edwards lifesciences 2006 investor...

1

Edwards Lifesciences2006 Investor Conference

Edwards Lifesciences2006 Investor Conference

WelcomeWelcome

David K. EricksonVice President, Investor Relations

David K. EricksonVice President, Investor Relations

2

Cautionary StatementCautionary Statement

Presentations and comments made today by the management of Edwards Lifesciences Corporation will include 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 include, but are not limited to, the company’s ability to achieve 2006 and 2007 financial goals for sales growth, gross profit margin improvement, net income, EPS and free cash flow; the continued success of recently introduced products and the regulatory approval for additional products in heart valve therapy; the continued adoption and sales of FloTrac and LifeStent; the success of the RESILIENT clinical trial; the timing and progress of clinical studies of, regulatory approvals of, and the market opportunity for transcatheter valve technologies; the impact on valuation and/or financial results of option expensing, foreign exchange and special items. 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.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 the productivity of the R&D pipeline; the strength of the company’s core franchises and their ability to provide a strong platform for sustainable growth; the potential opportunity of the company’s transcatheter valve programs and the ability of the company to continue to lead in the development of this field; and more generally, the ability to obtain regulatory approvals for and market new products; the ability to generate and maintain sufficient cash resources to increase investments in the company’s business and repay debt; the success and timing of new product launches; the impact of currency exchange rates; the timing or results of pending or future clinical trials; actions by the U.S. Food and Drug Administration and other regulatory agencies; technological advances in the medical field; product demand and market acceptance; changing conditions in the economy in general and in the healthcare industry; 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, 2005.

Clinician DisclosureClinician Disclosure

The following clinicians are consultants to Edwards Lifesciences and may have received compensation from the company

David H. Adams, M.D.Gary Ansel, M.D.Maurice Buchbinder, M.D.Stephen Clute, M.D.David Ferson, M.D.Barry Katzen, M.D.

John Laird, M.D.Martin B. Leon, M.D. Al Minjock, RNSteve Ramee, M.D.Craig R. Smith, M.D.

3

Opening RemarksOpening Remarks

Michael A. MussallemChairman and CEO

Michael A. MussallemChairman and CEO

Key MessagesKey Messages

Edwards Lifesciencesis a global leader in its core business operates in attractive, growing marketsis pursuing exciting new growth opportunitiesis financially stronghas a clear strategy for growth

4

Edwards’ Core Business is RobustEdwards’ Core Business is Robust

Heart Valve TherapyStrong market leadership in replacement and repairConversion to tissue continuingUnmatched product pipeline will fuel sustained growth

Critical Care technologies“Gold standard” products in market leading positionsDependable growth and strong customer loyalty

~85% of sales from products with #1 global positionsHigh barriers to entry and strong brand recognition

Edwards’ Core Markets are RobustEdwards’ Core Markets are Robust

Heart Valve DiseaseDemographics will continue to drive incidence Early studies suggest disease is under-treatedTreatments improve life expectancy

Critical Care TechnologyUse is expanding globallyTrained clinicians increasingly in demandSimpler predictive tools are needed

5

Edwards is Pursuing Exciting New Growth OpportunitiesEdwards is Pursuing Exciting New Growth Opportunities

Transcatheter aortic replacement substantially expands the heart valve marketFloTrac is expanding hemodynamic monitoringLifeStent will achieve a landmark SFA indication in 2007Transcatheter mitral repair is a large unmet needPursuing advanced technologies to address emerging field of structural heart disease

Edwards is Financially StrongEdwards is Financially Strong

Balanced portfolio of market leading productsMeeting our 2006 financial goalsGross margin expansion continuesStrong balance sheet and cash flowNet income growth continues while increasing investment in R&D and sales channel

6

Edwards’ Strategy for Growth is ClearEdwards’ Strategy for Growth is Clear

Remain focused on specific cardiovascular opportunitiesEmphasize differentiated, physician preference products with leadership potential Be a trusted partner Constantly prioritize investments

Recent Business Decisions Sharpen Edwards’ FocusRecent Business Decisions Sharpen Edwards’ Focus

Transferring angiogenesis program to SangamoDiscontinuing Optiwave 980 programTargeted regional exits

Exiting perfusion and mechanical valves internationallyEuropean vascular distribution arrangementU.S. pharmaceutical agreement

Selectively realigning resources Increased investment in advanced technologies

7

Environmental Challenges are IncreasingEnvironmental Challenges are Increasing

New product reimbursement pressuresIncreased emphasis on economic value

Rigorous regulatory compliance climateIncreasingly demanding heart valve approval standards

Strategic ImperativesStrategic Imperatives

Increase growth of core heart valve businessLead in transcatheter aortic heart valves Execute on growth opportunitiesStrengthen infrastructure

8

Increase Growth of Core Heart Valve BusinessIncrease Growth of Core Heart Valve Business

Surgical heart valve market remains attractive with significant growth opportunities for tissue and repair therapiesEdwards’ product portfolio is unequaled; new products in pipelineInvesting in programs to expand market and enhance surgeon loyalty

Lead in Transcatheter Aortic Heart ValvesLead in Transcatheter Aortic Heart Valves

Opportunities are large and transformationalNew option for currently untreated patientsPotential to increase device content while lowering overall costsStrengthens and further differentiates EdwardsFacilitates mechanical-to-tissue conversion

Complete successful clinical trials

9

Execute on Growth OpportunitiesExecute on Growth Opportunities

FloTrac – a market expansion opportunityContinuing adoption will drive additional growthClinical studies will help validate benefits

LifeStent – better technology for an underserved and growing market

Differentiated technologyExpanding sales channel

Advanced Technologies provide longer-term opportunitiesComplementary acquisitions

Strengthen InfrastructureStrengthen Infrastructure

Accelerating new product introductionsEnhancing quality systems Building clinical and reimbursement capabilities to support new technologiesOptimizing product sourcing

Exiting Japan manufacturing facility Building new Singapore heart valve facility

10

Management’s Incentives are Aligned with Growth ObjectivesManagement’s Incentives are Aligned with Growth Objectives

Financial goalsRevenue growthNet incomeFree cash flow

Five “Key Operating Drivers”Achieve sales goals for strategic product linesAchieve key R&D, clinical and regulatory milestones

Solid Fundamentals Will Drive Sustainable Financial Performance in 2007Solid Fundamentals Will Drive Sustainable Financial Performance in 2007

2007 Financial Goals: Net sales of $1,075 – $1,125 millionGross profit margin increase of 100 – 150 b.p.Net income growth of 12% – 14%*Free cash flow of $160 – $170 million

*Excludes special items in 2006

11

Conference AgendaConference Agenda

Transcatheter Heart Valve Therapy –Perspectives from a Cardiologist and a Surgeon

Martin B. Leon, MDCraig R. Smith, MD

Aortic Transcatheter TechnologiesLarry Wood

Sustaining Growth in Heart Valve TherapyAnita BesslerAlex Martin

Recognizing Undertreatment in Aortic Stenosis David H. Adams, MD

Conference Agenda (cont.)Conference Agenda (cont.)

