Edwards Lifesciences Corporation (EW) Earnings Call Transcript & Summary

Good afternoon, everyone. I'm Mark Wilterding, Head of Investor Relations at Edwards. Thanks, everyone, for coming back. I know there's a lot going on today at TCT, but really excited to see you all back here in person. And for those of you online, thanks for joining us as well. Big day for us here at Edwards. And we've got a great panel to talk you through the results of the TRISCEND II data that we showed earlier today. For the next 45 minutes, we'll have the panel on stage as we did on Monday, an opportunity for you guys to ask questions and we'll go from there. So real quick, I'll just remind you that we do have some cautionary statements here, forward-looking statements. Just to make sure you read through those. And with that, I'll turn it over to our CEO, Bernard Zovighian.

Thank you, Mark. Thank you, everyone. It's very impressive to see a full room. I know it is a Wednesday afternoon, a big week for all of you. We appreciate your interest in the company. And again, another exciting day for us, exciting electricity. It has been a great year for patient with this TRISCEND II study. and we are going to be focusing on TRISCEND II, but a big day for patients. These patients have a terrible quality of life and EVOQUE is a great solution. It is also a great day for physicians in the clinical community. They now have science to make their decision, medical decisions. And a great day for the company. We have been very successful with TAVR for 20 years. And I think EVOQUE, with this kind of data, with this kind of evidence, with this kind of impact to patient is super exciting. But I want to do a little bit like I did on Monday, and I want to bring you back. Like our TAVR leadership story about 8 years ago, 9 years ago, we had a vision to transform care for mitral and tricuspid patients. And we knew through our 65 years of pioneering leadership that these patients were diverse and complex at the same time so that adding a comprehensive portfolio was necessary, a comprehensive portfolio with breakthrough technology, science and partnership with physicians. You all know that we started with PASCAL. And PASCAL as a technology is differentiated. We are seeing a strong adoption. It is going very fast in the U.S. and in Europe and everywhere where we bring PASCAL to market into patients. And we see PASCAL in the tier segment as being a big opportunity in front of us. There is still a lot to do. There is still a lot of adoption for us to get. Second was EVOQUE, but first and only tricuspid replacement technology. There is a very high patient and physician demand. And Daveen is going to talk about it. So you are going to hear more from a physician standpoint and from Daveen's standpoint. There is more to come soon also. The SAPIEN M3 is going to be soon approved and it is going to be again the first transseptal -- mitral transseptal replacement technology available in the market in Europe first, next year and thereafter in the U.S. But today, let's stay focus on EVOQUE. And we have this very exciting TRISCEND II data presented this morning. So let me introduce our very impressive panel. First, Dr. Ted Feldman is our Senior VP of Global Medical Affairs for TMTT. As Ted, he has been a pioneer in structural heart, highly published, and he has been instrumental in the last 6 years with the company, bringing the mitral and tricuspid research to the next level. Dr. Susheel Kodali, Interventional Cardiologist, Director of Structural Heart and Valve Center at Columbia University, New York Presbyterian Hospital, one of our global TRISCEND II PI. Dr. Suzanne Arnold, Associate Professor of Medicine at the University of Missouri and clinical scholar for St. Luke's-Mid-America Heart Institute. And very important for this field, a clinical cardiologist, and a widely recognized expert in quality of life research. And of course, Daveen Chopra, our global leader of TMTT. So with that, let me turn over to Ted to start this conversation. Ted?

