrated. It doesn't matter anymore. I just don't even remotely believe that that's true. And again, that's still just the in-system part and the out-of-system part is probably even slightly larger. So the opportunity here is still really, really big for us, but it's going to take more of a ground game than just putting out 10 publications then I'll say the same thing and have everybody say, okay, we need to get serious about this. But this is where the work on creating a quality metric, creating an echo standard, creating all these things, they all really work in unison along with the evidence creation we do with asymptomatic and then later on progress. So it's all those things. I've been doing this for a really long time, as all know. But I look at what's ahead of me for the next 7 years. And the opportunities almost seem bigger than what they were when we started because our knowledge is so much deeper. And not to say it's simple, but it's all there in front of us.

Got you. And if I could follow up with Katie. Katie, just thinking about the spin-off. It's been -- I'm sure having Critical Care as part of Edwards has been -- is wonderful. But what are you going to be able to do as a separate entity that you weren't able to here? Scott kept you on a tight leash, I understand, but sorry, Scott.

Not to have to work with us [indiscernible].

Well, I didn't want to say that. But does this accelerate -- are you able to sharpen your focus on smart technology and maybe what's next? Could you just expand on that?

Yes. So thank you. We talked a little bit earlier on the Smart Expansion. We could go in so many directions. And so for us, it's really focusing on what are going to be the opportunities that are going to build momentum for us in the short term that we can build on to, right? And so one of the things I was just going to add to what Larry was saying on the algorithm side. So we've done a study with the Cleveland Clinic and shown that we can actually detect severe Aortic stenosis with the ClearSight Finger Cuff. So we may go into the detection and screening business as part of that. We've already submitted the algorithm to the FDA. We're in the review process with them. So trying to figure out what's the best form factor of ClearSight to do those types of screening assessments and screening tools. We're really excited about that as an opportunity. So we -- for us, it's really about having the freedom to kind of go after some areas. And if we need extra capital to do that to be able to raise some of the capital to. The opportunities in a sense are really endless. We just have to focus, right? Thanks for the question.

Larry?

Larry Biegelsen, Wells Fargo. Hopefully, you can hear me okay. Larry, I wanted to focus on asymptomatic a little bit. So what do you need to show in EARLY TAVR to drive adoption? primary endpoint [indiscernible], stroke, hospitalization -- can you frame the opportunity for us? Earlier slides, I've looked at it, shown asymptomatic to be basically the same size as symptomatic. So doubling your market opportunity. And how much could this accelerate TAVR -- it's very different like that low risk where you were -- a lot of it was cannibalization of a surgical heart valves, $5,000 to $30,000. This is really just expanding procedures.

No, I think you're right. I think it is expensive. And there's -- I talked about just all the different layers to doing diagnosis for severe aortic stenosis. But then you have this whole other layer on top of it, which is this judgment. And I think that judgment is one of the things that really impacts that group of patients that has maybe a depressed heart function, but severe AS because this judgment starts to come into play, well is it their AS? Or is it their heart function? Or is it this other sort of thing? And are there symptoms attributable to their AS or not? And I think there's just a lot of mental gymnastics that go into that where people are applying the judgment or waiting for symptoms to worsen. If you look at the -- again, the Sammy Elmariah paper, there was a significant group of patients, the doctors are saying they're waiting for symptoms to worsen, but there's no criteria for symptoms have to be severe. It's just any symptoms really are supposed to be criteria. So it's just kind of remove that judgment out and I like to think of it as it's going to go from Olympic figure skating to track and field. And what we really want to do is be able to say, look, if you meet these criteria by your Echo, and we have a way to extract that data, you should immediately move to a heart team for evaluation with no intermediate layer, with no judgment, with no other things being applied to it. And I think it's that streamlining of the workflow that EARLY TAVR has a massive ability to predict. The other thing we're going to get from EARLY TAVR though and I mentioned it before, is just all the learning, what percentage of patients who are asymptomatic? And how fast do they progress to symptoms and what happens to them during that progression time and I think it's just going to be just a war chest of data that is going to inform how we attack that opportunity.

Just one follow-up. I mean the pushback is that asymptomatic patients don't want to get a procedure. How do you address that? And it's just pull forward, but patients who otherwise would get a procedure.

Well, my best counter to that is we have moderate patients who aren't even on guideline, and we enrolled that trial faster than we ever would have expected. So they -- the physicians were able to convince patients with moderate disease that they needed to go get a therapy earlier than what even the guidelines recommend. So I think it's all about the discussion we have with patients. If we can prove to them that waiting is not benign. I mean there's a lot of patients with coronary disease that have absolutely no symptoms, none. And the doctor tells them, you have a ticking time bomb. And if you leave this alone, you're going to have a heart attack and you can die. And we don't treat aortic stenosis with that same energy. And I think if patients are told waiting is dangerous, they will move forward. If they're told waiting has no penalty, then they'll wait. Nobody wants to have a procedure before they need it.

