AccessMyLibrary provides FREE access to millions of articles from top publications available through your library.
Original Source: FD (FAIR DISCLOSURE) WIRE
. David Erickson, Edwards Lifesciences, VP, IR . Mikel Mussallem, Edwards Lifesciences, Chairman & CEO . Corinne Lyle, Edwards Lifesciences, Corporate VP, CFO . Stuart Foster, Edwards Lifesciences, Corporate VP, Technology & Discovery . Stanton Rowe, Edwards Lifesciences, President, Percutaneous Valve Interventions
EW's total sales increased 9.1% to $224.8m, driven by strong heart valve therapy sales. 3Q04 growth was aided by $7.5m in FX and partially offset by discontinued businesses. Q&A Focus: Markets, ThermaFix, volumes, Prima Plus, HDE, GM, and contracts.
A. Key Data From Call 1. 3Q04 total sales =$224.8m. 2. 3Q04 interest expense = $3.4m. 3. 4Q04 SG&A expectation = 34% of sales.
S1. 3Q04 Performance (M.M.) 1. 3Q04 Sales Results: 1. Total sales increased 9.1% to $224.8m, driven by strong heart valve therapy sales. 2. 3Q04 growth was aided by $7.5m in FX and partially offset by discontinued businesses. 3. Sales growth was strong in the US, Europe and emerging global markets. 2. Heart Valve Therapy Products: 1. Sales grew 14.4%. 1. FX contributed $2.9m of the growth. 2. Sales of heart valve products continued to gain share and grow in double digits in every region except for Japan. 3. Underlying global tissue valve growth once again exceeded 10% in 3Q04 even though porcine valve sales declined by nearly 20%. 4. Global growth in repair products was approx. 9%. 3. Magna: 1. Global sales of Perimount Magna grew to nearly $20m in 3Q04 and about $50m YTD. 2. Magna's unsurpassed hemodynamics and durability are continuing to drive strong market adoption and the Co. is successfully maintaining a 20% price premium over EW's leading Aortic Perimount Valve. 3. The Co. expects Magna to soon become the leading tissue valve in the US. 4. Other Products: 1. In the US total Perimount sales grew in excess of 20% led by Magna Aortic Valve and Tricentrix mitral valve system. 2. Strong Perimount sales also led the growth in Europe. 3. In Japan, where sales were about $1m lower than last year, EW continues to wait regulatory approval of its Prima Plus, which will help strengthen the Co.'s leading market position in this region. 4. EW is continuing to offer its new ThermaFix anti-calcification process on the Magna valve and will broaden the US roll-out over the next year. 5. BioPhysio: 1. During 3Q04, EW began the first human implants of its BioPhysio valve in Europe and is very pleased with the outcome. 1. This marks the beginning of a multi-center clinical trial that will be conducted in Europe, Canada and the US. 2. The Co. continues to expect IDE approval before the end of this year, which will enable the Co. to begin the US portion of that clinical trial. 3. BioPhysio is the only replacement heart valve designed to mimic the physiologic motion of the natural heart valve. 4. EW expects this novel valve to be a commercially available as early as 2008 in Europe and Canada and later in the US. 2. Critical Care:
1. Reported sales growth grew 5.7% in 3Q04 with FX contributing
$2.6m to the growth. 2. 3Q04 underlying growth was due to robust pressure monitoring sales resulting from market share gains and overall strong performance in emerging global markets. 3. Growth was partially offset by recent reimbursement changes in Japan and the ongoing decline in base catheter products. 6. MICO: 1. Looking forward, Minimally Invasive Cardiac Output (MICO) is an exciting and market expanding opportunity that could double the addressable patient population as well as the growth rate of the Co.'s Critical Care franchise in the next few years. 2. EW is continuing to evaluate MICO pilot systems in hospitals in the US and Europe and these clinical studies are generating positive clinician feedback.
3. EW remains on track to conclude the process by the end of the
year in support of a 510(K) submission. 4. Pending successful completion of the studies and receipt of regulatory approval, the Co. continues to anticipate product introduction in 1H05.
7. Cardiac Surgery Systems: 1. Sales grew 3.8% to $27.5m vs. 3Q03 with FX contributing nearly $1m to the growth. 2. Strong global growth in Cannula and US TMR sales were partially offset by the recent divestiture of Profusion Services business.
3. TMR sales were sequentially stronger in 3Q04 vs. 2Q04. 4. In 2Q04, TMR laser revenue was lower than expected as the Co.
temporarily deferred sales allowing customers to fully understand the reimbursement implications of the CMS panel discussions that occurred in July. 1. There were no changes made to reimbursement as a result of the meeting. 5. In Sept., the AHA and ACC issued joint guidelines relating to the treatment of angina using laser revascularization further building awareness of TMR. 6. During 3Q04, EW successfully completed market evaluation of its newly renamed Optiwave Laser System and the endocardial product is now available for sale in the US on a limited basis.
7. The epicardial version of this product, which was recently
approved by the FDA, is currently undergoing marketing trials
and is expected to launch early next year. 8. Vascular Products:
1. On a reported basis, vascular sales for 3Q04 grew 9.2% led by
sales of interventional products and FX gains. 2. Sales of base vascular products were slightly higher vs. last year.
3. Introduction of LifeStent products continued in 3Q04 in both
US and Europe and 3Q04 sales were about $0.5m. 4. Although, EW continued to produce additional sizes of self-expanding stents, the Co. was severely supply constraint throughout the quarter.
1. Specifically, the supply of a critical component for the delivery system has the been the key issue in restraining sales and delaying the Co.'s sales ramp. 2. The Co. has worked aggressively with this component supplier to increase its output and quality to meets its regular specifications. 3. EW recently ramped up production and expects a substantial increase in inventory over the next several weeks. 5. As such, the Co. estimates peripheral stent sales to be about $1-2m in 4Q04. 6. A full production ramp up is anticipated as the Co. moves into 2005. 7. EW continued to build its own in-house manufacturing capabilities many of which are also strategic to its percutaneous valve programs.
8. EW is continuing to build an experienced US sales force and
expects the hiring of additional sales reps to continue into
2005. 9. Both the Co.'s balloon and self-expanding stents continue to generate very positive customer feedback regarding the conformability …