Edwards Lifesciences 2019 Investor Conference. My name is Mark Wilterding. I'm the Vice President of Investor Relations. On behalf of the company, it's great to see so many people here today, both in person and online. Before we start, just a few housekeeping items that I wanted to get through. This morning, as I think you've seen by now, we issued a press release. It's also included in the information that you have in front of you in the packets, but just know that is available as well as on our website. As usual, today, the safe harbor and risk factors apply today.
I encourage you all to consult the latest SEC filings, including our 10-K and 10-Q, which have the full details. We'll also be making forward-looking statements, which speak only as of today, and we do not undertake any obligation to update them after today. Today's presentation also includes some figures identified as underlying and adjusted. When we use these items, we're referring to non-GAAP measures. Reconciliation of these non-GAAP measures is available on our website.
You'll notice today in the agenda, we've built in some time for Q&A. During the question- and- answer times, please raise your hand to be acknowledged. We'll get a mic to you as quickly as possible. If you could identify yourself and please limit yourself to one question so we can get to as many as possible, that would be great. With that, it's my pleasure to introduce our Chairman and CEO, Mike Mussallem. Mike?
Thanks, Mark. Thanks, all. Welcome to all of you, and thanks so much for taking time out to learn more about Edwards. We really appreciate you doing that and are humbled by that. I'm going to jump right in there. We've got an exciting program for you today, and I want to start off by telling you a little bit and then showing you a video of what makes Edwards go.
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It gives you a bit of a glimpse into our culture, and it's a culture that I'm extremely proud of. We all are. It really does make us go. At the center of that is our credo. Our credo was put in place when we became a publicly traded company 20 years ago now. You'll notice, we know that we can't do our work alone. It really takes a community for us to really have impact on patients, and we strive hard to be trusted partners with all the folks in the community. There's a lot of dialogue now about having a broad collection of stakeholders, a multi-stakeholder model.
We were kind of born that way. You see, our credo says our results will benefit customers, patients, employees, and shareholders. We really live it that way, and we close with helping patients is our life's work. That's really what motivates us and allows us to attract some of the best and brightest to be part of our team. Our company is driven by a set of aspirations. This is what we reach for on a continual basis. Transforming patients' lives with breakthrough medical technologies.
Easy to say, hard to do, but very motivational. Excelling as a trusted partner through our distinguished quality and integrity. Again, something we focus on every day. An inclusive culture where all employees can grow and thrive. Passion and engagement with our communities. We try and be folks that give back to all the communities that we operate in, and give back more than we take. People will say. We're glad that Edwards is in the community.
Finally, we feel like if we get that all right, that we can deliver exceptional shareholder value, and that's what we absolutely strive to do. It's hard to describe Edwards in a single slide. This is an attempt at that. At the center is our employees. It's an extraordinarily diverse group of employees. We're a very global company. We not only have a tremendous amount of experience in the company, we also have a tremendous amount of youth. Over half of our employees are Millennials and Gen Z. I'm proud that we're a leader in what we do. Over close to 100% of what we sell are in number one global positions.
What I'm most proud of is on a recent survey, one of the questions we asked employees is, do you think about patients when you make decisions? Over 90% of employees said yes. That's powerful from my perspective, because that talks to the credo and our aspirations in action. Our strategy is unchanged. We're proud of this strategy. It's a differentiated strategy, and we think it's one that works very well and allows us to really accomplish what we're trying to do. What makes it probably most differentiated is the focus.
At a time when many others in the medical technology world are diversifying, we've decided that we should absolutely stay focused. We are laser-focused on structural heart disease and the critically ill. The question would be, gee, why don't you go to other growth areas? We believe there's an incredible amount of growth possible within this space and that these patients are underserved. Yes. Are they served better than their parents were served or their grandparents? Of course, they are. Could they be served much better than they are today? Absolutely.
We think we're the ones to do that. By staying focused, we're able to bring more resources, have more understanding, understand the patient's journey, the burden that they bring, and potential solutions better than others that look at lots of opportunities. The other key element of our strategy is innovation. Many people say that. We strive for not just small innovations, but big, bold ones, bold ones that would actually change the practice of medicine. We believe that we can do that. Those are inherently risky, and many of the things that we start don't necessarily work out, but it's so fulfilling when you get that right.