Josh?

Josh Jennings from TD Cowen. Just a follow-up on Larry's question for Larry. Just on the Early TAVR submission. I know data you will present at TCT, but just thinking about investors focus on the potential for TAVR to reaccelerate in '25. Could the submission occur well in advance of TCT and potentially approval in the early days of 2025? And then the follow-up there is also -- do you -- does your team expect to have exclusivity in that indication with no other TAVR players having data in the asymptomatic indication? And then lastly, SAPIEN 3 Ultra RESILIA, that's -- I don't believe that is included in the EARLY TAVR trial. So can SAPIEN 3 Ultra RESILIA have that label expansion into asymptomatic as well. Sorry for the multi tiers there, but thank you.

Most amazing one-part question ever. So the expectation is that we would not get an approval next for EARLY TAVR. We expect the data to come out at TCT, and we wouldn't expect to get the approval next year. So we think the benefit is largely going to happen in 2025, again, assuming the data is compelling. I will say this data set, it's because of COVID, because of the other things, there's a lot of readjudication of events and bringing the patients back and we really need to do a high-quality job of all the monitoring and all the other things, and that's why we're planning to present at TCT so that we have the appropriate amount of time to really make sure the data is all being completely reviewed and adjudicated and all those things are done, but it's also TCT is the biggest stage, frankly. So we think that, that's an opportunity. The exclusivity of the indication is a fascinating one. On one hand, I want to say like, hey, look, I did all the work. I did all the effort. I deserve exclusivity. But if we're also talking about changing guidelines and really changing the course of medicine, you sort of almost have to say, "Hey, look, it's really a class effect". And the idea that if a patient came in -- and they were anatomically unfavorable for TAVR, then we're going to say, Wayne, you guys got to wait until they have symptoms, but they can go forward with TAVR. I just don't know there's a good logic stream to that. I think it's the disease that's deadly. And I think whether we treat it with a transcatheter valve or whether we treat it with a surgical valve, I think what we're really focused on is treating earlier and more appropriately. So from that standpoint, I really believe that -- this is more about changing the guidelines than it is about anything else. And I'm focused on how we treat patients better. And ultimately, I think that's the best thing. And I think trying to go for an exclusive indication would be trying to turn this into a share play in instead of helping patients play. And for me, it's all about how do we treat this disease better and more effectively. And if it grows the market broadly, given our position, we'll disproportionately benefit. And that's what I think I care about the most. So I think that answers your second question, which I think it would cover our entire platform of products.

Matt?

Matt Miksic from Barclays. I have one question, one follow-up, if I could. So the first, on the way you -- you're talking about in-system and out-of-system patients now, and we've kind of been talking about those challenges for the last 2 or 3 years and wondering what you're assuming for those strategies and contributing to 2024 growth, if anything, and then also, in particular, kind of zooming in on the sort of underserved communities of that bigger market, maybe 30% of the population or something. Are those strategies going to work there? Or are there other things driving to do there to make that...

Yes, it's a great question. So for the in-system patients, I think what we're learning is, I think for a long time, our strategy again was sort of, I call it the air where were we put enough data out in the world and people just accept it and start reacting to it. I think one of our key learnings is that it hasn't -- people just don't believe other people's data the way that they probably honestly should. And so now we've really switched that to much more of a ground game where we're working with individual systems and individual hospitals to run these programs and overlay the AI angle. And again, it takes time to scale, but our early pilots are super encouraging that -- and that's why I can say definitively, I know the patients are there. I don't -- it's not an area of question anymore for us. And so it's just a matter of putting those systems in place. But then the next part about it is when they turn these props on and we've seen this happen already. They turn to prop on and almost overwhelms the system. So now they have to -- do we need more [indiscernible] Do we need more schedules? Do we need more of these things. But it's sort of like a chicken and the egg thing with capacity. Do you wait until there's a need to build your capacity? Or you just build capacity in advance of the need. And most hospitals, frankly, wait until they're pushed into adding capacity. And I think that's a little bit of what's going to play out, which is why it's going to take time. But if you look at our history, we've been adding more and more patients every year. And as our base gets bigger, we have to add more and more patients every year, and we're still confident that we're going to see an acceleration and get back to double-digit growth over the long term, and it's a lot of these programs. In terms of underserved communities, it is something that feeds our growth, but it's something more that I just find to be completely just socially unacceptable in this country that after 11 years of TAVR only 4% of the TVT Registry is representative of [ blacks ]. And it just speaks to a lot of things around reimbursement, around policy, but even how patients move through. And I think the more judgment there is and not having TAVR programs that service these things, we have to build a network of hospitals that can address these communities and make sure that they get the care they need. And we ran a large study in former NFL players because we knew we would disproportionately pick up people of color to add to the natural history data that doesn't really exist because people of color aren't getting the product commercially, they're certainly not getting it in a clinical investigational setting. So we have to add to that knowledge base for a couple of reasons, but we have other active programs now where we're doing partnerships that get us out in the community. And what we can bring is our expertise on screening patients and evaluating them. What we looked for in partners is that they can bring their credibility in the community so that we can draw those patients in and demystify that. And it's a marginal contributor to our growth, but it's just more like we can do better than this. And I think part of our responsibility is running a successful company is, we have to be givers to communities we live and work, and this is just an unacceptable situation that's gone on for far too long. And so it's just it's -- I think it's an area of passion for all of us on the leadership team that we just make this better.