Growth Opportunities in Critical Care and Peripheral Vascular

Carlyn SolomonKeith Reisinger

Advanced Technologies and Mitral Transcatheter Technologies

Stan RoweDon Bobo

Strengthening Edwards’ Infrastructure and 2007 Financial Outlook

Corinne LyleTom Abate

12

Helping Patients is Our LifeHelping Patients is Our Life’’s Work, ands Work, and

Transcatheter Aortic Valve Transcatheter Aortic Valve Replacement: Rationale, Early Replacement: Rationale, Early

Clinical ResultsClinical Results

Martin B. Leon, MDMartin B. Leon, MDColumbia University Medical CenterColumbia University Medical Center

Cardiovascular Research FoundationCardiovascular Research FoundationNew York CityNew York City

Edwards Lifesciences Investor MeetingEdwards Lifesciences Investor MeetingDecember 8, 2006December 8, 2006

New York CityNew York City

13

Consultant or Advisory Board:Edwards Lifesciences (non-paid)Consultant or Advisory Board:Consultant or Advisory Board:Edwards Lifesciences (nonEdwards Lifesciences (non--paid)paid)

Presenter Disclosure InformationPresenter Disclosure Informationfor this presentationfor this presentation……

Martin B. Leon, M.D.Martin B. Leon, M.D.

Predicting the FuturePredicting the Future

TranscatheterTranscatheterAVR is the AVR is the

MOST EXCITINGMOST EXCITINGnew procedure in the new procedure in the field of interventional field of interventional

cardiovascular cardiovascular therapeutics!!!therapeutics!!!

Transcatheter AVR Transcatheter AVR

14

Transcatheter Aortic Valve ReplacementTranscatheter Aortic Valve Replacement

92 92 yoyo man withman withcritical AScritical AS……Treated at CUMCTreated at CUMCon 2/8/06on 2/8/06……Playing golf in Playing golf in Palm Springs onPalm Springs on3/8/06!!!3/8/06!!!

Patient #1Patient #1

RationaleRationale……(why are we doing (why are we doing

this?)this?)


15

“Surgical intervention should be performed promptly

once even … minor

symptoms occur”

““Surgical Surgical intervention intervention should be should be performed performed promptly promptly

once even once even …… minor minor

symptoms symptoms occuroccur””

40 50 60 70 800

20

40

60

80

100

AgeYears

SurvivalPercent Onset severe

symptoms

6420Avg. survivalYears

AnginaSyncope

Failure

Latent Period (Increasing Obstruction, Myocardial Overload)

Severely Symptomatic PatientsSeverely Symptomatic PatientsRequire Urgent AttentionRequire Urgent AttentionValvular Aortic Stenosis In Adults Valvular Aortic Stenosis In Adults

(Average Course)(Average Course)

Sources: Ross J Sources: Ross J JrJr, , BraunwaldBraunwald E. Aortic stenosis. E. Aortic stenosis. CirculationCirculation 1968;38 (1968;38 (SupplSuppl 1) 1) C.M. Otto. Valve Disease: Timing of Aortic Valve Surgery. HeartC.M. Otto. Valve Disease: Timing of Aortic Valve Surgery. Heart 2000.2000.

•• Symptomatic patients with severe AS Symptomatic patients with severe AS (Class I(Class I--B)B)

•• Patients with severe AS undergoing CABG Patients with severe AS undergoing CABG (Class I(Class I--C)C)

•• Patients with severe AS undergoing Patients with severe AS undergoing AoAo or or other heart valve surgery (Class Iother heart valve surgery (Class I--C)C)

•• Patients with severe AS and LV systolic Patients with severe AS and LV systolic dysfunction dysfunction -- EF<50% (Class IEF<50% (Class I--C)C)

•• Patients with moderate AS undergoing CABG, Patients with moderate AS undergoing CABG, or or AoAo, or other heart valve surgery , or other heart valve surgery (Class (Class IIaIIa--B)B)

Transcatheter AVRTranscatheter AVRIndications for Surgical AVRIndications for Surgical AVRIndications for Surgical AVR

Why is surgical AVR so great?Why is surgical AVR so great?

Because our patients…1. Live longer2. Feel better (marked Sx benefit)3. Have improved LV function

16

Natural History of Aortic StenosisNatural History of Aortic Stenosis

0

20

40

60

80

100

40 50 60 70 80Age (years)Age (years)

Sur

viva

l (pe

rcen

t)S

urvi

val (

perc

ent) Increasing obstruction,

myocardial overload

Average Age DeathAverage Age Death

Latent Period

SymptomsSymptoms

from Ross and from Ross and BraunwaldBraunwald, Circulation 1968, Circulation 1968

The Potential Population of AS Pts The Potential Population of AS Pts Requiring TreatmentRequiring Treatment

232,833,408232,833,40817,830,51317,830,51318,463,47218,463,47229,078,92429,078,92441,618,80541,618,805

125,841,694125,841,694

2004 Population2004 Population

––4.60%4.60%1.40%1.40%0.60%0.60%0.20%0.20%0.10%0.10%

AS AS PrevalencePrevalence

487,415487,415273,401273,40186,16386,16358,15858,15827,74627,74641,94741,947

Severe Severe ASAS

243,708243,708TotalTotal

43,08143,0816565--7474

13,87313,8734545--5454

136,701136,701>75>75

29,07929,0795555--6464

20,97420,9741818--4444

Severe AS Severe AS 50% with 50% with SxSx

Based upon the Olmsted County AS prevalence data Based upon the Olmsted County AS prevalence data and US and US poplulationpoplulation statistics;statistics; more than half of the more than half of the

severe AS patients are >75 years old!severe AS patients are >75 years old!