One of the things that goes along with those big, bold innovations is you better back it up with evidence because the practice of medicine is not going to change without big evidence. We know that's part of what we must do to execute this strategy. When we embark on this, we embark on it with the idea that there's going to be many years involved to actually demonstrate that these breakthrough innovations work.
Finally, leadership is a key component of our strategy. Sounds easy. People would say, "Yeah, why not lead?" Actually, it's way more efficient to go second and learn from other people's mistakes. There's something special that happens when you go first. We feel like you learn faster than others. It puts you in the room with policymakers and decision-makers when you're trying to craft how it should be done better than it's been done in the past, and we like it.
Although there's inherent risks that go along with innovation and leadership, it also allows us to be in a position here to really deliver on it. With an organization that's built to be agile and to be well-informed, we think that we can maneuver our way and find a way to make breakthrough innovations happen and really transform care, which is where the value gets created. We're fortunate that this strategy has delivered results. We've got more than 10 consecutive years of double-digit growth. We're pleased about that. It demonstrates how much patient demand there is out there for the work that we do and the power of a triple win.
When we're fortunate enough to have an innovation that extends life, that improves the quality of life, and saves the system money, now you have a winner. That's what we consistently try to do. When we can deliver on that, then we know that these long-term investments will actually pay off. The environment is one that stays dynamic. It's ever-changing. I would call it mostly favorable, although challenging at times. Underlying it for us is a growing and aging population, and that population is going to need our help. So we think that is a real positive. At the same time, this growing and aging population is consuming more healthcare than ever before, and it puts a lot of pressure on governments and systems to say, "We better get good value for healthcare."
There's more sophistication going into the determination of value than ever in the past. It's as if we're kind of moving into an area where we're treating structural heart more than ever before. You're watching systems prioritize structural heart as a growth area, as a place where they can deliver value that we haven't seen in the past. We would call the innovation climate in the U.S. as basically favorable, probably improving to some extent, probably becoming more challenging in Europe in general, and emerging and really growing in Asia at a pretty quick pace, but still a long way behind the U.S. We think the inclusion and use of digital technology is going to have profound impact on the healthcare system in several ways.
One, it's just going to plain help companies like ours run our company better. Separate from that, it's going to give us insight into patients and patient journeys like we've never seen in the past. We're excited about that, and we think it'll cause more patients actually to get treated better, like right patient, right time, right place. Just a glimpse into Edwards and what's coming, what you're going to hear about at the conference. You're going to hear that we've had a strong 2019, and it's been underpinned by some very strong TAVR growth. 2020 looks like it's going to be another very good year where we're going to have a chance to have a lot of positive impact.
I hope you get a sense for the depth and knowledge of this team, and also the large group of patients that are underserved, and get some look at our pipeline. We're excited about our pipeline and the ability of those technologies to reach more than ever. Stay tuned for that. 2020, you know the numbers. I'm sorry, I said 2020. I meant 2019. You know the numbers there, and you probably know 2020 by now as well. 2019 is going to turn out to be a very nice year, another year of double-digit growth. What I'm most proud of is each of our businesses is going to exit the year stronger than we entered the year, and that's something that we're very proud of.
Not only were we able to have some good financial performance, but we've gotten a lot of experience with breakthrough medical technologies, patient experience. That's some of the most valuable and really builds our confidence about what's ahead. At the same time that we delivered good, solid bottom-line performance, we were serious investors in the future. We continued to plant seeds for that, and fully knowing that the success that we enjoyed in 2019 is a result of the seeds that were planted five, 10, and 15 years ago, and knowing that the seeds that we plant today are the ones, again, that are going to pay off into the future.
2020 we think is going to be another great year. You're going to get a chance to hear from each of the business units about what their plans are, what their challenges are, and how they're going to tackle the future. Again, we think another double-digit year, and another year where we're very serious about investing in the future. We're going to continue that aggressive investment in our research and development. At the same time, it'll be a year where you'll see financial results.
You'll also see some serious progress, hopefully, on our milestones and the important therapies and technologies that we expect to deliver during the course of the year. Here's the conference agenda. I think you have this in front of you. You're going to get a chance to hear from our business leaders, and I'm very proud of this group, and you'll get a chance to get insight and ask questions of them. Scott Ullem is going to share the financial outlook in a fair amount of detail. You're also going to get a chance to hear from physicians, and we know that from past conferences that this is something that you like the most.
