Edwards Lifesciences Outlines Growth Strategy At Annual Investor Conference

IRVINE, Calif., Dec. 9, 2015 -- 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 guidance for 2016 during its annual investor conference today at its corporate headquarters in Irvine, Calif. 

Highlights of today's conference include:

  • Projected 2016 global sales of $2.50 to $2.75 billion, representing underlying1 growth of 7 to 11%
  • Projected 2016 THVT sales of $1.2 to $1.4 billion, representing underlying growth of 10 to 18%
  • Estimated 2016 adjusted earnings per share2 of $2.30 to $2.40 ($4.60 to $4.80 pre-stock split)
  • Global TAVR opportunity now estimated to exceed $5 billion in 2021
  • Upcoming anticipated THVT milestones include late 2016 intermediate risk U.S. approval and initiation of a low-risk trial during the year
  • Reaffirming current 2015 financial guidance

"We expect another year of strong performance for Edwards Lifesciences in 2016 led by growth in SAPIEN 3 valve sales and continued leadership in our core businesses," said Michael A. Mussallem, chairman and CEO.  "Despite foreign exchange headwinds, we are projecting solid financial results next year while we continue to invest aggressively to provide breakthrough therapies for patients in need."   

During the conference, Edwards' management will present the company's financial guidance for 2016.  Edwards expects sales of $2.50 billion to $2.75 billion, which reflects an estimated $55 million unfavorable impact at current foreign exchange rates compared to 2015, due to the strengthening dollar. Underlying sales growth is expected to be 7 to 11 percent.  Additionally, the company expects a gross profit margin of 74 to 75 percent, diluted earnings per share of $2.30 to $2.40 ($4.60 to $4.80 pre-stock split) and free cash flow3 of $400 million to $440 million, with all guidance excluding special items.

Beginning in 2016, the company's adjusted earnings per share will exclude amortization expense.  "We also expect to continue our significant R&D investment at approximately 16 percent of sales to expand patient access to TAVR and pursue our focused innovation strategy.  This positions Edwards to deliver longer term growth and greater shareholder value," said Mussallem. 

Among the topics to be discussed at today's event are:

  • Transcatheter Heart Valve Therapy (THVT) – Building on the excellent clinical outcomes of its market leading SAPIEN 3 valve, Edwards is well positioned to strengthen its global leadership.  The company continues to anticipate a late 2016 approval to treat intermediate risk patients in the U.S., with a minimal contribution to sales in the year. Edwards will also discuss transcatheter valve product development, including the new Edwards SAPIEN 3 Ultra Transcatheter Heart Valve System, as well as plans to initiate a trial in 2016 to study patients with a lower risk indication. Based on expanded indications and the significant number of still untreated patients suffering from severe aortic stenosis, Edwards now estimates the global TAVR opportunity will exceed $5 billion in 2021. 

Edwards expects to generate THVT sales of $1.2 billion to $1.4 billion in 2016, representing a 10 to 18 percent underlying growth rate, even as competition intensifies.  

  • Surgical Heart Valve Therapy – Edwards is well positioned to extend its leadership in the surgical heart valve product line with the planned 2016 U.S. introduction of its EDWARDS INTUITY Elite rapid deployment valve system. The company will discuss the anticipated 2017 launch of its new INSPIRIS valve platform, which utilizes its novel RESILIA tissue technology and VFit expansion feature.  Over the longer-term, new, innovative technologies directed at unmet patient needs are expected to drive continued growth of its surgical platform, even as the adoption of transcatheter heart valves moderates its growth rate.

Edwards expects to generate Surgical Heart Valve Therapy sales of $780 million to $820 million in 2016, representing a 3 to 6 percent underlying growth rate.  

  • Critical Care – In 2016, Edwards expects to continue building upon its global leadership in hemodynamic monitoring by expanding the benefits of Enhanced Surgical Recovery (ESR) to a broader patient population with its ClearSight noninvasive platform.  ESR represents an underpenetrated opportunity to help clinicians make better informed fluid management decisions for their patients, which can reduce complications and lengths of stay.  The company will also discuss its development of a next-generation hemodynamic monitor, and an integrated semi-closed loop system for standardized management of patient fluid levels.

