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Edwards Lifesciences Corp  (NYSE:EW)
Q3 2018 Earnings Conference Call
Oct. 23, 2018, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Greetings, and welcome to Edwards Lifesciences' Third Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, David Erickson, Vice President, Investor Relations. Thank you. Please begin.

David K. Erickson -- VP of IR

Welcome, and thank you for joining us today. Just after the close of regular trading, we released our third quarter 2018 financial results. During today's call, we'll discuss the results included in the press release and accompanying financial schedules, and then use the remaining time for Q&A.

Our presenters on today's call are Mike Mussallem, Chairman and CEO, and Scott Ullem, CFO.

Before we begin, I'd like to remind you that during today's call, we will be making forward-looking statements that are based on estimates, assumptions and projections. These statements include, but aren't limited to, financial guidance, expectations for product opportunities, clinical trials, litigation, new product approvals, reimbursement, competitive matters and foreign currency fluctuations. These statements speak only as of the date on which they are made and we do not undertake any obligation to update them after today.

Additionally, the statements involve risks and uncertainties that could cause actual results to differ materially. Information concerning factors that could cause these differences and important product safety information may be found in our press release, our 2017 Annual Report on Form 10-K and our other SEC filings, all of which are available on our website at edwards.com.

Also, a quick reminder that when we use the terms underlying, organic and adjusted, we are referring to non-GAAP financial measures. Otherwise, we are referring to our GAAP results. Additional information about our use of non-GAAP measures is included in today's press release and on our website.

And now I'll turn the call over to Mike Mussallem. Mike?

Michael A. Mussallem -- Chairman & CEO

Thank you, David.

We're pleased to report strong third quarter adjusted sales of $921 million or 11% growth on an underlying basis, consistent with our expectations, driven by a remarkable portfolio of innovative technologies. Year-to-date underlying sales growth was 10% and it was consistent with our full year guidance of 10% to 11%.

And even with the backdrop of a tough fourth quarter comparison, we expect 2018 to be a year of strong financial performance while also aggressively investing in our future. Looking forward, based on recent learnings, we have increased confidence that our innovative lifesaving therapies can benefit many more patients whose structural heart disease is deadly and under-treated today.

In transcatheter heart valve therapy, global third quarter sales were $558 million. Underlying sales were up 12.7% compared to the prior year, which reflects continued impressive organic growth. We estimate global TAVR procedures continued to grow robustly in the mid-teens. Our worldwide sales grew at a lower rate due to a modest year-over-year share decline outside the US and lower royalty revenues. Globally, our average selling price remained stable.

In the US, total procedures for the third quarter grew in the mid-teens versus the prior year and our growth was comparable. Growth was highest in newer and smaller centers where this therapy is increasingly accessible to a broader population of aortic stenosis patients. Based on our continued research, we are increasingly confident that there are many patients who would benefit from TAVR who are not diagnosed or treated today. We are continuing our efforts to increase awareness, improve diagnosis and help patients receive the care specified in medical guidelines.

Late in the third quarter, we began enrolling our limited continued access protocol or CAP for our US PARTNER 3 trial, which had a minimal impact on this quarter's results. And we continue to anticipate data from the PARTNER 3 trial to be presented at the ACC meeting in March of 2019, followed by receipt of a low-risk indication late that year.

Earlier this month, we announced the commencement of the US pivotal trial that will study our self-expanding CENTERA transcatheter valve for patients at intermediate risk of open heart surgery. And we expect the SAPIEN 3 Ultra system to gain US regulatory approval around the end of the year.

Following a public comment period and a review of TAVR outcomes at the Medicare Advisory Committee meeting in July, CMS is currently in the process of formulating a draft revision of the National Coverage Determination or NCD. This reconsideration is critically important for US patients seeking treatment for this deadly disease. We assume any changes to the current NCD are unlikely to significantly affect the global TAVR opportunity. We expect the new NCD to be finalized by June 2019.

Outside the US, procedures showed significant continued growth estimated to be in the mid-teens. Our procedures grew in the low double digits. We continue to see excellent long-term opportunities for growth as we believe international adoption of TAVR therapy is still low.

In Europe, we estimate the TAVR procedures grew at an impressive mid-teens rate, spread cross -- spread broadly across most countries. On a year-over-year basis, we experienced some expected share loss. However, our share stabilized this quarter, compared to last quarter. This quarter, we are implementing our targeted commercial introduction in Europe of our feature-rich CENTERA platform, which demonstrated outstanding clinical outcomes in its early experience. And we remain on track to receive a CE Mark of the SAPIEN 3 Ultra system in the fourth quarter.

We have decided to implement a controlled rollout strategy of Ultra, including training to ensure high procedural success of this advanced valve and delivery system and now expect it to have a minimal impact on results this year.

In an unrelated development earlier today, we announced that a court in Germany granted a preliminary injunction on future commercial sales of our SAPIEN 3 Ultra valve in that country. The decision does not impact sales of our SAPIEN 3 or CENTERA valves or the clinical study for European approval of SAPIEN 3 Ultra. We will promptly appeal.

In Japan, we continue to see strong TAVR therapy adoption, driven by SAPIEN 3, and new centers continue to be qualified. This is our fastest growing region this quarter, where we believe aortic stenosis still remains a large untreated disease.

In summary, year-to-date underlying sales growth for THVT is 12.5%, and we would expect full year 2018 to be in that area because of a limited contribution from Cardioband, which I'll discuss in a moment and revised rollout strategy for SAPIEN 3 Ultra. We are encouraged that the TAVR opportunity remains robust and we are confident in our new product offerings to sustain our strong global leadership position.

In surgical valve therapy, underlying sales for the third quarter was $199 million, up 3% on an underlying basis, consistent with our expectations. Growth was driven by solid aortic unit volume and continued adoption of our new premium aortic valves. With the approval of reimbursement, we're pleased to announce that we began launching our INSPIRIS RESILIA aortic valve in Japan last month. We expect strong adoption of this new class of resilient tissue valves in this important region. This valve is designed to be an attractive option for active patients, and we've observed a trend of physicians treating younger patients in our early global experience.

In summary, in surgical heart valve therapy, we continue to expect full year 2018 underlying sales growth of 2% to 4%. Even as TAVR adoption expands, we are excited about our ability to provide innovative surgical treatment options for more patients and to extend our global leadership in surgical heart valve technologies.