Okay. And then one follow-up, if I could, just on kind of that capacity versus some of the bullets that you mentioned across a bunch of your markets have been headwinds and healthcare spending in 2024. I'm just wondering if that's -- concerns about coverage or if that's actual something to do with reimbursement. And we think of we think of surgical and TAVR is kind of moving in lockstep. Are they still moving in lockstep? Or is there some change in trajectory in terms of reimbursement for TAVR and SAVR?

I think we've seen the system largely recover from COVID. But I will say we don't have the redundancies in the system, we had pre-COVID. We still get more disrupted by vacations or those things than what we did previously. And as Daveen's new technologies come out and all of these things happen, I don't feel like TAVR competes as much as surgical resources. I feel like they're pretty dedicated within the hospital systems for the most part. But I think as these new technologies come forward, one of the things Daveen and I partner on really closely is try to work with hospitals to understand what the capacity needs are. If they want to be leaders in these new therapies and the things that they're going to have to do. If the leader of the TAVR program right now wants to be the leader in a boat, he's going to have to get a second team up to speed on TAVR. And most big hospitals, they have second teams and third teams, but they're going to just have to be more efficient about how they triage patients through if they want to be leaders in these emerging new therapies.

But we feel like we are exiting the year and entering next year with a very stable environment from a hospital staffing standpoint, yes, they are leaner than what they were pre-COVID, but it is a little stable. So we feel it is a positive for us.

Yes. We all wish there was more redundancy built into the system, I think, especially as they're building up more, so when things are in some kind of little [indiscernible] as it affect things a little bit. But overall, to Bernard's point, we're definitely in a much more stable situation, which is nice to see.

I'm sorry. But what is the spending headwind, the health care spending headwind that you cited a few times throughout the presentation?

I think it's just general pressure on reimbursement, we see that in different markets. And -- but at the same time, I think it's a little more of a European thing probably is where we probably see the most pressure on that where people are most price sensitive. In the U.S., we obviously went for a price increase for S3UR and Wayne's whole strategy is premium products that come with a premium as well. And last time I checked Daveens', it's not that inexpensive. So I mean we still believe the system will pay for quality of the evidence backs it -- and that's why we spend so much time and energy generating a high-quality evidence that make people feel they're getting great value for their investment.

Hospitals are to the point of Bernard, hospitals are running a little bit leaner. So they're always putting more pressure on right now and especially as we bring new technologies, everyone sees the value, but -- they've created a system to try to bring it in-house, you go to through the back and -- this is because they're all running leaner regardless of the therapy space. So it's just a -- it's a consistent kind of headwind that we're working through that's been around, and we work through and surgical is working, every business works through it, that's a part of it.

As an innovator, we bring breakthrough technologies, premium technologies, with a premium price. They are bringing of value to the entire healthcare system. Nevertheless, when you come with a premium price, you get some -- you need to do some explaining to the hospital system, why your technology is having a higher price, and we explain that we have -- we bring in a higher value to the patients and to the healthcare systems.

Rich?

Rich Newitter, Truist Securities. So maybe just to start, maybe for Scott, the guidance that you provided, anything that you'd call out between kind of first half '24, second half '24. You got a lot of lot of considerations that I'm thinking about just comps are kind of probably a little tougher in the first half. And then you mentioned that your guidance considered or contemplated competition. So I'd love to hear how and where. And then I have a follow-up.