Great. Thanks very much. And I think I have only one slide with the trial conclusions. And I don't know who is controlling the slides. Great. Thank you. This trial is the first randomized trial in tricuspid valve replacement. And first, both from the perspective of many years' history, of surgical tricuspid valve therapy absent any randomized controlled trial evaluations and brings us the first approved tricuspid valve replacement device, also including even in the universe of surgical therapies. So the design of the trial as a randomized prospective evaluation of this therapy. You saw the results earlier this morning. I was pretty key in leading us to this pathway. And I just want to emphasize a couple of points about the trial. First, that we received breakthrough designation from FDA for the EVOQUE device because it serves a truly completely unmet patient need and that allowed us a 2-part trial, and Dr. Kodali presented the initial phase of the trial 1 year ago, 150 patients with 6-month data. And that, in fact, was the basis of FDA approval. And today, the primary outcome of the trial, which is a 1-year composite, and Susheel will talk about that for a moment. So on the one hand, this is a very heavy lift and a remarkable achievement. On the other remarkable in that from first-in-human implant to FDA approval was barely 4 years. And I think that's a record in terms of a completely new category of therapy receiving an approval in the U.S. Dr. Kodali.

Sure. So I think most -- as you have probably seen in the presentation, I was fortunate to be one of the global PIs along with Becky Han and [indiscernible]. This was a global study -- this was sort of the culmination of a lot of work. And Ted mentioned that tricuspid regurgitation is sort of an unmet need, and we've seen that and journey started 10 years ago, and we've started with other devices and it's trying to understand how do we give -- provide treatment options for this population. And this is really sort of the culmination of all of that, to get to an approved device. The trial was -- as Ted mentioned, do you want me just high line results or -- okay. So we -- it was a randomized trial, 2:1 randomization, to the technical success and the ability to deliver the valve was excellent, more than 95%. The safety events were similar to what we saw before in the 150. There is some bleeding risk, which I think can be mitigated with some of our sort of clinical pathway changes in terms of how we anticoagulate and how aggressive we are. There were conduction requirements for new pacemakers, which were, again, similar to what we saw in the initial 150 and something that we continue to look at more closely. But for the primary endpoint, which is a hierarchical endpoint of safety and effectiveness, and this is a higher end point, looking at hard endpoints such as mortality, tricuspid valve intervention, but also other endpoints such as quality of life, 6-minute walk and NYHA class, comparing TTVR versus EVOQUE was highly significant favoring TTVR. And to -- sort of that was using the Finkelstein and Schoenfeld just showing that there was a difference. But to calculate the magnitude of effect, we used the win ratio and win ratio basically compares the patients into 2 groups with each patient being compared to every other patient. And you just calculate the number of wins. And then you basically look at all-cause mortality with patient one compared to each one and you get all these pairs. And when it is a tie, you go to the next event and the win ratio was 2.02, which was -- again, highly significant. So clearly showing benefit. We also showed that the procedure was feasible as I said, but also eliminated TR. And I think that's one of the differentiators from repair technologies is that replacement eliminates TR, where 99.1% had moderate or less than 95% had mild or less. So this was -- valve works. And at 1 year, we saw good stability of valve results, and these patients will continue to be followed out to 5 years with serial echo. So continue to follow that. And I think that this is sort of the initial results. And then I'll let Dr. Arnold sort of comment on some of the quality of life results, which was -- she presented separately in this morning's session.

Great. So I'm Suzanne Arnold and I'm a outcomes researcher in clinical cardiologist. And the one thing I want to kind of mention before I get into the details of the results is, I presented the health status outcomes from a lot of different trials. And typically, what happens is the clinical results get presented at one meeting and then the how status results get presented at the next meeting because it's considered secondary. It's not quite as important. And this is really interesting trial for me because it's been one of the first ones where the clinical results and the health status results were prioritized both, and they were both presented at the same meeting. And I think this really highlights the importance that these health status results were placed because they're so important to these patients. And so I just want to highlight that because it's really important to somebody who takes care of these patients to see highlighted. In terms of what we saw, we saw that the TTVR arm had a moderately large improvement in health status that was present by 1 month. But this continued to grow through 6 months and was stable through 1 year. And at 1 year, that treatment difference was 18 points. And just to put that into perspective, 5 points is considered a minimal clinically important difference on this measure and 10 points is a moderately large improvement. So this is a really large change that was seen in the intervention arm.

Thank you. I think we are ready to take questions?