In critical care, our sales for the quarter were $164 million and grew 15% on an underlying basis. This performance was strong across all our product lines, led primarily by demand for HemoSphere. Sales in the US were particularly robust this quarter, additionally aided by new Group Purchasing Organization contracts. HemoSphere, our next generation all-in-one monitoring platform that is replacing our older monitoring systems, continue to receive excellent feedback from clinicians. HemoSphere is designed to provide greater clarity on a patient's hemodynamic status. This new monitor is expected to continue to be an important growth driver, although hospital capital replacement cycles can be somewhat unpredictable.

We continue to introduce our Acumen Hypotension Predictive Index or HPI to a limited number of hospitals utilizing our current platform until it becomes available on HemoSphere, which is expected in the fourth quarter. This first-of-a-kind technology leverages predictive analytics to alert clinicians of dangerous hypotension or low blood pressure before it occurs in their surgical patients.

In summary, due to excitement by early adopters of HemoSphere, 2018 is turning out to be a particularly strong year for critical care. We now expect 2018 underlying sales growth to exceed the top end of our full year guidance range of 6% to 8%.

Turning to our transcatheter mitral and tricuspid therapies or TMTT. We continue to invest aggressively in our portfolio of therapies. As you heard last month at TCT, the results of the COAPT trial clearly demonstrated the importance of reducing mitral regurgitation, reinforcing confidence in our strategy to address this large opportunity. There were also updates on our TMTT programs and you can expect a more complete overview of our portfolio at our Investor Conference in December. Today, I will cover some select updates.

Beginning with transcatheter mitral repair. Patients continue to be treated commercially in Europe with Cardioband, and we are encouraged by the high level of interest from clinicians in its potential. Third quarter sales were limited to $1 million due to the ongoing supply constraint in both our mitral and tricuspid programs and we expect that trend to continue in the fourth quarter.

In order to fortify our near-term supply and scale for longer-term volume expectations, we've decided to transfer production of this platform from the facility that we acquired to other Edwards manufacturing locations. We expect Cardioband supply constraints to progressively improve throughout 2019. We believe as this therapy advances, the annular reduction provided by Cardioband can be an important first line treatment for many mitral patients.

We continue to receive very favorable clinician feedback on our PASCAL mitral repair therapy, and still expect the European launch of this platform in 2019. In the US, we're pleased to announce the approval of our pivotal trial to study patients with primary mitral regurgitation and are in the process of securing hospital contracts.

In mitral valve replacement, we're encouraged by the positive scientific presentations at TCT last month on our new EWOK (ph) which is built on the learnings and experiences of CardiAQ. We continue to make good clinical progress with EWOK and SAPIEN M3 systems and remain confident in our transseptal mitral replacement strategy.

In transcatheter tricuspid repair, again constrained by supply, clinicians continue to treat a limited number of patients in Europe with our Cardioband tricuspid annular reduction system and we've received positive feedback on this therapy. In the US, we have initiated our early feasibility study. Overall, we remain enthusiastic about the opportunities for our transcatheter therapies to help patients who are suffering from mitral and tricuspid valve disease and we continue to expect a large global opportunity.

And now I'll turn the call over to Scott.

Scott B. Ullem -- Corporate VP & CFO

Thank you, Mike.

I'm pleased to report another quarter of double-digit underlying sales growth. Adjusted sales were $921 million, up 11% over 2017. These results were in line with our expectations and our typical third quarter seasonality. Consistent with our practice in the prior two quarters, adjusted sales exclude a sales return reserve related to our conversion to a consignment inventory model for surgical valves in the United States, which was $14 million this quarter. We still expect to complete the conversion by year-end and now estimate the conversion will impact sales by approximately $80 million to $90 million this year.

Adjusted earnings per share was $1.07 and GAAP earnings per share was $1.06. Adjusted EPS growth was 27%, which benefited from a lower tax rate driven by US tax reform and solid growth in operating income. Adjusted earnings per share was $0.02 higher this quarter than it would have been if the excess tax benefit was as we estimated in our guidance last quarter.

For the quarter, our adjusted gross profit margin was 75.5% compared to 74.4% in the same period last year. This improvement primarily reflects the benefit of a more profitable product mix and the absence of last year's expenses associated with Hurricane Maria in Puerto Rico. These benefits were partially offset by continued investments in manufacturing capacity. We continue to expect our full year 2018 gross profit margin, excluding special items, to be between 74% and 76%.

Turning to selling, general and administrative expenses. Third quarter expenses increased 10% over the prior year to $270 million or 29.7% of sales. This increase was driven by personnel related expenses. The ratio of SG&A as a percentage of sales would have been 40 basis points lower if you exclude the impact of the HVT consignment conversion. We continue to expect full year SG&A, excluding special items, to be between 28% and 29% of sales.

Research and development investments in the quarter increased 13% over the prior year to $162 million or 17.8% of sales. This increase was primarily the result of continued investments in our transcatheter programs, including spending on clinical trials. We continue to expect R&D, excluding special items, to be between 16% and 17% of sales for the full year.

Our reported tax rate for the quarter was 9.2%, down from 19.7% in the prior-year period. This reduction was driven primarily by US tax reform. This quarter's rate benefited 490 basis points from the accounting for employee stock-based compensation, which was 190 basis points higher than we estimated in our guidance last quarter. Excluding the impact from special items, our tax rate this quarter was 13.5%. We continue to expect our full year tax rate, excluding special items, to be at the low end of our previous range of 13% to 16%.

Foreign exchange rates decreased third quarter sales growth by $7 million or 0.9% compared to the prior year. At current rates, we continue to expect an approximate $30 million lift or about 1% to full year 2018 sales compared to the prior year. Compared to our July guidance, FX rates benefited earnings per share by about a $0.01 this quarter, reflecting the effect of currency hedging program we have in place.

Free cash flow generated during the quarter was $257 million. We define this as cash flow from operating activities of $342 million, less capital expenditures of $85 million. Our year-to-date, adjusted free cash flow, which excludes last quarter's tax audit settlements and repatriation taxes, was $550 million.

Turning to the balance sheet. Total debt at the end of the quarter was $1.2 billion and we had cash, cash equivalents and short-term investments of $1.6 billion. Just after the end of the quarter, we retired maturing bonds, which reduced both of these amounts by about $600 million.