17

CURRENTCURRENT Candidates for Candidates for Transcatheter AVRTranscatheter AVR

UnreferredUnreferredUnreferred

Severe ASSevere ASSevere AS

High Surgical RiskHigh Surgical RiskHigh Surgical Risk

symptomaticsymptomatic> 70 > 70 yoyo

High Risk AVRHigh Risk AVRHigh Risk AVR







18

SEVERE AS SEVERE AS PatientsPatients

AORTIC VALVE AORTIC VALVE REPLACEMENT REPLACEMENT

SURGERYSURGERY

SURGEONS view of the SURGEONS view of the aortic aortic stenosisstenosis populationpopulation

We operate onWe operate onEverybody!Everybody!

31.8% did not undergo intervention, despite NYHA

class III/IV symptoms

Do patients with Do patients with valvularvalvular heart disease receive heart disease receive treatment according to established guidelines?treatment according to established guidelines?

•• 92 92 hospitalshospitals fromfrom 25 countries25 countries•• 5,001 patients 5,001 patients fromfrom AprilApril--July, 2001July, 2001

19

Aortic Stenosis ≥ 75 yearsN=408

No Severe AS(n=114)

Severe AS(n=284)

No SymptomsN=68

SymptomsN=216

InterventionN=144 (67%)

No InterventionN=72 (33%)

NYHA III :106

NYHA IV : 36

Angina : 148

IungIung, B, et al. , B, et al. EurEur HeartHeart J 2005;26:2714J 2005;26:2714--2020

Euro Euro HeartHeart SurveySurveySymptomaticSymptomatic AS (AS (elderlyelderly))

Loma Linda Echo Study Loma Linda Echo Study in Patients with Severe ASin Patients with Severe AS

•• EchocardiographyEchocardiography perspective of all screened patients perspective of all screened patients between between 19931993--20032003

•• 740 patients740 patients identified with identified with severe ASsevere AS (AVA (AVA ≤≤ 0.8cm0.8cm22))•• 457 did not undergo AVR 457 did not undergo AVR –– 62%62%•• AVR was not offeredAVR was not offered in many of the patients with severe in many of the patients with severe

AS for various reasons: AS for various reasons: clinical coclinical co--morbidities, morbidities, ““lack of lack of symptomssymptoms””, or , or ““patient refusalpatient refusal””

•• Medically managed severe AS patients have a dismal Medically managed severe AS patients have a dismal prognosis (1,5 and 10 yr prognosis (1,5 and 10 yr survivialsurvivial = 60, 32, and 18%)= 60, 32, and 18%)

•• Independent risk factors for higher mortality includeIndependent risk factors for higher mortality includeAdvanced age, low ejection fraction , CHF, PHT, 3Advanced age, low ejection fraction , CHF, PHT, 3--4+ MR 4+ MR and CRI and CRI

PaiPai RG et. al. RG et. al. EurEur J J CardioThoracCardioThorac Surgery 2006Surgery 2006

20

U of Michigan Echo Study U of Michigan Echo Study in Patients with Severe ASin Patients with Severe AS

CourtesyCourtesy of David Bach; U of Michiganof David Bach; U of Michigan

Echo Echo severesevere ASASN=145*N=145*

2005 U of Michigan andMichigan Heart & Vascular

AVRAVR(n=73)(n=73)

NO AVRNO AVR(n=68)(n=68)

* 4 pts not felt to be severe AS clinically* 4 pts not felt to be severe AS clinically

•• 84% co84% co--morbidities (67% multiple)morbidities (67% multiple)•• 40% previous cardiac surgery40% previous cardiac surgery•• 34% asymptomatic 34% asymptomatic

FU FU meanmean 206 206 ++ daysdays::16 pts 16 pts dieddied (24%)(24%)

(47%)(47%)

The Potential Population of AS Pts The Potential Population of AS Pts Requiring TreatmentRequiring Treatment

232,833,408232,833,40817,830,51317,830,51318,463,47218,463,47229,078,92429,078,92441,618,80541,618,805

125,841,694125,841,694

2004 Population2004 Population

––4.60%4.60%1.40%1.40%0.60%0.60%0.20%0.20%0.10%0.10%

AS AS PrevalencePrevalence

487,415487,415273,401273,40186,16386,16358,15858,15827,74627,74641,94741,947

Severe Severe ASAS

243,708243,708TotalTotal

43,08143,0816565--7474

13,87313,8734545--5454

136,701136,701>75>75

29,07929,0795555--6464

20,97420,9741818--4444

Severe AS Severe AS 50% with 50% with SxSx

Based upon the Olmsted County AS prevalence data Based upon the Olmsted County AS prevalence data and US and US poplulationpoplulation statistics,statistics, the potential AS the potential AS

treatment cohort could exceed 250,000 patients!treatment cohort could exceed 250,000 patients!

21

Projected AVR Procedures (US)Projected AVR Procedures (US)

66,980 69,768 72,619

59,263 61,658 64,196

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

2005 2006 2007 2008 2009 2010

# Im

plan

ts#

Impl

ants







22

High RiskHigh Risk AVR PatientsAVR Patientswith Poor Outcomeswith Poor Outcomes

•• Radiation chest wall/heart diseaseRadiation chest wall/heart disease•• Octogenarians with multiple coOctogenarians with multiple co--morbiditiesmorbidities•• STS Predicted Risk >8%, Logistic STS Predicted Risk >8%, Logistic

EuroSCOREEuroSCORE >30% (~10% operative risk)>30% (~10% operative risk)•• Cirrhosis with portal hypertensionCirrhosis with portal hypertension•• ESRD on dialysisESRD on dialysis•• Porcelain aortaPorcelain aorta•• Degenerative Degenerative neurocognitiveneurocognitive dysfunction dysfunction

There is no perfect formula! There is no perfect formula! Requires some quantitative risk algorithmRequires some quantitative risk algorithm

+ a thoughtful surgeon/cardiologist!!! + a thoughtful surgeon/cardiologist!!!