We are, thank you very much. And the first question from Anthony.

Anthony, Mizuho. Congratulations on the data. I guess the first one would just be the level set symptomatic severe tricuspid regurgitation, how many of these patients are out there? And do you think that this data will drive earlier intervention versus optical medical therapy in the near term? And then we think of quality of life versus mortality, mortality wasn't there. But at the panel, they mentioned that the mortality rate overall of tricuspid is low. So really, the quality of life should be heavier weighted in the decision-making process, just considering again that there is lower mortality versus aortic, so how does that play out?

So maybe let me start, and I will ask Ted or Daveen or Susheel to further comment. I will make two comments. The first one is, it was one of the fastest enrolling randomized trial. And it is always a leading indicator that there are many patients in need and that physicians are trusting the technology and they don't have any other solution. The second one is a little bit of a comment that we made on Monday for aortic stenosis, where when it is one of the first study in the space. We don't know well about this disease at the time, 20 years ago. We believe that aortic stenosis was not necessarily as big as it is today. And so these are two leading indicators tell us that, you know what, it's probably bigger than what we think, and we are going to learn more. I think who wants to go next? Ted or Susheel?

To address the potential population size, there's a number that is cited repeatedly in the cardiovascular literature that there are 1.6 million patients with severe or greater TR in the United States. That number is derived from old population data and is probably wrong. And if we're going to call it wrong, it's because it is based on information that's 20 years old and the population has grown and aged. So if I would have to imagine, it's an underestimate if it's anything. So that's one key point. And that said, there isn't a specific measure. Nobody has ever looked really hard to try to figure out what is the universe in the U.S. of severe or greater tricuspid regurg. The idea that mortality is low depends on the population that's studied and when we started working on designing these trials, we were looking at retrospective historical data that suggested 1-year mortality rates between 30% and 40% for severe or greater TR. And we've subsequently come to appreciate that those are mixed populations mostly with left-sided heart disease and left heart failure who were captured in older echo databases. And we've done some population exploratory studies now and published them. There's a Colin Barker paper from 2 or 3 years ago that we produced that do show that depending on how you look at the population, the annual mortality rates for isolated tricuspid regurg in an older population tend to be closer to 10% or 15% than they are to 40%. And that you get those higher rates only with patients who have multiple left-sided heart problems. So I think those are a couple of your bigger points, other comments.

No, I think I agree. And I think the population is a little bit uncertain. What I can say is that as our population ages, HFpEF increases, atrial fibrillation increases. These are all determinants of what caused right-sided heart disease over time. Now we're going to get better at managing them. But right now, this is a therapy that we get a fair number of referrals for. I would say I get more referrals for tricuspid than mitral right now because there aren't good treatment options. I think that lack of treatment options and these patients are very symptomatic to drive a lot of this. And we're seeing quite a bit of that, and we work with our heart failure colleagues quite closely on it. The issue of mortality is an intriguing one. And I caution us to say that there is a mortality benefit with this therapy. This study wasn't powered for mortality. This patient population we enrolled right now didn't show a mortality benefit. But there are -- I strongly believe there are groups that are going to have a mortality benefit. These -- if you -- in the -- whether it's patients with more severe TR, whether it's patients with -- what we do know is atrial functional TR, the mortalities are low. But ventricular function and others, it's high. And you enroll a higher population -- I'm sorry, in patients that are very sick you are going to drive benefit. And I think we just don't know the groups that are going to get the mortality benefit. There is quality of life seen throughout, but we need more data. We're going to continue to identify those patients. But these patients are also coming and are self-referring to an extent, too, as we see more and more of this data because when you have lack of treatment options, this is what we see. And this we saw this with TAVR in the early days when patients were inoperable and didn't have options. So I think this is beginning of data. We're going to continue to get more. But there's clear benefit in quality of life, but I do think there's mortality benefit, but I just can't say where we're at right now.

Danielle?