Now turning to our 2018 guidance. For the full year, as we discussed earlier, we're now modeling slightly lower transcatheter heart valve therapy sales and higher critical care sales. For the total Company, our prior guidance ranges are unchanged as we continue to expect to achieve the higher end of each of the current sales guidance ranges of $2.1 billion to $2.4 billion for transcatheter heart valve therapy, $810 million to $850 million for Surgical Heart Valve Therapy and $610 million to $650 million for critical care and for total Edwards $3.5 billion to $3.9 billion.

Our prior guidance ranges for adjusted earnings per share and free cash flow are also unchanged. We continue to expect our full year adjusted EPS to be between $4.60 and $4.75. Lastly, we continue to expect adjusted free cash flow to be at the higher end of $700 million to $775 million. For the fourth quarter of 2018, at current foreign exchange rates, we project adjusted sales to be between $950 million and $1 billion and adjusted earnings per share to be between $1.05 and $1.20.

And with that, I'll hand it back to Mike.

Michael A. Mussallem -- Chairman & CEO

Thanks, Scott.

We remain confident in our outlook for continued strong sales growth and are passionate about helping more patients around the world. We continue to focus on driving organic growth with leading innovative technologies, while aggressively investing in our future. Our foundation of leadership, coupled with our robust product pipeline, positions us well for continued longer-term success and greater shareholder value as we pursue multi-billion-dollar market opportunities.

And with that, I'll turn it back over to David.

David K. Erickson -- VP of IR

Thank you, Mike.

Before we open it up for questions, I would like to remind you to mark your calendars for the evening of Tuesday, December 4th, and the morning of Wednesday, December 5th when we will be hosting our 2018 Investor Conference at our corporate headquarters here in Irvine, California. This event will include discussions with key opinion leaders, updates on our latest technologies and views on longer-term market potential as well as our outlook for 2019. More information will be available in the coming weeks.

We're ready to take questions now. In order to allow broad participation, we ask that you please limit the number of questions. If you have additional questions, please reenter the queue, and we'll answer as many as we can during the remainder of the call.

Operator, please go ahead.

Questions and Answers:

Operator

Thank you. We will now be conducting a question-and-answer session. (Operator Instruction) Thank you. Our first question comes from the line of Larry Biegelsen with Wells Fargo. Please proceed.

Lawrence Biegelsen -- Wells Fargo Securities -- Analyst

Good afternoon, guys. Thanks for taking the question. One on 2019 and one legal question. So Mike and Scott, I know you won't provide 2019 guidance until the Investor Conference in December. But you've always been helpful in providing some of the puts and takes looking at the following year. I think consensus is modeling about 10% revenue growth next year, which is similar to the underlying sales growth you're guiding to this year. It does seem like there's more tailwinds in 2019 than '18, which should help in the Street's modeling about 12% EPS growth. So is there anything you would call out there? And I had one follow up.

Michael A. Mussallem -- Chairman & CEO

Larry, you kind of answered your own question. We're not at a position to provide 2019 guidance until we get to the Investor conference. But I mean, if you just want to take big picture our TAVR business is healthy and we continue to expect mid-teens growth in that marketplace through 2021 and beyond, for that matter, and we know AS is dramatically under-treated. And when you couple that with this comprehensive TMTT portfolio, with some very nice mid-to-longer-term growth opportunities, we think it provides a very positive backdrop. We're committed to win in that space and we've been aggressively invested. And we just have continued confidence in our innovation strategy. So we'll get into the numbers later, Larry, but I think we have nothing specific to share at this time.

Lawrence Biegelsen -- Wells Fargo Securities -- Analyst

I understand. So Mike, let me push my luck a little bit and ask a legal question. I spoke with an investor today who said, I love what Edwards is doing in transcatheter heart valves and I'd like to buy the stock, but frankly I'm concerned Boston could potentially enjoin both SAPIEN 3 and Ultra in Germany any day. And I know you're appealing those decisions. But in the meantime, Boston does have that option. So Mike, if you were speaking to that investor, how would you allay his or her concern? Thanks for taking the questions.

Michael A. Mussallem -- Chairman & CEO

Well, I think big picture, you know that Boston Scientific has initiated litigation that involves a number of patents in multiple countries and it's likely to yield a number of court actions over an extended period of time. The recent developments have not changed our view that Boston's patents are invalid and we're confident in our leading intellectual property position.

Lawrence Biegelsen -- Wells Fargo Securities -- Analyst

Got it. Thank you for taking the questions.

Michael A. Mussallem -- Chairman & CEO

Sure.

Operator

Thank you. Our next question comes from the line of Jason Mills of Canaccord Genuity. Please proceed.

Jason Mills -- Canaccord Genuity -- Analyst

Hi Mike. Thanks for taking the question. I wanted to go back to Larry's question about puts and takes. What we've seen thus far in 2018 and frankly for the last 18 months are trials that would suggest that the low risk opportunity for you in TAVR is meaningful and could be material to growth rates for the marketplace. The LRT trial from Washington Hospital Center comes to mind recently. And there are other puts and takes, obviously, with some of your product launches and seemingly perhaps having more impact on 2019 than 2018. So I guess if we just stick with the market growth rates and sort of your share trends both in the United States and Europe, would you anticipate that the goings on with respect to trials on low risk over the next six to 12 months as well as new market entrants, Boston in the United States, sort of offset by your product launches would create an environment where market growth rates are still strong, maybe commensurate with what we've seen this year and you can maintain share over that time?

Michael A. Mussallem -- Chairman & CEO

Yes. Thanks, Jason. It's a good question. As I said, we continue to be confident about the long-term growth prospects for TAVR. But as you correctly surmised, I think this data that's going to come out related to the low risk indication has the potential to be some kind of a catalyst -- as we've said before -- probably not a step function, but a net positive to a market that's already growing quite nicely. As we've talked before, our pricing has been quite stable and so the question comes back to share. But it's share of a rapidly growing market and we're pretty confident in our position. I mean, it's absolutely true that we're going to have new competition, but at the same time 2019 is going to be the first year that we have real impact from our Ultra valve and CENTERA.

Jason Mills -- Canaccord Genuity -- Analyst

Okay, that's helpful. And then on the mitral side, Mike, you were asked several questions at the TCT meeting about COAPT, and I'm wondering, with the benefit of an extra month or so since that trial was presented, if you have any different or augmented perspective on how COAPT may or may not change the landscape in mitral and maybe more specifically how fast these trials enroll, whether it be your PASCAL study uptake in Europe of Cardioband and PASCAL, and then also on the replacement side, what COAPT may or may not do with respect to excitement around clinical trial enrollment in those studies? You have a couple going on, I know.