You're going to hear about research associated with moderate aortic stenosis and the challenges of changing practice as it becomes this new area of Transcatheter Mitral and Tricuspid Therapies. You're going to hear from a number of members of Edwards' executive leadership team. There's a number of others that are also in the audience today. I am really proud of this team. Each of these people are really, in my view, best in class in terms of what they do. They have a tremendous amount of experience. The thing that you would feel good about is, I don't know if you realize how Edwards is run. It's not like there's a single person that's making decisions here.
We run this company together. This group collectively brings all their experience and all their passion together, and we develop our long-term strategies, and we work through all the operating opportunities and challenges, and we do this as a team. This is a group of people that really get along together, respect each other, and deliver a lot of progress. You'll be glad to know that they're also incentivized to be aligned with shareholders. With that, it's my pleasure to introduce Larry Wood, who's going to give you an update on the global picture of transcatheter aortic valve replacement. Larry.
Thanks, Mike. It's always an honor and a privilege to be here and talk about our transcatheter heart valve business. It's been an incredible journey, and it's with great pride that I've been involved with this throughout its existence at Edwards, and so it's very glad to be here today. We're the global leaders in what's now over a $4 billion transcatheter aortic replacement market. It's been driven by a lot of things, indication expansion, the therapy itself, but patients are getting more and more aware of the therapy, and we know that those are big drivers.
Despite all the growth that we've seen in transcatheter heart valves, though, one of the things that we know is there's still significant undertreatment of aortic stenosis. The deeper we dig in this, the more we find patients just don't flow easily through the system for a number of reasons. We continue to build evidence, we continue to do groundbreaking trials. We now project that this is going to be bigger than a $7 billion market by 2024. 2019 was a pretty exceptional year. I think the highlight of the year certainly for us was the PARTNER 3 trial.
We obviously always expected that trial to be successful. To demonstrate superiority to surgery in the low-risk patient population, I think exceeded our expectations and I think surprised most people that had been involved, even our investigators. This led to the approval in the U.S. for the low-risk indication as well as a CE mark in Europe. Partially this data as well as some other learnings caused us to discontinue our CENTERA self-expanding program. Given the strength of our balloon expandable platform, we just felt that this was the best thing to do to focus on.
We had positive SAPIEN 3 performance, and that offset a little bit of a slower launch for our Ultra valve, which I'll talk about more in detail. Healthcare spending and competitive pressures were probably a little less than we anticipated, which was a positive for us. We were actually very pleased with where the NCD landed. We're very pleased where CMS really focused on improving access for patients and making sure that we could add centers so that people could have access to TAVR programs more locally. We're very happy where that landed. We kind of break this up into three groups. We talk about indication, we talk about awareness, and we talk about technology.
I'll start with indication, but this is one of the things that I think is one of our important learnings as we've talked about how we think about building evidence. When we do it in the clinical and regulatory community for regulators, we start with all the hard clinical endpoints. We start with things like death and stroke, and we build those into the endpoint. We sort of go to the secondary endpoints, like bleeding and pacemaker rates and atrial fibrillation, and then we move to some of the functional things, but the really quantitative ones like the KCCQ functional tests and six-minute walk. Then we kind of go to where patients got discharged, their NYHA score, and length of stay, and those things.
When we work with patients, and this is work done by Megan Coylewright, who's a real expert in this field, when she surveys patients, and she asks them what matters most to them, they give us a very different story. The number one thing that matters to patients is to get back to a specific activity. Maybe they like to dance, maybe they like to golf, maybe they like to play with their grandkids. It's an activity that the disease has caused them to not be able to do anymore, and what they want to do is be able to get back to that lifestyle and get back to that. Maintaining independence is critically important for patients, especially elderly patients.
Think about it in your own lives. None of us, very few of us are ever going to want to live with our children, and very few of us want our parents to come live with us. Elderly people want to be able to maintain their independence. They want to be able to drive. They want to be able to do all the things that they used to do, and it's critically important to them, more important than a lot of the hard clinical endpoints. When we get to staying alive, that was actually one of the lower-rated things that they said. Fear of dying was not anywhere near their top one or two, three things that they were focused on. It's very different when we look at that.
This is where TAVR really shined. In the PARTNER 3 trial, we looked at things like length of stay, when there was a three day length of stay, which is always a little biased upwards in a clinical trial because some of the required testing. Most of the hospitals in the U.S. now are doing two day length of stay, and a lot of centers really now have adopted next-day discharge. Where the patients went after the procedure. 96% of TAVR patients were discharged home. That was probably one of the more surprising figures that we saw. 96% of patients went home to self-care. They were able to go back and remain independent.