Sure. Why don't I start on the overall company? And then on competition, it's probably related to TAVR. I'll let Larry comment about what's going on there. The first half of 2024, we'll have very different comps, harder comps, higher comps than the second half of 2024. So recall, in 2023, we had greater than 12% sales growth for Edwards in both Q1 and Q2. So higher [ border clear ] and as a result, probably expect an increasing year-over-year growth rate by quarter during 2024 or at least second half higher than first half. In terms of TAVR, Larry, do you want to talk about competitive landscape?

Sure. Yes. Well, I mean, competition is certainly is factored in your guidance and factored into our model. We do expect to see some impact from competitors launching new products. We have a new competitor coming, we anticipate in the U.S. sort of late next year. So there's some impact of that. And we have deep respect for our competitors and for the work that they're doing in this space. At the same time, we get a full -- we had benefit of a full year pricing in S3UR. And so that's a little bit of an upside for us. But at the end of the day, it's all about market growth. It's all about getting these based off sideline of value from the market, and that is the biggest thing that drives our guidance.

Got it. And if I -- if I could just ask one more. The comment that you made about Critical Care being 50 to 100 basis points accretive to topline growth. With respect to '25 and '26, the 10%-plus commentary on the topline, is that -- are we to think that you can get to 10% without the spin and that's 50 to 100 basis points on top of that 10% floor or the 10% plus contemplates the benefit that you would get from the removal of the spin?

Let me start. We see the multiple catalysts. Critical Care is one. But the biggest one are, again, asymptomatic, EVOQUE and 3 big technology, new technology, new indications coming for TAVR and TMTT. So it is altogether where we are -- feel confident about the 10 plus, '25 and '26.

But pro forma for the separation, TAVR is 75% of the company. So TAVR has to be growing at healthy levels to get to 10% or above and we expect it will be and complement that with everything that's going on with TMTT and the continued strong performance of surgical, and we've got a lot of confidence about trying to hit that goal.

David?

Dave Rescott with Baird. Larry, I just wanted to follow up on your comments just on how you're expecting competition to come in? And maybe just attacking more from the pricing angle, how you're expecting in your longer-term goals for pricing to be a factor in that? And I have a follow-up.

Yes. I think in the U.S., certainly, people have, I think, been pretty respectful of the market and the current pricing. There's certainly people that do some discounting and they try to sort of lead with price. But I think we're very fortunate in this country that people still focus on outcomes and outcomes better. And I think that people truly want the best product for their patients. And so I don't think we're as price sensitive in the U.S. as we are in other markets. And it's not to say that price doesn't matter because it does. But I don't think a $1,000 discount is going to move somebody off of a platform that they fundamentally believe is better for their patients.

And then just to follow up on -- from a higher level. I appreciate that you guided to reiterate kind of the $10 billion by 2028 for TAVR. I think at the last Analyst Day, you called out $5 billion for TMTT. I'm just wondering if -- what went the decision maybe to not include that in this presentation and whether or not that's a change in the way you think about the market, the way that you help all of us just think about that market?

Daveen, you want to take it?

Yes. I'll take that one, definitely. As I mentioned, right, ultimately, right, there are millions of patients suffering from mitral and tricuspid disease. And so we believe over the long term, the opportunity is way beyond $5 billion. But we know the creation of new therapies, it's never linear. It's always lumpy. It's always changing directions. As I mentioned before, we saw in the couple of years of COVID, we saw that the mitral TEER market, the one existing market definitely grew at a much lower rate than we had expected. And also the creation of the rest of the TMTT market talk about tricuspid, talk about mitral, didn't go as fast as we want to. But now that we've gotten out, we're seeing both the mitral TEER market continuing to go. And we're also seeing that the Tricuspid markets at the starts, the revolutionary start of it, Mitral Replacement is coming soon after. So we ultimately believe that, yes, we're going to get to an amazing Tricuspid market with both PASCAL and EVOQUE that's going to be differentiating and create this great market. We definitely believe that Mitral TEER is going to continue to grow very heavily with Pascal is going to continue to accelerate and grow hopefully above market there. And we see that Mitral Replacement is going to come online as well and be another additive thing. When you take all these pieces, yes, we're not quite sure what the number they all add up to, so we didn't update our 2028 number. We expect especially now, hey, we get through a full year revoke in understanding how the revolution of Tricuspid is going to take off. A year from now, we'll be able to give you a better number. We just -- we don't have it now because we think we just see a lot more uncertainty based on how fast each of these markets grow, but we're excited for the opportunity for patients. I don't know, Scott, looks like you want to say something on that?

I was just nodding in agreement, good explanation.

Jayson, did you have a question?

Jayson Bedford from Raymond James. I guess maybe for Daveen, can you frame the initial market size for EVOQUE upon approval and then just the strategy for indication expansion?