Michael A. Mussallem -- Chairman & CEO

Yes. Thanks, Jason. As you correctly pointed out, we've got quite a bit going on in the mitral space and we're excited about the new developments. The results of COAPT clearly demonstrated the importance of reducing mitral regurgitation and it does reinforce our confidence in our strategy to try and address this opportunity that's very large. We're just -- we're enthusiastic about the transcatheter therapies to help patients that are suffering in these areas. So we feel good about it. It can't hurt enrollment, that's for sure. It should facilitate that both on the PASCAL side and our other clinical trials that we have ahead.

Jason Mills -- Canaccord Genuity -- Analyst

Thanks, Mike.

Operator

Thank you. Our next question comes from the line of David Lewis of Morgan Stanley. Please proceed.

David Lewis -- Morgan Stanley -- Analyst

Good afternoon. Mike, just two questions for you. Your first just on Cardioband. And my sense is you reiterated sort of the $15 million contribution at TCT. So could you just talk about when the decision on manufacturing was reached? Should we assume basically zero revenue for Cardioband in the fourth quarter? And as you think about next year, you talked about scaling up manufacturing. Is $50 (ph) million a better way of thinking about '19 or is that sort of conservative relative to how you see the manufacturing scale-up next year? And then a quick follow-up.

Michael A. Mussallem -- Chairman & CEO

Yes. Thanks, David. You're right. We're more and more optimistic about being able to scale up Cardioband and now we expect that to change. We fell short of our goals of our current supply base and also the acquired facility. And so we've already begun this process to begin the transition to other facilities. As I mentioned in prepared remarks, we expect the supply constraints to progressively improve throughout 2019 and we'd expect the manufacturing transition probably to finish by the end of the year. So it's premature for us to be able to actually estimate numbers, David, but hopefully that gives you a sense of the direction and the rationale.

Scott B. Ullem -- Corporate VP & CFO

Hey, David, it's Scott. I'd just add in terms of contributions to Q4, it's not going to be zero, but it's probably going to look something more like what we did in Q3, maybe $1 million or somewhere in that range.

David Lewis -- Morgan Stanley -- Analyst

Okay. That's helpful. And then, Mike, the -- obviously the biggest update on this call was the decision to move forward with the US pivotal for PASCAL. So can you just talk about the decision of the company to move forward on primary MR and what the structure of that trial is going to look like? Thanks so much.

Michael A. Mussallem -- Chairman & CEO

Yes. So the -- this trial that we call the trial CLASP is one where we are going to be studying primary mitral regurgitation. It's going to be a 2 to 1 randomization versus MitraClip, and it's going to be -- for patients that are deemed inoperable by the local heart team. So the same way that MitraClip is labeled today -- non-inferiority study around 300 patients at 50 centers, primary endpoint MR rate reduction and then secondary endpoint of major adverse events.

David Lewis -- Morgan Stanley -- Analyst

Okay. Thanks so much.

Michael A. Mussallem -- Chairman & CEO

Sure.

Operator

Thank you. Our next question comes from the line of Isaac Ro with Goldman Sachs. Please proceed.

Isaac Ro -- Goldman Sachs -- Analyst

Good afternoon. Thank you, guys. Wanted to start with a question on pricing, I think you guys mentioned in your prepared comments that the global pricing dynamic for TAVR has been stable. But I'm interested in sort of what went on in the quarter competitively. I think that's been a topic of interest all year long. It seems like your competitors are still pretty active and fighting for market share in various ways. So I'd be interested in if you could put some color on what's going on in pricing, what's assumed in the rest of the year for your guidance on that topic. Thank you.

Michael A. Mussallem -- Chairman & CEO

Yes, thanks. Yes, you're right, we did mention in prepared remarks that global average selling price remained stable and we would expect that condition to continue in 2018. That's been very steady for some time to come. I know that we had some conversations last quarter about some aggressive pricing that we saw in Europe. We probably -- although there continues to be a significant difference between Edwards' pricing and our competitors', that's probably settled down a little bit and we look from a share perspective to believe that it's probably stabilized versus the quarter before. So I don't know if that helps get an extra question.

Isaac Ro -- Goldman Sachs -- Analyst

Yes, sure, that's helpful. And this is a follow-up on your comments for the MEDCAC panel outcome. There has been obviously a lot of debate about if that -- how the NCD gets updated, what that means for the marketplace and TAVR overall. Just want to make sure I understand your reasoning as to why you don't think that will have a meaningful impact at least initially and how you think that will play out over time. Thank you.

Michael A. Mussallem -- Chairman & CEO

Yes, it's a good question. I think big picture is CMS is taking a look at our -- what's going on in TAVR from a reimbursement perspective and consider that a success. So although the NCD needs updating and it will be updated, we don't expect right now for it -- for whatever happens to have a significant impact on the TAVR opportunity. Now, of course, depending on what they decide it could have some influence up or down, but we're just trying to share with you that when we do our own modeling, we're kind of modeling no significant change.

Isaac Ro -- Goldman Sachs -- Analyst

Understood. Thank you.

Operator

Thank you. Our next question comes from the line of Vijay Kumar with Evercore ISI. Please proceed.

Vijay Kumar -- Evercore ISI -- Analyst

Hey guys. Thanks for taking my question. So maybe I want to start one with the 2019 drivers. Obviously, given where we are in the year, I think all eyes are turned to 2019. When I think about the negatives, right, Mike, obviously you have pricing pressure ongoing in Europe and you have a new competitor coming into the US at some point, possibly mid of next year, but on the other side you have low risk approval Cardioband ramping up and PASCAL launching. I don't think you commented on the timing of PASCAL launch and we're just assuming mid of '19. And the base case seems to be one offsets the other. Is there any reason why TAVR growth in '19 could be below 2018 levels that you could think of?