Early Clinical Early Clinical ResultsResults……


23


TranscatheterAVR

TranscatheterTranscatheterAVRAVR

Trans-femoral (cath lab)

TransTrans--femoral femoral ((cathcath lab)lab)

Trans-apical(OR)

TransTrans--apicalapical(OR)(OR)

•• Antegrade = femoral Antegrade = femoral veinvein

•• Retrograde = femoral Retrograde = femoral arteryartery

Transcatheter AVRTranscatheter AVR

TranscatheterAVR

TranscatheterTranscatheterAVRAVR

Trans-femoral (cath lab)

TransTrans--femoral femoral ((cathcath lab)lab)

24

CribierCribier--Edwards Aortic Edwards Aortic BioprosthesisBioprosthesisEnrollment (2002Enrollment (2002--06) 06)

282 282 Cases*Cases*

AntegradeAntegrade(n=59)(n=59)

RetrogradeRetrograde(n=143)(n=143)

TransTrans--apicalapical(n=80)(n=80)

40 Rouen40 Rouen7 US7 US

12 other OUS12 other OUS

59 Vancouver59 Vancouver54 US54 US

30 other OUS30 other OUS

19 Vancouver19 Vancouver38 Leipzig38 Leipzig21 Vienna21 Vienna2 Dallas2 Dallas

* Updated October 16, 2006* Updated October 16, 2006

Embolized valve 2Embolized valve 2Embolized valve 2

St. PaulSt. Paul’’s Hospital Vancouver Experiences Hospital Vancouver Experience

Unable to deliver/cross 5Unable to deliver/cross 5Unable to deliver/cross 5

80 Patients80 Patients80 Patients

58 Femoral58 Femoral58 Femoral 22 Apical22 Apical22 Apical

Successful Deployment

51

Successful Successful DeploymentDeployment

5151

Unsuccessful Deployment

7

Unsuccessful Unsuccessful DeploymentDeployment

77


18


1818

3030--day mortality: 12.1%day mortality: 12.1%3030--day stroke: 3.4% day stroke: 3.4% Logistic Logistic EuroSCOREEuroSCORE: 28%: 28%

J. Webb and colleagues

ImplantImplantsuccess: 88%success: 88%

25

Vancouver RegistryVancouver RegistryAortic Valve Area (TTE, n=50 femoral)Aortic Valve Area (TTE, n=50 femoral)

Baseline Post 1 Month 6 month 12 monthBaseline Post 1 Month 6 month 12 month

0.6

1.7 1.6 1.6 1.6

AVA

(CM

AVA

(CM

22 ))Echo Assessments of Valve PerformanceEcho Assessments of Valve Performance

Preliminary Results from the Preliminary Results from the PePeRRcutaneouscutaneous EEndondoVVascularascular

IImplantation of mplantation of VALVALvesves Trial in Trial in High Risk Patients with Critical High Risk Patients with Critical

Aortic StenosisAortic Stenosis

SusheelSusheel K. K. KodaliKodali, William O, William O’’Neill, Neill, Jeffrey W. Moses, Jeffrey W. Moses, SamirSamir KapadiaKapadia, , Mathew Williams, George Mathew Williams, George HanzelHanzel, ,

Allan Stewart, Murat Allan Stewart, Murat TuzcuTuzcu, Michael , Michael Collins, and Martin B. LeonCollins, and Martin B. Leon

26

Malpositioned valve 1MalpositionedMalpositioned valve 1valve 1

US Retrograde US Retrograde CribierCribier--Edwards ExperienceEdwards Experience

Unable to cross 3Unable to cross 3Unable to cross 3

55 Patients*55 Patients*55 Patients*

Trans-femoral55

TransTrans--femoralfemoral5555


7


77

3030--day Mortality: 7.3% (4) day Mortality: 7.3% (4) 3030--day MACCE: 16.4% (9) day MACCE: 16.4% (9) Logistic Logistic EuroSCOREEuroSCORE: 33%: 33%STS score: 13%STS score: 13%

PI: Wm OPI: Wm O’’NeillNeill

Centers:Centers:29 Columbia29 Columbia15 Beaumont 15 Beaumont 11 Cleveland 11 Cleveland

ClinicClinic

REVIVAL IIREVIVAL II

* Updated October 16, 2006* Updated October 16, 2006

Failed access 3Failed access 3Failed access 3

ImplantImplantsuccess: 87%success: 87%


48


4848

REVIVAL IIREVIVAL IIPatient Characteristics (n=54)Patient Characteristics (n=54)

20.4% (11)20.4% (11)≥≥ 90 years90 years

63.0% (34)63.0% (34)≥≥ 80 years80 years

53% 53% ±± 16%16%Ejection Fraction (echo)Ejection Fraction (echo)

53.7% (29)53.7% (29)FemaleFemale

33.3 33.3 ±± 17.3 (517.3 (5--83)83)EuroSCOREEuroSCORE (%)(%)

2.05 2.05 ±± 0.67 (10.67 (1--3) 3) PrePre--AR grade (echo)AR grade (echo)0.59 0.59 ±± 0.12 (0.4 0.12 (0.4 -- 0.81)0.81)PrePre--AVA (cmAVA (cm22 –– echo)echo)

13.0 13.0 ±± 7.1 (47.1 (4--31)31)STS score (%)STS score (%)

82.4 82.4 ±± 6.4 (696.4 (69--100) 100) Age (yrs)Age (yrs)

27

REVIVAL IIREVIVAL IIHigh Risk CoHigh Risk Co--morbiditiesmorbidities

9.3% (5)9.3% (5)Severe COPDSevere COPD3.7% (2)3.7% (2)CirrhosisCirrhosis

7.4% (4)7.4% (4)Chest wall radiationChest wall radiation14.8% (8)14.8% (8)Renal failure Renal failure (Cr > 2.0)(Cr > 2.0)

9.2% (5)9.2% (5)Porcelain aortaPorcelain aorta25.9% (14)25.9% (14)Peripheral vascular diseasePeripheral vascular disease40.7% (22)40.7% (22)Prior CABGPrior CABG