Danielle Antalffy with UBS. I was just curious about how the data that we've seen today, sort of changes in conversation between intervening via tier versus replacement and sort of how you see that evolving over time? I mean, obviously, Edwards will eventually have it to your product as well. But just curious about how that plays out over the next few years?

No, I think it's an important point. It's going to be a lot of discussion. What I would say is there are anatomic restrictions to both therapies, but that's not the entire cohort. So I don't know what that number is, but maybe there's some bars on side where TTVR is not an option because you not anticoagulation candidate or the RV functions to poor or whatever reason. And there a lot of patients where TEER is not a candid because of leaflet complexity, 5 leaflets instead of 3, pacing leaves, leaflet tethering. And fundamentally, I think if I'm going to choose a patient -- if I don't think I can get their TR down to mild to moderate or at least moderate with TEER, then I don't think that's a therapy I'm going to pursue if TTVR is an option. And that's sort of my bias. And so I look -- can I an anatomically -- and as I look at clinical factors, someone's having hepatic congestion and ascites, I really want to eliminate TR. And so in that patient, I might say, I'm going to do replacement more. And I think there's a lot of people where replacement is going to be an easier procedure because just being very honest, the imaging requirements for TEER are higher. The availability of good echocardiographers. I mean, interventionalists are, in some ways, everywhere, but it doesn't. But the structural images are much more limited. And the imaging burden for TEER is higher. That being said, whether it's TriClip or PASCAL, there's a clear role and there's going to -- and we're going to continue to see that. But I think both are great options for patients. As long as we can get reduced TR, at least to moderate or less, in my opinion, or eliminate it. And so we have to be able to say we can do it. And -- but that's how I choose. I don't know if anyone feels differently.

I would echo your comments and say I think about it as a Venn diagram and the giant universe of severe symptomatic tricuspid disease as we think it's really large. We don't know how big. And at this stage, all we know is that we have within that very large circle, a group that are treatable with TEER. And part of that group that are ideal for TEER. And then a zone of no overlap where EVOQUE, we know can be used successfully. The overlap, I think, is where there's a lot of uncertainty. And today, with -- in most parts of the world, only one tool on the market, people will try TEER, knowing that they have a low level of confidence that they're going to get a great result. And where replacement and repair settle in that zone is going to take a long time to develop.

Yes. And we're just going to need to collect evidence base for it too and look at it.

Rich Newitter from Truist Securities. Congrats on the data. Two for me. The first is just on the pacer rate. And I'm curious just to hear your thoughts on that. What steps can you take to potentially kind of alleviate that aspect going forward in product iterations, et cetera? And then just the second question I'm going to have is just on the crossover. Can you just talk a little bit about how you think that might impact what we'll see at 2 years? And how is that accounted for when you guys kind of initially put the trial together?

Maybe let me make a quick comment and Daveen, you can talk about what we have in mind in terms of iterations here. What you can count from us is do what we did for TAVR. Remember, we had 5 generation of SAPIEN platform. The first one to Ultra RESILIA today is very different. In 15 years, we were -- we had the best platform always, but we improved our platform always. And here, we have the same vision and Daveen is leading this one.

Well, just a couple of points. If you look at PASCAL today a couple of years out, we're on our third generation. For EVOQUE, we've already started our second generation couple of years back. So we are -- and one of the things we are trying to look for from design is how as we understand what causes pacemaker rates, how can we potentially from a design, help optimize and reduce that. So that's definitely front and center on our line and something we'll look to improve, and we believe will improve with future generation.

Any other questions?

The second part of the question? The crossover?

About that -- I mean I can make a quick comment. Yes, it's going to be an issue in terms of the 2-year data. Majority -- we're going to have such a small cohort of 2 years, and it's going to be a biased cohort of probably patients that are actually doing okay that the 2-year data isn't going to answer those questions that we'd like to. Obviously, to a point of mortality before. I think same is correct. If we follow these patients long enough, I think these curves separate, we're not going to be able to get that in this study with the crossovers.

David?