Michael A. Mussallem -- Chairman & CEO

Yes, so -- I appreciate the fact that you're looking at the negatives. So we look at the future, and we're pretty positive about it. The pricing pressure in Europe is something that we've dealt with for a long time. That's been there and we're excited about having new products in the future. And although it won't have a big impact on Q4, it will have an impact going forward. The US approval has been somewhat inevitable that there was going to be that competition and we kind of fully accounted for that. We're going to be excited about bringing CENTERA and Ultra to the US as well. In terms of the upside on TMTT and some of those -- we're not prepared yet to talk about when we're going to launch PASCAL in terms of what time of the year, but it's going to be positive. But you also have to remember that THV, the aortic business, is a much larger business and has more influence on our near-term -- probably our 2019 sales.

Vijay Kumar -- Evercore ISI -- Analyst

That's helpful, Mike. And then maybe one if I could on the Cardioband, the ACTIVE trial. So I think there was some debate post -- COAPT whether it needs redesign. Now we've spoken to some people and they said the feedback seems to be the Cardioband or the annuloplasty patient population is very different from the CLEP (ph) patient population. If that thesis or assumption is true, then you may not need to redesign the Cardioband trial. You could do a device versus a drug trial. So I guess, I want to know, one, if suite (ph) of thinking annuloplasty, Cardioband is dead, how right or how wrong is the suite on those assumptions and -- versus the trial design, does it need to be changed? Any comments I think would be helpful.

Michael A. Mussallem -- Chairman & CEO

So big picture for us -- we continue to get positive feedback and our belief is that annular reduction that's provided by Cardioband could be a really important first line therapy. Again, it's going to require some advancements on our part, but we continue to feel strongly about that. In terms of the future implications of the ACTIVE trial -- post COAPT, we are assessing the implications of clinical trial design based on what was learned in that. And we hope that we are going to have more to share with you about that when we get to our Investor Conference in December.

Vijay Kumar -- Evercore ISI -- Analyst

Thanks, guys.

Michael A. Mussallem -- Chairman & CEO

Sure.

Operator

Thank you. Our next question comes from the line of Raj Denhoy with Jefferies. Please proceed.

Raj Denhoy -- Jefferies -- Analyst

Hi, good afternoon. What if I could maybe just dig a little bit on Europe? I think you mentioned that you did see some share loss early in the year, but it's stable at this point. I'm curious if you can confirm that, and really give us in terms of the dynamics in Europe, as we sit here today.

Michael A. Mussallem -- Chairman & CEO

Yes. I think as we indicated last quarter, we felt like we experienced some share loss, and so we continue -- that share loss, it happened, and so it continues to be reflected in our year-over-year growth rates. What we're saying is sequentially shares seemed to stabilize from our perspective. So this is -- so we're saying we didn't see it as a continued trend that continued into the third quarter. Does that get at your question, Raj?

Raj Denhoy -- Jefferies -- Analyst

It does. Yes, no, it does. And I'm curious if there's anything more you can offer in terms of where that was, was it specific accounts or why you did experience that share loss and why don't expect it's going to get any worse for you in Europe.

Michael A. Mussallem -- Chairman & CEO

Yes -- I don't know that I'm able to do that. I mean, this is pretty vast (inaudible) a lot of countries, a lot of moving parts here. I think it's just generally true. Even when we think back to what happened in Q2, it's not like it's widespread. It doesn't take a lot of procedures to change the actual results in transcatheter heart valves.

Raj Denhoy -- Jefferies -- Analyst

Okay, fair. Maybe just for my follow-up, just -- now you mentioned that you're not going to look at more of a measured rollout for Ultra in Europe. And I'm curious why that is, is there something about that valve? Do you think you need to go a bit slower now as you roll that out?

Michael A. Mussallem -- Chairman & CEO

Yes. Well, it's a good question. So -- we learned with experience that the Ultra system is different from SAPIEN 3 and we wanted to ensure that we had -- that we ensured our own high performance through training. Remember, we took steps on the procedure with Ultra mounting the valve on the balloon rather than alignment in the aorta, the (inaudible) is an improvement, but it also benefits from additional training. So we just wanted to make sure that we maintain this very high level of performance as we roll this out, knowing that it's a different valve. And that became apparent to us through our own experience.

Raj Denhoy -- Jefferies -- Analyst

Okay. Thank you.

Operator

Thank you. Our next question comes from the line of Bob Hopkins with Bank of America Merrill Lynch. Please proceed.

Robert Hopkins -- Bank of America Merrill Lynch -- Analyst

Thanks very much, and good afternoon. Just wanted to ask a couple questions, Mike, on PASCAL. First of all, can you give us a sense as to the first time that we'll see data from any PASCAL trial? I assume the first data would be from the European studies. So when will see some of that data?

Michael A. Mussallem -- Chairman & CEO

Yes. We would guess that it will be mid next year when data will really be available on PASCAL.

Robert Hopkins -- Bank of America Merrill Lynch -- Analyst

Okay. And then also -- maybe this is just my misunderstanding, but I'm just curious about your US PASCAL trial strategy, focusing on primary MR. What's the strategy for focusing on secondary MR, which is obviously the bigger market opportunity and the one that created all the attention at TCT. So what's the strategy on secondary?

Michael A. Mussallem -- Chairman & CEO

Yes. I mean, obviously it's on our radar screen. We don't have anything specific to report at this point. I will probably have more to say about that when we get to the Investor Conference, Bob. But you're right, that's an important patient population as well. But we didn't want to hold up on getting moving forward with our existing trial.

Robert Hopkins -- Bank of America Merrill Lynch -- Analyst

Got it. Thanks very much.

Operator

Thank you. Our next question comes from the line of Rick Wise with Stifel. Please proceed.

Frederick Wise -- Stifel -- Analyst

Good afternoon, Mike. Let me come back to your comments on the -- now the controlled launch for both the new TAVR device, CENTERA, and Ultra. Is this the new norm do you going forward? We should all generally assume and it makes sense I get it, to really (inaudible) and maybe you could help us understand what controlled means. Does it mean two or three centers? Does it mean that it will take you six months to sort of get your sea legs as it were, or no this is a process that it could take a couple of years? Can you help us better frame the thinking behind all that?

Michael A. Mussallem -- Chairman & CEO

Yes -- I don't know, it's the new norm. We certainly feel responsible. We are going to customers and offering systems that we think are improvements over systems that already have some very high performance. So the way that SAPIEN 3 has performed in big data sets, and so we feel we obligation to make sure that the next generations of systems, whether it's CENTERA or Ultra continue to perform, at least at that level or better. And so we just want to make sure that we invest the time to do that. For the most part, I expect this training to be done by our clinical specialists, it's not like we're going to start reproctoring patients again, but we do feel like we want people to slow down and recognize, hey, there's a number of advancements in these systems, let's really focus on them, understand them well so that you get great performance right from first patient.

