Edwards Lifesciences Earnings Call Insights: Stocking Numbers and PARTNER II
Edwards Lifesciences Corporation (NYSE:EW) recently reported its fourth quarter earnings and discussed the following topics in its earnings conference call.
Larry Biegelsen – Wells Fargo: Okay, let me start with the question on the U.S. launch. $16 million in stocking in Q4, Mike on the last call you said you expected a few million dollars in stocking. So, am I thinking about this right, if you had come in that stock just a few million dollars, you would have fallen below the 230 to 240 in your U.S. SAPIEN guidance. Is that fair or am I doing the math right and maybe you can talk a little bit about the difference in the stocking versus your expectations?
Michael A. Mussallem – Chairman and CEO: Yes, the stocking fairly was more than we expected Larry, and I think we thought it was going to be a lower number, and so you are right, there is a real impact here that the $16 million of stocking lifted us, but I think you need to look at a little bit of a broader picture here. There was such a rush for – to be trained on transapical that. We trained an awful lot of accounts more than we expected to train in the quarter and with that came the stocking orders. At the same time, there was a pretty tremendous queue of transapical patients that had been collected by hospitals and these are patients that could not have been treated with the transfemoral system and particularly here with the SAPIEN valve and its large delivery profile, it probably exasperated that number. And so what we believe happened here is kind of triaging effect where there was a real rush to be able to treat these transapical patients and part of that drove more training more transapical training than we anticipated and probably held down some of the transfemoral numbers in the quarter. We heard at least anecdotally that the number of our accounts, for example, when we had one day a week that were dedicated to the TAVR procedure and so those for the fourth quarter in many cases were exclusively transapical procedures. Hopefully that helps.
Larry Biegelsen – Wells Fargo: That helps. And let me use my second question on PARTNER IIb at ACC, maybe if you can talk about your expectations a little bit based on maybe some of the registry data we’ve seen from Europe. Will we see any of the nested registries also at ACC and just lastly do you expect a panel for XT?
Michael A. Mussallem – Chairman and CEO: Okay. Let me see if I can get them. Well, first of all, Larry, in terms of what we expect to see out of ACC, we really don’t have any insight to share on that one. You know how we feel about the SAPIEN XT valve. We think that that’s very good therapy but no real heads up here in terms of what to expect to see out of that trial. Your second question, Larry, just want to make sure…
Larry Biegelsen – Wells Fargo: Any nested registries Mike in that trial, any nested registries? And just lastly…
Michael A. Mussallem – Chairman and CEO: No, I don’t expect to have anything published on the nested registries. Anything is possible there but I’m not expecting that. And finally, you asked about whether we thought there would be a panel on PARTNER II on XT. We think it’s probably unlikely. When we gave you estimates on what to expect, we said that we would have a submission of the PARTNER II Cohort B by midyear and there would be about a 365-day review process. Again, that’s just an estimate on our part. That would be our estimate of how this thing would go and it anticipates that it’s unlikely there’s a panel, but FDA really hasn’t weighed in on that, so we don’t know. We would say it would be very likely that there would be a panel on PARTNER IIa since that’s a different group of patients.
Bruce Nudell – Credit Suisse: Mike, next year your guidance is in the U.S. is $390 million to $440 million and if I heard you right, it sounds like it’s going to be kind of a clean number devoid of stocking and probably not heavily influenced by clinical trials? In your mind’s eye what do you think that would represent in terms of penetration of the PARTNER I opportunity at least in the shorter term, for you can maybe recruit people or not refer today?
Michael A. Mussallem – Chairman and CEO: Well probably two very different points here. One is that in the 3.90 to 4.40 those are reported results, and so we would indeed say a little bit lift from clinical units particularly in the first half of the year, while we are still finishing up PARTNER II. And then actually stocking is going to go from being little less than the first half to be in a drag in the back half and that’s probably actually a drag on reported sales for the year-end total, at least that’s the way we model, that we never know exactly how this is going to turn out. And so that’s what’s in the number. In terms of how deeply where we penetrate, we think there is an awful lot of patients out there, Bruce, that are not treated. This whatever kind of results we would have in 2013, we think doesn’t come closely even getting after the potential population.