37.5% (20)37.5% (20)10% (5)10% (5)

Impaired LVEF <40%Impaired LVEF <40%<30%<30%

76% (41)76% (41)NYHA Class III/IV (CHF) NYHA Class III/IV (CHF)

Unable to cross - 3Unable to cross Unable to cross -- 33

REVIVAL IIREVIVAL IIProcedural ResultsProcedural Results

54 Patients Enrolled

54 Patients 54 Patients EnrolledEnrolled


47


4747


7


77

Failed access - 3Failed access Failed access -- 33

Implant Success Implant Success 87.0%87.0%

23 mm Valve(18)

23 mm 23 mm ValveValve(18)(18) Malplacement - 1MalplacementMalplacement -- 11

26mm Valve(29)

26mm 26mm ValveValve(29)(29)

61.7%38.3%

28

REVIVAL IIREVIVAL IIMean AV Gradients (n=42 pts)Mean AV Gradients (n=42 pts)

0

10

20

30

40

50

60

70

80

Pre Post

Mea

n G

radi

ent

P<0.0001

Measured post-PHV placement in cath lab

REVIVAL IIREVIVAL II –– Clinical OutcomesClinical Outcomes

5 (9.2%)5 (9.2%)5 (9.2%)5 (9.2%)5 (9.2%)5 (9.2%)NeurologicNeurologic eventsevents

2 (5.5%)*2 (5.5%)*2 (5.5%)*2 (5.5%)*2 (5.5%)*2 (5.5%)*Renal failure (Renal failure (reqreq dialysis)dialysis)7 days7 daysMedian hospital stayMedian hospital stay

000000Device migration (postDevice migration (post--proc)proc)1 (1.8%)1 (1.8%)7 (13.0%)7 (13.0%)

00

0 0 4 (7.4%)4 (7.4%)

9 (16.7%)9 (16.7%)

30 Day30 Day

2 (3.7%)2 (3.7%)7 (13.0%)7 (13.0%)

00

0 0 8 (14.8%)8 (14.8%)

13 (24.1%)13 (24.1%)

> 30 Days> 30 DaysInIn--HospitalHospital

OtherOther

007 (13.0%)7 (13.0%)

00

0 0 4 (7.4%)4 (7.4%)

9 (16.7%)9 (16.7%)MACCEMACCE

Repeat balloon dilatationRepeat balloon dilatationVascular complicationVascular complication

MIMIDeathDeath

ReopReop for valve failurefor valve failure

* One patient on CVVHD prior to valve implantation* One patient on CVVHD prior to valve implantation

29

REVIVAL IIREVIVAL IIPatient DeathsPatient Deaths

Liver failureLiver failure102 102 7/87/876 F76 F

Acute abdomen with shockAcute abdomen with shock15815837/1137/1183 F83 F

CHF (failure to cross)CHF (failure to cross)565614/5514/5577 M77 M

4141

1414

33

11

00

Day #Day #

HyperosmolarHyperosmolar coma and renal failurecoma and renal failure21/2821/2891 F91 F

CHF and renal failure (failed access + CHF and renal failure (failed access + vascular complications)vascular complications)

13/7313/7391 F91 F

Ascending aortic dissection Ascending aortic dissection (failure to cross)(failure to cross)

13.3/ 5213.3/ 5292 F92 F

Ascending aortic dissection Ascending aortic dissection (failure to cross)(failure to cross)

7/ 207/ 2069 M69 M

MalplacementMalplacement of valve with severe AR of valve with severe AR and shockand shock

26/ 6026/ 6085 M85 M

CauseCauseSTS/STS/EuroSCOREEuroSCOREAge/GenderAge/Gender

outout--ofof--hospitalhospital

REVIVAL IIREVIVAL IIVascular and Vascular and NeuroNeuro ComplicationsComplications

3 (5.6%)3 (5.6%)Minor StrokeMinor Stroke

1 (1.8%)1 (1.8%)SubarachnoidSubarachnoid HemorrhageHemorrhage

1 (1.8%)1 (1.8%)Major StrokeMajor Stroke

NeurologicNeurologic EventEvent

2 (3.7%)2 (3.7%)Unplanned Unplanned IliofemoralIliofemoral bypass graftbypass graft

5 (9.2%)5 (9.2%)Iliac PerforationIliac Perforation

VascularVascular

30

REVIVAL IIREVIVAL IINYHA Class (to 3 months)NYHA Class (to 3 months)

0

0.5

1

1.5

2

2.5

3

3.5

4

44 34 17

Baseline 30 days 3 months

NYH

A

n

P < 0.05

REVIVAL IIREVIVAL IILV Function LV Function -- Echo (n=27)Echo (n=27)

Ejection Fraction

48.653.3

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

%

Baseline30 Days

P<0.01P<0.01

31

REVIVAL IIREVIVAL IIImprovement in LV Function (n=27)Improvement in LV Function (n=27)

Baseline EF < 50%

01020304050607080

Baseline 30 Days

EF (%

)

P < 0.01P < 0.01

Echo ResultsEcho Results

REVIVAL IIREVIVAL II -- Aortic Regurgitation Aortic Regurgitation (n=21)(n=21)

None

Mild

Moderate

Trace

Mod-Severe

Severe

4

4

9

4

12

1

2

11

3

6

3

1

2

8

9

2

Pre Post

32

•• Improved valve implant success (87%)Improved valve implant success (87%)•• Excellent immediate valve performance (minimal Excellent immediate valve performance (minimal

AV gradients and no severe AR)AV gradients and no severe AR)•• Acceptable inAcceptable in--hospital clinical outcomes (mortality hospital clinical outcomes (mortality

7.4% and MACCE 16.6%)7.4% and MACCE 16.6%)•• Frequent vascular and neurological complications Frequent vascular and neurological complications

(13.0 % and 9.2% respectively)(13.0 % and 9.2% respectively)

REVIVAL IIREVIVAL IIConclusions Conclusions --11

Preliminary results of transcatheter AVR using the Preliminary results of transcatheter AVR using the CribierCribier--Edwards PHV, via Edwards PHV, via transfemoraltransfemoral retrograde retrograde access, in elderly patients at high risk for access, in elderly patients at high risk for conventional AVR, indicate:conventional AVR, indicate:

•• Improved LV function at 30 daysImproved LV function at 30 days•• Improved symptoms up to 3 monthsImproved symptoms up to 3 months•• Continued excellent valve performance up to 3 Continued excellent valve performance up to 3

monthsmonths•• No valveNo valve--related late cardiac deathsrelated late cardiac deaths

REVIVAL IIREVIVAL IIConclusions Conclusions -- 22

Clearly, longer term followClearly, longer term follow--up is required to assess up is required to assess valve durability. A valve durability. A multicentermulticenter U.S. pivotal U.S. pivotal randomized clinical trial is being planned to assess randomized clinical trial is being planned to assess the value of this new the value of this new tAVRtAVR therapy in high risk therapy in high risk patients with critical AS. patients with critical AS.