Frederick Wise -- Stifel -- Analyst

All right. And maybe a question for Scott. Scott, yes, you highlighted capacity investments and anticipation of growth in new products. Maybe talk about what that -- how long that spending is going to go on, when you think that's completed and how that affects, if at all, any of the ramp for these new products.

Scott B. Ullem -- Corporate VP & CFO

We've been investing in increasing our capacity now for a couple of years. And remember we are supply constrained and so we had some catching up to do just to support THV. Now we're ramping up to also support expansion in TMTT and so we've been making investments in our existing facilities in the US and outside of the US. And as you know, we're working on building a new facility in Costa Rica and just announced a plan earlier this year to put in a facility in Ireland and so I think that spending an investment is going to continue for a number years down the road. You've seen it reflected in our higher capital expenditure investments will probably be over $200 million this year and the result is going to be that we'll be able to satisfy the needs for really addressing these large untapped markets in the years ahead.

Frederick Wise -- Stifel -- Analyst

Thanks, Scott. Thanks, Mike.

Thanks, Scott. Thanks, Mike.

Operator

Thank you. Our next question comes from the line of Glenn Novarro with RBC Capital Markets. Please proceed.

Glenn Novarro -- RBC Capital Markets -- Analyst

Hi, good afternoon. Hey Mike, I know you don't want to give guidance for 2019. But as I think about what I'm hearing on this call, a slower rollout of SAPIEN, Ultra in 2019 and hopefully some positive benefits later in the year from PARTNER 3, so as you, one, assume as we build our models for 2019, kind of a slower first half and a stronger second half. And I know the comps are going to be a little bit easier as well. So maybe some color on kind of how we should think about 2019 and US TAVR ramp. Thanks.

Michael A. Mussallem -- Chairman & CEO

Yes, thanks, Glenn. I think you've got the right idea. I do think you should more think of ramp rather than step function in 2019. And you're right, whether it's the way we roll out new products or the way the product -- or the way that physicians and the rest of the marketplace absorb the low risk data, we think this is going to happen in a gradual fashion rather than sort of a jump. So yes, I think it's reasonable to think about that. Remember, the low risk approval itself doesn't come until late in '19.

Glenn Novarro -- RBC Capital Markets -- Analyst

Okay, and then just as my follow-up, just to clarify PASCAL in Europe, can you just remind us where you are in enrolling that trial? And can you give us some specifics as to when in 2019 you think you'll be launching in Europe? Thanks.

Michael A. Mussallem -- Chairman & CEO

Yes. We've resisted giving specifics on 2019. We're right on track on that trial. So we're continuing to enroll patients and so that -- it's right where we want it to be. And so we expect to be launching in 2019. But at the Investor Conference we may have more detail for you, Glenn.

Glenn Novarro -- RBC Capital Markets -- Analyst

Okay. Can I just sneak in one more for Scott? Scott, can you give us just ballpark for next year of where the tax rate is? We're modeling an uptick but is it 200 bps, 300 bps? Anything in the ballpark for the tax rate next year would be helpful. Thanks.

Scott B. Ullem -- Corporate VP & CFO

Yes, we're reluctant to do that at this point. And I can't say that it's a lot lower than we would have expected at the beginning of this year. As you know, we're looking at the lower end of a 13% to 16% rate for the full year 2018, but I'm reluctant to get into any more than that. Keep in mind, one of the big influences on our tax rate is this excess tax benefit that we receive from the premium on employee stock based performance-based options. And so that's a variable that we'll be able to estimate a little bit better maybe when we get to the Investor Conference in December.

Glenn Novarro -- RBC Capital Markets -- Analyst

Okay, great. Thanks, Scott.

Operator

Thank you. Our next question comes from the line of Bruce Nudell with SunTrust.

Bruce Nudell -- SunTrust -- Analyst

Good afternoon. Thanks for taking my questions. Mike, you've had some commercial experience with CENTERA in Europe and just given all the discussions about pricing, are you seeing that the customer appeal of CENTERA is up to your expectations?

Michael A. Mussallem -- Chairman & CEO

I mean, our experience has been that the customers that have tried CENTERA really like it. It's feature rich and we've frankly sensed a lot of excitement, and so the early feedback has been very strong on that system and even the early feedback in the US is quite positive for those people that are in the trial.

Bruce Nudell -- SunTrust -- Analyst

And my follow-up is on COAPT. I mean, I listened to your comments today from last quarter and you explicitly said you don't expect -- people (inaudible) hope for a mortality benefit, but you got both mortality and a rehospitalization benefit in a very convincing way and before you had said this market would be $3 billion in 2025. How should we be thinking about it now that we actually have that very important clinical proof of concept?

Michael A. Mussallem -- Chairman & CEO

Yes, I know, you're right about that. We had shown confidence and this being the -- as we said, our $1 billion and $3 billion projections in the past, so we haven't backed off on that and here -- here's the COAPT trial that is very impressive, and I think even surprised us. So we are thinking about that deeply, Bruce. We don't have anything to share at this point, I mean, we'll be able to get deeper with you in terms of mitral models when we get to the investor conference. So I guess, we're starting to sound a little bit like a broken record, but we're in the process of studying that now.

Bruce Nudell -- SunTrust -- Analyst

Thanks so much.

Operator

Thank you. Our next question comes from the line of Joanne Wuensch at BMO Capital Markets. Please proceed.

Joanne Wuensch -- BMO Capital Markets. -- Analyst

Hi, good evening, and thank you for taking my question. One of the things that investors frequently ask us is how much or how many of the low-risk patient pool has been already penetrated, with sort of the shifting labeling of STS as not necessarily metric for defining low versus intermediate risk, the sort of segues into the (inaudible) risk really help them next year. How would you respond to that?