The ability to stay out of the hospital. Only 1.4% of our patients ended up back in the hospital within a year. I think the most impressive statistic to me out of the PARTNER 3 trial, 99% of our patients were alive and well at a year. That was a patient population of about 73 with severe aortic stenosis. We're very proud of that trial. We're very proud of the data. We're very proud of what transcatheter technology means for patients. There's a lot of discussion continually almost about with the low-risk approval, what about the young bicuspid patients or some of the younger patients, and what about the issues of long-term durability, and how is that going to play in the 50-year-olds or in the 55-year-olds, and how do we think about that?
The reality is that the majority of patients with aortic stenosis are still above the age of 70. I think most people would agree that above the age of 70, things like long-term durability and some of these other things that we don't have the data on necessarily are not of great importance compared to some of the other factors that patients are concerned with. That's really where the bulk of the opportunity remains. There is no age restriction on low-risk, and I think one of the best things about having a low-risk approval now is patients can be involved in that discussion process. They can weigh in and say, "This is what my priorities are. These are the things that are important to me," and they're not having their care defined by a somewhat arbitrary risk score.
We think a lot now about symptoms, and aortic stenosis is a little bit unique as how it's been treated historically, as symptoms have played a huge role of when a patient is indicated. Frankly, we've never thought that made a lot of sense, and we've talked about this before. Most other diseases, having the disease is enough. You don't have to wait to begin to have symptoms from your disease before you pursue therapy. When you have aortic stenosis, there's things that start happening to your heart that are irreversible. Even when you get therapy later, you can't necessarily recover from all of those things. We believe that treating patients earlier could actually make it a lower-risk procedure.
People could be healthier. We believe that the less invasive nature of transcatheter valves, along with the data that we continue to see, actually enables us to do things maybe earlier than we typically would have done it. There's been additional data that's come out that supported this, things like the RECOVERY trial that was presented at AHA this year. This is a pretty landmark trial. This is a trial that's the first thing that we've done that was ever off guideline. It's got a two-year endpoint. We're a little over halfway enrolled in the trial, but we're excited about its potential.
Just to talk about the trial a little bit, this trial really requires a change in how patients are processed through a hospital. Typically now they go through the process, and they get referred, or they don't get referred. What we do now is the patients have to go through the heart team, and if a patient has severe aortic stenosis, so they have the disease, but they're not exhibiting symptoms, we actually put them on a treadmill stress test, and we actually confirm and have to confirm objectively that the patient is truly asymptomatic.
Many patients develop symptoms when they go through the stress test, and at that point in time, they're actually now on indication, and they can receive commercial therapy. It's only patients that are confirmed to be asymptomatic after the treadmill test that can then enter the trial. What we found is, and you see this in all trials, you have your large enrollers and your lower enrollers, but it's more pronounced in this trial, I think, than we've seen in other trials. For the trials that really have the centers that really have the ability to change their practice and change how patients flow and direct them, we see those centers enroll quite well, and the patients are absolutely there, and they move through the process pretty well.
For the centers that struggle to change their practice for whatever reason, we just see those as being lower enrolling centers. There's just a lot of education that's going to need to be done within the trial and certainly if the trial is successful to change clinical practice. We're very encouraged about the potential for the therapy to help these patients. Waiting for your valve replacement or for an intervention with aortic stenosis is deadly. I will caution everyone, this data is from 2014, so it's a little bit dated. Back at that time frame, TAVR was limited to high-risk patients, you need to keep that in context with this curve.
Even if you look at surgical patients, one month of waiting is just a little bit under 4% mortality risk. If you go out to three months, you're up in there anywhere from seven to 10%, depending, and when you get out to six months, even for surgical patients, it's 8%. Obviously, for high-risk TAVR patients, it was almost 25%. Waiting is not benign for these severe symptomatic patients. When we look at what the TAVR journey is for many patients, about 28% of patients, it takes more than six months from the time they're diagnosed first with aortic stenosis till the time they get therapy.
There's just a lot of process that patients go through, where they're sent back and forth, and they got to be seen by the heart team, and then they got to get referred and a lot of those things. This is an area that we continue to focus on, of how do we improve that patient pathway? How do we streamline it? How do we make it easier for patients to move through the process? It takes a lot of work. One of the things we're doing in this area is a program that we call Benchmark, this is really a thing that we try to do with centers.