Can I frame it? Well, it's an initial market where today, there's very few people being treated for Tricuspid disease. There's a very small number of being done with surgery, whether mostly very few isolated, like they're in the U.S., a couple of thousand isolated patients, right , for Tricuspid, and a handful more we think. But those are -- that's not really the patient group we're looking at, and there's a handful of off-label patients sometimes being done, that always exists. So it's -- we know though that from our trials, especially TRISCEND II, we saw really fast enrollment and we saw really fast enrollment like PARTNER I levels enrollment. So we know the patients are there. So how the exact number of patients already in the system, hard to get, but we do have this really nice gauge that -- there is a lot of interest in technology. I was at London Valves a couple of weeks ago, right? And that was the first time we had a vote there at our booth, right, public kind of booth. There was like a line of physicians to like see the new technology. That tells you there's definitely interest. And so for us, obviously, the focus really for the European launch now and the U.S. launch we get there is just kind of training center at a time, building up, helping centers continue to create or expand their Tricuspid referral program because if you're in Europe right now, you already have some Tricuspid referral program from the recent launches of TEER in Tricuspid, but this is an opportunity to really grow it. In the U.S., there's going to be -- there aren't a lot of strong Tricuspid referral centers, there's some that come from people who are in the trial, et cetera, but that's got to be built up as well. So that's kind of how we see the expansion of the therapy. I think you mentioned indication expansion as well for Tricuspid. With Europe right now, we have an indication for commercially unsuitable products, surgical and TEER ineligible products. We're excited by our 1-year data set, our trial in the U.S., the big randomized patient trial is for severe tricuspid regurgitation. So we think we'll see what that means for U.S. indication. But in Europe, I think that data set is really important for us to continue to have a broad indication with a vote because we didn't have that data set -- or the full data set when we submitted in Europe and got that approval. Does that kind of answer what you're going to end? I know it's kind of a...

Yes. I was looking for a few numbers, but that's...

Suraj?

Suraj Kalia, Oppenheimer. So one question for Larry and a follow-up for Daveen. Larry, I just want to piggyback on what the other Larry asked, in your slides, you mentioned compelling data in EARLY TAVR. So in severe symptomatic sSAS, we know the penetration, let's say, it's 13%. I know a few years ago, you all have given numbers of 650,000 is the total market. We know the challenges so on and so forth. In your mind, and also for EARLY TAVR, I don't think so we are going to get an indication, correct me if I'm wrong, progressing to symptomaticity. So what does compelling data mean in your mind, for EARLY TAVR to jump? And I understand the AI part. But specifically in data, what would compelling mean?

I think there are several different options for what could be compelling. If we start stress testing these patients and it turns out, none of them are truly asymptomatic when they're properly stressed and so few patients get stress pass. But now we'd sort of say why are we going through this whole process? If people crossed over very quickly, if they had a very quick progression time and right now, the guidelines they follow these patients annually then you're basically saying these patients are going to get missed when they come through. I think the other thing is do bad things happen to patients while they're waiting? Do they have events? Do they have clinical events, do things happen to them? So I think there's many, many different ways the data could be compelling, and we're just going to have to wait to see the data set. But as I talked before, I think the benefits to getting the asymptomatic indication of changing the mindset in terms of when patients could get referred is also going to have an impact on patients with mild symptoms. I think there's a lot of patients that are that are sitting there with mild symptoms, and they're just older and they're slowing down a little, but the doctor doesn't feel they're ready for the intervention yet. I think it will take those patients off the table. I think the -- and when you think about layering over this AI, it's always going to have a limitation if you're laying over the AI, but there's still a -- somebody has to look at the patient and judge their symptoms in between before they get the referral. If we take symptoms off the table for that and say, no, symptoms shouldn't play a role in the diagnosis then you can literally just look at their medical record and say, A plus B equal C, they should get referred and they should go. And so I think it enables a lot of that activity, and that's why I think the trial is important. But I think there's a number of ways that data could be compelling.

One follow-up for Daveen. Daveen, EVOQUE mid-'24 launch, which is timeline has pulled up. So the data is going to come after you guys have started launching. Maybe just walk us in terms of how you think about the imaging component for EVOQUE and also the reimbursement framework as we'll start launching in the second half '24.