Michael A. Mussallem -- Chairman & CEO

Yes, we don't think there has been any significant penetration of this low-risk group. We believe that our customers largely stay on label, and it's because it's backed up by the NCD and again the NCD is very clear of (inaudible) paid for and the stakes are quite high to go off base from that perspective. Having said that, the whole designation of risk categorization by various patient groups, I think, is going to become an obsolete notion once PARTNER 3 is out there. There's not going to be this question of, gee, how risky is it for patients to go through surgery. We believe that we're going to have a trial demonstrate that TAVR is substantially equivalent to surgery for all patients at this point, or at least the groups that have been studied. It's going to be more about anatomy than it is about risk. So we think the conversation is going to change, and we believe it's going to be helpful to have that PARTNER 3 data, probably the last really big transcatheter aortic valve study done in patients with severe aortic stenosis and symptoms.

Joanne Wuensch -- BMO Capital Markets. -- Analyst

And my second question has to do with product time lines. I'm sure we'll get a full update in December, but can you give us an update on where you are with FORMA. If memory serves, you've paused (ph) that clinical trial or product development? Thank you.

Michael A. Mussallem -- Chairman & CEO

Yes, thanks. So we had some procedural learnings as we rolled out FORMA, and that led to system enhancements. And we resumed treating patients on a compassionate basis with the new FORMA system and we're pleased with that. But it's still early experience with the revised system.

Joanne Wuensch -- BMO Capital Markets. -- Analyst

Thank you.

Michael A. Mussallem -- Chairman & CEO

Sure.

Operator

Thank you. Our next question comes from the line of Chris Pasquale with Guggenheim. Please proceed.

Christopher Pasquale -- Guggenheim -- Analyst

Thanks. Mike, first on Cardioband. I just wanted to confirm that this is an issue with the facility and not with the product. Is the fix here really just a location change or are there things you need to tweak about the product design itself to make it more manufacturable?

Michael A. Mussallem -- Chairman & CEO

Yes, no, we're really talking about fixing supply constraints, Chris. If your question is, is there an issue with the performance or with the demand, I mean, we believe the demand has been there. We've got a lot of suppliers on that system. There's been a lot of integration into the Edwards system and this has been significant. But recall, we are always innovating, where we're going to improve the system over time. But the supply constraints that I'm talking about are not related to some overall performance shortcoming but just our ability to supply at the level that we'd like to hit the quality level we want to.

Christopher Pasquale -- Guggenheim -- Analyst

Yes. And just to clarify, I'm not talking about clinical performance, but just the manufacturability of the product itself. Is it too hard to make or is it just a problem with where it was being made?

Michael A. Mussallem -- Chairman & CEO

Yes. So when you get into these kind of things, of course, we have many, many suppliers in that system. They wouldn't be typical Edwards suppliers, and they're also in a very small facility in Israel that's not very typical to what Edwards would employ. And we just feel like we need to make migration of both some of the suppliers and the manufacturing facility itself so that we feel confident both in boosting the near term and fortifying the supply and also being able to scale as for our long-term expectations.

Christopher Pasquale -- Guggenheim -- Analyst

That's helpful. And then just quickly on critical care. Can you talk a little bit about how you frame the opportunity for HemoSphere? The business grew 15% this quarter. That's something nice; you should get noticed a little bit. Should we be thinking about that as a very short-term upgrade cycle you're going through right now or could double-digit growth in that business actually be sustainable for a while?

Michael A. Mussallem -- Chairman & CEO

Yeah, I mean, we're really pleased with what's going on in critical care, and you're right. HemoSphere has been very popular with customers and these early adopters have really boosted our sales growth rate. Now we did get a little bit help this year for some group purchasing organization contracts, but HemoSphere has been the one that's really driven this. It's -- part of what we're benefiting from is a capital replacement cycle as it replaces our existing monitors. Although we're not deep into that replacement cycle at this point, it's hard for us to predict what this is going to look like. And so it's tough to say exactly what it's going to mean for the future growth rates. I wouldn't automatically anticipate that we're going to maintain a growth rate like we just enjoyed in the third quarter.

Christopher Pasquale -- Guggenheim -- Analyst

Thanks.

Operator

Thank you. Our next question comes from the line of Robbie Marcus with JP Morgan. Please proceed.

Robbie Marcus -- JP Morgan -- Analyst

Thanks for taking the question. Scott, maybe some financial housekeeping questions here. Gross margin came in better than expected. Maybe you could help us with the drivers there. Were hedges included in that, and how we think about FX, both for the balance of the year, on the top and bottom line and what your latest count is into 2019?

Scott B. Ullem -- Corporate VP & CFO

Sure. As it turns out, gross margin came in right about where we expected, and I think that was a little bit above where someone on the Street, but it was right where we thought it was going to be. It was up over 100 basis points versus the 74.4% in the third quarter of 2017, and it reflected benefit from improved mix which we've been seeing consistently with the growth of THV and it also reflected the benefits of not having the recurring expenses that we experienced from Hurricane Maria last year. And that was offset a little bit by manufacturing capacity investments that we talked about earlier.

Robbie Marcus -- JP Morgan -- Analyst

And where FX stands for top and bottom line for this year and next year at current rates?

Scott B. Ullem -- Corporate VP & CFO

So for FX, we continue to expect that for the full year we'll see about a 1% benefit to sales or $30 million. At the gross profit line, we're largely insulated. By the time you get down to EPS, it's about $0.01 benefit in the third quarter. But the gross profit line, it's tough to predict what the impact is going to be from these hedge outcomes that we realized during the course of the year.

Robbie Marcus -- JP Morgan -- Analyst

Okay, thanks. And maybe as a follow-up, I haven't heard any update on Harpoon lately. Maybe you could just give us the latest status of that program. Thanks.

Scott B. Ullem -- Corporate VP & CFO

Sure. Last time we talked about it, we said that we are examining the root cause of some of the complications we saw earlier. We haven't completed that analysis. We will report to you as soon as we have that completed. We're hopeful that that's not going to go on too much longer.

Robbie Marcus -- JP Morgan -- Analyst

Thank you.

Operator

Thank you. Our next question comes from the line of Danielle Antalffy with Leerink Partners. Please proceed.

Danielle Antalffy -- Leerink Partners -- Analyst

Hey, good afternoon, guys. Thanks so much for taking the question. Mike, I just have two questions for you. One on US and one on ex-US and litigation. So first on US, this is the market that presumably or potentially could be going from two players to four sometime over the next, call it, 18 to 24 months. And I know I've asked this before, but just how are you feeling about the sustainability of the pricing environment, particularly in the context of what we're seeing happen in Europe? And then I just have the one follow-up on litigation.

