Edwards Lifesciences Outlines Growth Strategy at Annual Investor Conference
Edwards Lifesciences Outlines Growth Strategy at Annual Investor Conference
2014 Growth Impacted by Early TAVR Competitive Launches; Strong Pipeline Positions Company for Sustainable Longer-Term Growth; Transcatheter Mitral First-in-Human Procedures to Begin This Month
NEW YORK, NY -- (Marketwired) -- 12/09/13 -- Edwards Lifesciences Corporation (NYSE: EW), the global leader in the science of heart valves and hemodynamic monitoring, will discuss the company's strategy for longer-term growth, provide an update on its technology pipeline and share its financial goals for 2014 during its annual investor conference today in New York City. Edwards will also reaffirm its current 2013 total sales and earnings guidance, which includes diluted earnings per share of $3.00 to $3.10, excluding special items.
"We expect 2014 will be an important year for Edwards Lifesciences as we bring next generation transcatheter heart valves to three key geographies," said Michael A. Mussallem, chairman and CEO. "We continue to invest aggressively to provide breakthrough innovations for patients with unmet needs, positioning Edwards to extend its leadership and drive sustainable long-term growth.
"While patient demand for our SAPIEN transcatheter valve therapy remains strong worldwide, Edwards will face new competition in the U.S. and Europe early in 2014. With the uncertain timing of these competitive entries, as well as the regulatory approvals of our own next-generation technologies, we are providing a wide range of forecasted THV sales. As such, total global THV sales for 2014 are estimated to be between $700 million and $820 million."
During the conference, Edwards' management will present the company's financial guidance for 2014, which include total net sales of $2.05 billion to $2.25 billion, a gross profit margin of approximately 73 percent, a wide range around a diluted EPS estimate of $3.00, and free cash flow(1) of $325 million to $425 million, with all guidance excluding special items. "We also expect to continue our investment in research and development of approximately 16 percent of sales in 2014, which positions us well to serve many more patients with our innovative technologies," said Mussallem.
Among the specific topics to be discussed at today's event are:
-- Transcatheter Heart Valves - Building on high procedural success rates and distinguished clinical evidence, Edwards expects to maintain its leadership position with the introduction of next-generation transcatheter valves in the U.S., Europe and Japan. In the U.S., the company anticipates receiving regulatory approval for Edwards SAPIEN XT during the first half of 2014, while the company's Edwards SAPIEN 3 valve remains on track to receive European regulatory approval by the end of 2013. In Japan, where market conditions and reimbursement are favorable, the recent launch of SAPIEN XT is progressing well. Total THV sales in Japan for 2014 are estimated to be $40 million to $50 million. Patient enrollment in the study of Edwards' self-expanding CENTERA valve with an enhanced delivery system is expected to commence in early 2014, with European regulatory approval targeted for mid-2015. U.S. trial enrollment for SAPIEN 3 is well underway and FDA approval for this cutting-edge valve is anticipated by mid-2016. -- Surgical Heart Valve Therapy - Edwards is making substantial investments in new surgical valve technologies designed to extend its leadership by enabling less invasive procedures and improving patient recovery. In 2014, the company expects to initiate the European commercial launch of its enhanced EDWARDS INTUITY Elite valve system, aided by the recent approval in Germany of higher reimbursement. Also during the year, Edwards plans to complete enrollment in the U.S. clinical trials of both EDWARDS INTUITY Elite and the GLX advanced tissue platform. Additionally, the company will discuss the Zeta next-generation surgical valve platform, designed to broaden tissue valve therapy options, especially for younger patients. Edwards expects to generate Surgical Heart Valve Therapy sales of $810 million to $850 million in 2014, representing a 4 to 7 percent underlying growth rate. -- Critical Care - In 2014, Edwards expects to build upon its global leadership in hemodynamic monitoring systems by broadening the application of the company's technologies for enhanced recovery of moderate and high risk surgical patients. The company also plans to introduce its ClearSight noninvasive platform, which is being integrated into its EV1000 monitor. Additionally, Edwards will update its GlucoClear hospital glucose monitoring system, which has potential to address a large unmet need. Critical Care sales are projected to be $535 million to $575 million for 2014, representing 3 to 6 percent underlying growth. -- Transcatheter Mitral Valve Development - With extensive experience in pioneering the treatment of mitral valve disease, Edwards is well positioned to lead the development of transcatheter mitral valve replacement (TMVR) therapies. During 2013, the company has conducted extensive work in the design, testing and preclinical study of a novel TMVR technology prior to initiating the first-in-human phase. As previously communicated, Edwards expects first-in-human procedures with its mitral valve replacement technology to begin this month. -- Additional Financial Guidance - Edwards expects a 2014 gross profit margin of approximately 73 percent, lower than the estimated 74 percent projected for the fourth quarter 2013. The change in 2014 is driven mainly by higher product manufacturing costs, particularly the SAPIEN 3 transcatheter valve, and a negative foreign exchange impact, which together more than offset a favorable product mix compared to the prior year.
In addition to Mr. Mussallem, other members of Edwards' management team presenting at the conference include:
Thomas M. Abate, corporate vice president and chief financial officer; Donald E. Bobo, Jr., corporate vice president, Heart Valve Therapy; Carlyn D. Solomon, corporate vice president, Critical Care and Vascular; and Larry L. Wood, corporate vice president, Transcatheter Heart Valves.