Yes, the 1-year primary data set, the full complete data set we expect in TCT. So we do expect approval before that. So that is true. Yes, right on the right side of the heart, right? The tricuspid side is different in imaging and a little bit more challenging than the left side of the heart. That's a fact. And so I got this question last night for folks, the expertise requires buildup of expertise over time. So when we work with a lot of centers in the TRISCEND trial or the Class II TR side, we're working with them and helping understand how to image the right side of the heart when doing the intervention. So that's a newer scale. And our teams with EVOQUE, when we first started doing this therapy 4, 5 years ago, we help create a lot of this stuff. It's awesome. It's fast things. So we have a way we know to do it. We have a way we can help train centers, and we've seen that it can be effective from not only the trial sites in the U.S. through EVOQUE or Class II TR, but from our European PASCAL experience as well. So that's been cool to go through and see that kind of occur. Switching over to reimbursement. If you think about payment, right? So it is -- we've already applied for a new technology [ add-on ] payments. So that's public information, you can look on the website. And so if for that to occur in the right timeline, we expect incremental payment going to a hospital based on all these equations of costs, et cetera, which starts normally October 1 of the fiscal year. So that would be an October 1 kind of start. So that's kind of the payment. But otherwise, luckily, our therapies as they were in the trial, they're under the existing DRG. So there is a hospital payment. They're not getting something. They're getting the existing TEER/TAVR kind of payment scheme. So they are getting a good chunk of money to help pay for it and we do have physician coding in place for that as well. So we feel pretty good about that, and we're continuing to work at it.

Maybe a small thing to add on the imaging front, the requirement for imaging, for EVOQUE in the replacement is way easier than the imaging requirement for a TEER in the tricuspid position. So we have seen that. In most of the cases, with EVOQUE, physicians are able to conduct a procedure in an hour in average. And again, all of these cases were very early, correct, we didn't have any experience. So now we're for something new, a new technology compared to Tricuspid TEER, usually, it is taking even longer. So imaging requirement for Tricuspid replacement easier than Tricuspid TEER.

And one other point is the variability is less, and that's actually a key point because in Tricuspid TEER, you can sometimes get these difficult cases where you're trying to glass on the leaflets and so it adds a lot of time. In the predictability, right, predictability of EVOQUE where the standard deviation of time, we believe is -- from the day we've seen is much more narrow. It will allow hospitals and cath labs to be more efficient. So you could add, a couple of TAVRs, and I can do an EVOQUE,and you're not like, "Oh, I'm going to block off the whole afternoon in case this case goes along. I don't want to play in that other case". So that's the predictability component of that relatively short time is a nice benefit with replacement.

I will say we've really learned that in the TAVR space. When we first started TAVR people would only schedule 2 cases a day. They get to 1 in the morning and 1 day afternoon. And it wasn't because every case took 3 or 4 hours. It's because they didn't know whether the case was going to take 45 minutes or whether it was going to take 2 hours. And if your first case ends up taking 3x as long as you thought, it screws up all of the schedule for all the rest of the day, and you have patients in the hospitals and they need to move through in a certain cadence. When we got to -- especially with SAPIEN 3, we got to an incredibly predictable procedure. We have many, many centers in the country that are stacking 5, 6, 7 cases in a day because they know every case is going to be done in 40 minutes to an hour, and they can schedule their time very, very reliably. And so That's, I think, one of the real advantages that EVOQUE has where TEER still has a wider variable amount of time that it takes to do those cases. And -- and I think it helps on stack cases.

Still in trial, in a day there's 3 cases done in trials like that's also like it's predictable.

Shagun?

Shagun Singh, RBC Capital. Larry, a couple of questions for you. Firstly, just on TAVR. I think you guys specifically alluded to the low end of growth in '23, 10% to 13% versus prior commentary of 10% to 13%. You may have talked about it on the Q3 call, but just any color on Q4. How things are trending on asymptomatic EARLY TAVR? Can you talk about your specific strategy for patient identification. You did allude to it, but I'm just thinking about the ramp? And is this going to be a harder population to tap into versus low risk? And then just the last one on TAVR. With respect to progress, obviously, you've pulled forward the timelines there. What is now assumed in that $10 billion number in 2028 for asymptomatic as well as moderate AS?

You guys ask the best questions. As it relates to guidance in Q4 color, I'm going to turn to the guy on my left because I like to keep my job.

So I mentioned we're on track with the expectation that was baked into our guidance for Q4. And as a result of that being on track, TAVR specifically will come in for the full year at the low end of 10% to 13%. So it's consistent with the expectation when we provided guidance for Q4.