Centers are seeing an increasing demand from patients coming in, and that's driven a lot by the expanding indications. They're worried about how they're going to be able to meet all of this volume. One of the things that we look at is how do we achieve the great patient outcomes. The number one thing we have to do is always make sure patients get good outcomes. Discharging a person quickly is of no value if the person ends up back in the hospital. We have to make sure we do great clinical cases and we maintain a very high safety standard. We also can make centers more efficient.
If we can reduce their length of stay and we can reduce some of the resources required, we move to things like conscious sedation and we streamline things, we can actually increase their throughput and increase their efficiency. We have centers now that do five, six, seven cases in a single day because they've got very efficient about how they do their procedures. By doing this, by doing more cases in the same amount of time, is how we can increase their efficiency without having to add case days or without having to add beds or add cath labs. The NCD also will play a big role in how patients are going to be able to get treated. Where the NCD landed, we think this is going to allow up to 850 centers in the U.S.
Obviously, a lot of these centers are going to be smaller centers. It's going to take time for those centers to ramp. Not every center that qualifies is going to probably start a TAVR program just because they may not want to make the investments in infrastructure that are required to do it. It does give the opportunity to have a lot more centers, and patients want to be able to be treated locally. As we've seen, as we expanded the centers in the U.S., we continue to see great clinical outcomes even as we've gone to, I think we're at probably 600, 650 centers now.
We continue to see great outcomes, which are tracked obviously in the TVT registry. We continue to maintain a high level of support. We focus on training. We focus on proctoring. That's going to be even more important in these smaller centers. We're very confident we can get these programs up and running. We have a very high-touch model for transcatheter heart valves. We have a person in almost every single case in the U.S. It's more than just crimping the valve. We provide screening support. We provide imaging support. We provide proctors. Even an experienced center may have a difficult case come up or something unusual that they may want a proctor for. We do handle the device preparation. We manage their inventory.
We do a lot of things for the sites, but our goal is really to become an integrated part of their team and to provide all the support and help to make sure that all of our centers are getting great outcomes and that they have any questions, we have people on site always that can provide the assistance and whatever assistance that they need. We're very proud of how this model has worked, and we really believe this has helped drive the amazing outcomes that we have with this therapy. Increasing awareness is an important part of the program for us, and when we started, we were really, really focused probably on two areas.
We were focused on training and proctoring and making sure that centers knew how to do cases, and we made big investments in that. We trained a whole heart team, two surgeons, two cardiologists, usually an imaging person or perhaps the valve clinic coordinator, and then we focused on the procedure itself and really how do we make sure we do great procedures. Once we got that pretty much accomplished, we focused on the next step, which is how do we help centers with the post-procedure care? How do we help centers reduce their length of stay?
Many centers when they started, they just followed the same basic protocol and procedure that they did for surgical patients. They'd send people to the ICU. They'd just move them through the process. Once we were able to streamline those things, we were able to help centers reduce their length of stay while maintaining great outcomes. Now we focus a lot of our energy on what happens before the patient gets referred to the heart team. How do we make sure patients are aware of this therapy? How do we make sure that they know what the new indications are? How do we make sure general cardiologists are aware of the latest data and know where to send patients if they have a patient with aortic stenosis who may be a TAVR candidate?
We spend a lot of time with that. We spend a lot of time. How do we improve echo quality? We have our cardio care program where we work with centers, and we try to make sure that they're following all of the guidelines as it relates to identification of aortic stenosis and that those patients don't get lost in the system. We make a huge investment in this to make sure that patients know what their options are and that hospitals know what their options are and that cardiologists know where to send patients appropriately. When we look at Europe, we see that there's a lot of divergence in terms of the penetration rates of transcatheter heart valves.
We have obviously the big countries like Germany, France, and Switzerland that have adopted it pretty significantly, but we have a lot of countries where TAVR remains very underpenetrated. As we look at what's going to happen over the next several years and where a lot of our growth comes from, we think there's going to be a lot of catch-up in these other countries where their adoption rates are going to get more similar to Germany and France over time, and as that happens, we're going to see a lot of growth in a lot of those countries. We still think there's a lot of opportunity in Europe. SAPIEN 3 is the first valve to get the CE mark for low risk, and we're very proud of that.
