Edwards Lifesciences Earnings Call Insights: Europe Growth, TA Procedures
On Friday, Edwards Lifesciences Corporation (NYSE:EW) reported its third quarter earnings and discussed the following topics in its earnings conference call. Take a look.
Raj Denhoy – Jefferies: I wonder if I could ask a little bit about Europe. I appreciate the comments in terms of southern Europe perhaps falling off a bit, and then it was intriguing with the commentary around some of the more established countries in the U.K., France not expanding reimbursements. I’m curious what your thoughts are around when that might happen and what that could potentially do to the growth we’re seeing in Europe?
Michael A. Mussallem – Chairman and CEO: We had experienced a pretty good growth rate in the U.K. in the first half of the year, and that didn’t happen in the third quarter. There are limitations on the way that their payors are actually providing coverage to the local hospitals, and so they’ve already reached the limit at some hospitals and so we are working closely with them and we are hoping that we can get some coverage improvement, but it could take some time. In France, we (literally) expected additional accounts to be added that would have impact in the third quarter. Those had been previously approved. Those have just started to become added here in the fourth quarter. I think it’s an additional maybe 10, 12 accounts and the first of those have already come on line.
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Raj Denhoy – Jefferies: There’s been some conjecture that perhaps we’re seeing something structural in Europe with perhaps the demand for transcatheter valves perhaps not being so great or perhaps competition having better success there. Perhaps given the softness, if you just have any broader comments about your expectations for Europe and what you expect to see there over the next couple of years?
Michael A. Mussallem – Chairman and CEO: Sure. Well, first of all, I think we try to share here that competitively we’re just not seeing much. The 29 millimeter transfemoral valve was a boost in the trasfemoral position. The new transapical competition really hasn’t done very much to change what’s going on in that position and if we think about what’s going on more broadly I mean we literally saw a decline in the south of Europe, that’s the single biggest factor. Structurally, we feel pretty good about things. Germany, the biggest country, grew 13% and as we mentioned, it’s pretty solid in Europe with the GARY Registry having the results that they are demonstrating in real world conditions the new guidelines that have come out from societies, the very procedural growth rate. If you were at the London Vale Meeting there were 1,300 attendants. We think structurally Europe is going to be a very good transcatheter heart valve market.
Glenn Novarro – RBC Capital Markets: My first question has to do with Mike. You had mentioned that the societies like STS now has to submit I guess guidelines or protocols to the government for reimbursement. So, my first question is, how quickly can that occur and then second, is that what unlocks the TA backlog or can hospitals start doing TAs starting tomorrow?
Michael A. Mussallem – Chairman and CEO: Two different things; the approval of Cohort A is going to open up TA procedures for non-operable patients and that’s going to be significant group of patients and maybe the most sizeable in terms of the group of patients that we are expecting to be (driven). Separate from that, there were some groups of patients that were not covered by the approval of Cohort B. So for example, people that didn’t have transfemoral access, they were non-operable patients, but say their vessels weren’t big to get a SAPIEN valve into. Those required, if you were going to get paid by CMS, those required a special clinical protocol, because the TBT registry of the natural place to collect that data. We needed the cooperation of the (SPS) and ACC to submit. We expected that to happen really much earlier in the third quarter and there was quite a bit of process for them to work through. That’s going to happen next week. All the signs that we have from CMS is that they are ready to act on that very rapidly once it’s submitted.
Glenn Novarro – RBC Capital Markets: Just as a follow-up, if you’re assuming the next week or two, does that what’s giving you the confidence that fourth ramp would be there because of the next week or two hospitals can start unlocking the backlog?
Michael A. Mussallem – Chairman and CEO: We were prepared to ship immediately transapical and so, with the approval Cohort A that we just received this afternoon, that’s going to begin immediately in PARTNER sites. You know that the PARTNER sites are already trained to do transapical and so, that will have an uptake here right away. The rest of the hospitals that don’t have transapical training are going to have to go through that. That’s going to be a couple of quarter process, but that’s beginning immediately and it’s built into our guidance, Glenn. So we feel pretty comfortable in the U.S. that we are going to achieve this $230 million to $240 million range.