33

Retrograde TranscatheterRetrograde TranscatheterAVR at CUMCAVR at CUMC

A unique collaborative effort!A unique collaborative effort!

•• interventional cardiologistsinterventional cardiologists•• endovascular therapistsendovascular therapists•• cardiac surgeonscardiac surgeons•• vascular surgeonsvascular surgeons•• cardiac anesthesiologistscardiac anesthesiologists•• echocardiographersechocardiographers•• angioplasty assistantsangioplasty assistants•• dedicated nursing staffdedicated nursing staff•• research nurse coordinatorsresearch nurse coordinators•• industry specialists industry specialists

•• 100 100 yoyo Holocaust survivorHolocaust survivor•• critical AS (AVA 0.2 cmcritical AS (AVA 0.2 cm22), ), CAD CAD s/ps/p CABG, PAH, CRI, andCABG, PAH, CRI, andclass IV CHF; class IV CHF; EuScEuSc (log) 49%,(log) 49%,STS 29%STS 29%

•• 23mm 23mm CribierCribier--Edwards PHV,Edwards PHV,retrograde without retrograde without complicscomplics

•• Discharge POD #3Discharge POD #3•• Continues to do well Continues to do well -- markedmarkedlifestyle improvement!!!lifestyle improvement!!!

POD #1

POD #3

Transcatheter AVRTranscatheter AVRCase Example: CUMC (Aug 2006)Case Example: CUMC (Aug 2006)

34

Final Thoughts - 1Final Thoughts Final Thoughts -- 11

•• There is a There is a clear unmet clinical needclear unmet clinical need –– many many patients with severe AS are poorly served with patients with severe AS are poorly served with either surgery or medical therapy. either surgery or medical therapy.

•• Transcatheter AVRTranscatheter AVR has been performed in has been performed in almost 300 pts worldwide and almost 300 pts worldwide and proofproof--ofof--concept concept has been validatedhas been validated for the retrograde transfor the retrograde trans--femoral and the femoral and the antegradeantegrade transtrans--apical apical approachesapproaches…… pivotal pivotal RCTsRCTs are on the verge of are on the verge of beginning in the U.S.!beginning in the U.S.!


Transapical Surgical Delivery Transapical Surgical Delivery of the of the

CribierCribier--Edwards Aortic Edwards Aortic BioprosthesisBioprosthesis

-- Worldwide Clinical Experience Worldwide Clinical Experience --

Craig R. Smith, MDCraig R. Smith, MDChief, Cardiothoracic SurgeryChief, Cardiothoracic Surgery

Columbia University Medical CenterColumbia University Medical Center

Edwards LifesciencesEdwards LifesciencesInvestor ConferenceInvestor ConferenceDecember 8, 2006December 8, 2006

35

Transapical Surgical Aortic Valve Replacement of the Transapical Surgical Aortic Valve Replacement of the CribierCribier--EdwardsEdwards Aortic Bioprosthesis Aortic Bioprosthesis

The first sternal sparing, offThe first sternal sparing, off--pump/beating heart procedure pump/beating heart procedure targeting high risk patientstargeting high risk patients

Transapical Access

•• Minimal access incision between the ribsMinimal access incision between the ribs

•• Designed to improve clinical outcomesDesigned to improve clinical outcomes

•• Intended to shorten procedure and Intended to shorten procedure and recovery times recovery times

•• Aim to reduce hospital length of stayAim to reduce hospital length of stay

•• Potential to expand the market for valve Potential to expand the market for valve surgery by treating patients not treated surgery by treating patients not treated todaytoday

CribierCribier--EdwardsEdwards Aortic Bioprosthesis and Aortic Bioprosthesis and AscendraAscendraTMTM Transapical Valve Delivery SystemTransapical Valve Delivery System

CribierCribier--Edwards aortic bioprosthesisEdwards aortic bioprosthesis::•• Frame: Balloon expandable stainless Frame: Balloon expandable stainless

steel stent for sutureless implantationsteel stent for sutureless implantation•• Valve: Valve: TrileafletTrileaflet bovine pericardial bovine pericardial

tissue leaflets treated with ThermaFixtissue leaflets treated with ThermaFix™™processprocess

AscendraAscendra™™ valve delivery systemvalve delivery system::•• Balloon catheter system for direct Balloon catheter system for direct

ventricular transapical accessventricular transapical access•• Introducer sheath for direct ventricular Introducer sheath for direct ventricular

transapical access transapical access •• Designed for ease of use and timely Designed for ease of use and timely

aortic valve implantation aortic valve implantation

36

Transapical Surgical Aortic Valve Replacement: Transapical Surgical Aortic Valve Replacement: Procedural StepsProcedural Steps

4) Valve fully deployed3) Valve deployed over a guidewire using balloon catheter into native aortic annulus

1) Small incision between the 5th & 6th ribs of the left chest wall

2) Introducer sheath placed through apex & balloon valvuloplasy performed

CribierCribier--Edwards Edwards TransapicalTransapical Surgery Surgery Clinical ExperienceClinical Experience

•• Clinical indication for the transapical Clinical indication for the transapical approach = high risk surgical patients approach = high risk surgical patients who have one or more of the following:who have one or more of the following:

Significant cardiac & nonSignificant cardiac & non--cardiac cardiac comorbiditiescomorbiditiesContraindication for open chest Contraindication for open chest procedureprocedureAortic arch and thoracic aorta diseaseAortic arch and thoracic aorta diseaseSmall, tortuous, calcified iliofemoral Small, tortuous, calcified iliofemoral vesselsvessels