Edwards expects to generate Critical Care sales of $510 million to $550 million in 2016, representing a 2 to 4 percent underlying growth rate.

  • Structural Heart Initiatives – Edwards is continuing to invest in a number of structural heart initiatives to address large unmet patient needs.  A U.S. early feasibility study of the company's CardiAQ-Edwards transcatheter mitral valve replacement technology is expected to commence shortly, and a CE Mark study should begin in mid-2016.  Further product enhancements to this platform are also in development.  Edwards' management will also discuss the development of other innovative structural heart technologies.

In addition, Edwards is announcing a structured investment in Harpoon Medical, Inc., a privately held medical technology company that is pioneering a beating-heart, transcatheter therapy for minimally invasive surgical repair of a degenerative mitral valve.  This transaction includes an upfront investment and an exclusive option to acquire the company.   

In addition to Mr. Mussallem, other members of Edwards' management team presenting at the conference include:

Donald E. Bobo, Jr., Corporate Vice President, Heart Valve Therapy, Corporate Strategy & Development;

Katie M. Szyman, Corporate Vice President, Critical Care; 

Scott B. Ullem, Chief Financial Officer;

Larry L. Wood, Corporate Vice President, General Manager, Transcatheter Heart Valves; and

Bernard J. Zovighian, Vice President, General Manager, Surgical Heart Valves.

Guest Speakers to Provide Clinical Perspective
Also speaking at the conference are: Maurice E. Sarano, M.D., Consultant Cardiovascular Diseases and Professor of Medicine, Mayo Clinic in Rochester, Minn., and Vinod H. Thourani, M.D., Chief of Cardiothoracic Surgery, Emory Hospital and Co-Director, Structural Heart and Valve Center, Emory University School of Medicine in Atlanta.

Webcast Information
The Edwards Lifesciences 2015 Investor Conference can be accessed via live webcast at http://ir.edwards.com/ beginning at 11:00 a.m. Eastern Time on December 9, 2015.  The webcast will also be live streamed via the Edwards conference app available for free download at the Apple App Store or Google Play.  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, enabling 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 2015 and 2016 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; expectations regarding the size of the TAVR opportunity; strategies to maintain leadership positions and lead in the development of new structural heart technologies; and expectations regarding the development and introduction of new products, indications and technologies (including expected timelines and outcomes of feasibility studies, clinical trials, and regulatory approvals).  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 products and the ability of the Company to continue to develop safe and effective new products and therapies; uncertainties associated with the timing and extent of regulatory approvals, expanded indications and reimbursement levels for our products; unexpected quality or manufacturing issues; unexpected costs or impacts from litigation; the impact of competitive products; changes in currency exchange rates; actions by the U.S. Food and Drug Administration and other regulatory agencies; 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, 2014. 

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, sales return reserves associated with THV product upgrades, and foreign exchange fluctuations, and "excluding special items" and "adjusted" to also exclude gains and losses from special items such as significant investments, litigation, amortization of intangibles, THV sales return reserves and related costs, 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, ClearSight, Edwards INTUITY, EDWARDS INTUITY Elite, Edwards SAPIEN, Edwards SAPIEN 3, Edwards SAPIEN 3 Ultra, INSPIRIS, RESILIA, SAPIEN, SAPIEN 3, Edwards SAPIEN XT, SAPIEN 3 Ultra, and VFit are trademarks of Edwards Lifesciences Corporation.  All other trademarks are the property of their respective owners.


[1] "Underlying" amounts are non-GAAP items and in this press release exclude foreign exchange fluctuations and other special items.

[2] "Adjusted earnings per share" is a non-GAAP item and in this press release excludes amortization of intellectual property and other special items on a diluted basis.

[3] "Free cash flow" is defined as cash flow from operating activities less capital expenditures.


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Contact Information :
Media, Sarah Huoh, +1-949-250-5070, or
Investors, David K. Erickson, +1-949-250-6826, both of Edwards Lifesciences Corporation

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