Guest Speakers to Provide Clinical Perspective Also speaking at the conference are interventional cardiologists Markus Kasel, MD, Director of the Structural Heart Programs at The German Heart Centre, Munich and Klinikum Augsburg in Augsburg; Randolph P. Martin, MD, Chief, Structural & Valvular Center of Excellence and Principal Advisor Marcus Heart Valve Center at Piedmont Heart Institute, Atlanta; Wesley R. Pedersen, MD, Director, Transcatheter Valve Therapy Program at Minneapolis Heart Institute Foundation, Minneapolis; Stephen R. Ramee, MD, Director, Heart Valve Program at Ochsner Heart and Vascular Institute, New Orleans; Samin K. Sharma, MD, Director of Clinical Cardiology and President of the Mount Sinai Heart Network at Mount Sinai Medical Center, New York; and cardiothoracic surgeon Michael J. Mack, MD, Director, Cardiovascular Disease at Baylor Scott and White Healthcare System, Dallas.
Webcast Information The Edwards Lifesciences 2013 Investor Conference can be accessed via live webcast at http://ir.edwards.com/investor-conference.cfm beginning at 8:30 a.m. Eastern Time on December 9, 2013. The webcast will also be archived on the Edwards Web site after the conference concludes.
About Edwards Lifesciences Edwards Lifesciences is the global leader in the science of heart valves and hemodynamic monitoring. Driven by a passion to help patients, the company partners with clinicians to develop innovative technologies in the areas of structural heart disease and critical care monitoring that enable them to save and enhance lives. Additional company information can be found at www.edwards.com.
This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements can sometimes be identified by the use of words such as "may," "will," "should," "anticipate," "believe," "plan," "project," "estimate," "expect," "intend," "guidance," "outlook," "optimistic," "aspire," "confident" or other forms of these words or similar expressions and may include, but are not limited to, Mr. Mussallem's statements; the Company's 2013 and 2014 financial goals or expectations for sales and sales growth, gross profit margin, earnings per share, R&D expense, free cash flow and other financial expectations; strategies to maintain leadership positions and lead in the development of TMVR; and expectations regarding the development and introduction of new products, indications and technologies (including expected timelines and outcomes of clinical trials, regulatory approvals, and first-in-human trials). Forward-looking statements are based on estimates and assumptions made by management of the Company and are believed to be reasonable, though they are inherently uncertain and difficult to predict. Our forward-looking statements speak only as of the date on which they are made and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of the statement. If the Company does update or correct one or more of these statements, investors and others should not conclude that the Company will make additional updates or corrections.
Forward-looking statements involve risks and uncertainties that could cause actual results or experience to differ materially from that expressed or implied by the forward-looking statements. Factors that could cause actual results or experience to differ materially from that expressed or implied by the forward-looking statements include unexpected changes or developments in opportunities for the Company's transcatheter valve programs (THV) and the ability of the Company to continue to lead in the development of its product categories; the rate of growth in the U.S. THV marketplace; the Company's success in developing new products and creating new opportunities for its products; uncertainties associated with the timing and extent of regulatory approvals, expanded indications and reimbursement levels for our products, particularly THV; unexpected quality or manufacturing issues; reimbursement for the Company's products; the impact of competitive products, particularly TAVR products in the U.S.; changes in currency exchange rates; actions by the U.S. Food and Drug Administration and other regulatory agencies; costs and impact of litigation; and other risks detailed in the Company's filings with the Securities and Exchange Commission including its Annual Report on Form 10-K for the year ended December 31, 2012.
To supplement the consolidated financial results prepared in accordance with Generally Accepted Accounting Principles ("GAAP"), the Company uses non-GAAP financial measures. The Company uses the term "underlying" when referring to non-GAAP sales information, which excludes discontinued and acquired products and foreign exchange fluctuations, and "excluding special items" to also exclude gains and losses from special items such as significant investments, litigation, and business development transactions. Guidance for sales and sales growth rates is provided on an "underlying" basis, and projections for diluted earnings per share, gross profit margin, and free cash flow are also provided on the same non-GAAP (or "excluding special items") basis due to the inherent difficulty in forecasting such items. Management does not consider the excluded items part of day-to-day business or reflective of the core operational activities of the Company as they result from transactions outside the ordinary course of business. Management uses non-GAAP financial measures internally for strategic decision making, forecasting future results and evaluating current performance. By disclosing non-GAAP financial measures, management intends to provide investors with a more meaningful, consistent comparison of the Company's core operating results and trends for the periods presented. These non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP and reflect an additional way of viewing aspects of the company's operations that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting the company's business. These non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with generally accepted accounting principles. Non-GAAP financial measures are not prepared in accordance with GAAP; therefore, the information is not necessarily comparable to other companies. The Company is not able to provide a reconciliation of projections for underlying sales and sales growth or projected gross profit margin, projected earnings per share guidance and projected free cash flow, excluding special items, to expected reported results due to the unknown effect, timing and potential significance of special charges or gains, and management's inability to forecast foreign currency changes and charges associated with future transactions and initiatives.
Edwards, Edwards Lifesciences, the stylized E logo, CENTERA, ClearSight, EV1000, EDWARDS INTUITY Elite, Edwards SAPIEN, Edwards SAPIEN XT, SAPIEN, SAPIEN 3, GlucoClear, and GLX are trademarks of Edwards Lifesciences Corporation.
(1) Free cash flow is defined as cash flow from operating activities less capital expenditures.
Edwards Lifesciences Corporation One Edwards Way Irvine, CA USA 92614 Phone: 949.250.2500 Fax: 949.250.2525 www.edwards.com
Media Contact: Sarah Huoh 949-250-5070
Investor Contact: David K. Erickson 949-250-6826