37

CribierCribier--EdwardsEdwards Transapical Surgery Transapical Surgery Clinical ExperienceClinical Experience

Participating SitesParticipating Sites

CenterCenter CliniciansCliniciansEUROPE EUROPE –– Feasibility Trial Feasibility Trial –– 72 pts (Nov 2006)72 pts (Nov 2006)

Heart Center Leipzig, Leipzig, GermanyHeart Center Leipzig, Leipzig, Germany Professor Professor Dr. F. MohrDr. F. MohrProfessor Dr. T. WaltherProfessor Dr. T. Walther

JWG University Clinics, Frankfurt, GermanyJWG University Clinics, Frankfurt, Germany Professor Dr. G. WimmerProfessor Dr. G. Wimmer--GreineckerGreineckerDr. M. DossDr. M. Doss

AKH/Medical University Vienna, Austria Professor Dr. E.AKH/Medical University Vienna, Austria Professor Dr. E. WolnerWolnerProfessor Dr. P. SimonProfessor Dr. P. Simon

CANADA CANADA –– Special Access Special Access -- 20 pts (Nov 200620 pts (Nov 2006))St. PaulSt. Paul´́s Hospital, Vancouver, BC, Canadas Hospital, Vancouver, BC, Canada Dr. S. LichtensteinDr. S. Lichtenstein

Dr. A. Cheung, Dr. J. YeDr. A. Cheung, Dr. J. Ye

US US –– Compassionate Use Compassionate Use -- 2 pts (Nov 2006)2 pts (Nov 2006)Medical City Dallas, Dallas, Texas, USAMedical City Dallas, Dallas, Texas, USA Dr. Todd DeweyDr. Todd Dewey

Dr. Michael MackDr. Michael Mack

CribierCribier--EdwardsEdwards TransapicalTransapical Surgery Surgery EuropeanEuropean Clinical ExperienceClinical Experience

•• Interim Analysis (Oct. 2006): 44 patients enrolled through Aug. Interim Analysis (Oct. 2006): 44 patients enrolled through Aug. 20062006

•• DemographicsDemographicsMean Age: 80.6 yrs Mean Age: 80.6 yrs Female: 79.5% Female: 79.5% Mean logistic Euroscore: 24.3%Mean logistic Euroscore: 24.3%NYHA Class III: 56.8%; Class IV: 43.2%NYHA Class III: 56.8%; Class IV: 43.2%

•• ResultsResultsExplants: 15.9% (7)Explants: 15.9% (7)

•• Perivalvular leaks: 13.6% (6)Perivalvular leaks: 13.6% (6)Overall Mortality Overall Mortality

•• Early Mortality Early Mortality << 30 days: 11.3% (5) (1 valve related)30 days: 11.3% (5) (1 valve related)•• Late Mortality: 11.3% (5) (0 valve related)Late Mortality: 11.3% (5) (0 valve related)

Significant improvement in mean gradients at dischargeSignificant improvement in mean gradients at discharge•• Preop: mean 45.88 Preop: mean 45.88 ±± 16.91 mmHg16.91 mmHg•• Discharge: mean 10.54 Discharge: mean 10.54 ±± 7.08 mmHg7.08 mmHg

38

Key Considerations for Transapical Surgical Key Considerations for Transapical Surgical Aortic Valve ReplacementAortic Valve Replacement

•• MultiMulti--disciplinary coordinated team approach optimal for 1disciplinary coordinated team approach optimal for 1stst

generation technology & proceduregeneration technology & procedure

•• Surgeons can be readily trained to perform transapical Surgeons can be readily trained to perform transapical procedure, but there will be a learning curveprocedure, but there will be a learning curve

•• Visualization is critical for procedural success Visualization is critical for procedural success -- valve valve placement requires high quality placement requires high quality echocardiographicechocardiographic and and fluoroscopic imaging fluoroscopic imaging

Hybrid OR provides best environmentHybrid OR provides best environment

•• Future standard of care for many high risk surgical patientsFuture standard of care for many high risk surgical patients

SEVERE AORTIC STENOSIS

AORTIC VALVE REPLACEMENT SURGERY

BALLOON AORTIC VALVULOPLASTY

REFUSALS

“MEDICAL THERAPY”

“ASYMPTOMATIC”

Valve Surgery Market Expansion MapValve Surgery Market Expansion Map

HIGH-RISKPATIENTS

39




REFUSALS


“ASYMPTOMATIC”

Mapping TCAVR: The present and PARTNERMapping TCAVR: The present and PARTNER

HIGH-RISKPATIENTS

TCAVR

At Columbia, availability of At Columbia, availability of TransfemoralTransfemoral has:has:

•• Generated AVR referrals from Generated AVR referrals from TransfemoralTransfemoral

•• Generated Generated TransfemoralTransfemoral referrals from AVRreferrals from AVR

•• NNet result: Modest growth in bothet result: Modest growth in both

40




REFUSALS


“ASYMPTOMATIC”

Mapping TCAVR: ShortMapping TCAVR: Short--term impact on AVRterm impact on AVR

HIGH-RISKPATIENTS

TCAVR




REFUSALS


“ASYMPTOMATIC”

The Future: Worst CaseThe Future: Worst Case

HIGH-RISKPATIENTS

TCAVR

41




REFUSALS


“ASYMPTOMATIC”

The Future: Best CaseThe Future: Best Case

HIGH-RISKPATIENTS

TCAVR

SummarySummary

•• Feasibility demonstrated in Europe, Feasibility demonstrated in Europe, Canada & USCanada & US

•• Transitioning to next phase trials in 2007Transitioning to next phase trials in 2007•• Technology & procedure will expand the Technology & procedure will expand the

market for valve surgerymarket for valve surgeryHigh risk patients not treated today High risk patients not treated today –– safer safer procedureprocedure““ValveValve--inin--valvevalve”” should accelerate tissue should accelerate tissue usage in younger patientsusage in younger patients