So for EARLY TAVR, for the patient identification, we -- on our clinical trial sites, and they have patients that get referred to them and they have an echo. There's a lot of reasons that patients might referred for an echo, and they identified [ valve ] stenosis but the patient just doesn't -- isn't exhibiting symptoms left yet. And there's a lot of patients that are that are being held in the queue awaiting symptoms. And so that's largely where we drew from the EARLY TAVR trial. I think long term, though, that's not the strategy. I think long term, the strategy is, again, applying this overlay of AI, extracting this data, taking all the judgment out and then just these patients being able to move directly to a heart team for assessment. And I think taking -- every link in the chain is an opportunity for people to fall out and for bad things to happen. And especially when you ask people to apply judgment, especially in an elderly patient that may have other comorbidities. Taking that judgment off the table, we think, just streamlines the entire process and it takes a big -- patch is a big hole in the bucket where I think people -- where we see a lot of leakage. In terms of the $10-plus billion, we do see progress coming in very late in the strat-plan period. So there's a little bit of that, but it's not -- I wouldn't call it the primary driver.

Bill?

Bill Plovanic, Canaccord. So conceptually, I get the in-system strategy that you're putting in place, but I was wondering, executionally, how long does it take you? You've got 850 centers plus minus in the U.S. You've got to get in there and you'll get them to agree to look at the data, how long does it take -- first how long does it take to get them to agree to that. Secondly, how long does it take a look at the data. And then third, to implement the AI you're going to flow over the top and get through the -- all the tech and back-end stuff. Is this something that you think you'll be able to execute within -- is this a 5-year project? Is this a 2-year project? How should we think about that and the kind of the roll in of that into the numbers. That's it for me.

Well, it really is just that easy. It's -- I think it depends a lot on the hospital system. I will say we have some hospital systems that they see the data coming out. And when we engage with them, they're asking questions and they're kind of like we're worried, maybe we're not doing as good a job as we think how can we work together and how can we do that? And we can get pilots off the ground pretty quickly, and we have some good partners that we've been doing that. I think there's other centers that have their head in the ground. I think there's the issue of once you do turn it on, then they have to really start adding the capacity and they really have to start adding those things. I think what we're going to see is we're going to see some -- like we do with a lot of therapies. We're going to see some really early adopters that are going to say, we're going to change this. We're going to get ahead of that quality metric. We want this to be a real campaign that we have that we treat X number of patients. Under that 90-day window. And then there's going to be some people that are going to get straggle along. So I don't think it's going to be a light switch. I think it's going to be more like a dimmer switch that we'll continue to turn on. But I also may think that, that we're not going to see like one bolus of it, and then it's over. I think it's going to be something that's going to continually do feed our growth over the next several years. But I'm very encouraged where the pilots are. And again, I don't think you guys have ever heard me be so definitive about. I know the patients are there. That is a reflection of the pilots that we have run. And in every single place that we run the pilot, we have not found one single example where they treated 90% of their patients and they do it within 30 days of diagnosis. We haven't found one single example of that. All of the examples are on the other end of the spectrum. And -- and that's why I have conviction we're on the right path. I think the biggest learning for us that's different maybe than what we've talked about in the past is we thought evidence generation and just showing this to the world and the [indiscernible] study and all this other study, it would be enough to make people self-reflective, and it's just not.

Yes. But you think though, Larry, we had plenty of learnings. We know what we have to do. Larry as a team to execute a plan here. So we feel confident that the patients are there and we know what to do. We see what is giving us confidence here.

Rick?

Rick Wise, Stifel. A follow-up question maybe for Daveen. I was lucky enough to spend some time with the M3 team last night. And it seems like -- I don't know, I'm not smart enough to know, but the M3 seems more credible now and sort of ready for prime time. I was hoping you could talk a little bit about how the technology has evolved, where we are now from that perspective. And maybe your latest thinking about the potential population to be addressed with this first. I appreciate the trial is going to happen the day is going to be good or not, hopefully, it will be good. And there'll be an initial indication, but is replacement back because of M3 now?

Maybe for the technology side of things because it was developed within a TAVR in a business unit, it is best for Larry to talk about that. And Daveen can talk about the indication.

Yes. So we've learned a tremendous amount. I mean, I think everybody has figured out that [ mitral ] replacement has probably been a little bit more challenging than what people thought initially. We may have to make -- the thing that was really attractive about M3 for us is there's no mystery of the valve platform. So we've had indications for treating mitral valve. We've had indications for peak treating, mitral valve and ring, and we also have had clinical trials going on for treating mitral valve in MAC. So for patients that are not surgical candidates due to Mitral annular calcification. So we know that our valve performs really well in the mitral position and all those procedures require transseptal delivery and putting the valve in either the diseased surgical valve or in the ring or in the MAC patients. So that part of the procedure is all known and it gets done all over the country literally every day. What we had to do is we had to figure out how to get the dock there and how to get the dock there repeatedly and reliably. And a little bit of the learnings are once TEER got approved, that changed the patient population, the substrate that we were working in because there became more TEER ineligible patients than eligible patients. And so I think we've got the dock to a place that it's commercializable. And I think it's -- we're very pleased with how it's gone, the fact that we enrolled a 300-plus patient trial in the time frame that we did it, I think, is incredibly encouraging. I think that speaks to the confidence that clinicians have in the procedure, that is a good procedure for their patients. Obviously, we need to see the results from that trial. But Daveen can talk about how we sort of integrate the mitral patient and figure out what the best therapy is for that patient. And that is going to define really what the split is between replacement and repair.