Michael A. Mussallem -- Chairman & CEO

Sure. We have a lot of experience selling heart valves in the US and we wonder whether THV is going to be a lot different than that. It's a pretty heavy lift to be able to get a product approved in the US market, and we think largely our competitors, our disciplined pricers, especially with all the work that is necessary and critical investment necessary to come to the US market, so we are not overly concerned. We, in our long-term models, we model a modest price decline. But we don't think there's going to be anything that's dramatic. For the most part, when we do our own pricing we do some discounting based on volume, right.

Danielle Antalffy -- Leerink Partners -- Analyst

Okay, got it. And then just last question here for me. Appreciating that you're not going to necessarily comment on the ongoing litigation, but let's just assume -- I understand that Ultra is certainly an advance, but I'm curious about how you feel about your competitive positioning for SAPIEN 3 with or without the advance of Ultra, I guess I'm trying to get at assuming Ultra does get enjoined. It feels to me like there is no reason to think there should be any significant shift in market share for SAPIEN 3 from here but tell me if you think I'm thinking about that wrong.

Michael A. Mussallem -- Chairman & CEO

Yes, I mean, we're really pleased. I think SAPIEN 3 has clearly demonstrated that it is best-in-class performance, and there's an awful lot of data that supports that. Our efforts in Ultra was to be able to do that and do it even better and be able to have some advantages for physicians and patients that go along with that. So we were very proud of the SAPIEN 3 platform and feel good about where it stands.

Danielle Antalffy -- Leerink Partners -- Analyst

Thank you so much.

Operator

Thank you. Our final question today comes from the line of Kristen Stewart with Barclays. Please proceed.

Kristen Marie Stewart -- Barlcays -- Analyst

Hey guys, thanks for taking the question. Sorry for my voice. I just wanted to circle back just in terms of thinking about kind of the P&L and just kind of generally, your philosophy on how you think about -- I know you're not giving guidance, I assume you will give explicit guidance at the Analyst Day. But how do you feel about at this stage in ramping up to support things like mitral and tricuspid R&D came in a bit heavier this quarter. Is this kind of a new sort of run rate, maybe we should think about 16 to 17 but maybe closer to 17 ongoing rate and then whether or not there's additional investments that need to really be made from a sales and marketing perspective that's not really being reflected this year?

Michael A. Mussallem -- Chairman & CEO

Yes, thanks, Kristen. Maybe I'll make a few comments and let Scott jump in and add additional color. So big picture, we are -- you know we're aggressive investors in R&D and we see rich opportunities. We've been aggressive not only in our current portfolio, but also in the new portfolio associated with transcatheter mitral and tricuspid. I think our R&D as a percent of sales always look seasonably high in the third quarter. Remember we -- this is our -- for at least for our company, this is our lowest seasonal quarter, so ratios tend to be a bit deceiving. But the nonetheless, we're going to stay aggressive investors in the space.

Scott B. Ullem -- Corporate VP & CFO

Yes, I just add, we had the benefit of this tax reform in 2018, and so end up being able to invest even more aggressively and advance some of these programs that we've had on deck to really accelerate to ultimately commercialization. And so we've been fortunate to be able to fund these programs and to continue to invest for long-term top line organic growth.

Kristen Marie Stewart -- Barlcays -- Analyst

Okay. And then, Scott, just a follow-up on the kind of topic of tax I think has just kind of came up before, but if I look at kind of the year-to-date run rate for the adjusted tax line, how much of that is just related to employee stock compensation? I guess this quarter was 490 -- is that consistent with the full year-to-date and kind of thinking forward to next year -- I know you didn't make comments, but is that something that you can typically start out at the year assuming no benefit?

Scott B. Ullem -- Corporate VP & CFO

This is -- it's really hard to estimate because as you know, exercises tend to go up when the stock price performs well and then the tax benefit is even greater the higher the stock price is, so you get this double benefit. The reverse also happens. And so if the stock is not as mobile on the upside, then there may not be as many exercises and the value of those exercises does not flow through to the same degree of the tax rate. So this year, we've -- this quarter, we realized an effective adjusted tax rate of about 13.5%. You mentioned before a 490 basis points of that was for from the excess tax benefit, but we'll think more about it and try to give you our call when we get to the Investor Conference for 2019, but this is one that's tricky. It's one of the reasons why we have also started talking about our operating profits and our operating margins just because the bottom line is more volatile as a result of this new accounting practice.

Kristen Marie Stewart -- Barlcays -- Analyst

Okay. That makes sense. Thanks very much, guys.

Michael A. Mussallem -- Chairman & CEO

Okay. Well, thanks all for your continued interest in Edwards. Scott, David and I welcome any additional questions by telephone. And with that, I'll turn it back over to David.

David K. Erickson -- VP of IR

Thank you for joining us on today's call. Reconciliations between GAAP and non-GAAP numbers mentioned during this call, which include underlying sales and growth rates and amounts adjusted for special items, are included in today's press release and can also be found in the Investor Relations section of our website at edwards.com. If you missed any portion of today's call, a telephonic replay will be available for 72 hours, and you can access this by dialing 877-660-6853 or 201-612-7415 and use the conference number 13683434. Additionally, an audio replay will be available on the Investor Relations section of our website. Thank you very much.

Operator

Thank you. This concludes today's conference. You may disconnect your lines at this time. And thank you for your participation.

Duration: 64 minutes

Call participants:

David K. Erickson -- VP of IR

Michael A. Mussallem -- Chairman & CEO

Scott B. Ullem -- Corporate VP & CFO

Lawrence Biegelsen -- Wells Fargo Securities -- Analyst

Jason Mills -- Canaccord Genuity -- Analyst

David Lewis -- Morgan Stanley -- Analyst

Isaac Ro -- Goldman Sachs -- Analyst

Vijay Kumar -- Evercore ISI -- Analyst

Raj Denhoy -- Jefferies -- Analyst

Robert Hopkins -- Bank of America Merrill Lynch -- Analyst

Frederick Wise -- Stifel -- Analyst

Glenn Novarro -- RBC Capital Markets -- Analyst

Bruce Nudell -- SunTrust -- Analyst

Joanne Wuensch -- BMO Capital Markets. -- Analyst

Christopher Pasquale -- Guggenheim -- Analyst

Robbie Marcus -- JP Morgan -- Analyst

Danielle Antalffy -- Leerink Partners -- Analyst

Kristen Marie Stewart -- Barlcays -- Analyst

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