42

Transcatheter Aortic Technologies Transcatheter Aortic Technologies

Larry L. WoodVice President and General Manager,

Transcatheter Replacement

Larry L. WoodVice President and General Manager,

Transcatheter Replacement

Transcatheter Aortic Program UpdateTranscatheter Aortic Program Update

Target patient population Market potentialTechnology advancementsRegulatory pathway

43

Aortic Stenosis is Under-treatedAortic Stenosis is Under-treated

There are a number of reasons for the under-treatment:

Patients are too ill for traditional surgeryPatients are judged to be asymptomatic and thus not indicated for surgeryPatients decline surgery due to the invasiveness of the procedure

Less invasive therapies will increase diagnosis and referrals for treatment

Represents symptomatic patients diagnosed with severe ASDoes not include undiagnosed or asymptomatic patients with severe AS

About 50% of Severe Aortic Stenosis Patients Get SurgeryAbout 50% of Severe Aortic Stenosis Patients Get Surgery

* Other includes those with financial concerns, don’t want to live longer, etc.Source: Internal analysis

Annual Flow of Symptomatic, Severe Aortic Stenosis Patients

High operative risk, prohibitive comorbidities

Surgery No Surgery

Patient refusalAgeNot offered

60K

Aortic Replacement

25K

15K

10K

Other*

44

Edwards is Uniquely Positioned to Drive Transcatheter and Surgical ProceduresEdwards is Uniquely Positioned to Drive Transcatheter and Surgical Procedures

There is an abundance of patients with severe aortic stenosis who go untreatedA less invasive technology will lead to increased diagnosis and treatment This would increase both the transcatheter and surgical procedures

Source: AHA, Internal analysis* Only includes therapeutic interventions (not diagnostic angiograms)

Predicted CABG volume based on historical growth Actual CABG volume PCI volume*

PCI introduced

Stentsintroduced

0

100

200

300

‘81 ‘82 ‘83 ‘84 ‘85 ‘86 ‘87 ‘88 ‘89 ‘90 ‘91 ‘92 ‘93 ‘94 ‘95 ‘96 ‘97 ‘98

Thousands

400

500

600

Interventional Procedures Expand the Surgical MarketInterventional Procedures Expand the Surgical Market

45

Total Procedures Doubled by Year FourTotal Procedures Doubled by Year Four

Cardiac Procedures(in thousands)

CABG

“Pre-PCI growth”

0

500

1000PCI

‘81 ‘86 ‘91 ‘96 ‘01

Reimbursement Expected to be Favorable Reimbursement Expected to be Favorable

In the U.S., we have a reimbursement code and sites are being reimbursed for cases performed in the trialWe have country-specific plans in Europe We expect to have reimbursement in place for key markets at time of launchExpect pricing to be in the $13-$17K range global basis

46

Procedural Success Drives Therapy AdoptionProcedural Success Drives Therapy Adoption

4-815-20Number of sites added per month

5-77-9Procedures per month

<250>500Number of sites

Low (85%)High (95%)Variable

Procedural Success

While there are many modeling variables, procedural success is the most important.

Next Generation Edwards – SAPIEN THVNext Generation Edwards – SAPIEN THV

Edwards-SAPIEN THVPrevious

Skirt Height

New Skirt Height

Untreated EquineTissue

[]

Bovine TissueThermaFix TreatmentPericardial MappingLeaflet DeflectionProprietary Processing

Cribier-Edwards PHV

47

Next Generation Valve Leverages Edwards’ Proprietary TechnologyNext Generation Valve Leverages Edwards’ Proprietary Technology

PeriMap Technology Leaflets are optimally matched by thickness

Deflection TestLeaflets are matched for elasticity = improvedcoaptation, performance

One Transcatheter Valve – Two ApproachesOne Transcatheter Valve – Two Approaches

Edwards-SAPIEN THV

Transapical approachusing the

Ascendra Delivery System

Transfemoral approachusing the

RetroFlex Delivery System

48

Two Procedures = More Options for PatientsTwo Procedures = More Options for Patients

By having both procedures available, patients can receive optimal therapyTransapical approach provides surgeons with an advanced technology for treating their high-risk patientsTransfemoral approach provides interventional cardiologists with a technology for treating high-risk patients

Procedural Success ImprovementsProcedural Success Improvements

Our procedural success has been driven by many factors:

Better technologyImproved trainingBetter patient screening

While the improvements have been significant, there is still room for improvement

49

Advanced Training Reduces Learning CurveAdvanced Training Reduces Learning Curve

8%

28%

82 yrs.

Vancouver Transfemoral

Pts. 26-50

16%

28%

82 yrs.

Vancouver Transfemoral

Pts 1-25

7.4%30-day actual mortality

33%30-day predicted mortality

82 yrs.Average age

REVIVALN=54

More than 100 patients Significantly lower 30-day mortality versus predicted in target populationLearning curve improved with advanced training

Future DevelopmentsFuture Developments

Procedural outcomes will improve with better technology State-of-the-art simulation training will accelerate learning and adoptionExpanded indications for use, such as pulmonic valve replacementNext generation valve designs are progressing

50

A Procedural Simulator is Being Usedfor TrainingA Procedural Simulator is Being Usedfor Training

Real patient images

Clinical scenarios

Responsive hemodynamics

Adverse event scenarios

Performance metrics

The Edwards-SAPIEN THV is a Platform TechnologyThe Edwards-SAPIEN THV is a Platform Technology

The Edwards-SAPIEN valve platform can be used to treat pulmonicvalvesWhile this is a relatively small market opportunity compared to aortic, it leverages our existing technology and requires only a modest investment

51

Regulatory UpdateRegulatory Update

Expect to add our next generation delivery systems early next yearOn track in Europe for a late 2007 CE Mark approvalExpect to begin the U.S. pivotal trial in early 2007

Transcatheter Aortic Program SummaryTranscatheter Aortic Program Summary

There is a large unmet clinical need that can be addressed by transcatheter valve technologyEdwards’ transcatheter valve technologies are complementary to our surgical heart valve business Clinical feasibility has been demonstrated and we are ready to move to a pivotal trial Edwards is the clear leader and uniquely positioned to drive this technology

52

Helping Patients is Our LifeHelping Patients is Our Life’’s Work, ands Work, and

edwards lifesciences 2006 investor...

Documents