The way the process works in Europe, you get the CE mark first. Then usually the guidelines begin to follow and reimbursement follows after that, there's not really a step function. Getting the CE mark is the first step that really enables the rest of the process to happen with guidelines and reimbursement. We think we will see gradual impact of that in 2020, but it really varies by country in terms of how fast they drive reimbursement for these low-risk patients. Japan remains significantly under-penetrated, and it's a real opportunity for us. When we look at the rates of penetration in Japan versus Germany or the U.S., they lag significantly. This is a wonderful opportunity for us.
There's just a number of challenges. There's less centers in Japan, and the centers are not always located in the places that a lot of the patients are. The treatment pathway is different. We just learned that patients don't move through the same way that they do in the U.S., and there's just some cultural challenges. There's just a lot of senior people, and they're used to doing things a certain way, and it just requires probably more time to change practice and more time to do some of the education. We do a lot of work in this area in terms of education.
We are trying to expand the number of centers, and we're working with the guidelines there to try to be able to expand those and improve that. We're also doing a lot of work with education with the general cardiologists to make sure that they know where the centers are and what to do with these patients. This remains a great opportunity for us for growth over our plan period. Right now, when we look at where most of our TAVR business is, it's obviously in the U.S., Europe, and Japan.
Over time, as we get to 2024, we think the rest of the world really starts to play a larger role in this. Other countries begin to come online, and we think that this will be an important part of our growth over the longer term. Technology, obviously our technology is very important to us, so I want to spend a little time and provide a little more detail on SAPIEN 3 Ultra. We launched the SAPIEN 3 Ultra valve, which had our new skirt, which is taller, and it's also a different material. The technical premise of this was that we believe with this taller skirt and with changing the material on it, we can improve tissue ingrowth, and by doing that, we can improve paravalvular leak performance.
We still believe that that's going to be very important over time. When we launched the Ultra valve, we launched it on its own delivery system, the Ultra Delivery System. What we found was the clinicians really liked the Ultra valve. They really liked the performance of it. They really liked how the valve performed. The delivery system, when they compared the Ultra Delivery System to the Commander Delivery System we use on SAPIEN 3, they just preferred the SAPIEN 3 delivery system. They just thought it was easier. They thought it was more intuitive. They liked some of the features of it.
They weren't as happy with the Ultra Delivery System. That came as a surprise to us. We were very happy, and all of the work that we did prior to launch suggested that people were really going to like the Ultra system. It just, I think, really spoke to the success and to the robustness of our Commander system. What we've done now is we've taken the Ultra valve and we've put it on the SAPIEN 3 Commander Delivery System, and that's what we're relaunching. The feedback overall we have on that is very, very good. We're rolling it out in Europe. We're beginning to roll it out in the U.S., and we still anticipate that next year, the majority of our sales are going to be on our Ultra valve platform.
Pulmonic. We continue to make progress in the pulmonic position, and we started out just using our valve in the pulmonic position, but what we really found was a lot of patients needed a stent procedure prior to, and historically, that's been using off-label stents to do this pre-stenting procedure. We actually partnered pretty closely with FDA, and FDA said, "Look, we really feel that there's a need for a stent just for these patients." We worked on what we call our Alterra stent, and this is a stent that's specifically designed for these patients to help more patients have the option of getting a transcatheter valve.
Remember, these are patients that typically are young. They were born with a congenital problem, and these patients oftentimes have many surgeries over the course of their life. Unlike aortic stenosis, where we're trying to do something maybe to take them to the end of their life, what we're trying to do oftentimes with these pulmonic patients is we're trying to take a surgery or two out of their treatment course over their lifetime. Compared to the aortic stenosis opportunity, this is small.
For the patients and the families that need this therapy, it's priceless. It's a program we're very, very proud of. We're very excited about it. We completed enrollment in the trial, we're working toward the approval, we think that this is a major advance for patients. We work on our next generation valve, which we call X4. I'm not going to go into a lot of detail about that for competitive reasons, but we're excited. We still think there's a lot of things that we can improve on with our platform. It is a balloon-expandable platform. We are building on a lot of the things that we've known. We've completed a first-in-human experience with it, we will start a pivotal trial within the next 18 months.
We're excited about the potential for this and how it can change things. As we look toward next year, we expect our growth rate to be between 12% and 15%. As always, there's headwinds and tailwinds. We worry about some of the competitive entrants and does that heat up some and overall healthcare spending pressure. We're very pleased with how the low-risk rollout has gone and the interest from patients and from clinicians in treating their patients. We continue to see improving adoption globally. Those are some of our tailwinds. We're pretty excited about our future.