Well, I mean, ultimately, right, you see this trial is a single-arm trial done with TEER and Surgery ineligible patients, and it enrolled very well. So the reality of mitral here today is a fantastic therapy. It's gotten better and better through the over a decade as a therapy and it continues to get refined. The reality is even with that, there are still tons of patients who are TEER ineligible. And that's why the initial indication for us is this TEER ineligible indication we were able to enroll in a single arm, and we're able to hopefully officially get it to market and get great results. Over time though, we'll see that as mitral replacement as a therapy continues to evolve as technologies. M3 is, as Larry said, already a lot of iterations in and we've still got more iterations we're working on, just like every technology we got. We're always working on new iterations as it continues to evolve, we'll then see, hey, is this technology right for other types of trials, other types of trials some of our competitors may be doing in the mitral space or what other patient groups make the most sense. So I'm confident that mitral replacement is going to add a lot of patients to the pool. Where it then goes, we'll see as we continue to get this in the marketplace, get more usage and understand what does the technology need to be to continue to expand. We know it will expand. We know we'll keep do iterations. We know we'll keep getting better at the technology. So I hope that kind of helps.

Probably time for one more question. All right, to Danielle and then Joanne.

Just a quick question on valve-in-valve actually because that's starting to become a topic. I know we don't have a ton of data yet with TAVR and TAVR, but we have a lot in TAVR and in surgical valves. So just curious about what -- how you guys are thinking about that through the 2028 time frame and how incremental that could be to that $10 billion number?

No, it's a great observation, Danielle. We -- we expect valve-in-valve to be an increasing contributor over time. And I think one of the things that we saw in the surgical space is when TAVR got approved and people saw the potential to do TAV-in-SAV, we saw a shift even more of a shift from mechanical valves to biologic valves because patients can come back for valve-in-valve and a lot of those went into much younger patients. And so that's the whole design proposition for INSPIRIS, is if you're going to do surgery out of patient at a younger age, make sure that they're a good candidate for lifetime management. I talk about lifetime management and TAVR. But I don't think the equation is really any different in surgery. You got to put a degree -- index procedure, but then how do you give them a durable outcome, but then how do you manage that patient when they come back. TAV-in-TAV is going to be the next horizon. Now that we've got low risk approval now for 7 years. As those patients live longer and longer now live their valves, we think TAV-in-TAV is an important part of our future. I will say, from an R&D standpoint, as we've evolved over time, our 100% focus back 15 years ago was just get the patient through that index procedure and we are about improving that index procedure. Now you think about our platform development, it's about how do we have a great platform for the index procedure. How do we make sure it's a great host valve for that next procedure? And then how do we make sure it's a great guest for that next procedure that comes along and maintain all the versatility of our platform that we can do pulmonic. We can do valve-in-valve. We can do M3, we can do all these things with it. And that versatility of our platform, I think, is one of our real strengths.

Joanne?

This may seem a silly question given how much you have going on in terms of clinical trials. Why is 17% to 18% the right percentage of revenue to have? And is there a moment in time where you say, let's lean in and make it higher or a moment of time where you say, "You know what, you've invested a lot, particularly as our revenue base goes higher".

Yes. I can start with that. So look, our screen is always what can we do to drive long-term organic durable growth. And we build the R&D portfolio around that. Our belief is that over time, we're going to have sufficient capacity to both accommodate additional clinical trial activity for our current valvular structural heart businesses as well as accommodate investments and trialing in other adjacencies like the structural heart failure initiatives that we talked about. 17% to 18% is current. I can see it trending down from there over time. It's not guidance, it's just an observation that we expect our topline to outgrow our spend over time.

Thank you, Scott. So with that, let me close the meeting. Thanks to all of you who come all the way to California. I hope you enjoyed here last night. I hope you enjoy here today. I think it is, I believe, an exciting day for Edwards and for our employees. We never want to close the meeting without having a video, a patient video because it is a great reminder of our work. Thank you so much again for coming, and we are going to have lunch together.