I'll leave you with this slide, and you can read the executive summary stuff, but this is a really fun patient, and it's one that I'm very close to. This is Dr. Bill Anderson. He was our Principal Biostatistician at Edwards Lifesciences for quite some time. Back in 2002, when I worked in our surgical heart valve business, he actually needed an aortic valve replacement. We worked with him and one thing that's kind of funny, I think the most difficult person to ever market to in the world would be a principal biostatistician. You're not really going to do anything funny with the data with them. He looked at all the data, and he opted to get a PERIMOUNT valve, and he got that in 2002, and we were just starting to work on transcatheter valves then.
I remember having a conversation with Bill, and I said, "Hey, look, if you ever need your valve replaced, I think we're going to have a better option for you." Well, just this year he came back. It was time for him to get his valve replaced. He was able to get a SAPIEN 3 procedure, and this is actually him hiking one month after his valve-in-valve SAPIEN 3 procedure. Really, really fun. All of our patients matter to us a lot, but when they're really part of the Edwards family, it's that much more special. Again, we think the future for transcatheter valves is very bright. We talk about the opportunity through 2024 being greater than $7 billion.
We think there's opportunity well beyond 2024 as well. We think there's a lot of opportunity to improve adoption and to continue to grow this opportunity. It's been the most amazing experience to be a part of this, and I'm just very, very proud. Thank you very much. With that, I'd like to invite Dr. Geoff Strange up. He's from Australia. He's going to talk about Moderate AS, and I think it's a very interesting presentation. I think you're really going to like it. Come on up.
Thank you. Cheers. Good morning, I think it is over here. Thanks for having me. What I wanted to do is just change courses a little bit and talk about some work that we've been doing over the last five years. I've been given 15 minutes to talk about five years' worth of work, so forgive me for rushing through a few points here, but I'll stop when I think it's important for you to really pay attention. Okay. First of all, I don't operate. I'm not a surgeon. I'm not an interventionalist. I don't use any of Edwards' products. I get a little bit of money to come over here for my time, and they've paid my travel. That's it.
Okay. If you look up Google, and you look up natural history of aortic stenosis. The board's creaking here. The first 100 images that you see are this is a 50-year-old image that basically says that patients are stable for a long period of time, then they drop off the perch. It's 50 years old. More importantly, it was based on a dilemma that people had 50 years ago about the risk to benefit for patients, both the risk from a natural history perspective, so how the patients would deteriorate over time, and the risk for what you do to them if you were intervening with a surgical procedure at that particular point in time.
Alarmingly, the guidelines that are put in place now to treat patients have been based on these numbers of individuals. This is incredibly small data to base a treatment paradigm for a massive amount of patients across the globe. I've spoken to each of these authors, and they all agree that when they did the research, they did the best they could because the disease wasn't as prevalent as it is today. Well, the truth is there just wasn't as many options, and so the disease wasn't studied as much. We've got some more information. Really what we need to do is think about what-
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...that we talk about that have changed the way that guidelines are put together need to be rethought because just simply having 122 patients and splitting the data above and below a mean or a median really is not a real true evidence base for 2019- 2020. We thought it was a good idea to use some big data to try and change this paradigm and understand exactly what's going on for this patient population. We've developed this thing we call NEDA. You guys would say Needer. It's the National Echo Database of Australia. We have a universal healthcare system in Australia. We do not have to argue and fuss and fight.
We all kind of join together. Because we've been able to do that, we've been able to link digital echoes, which is the main point of diagnosis. It's the main funnel point of entry to the diagnosis of aortic stenosis. We've been able to link digital echoes right across the country. What we've built is a vendor-agnostic system, so it doesn't matter whether you've had your ultrasound on a Siemens machine or a Canon or a GE or a Philips or however it's been acquired or what reporting software you use. We can actually take all of that data and build it into one data set, and we can link that to mortality. I'm not going to labor the point of all of this.
You can read the paper. It was published in American Heart Journal late last year. Basically, this is a racking and stacking system of automation, so we can take all of the different communication packages. We can take all of the naming conventions, and we're able to map them so that everything's uniform right across the board. We rack it, stack it, put it into a single database, have all the uniform bits and pieces of information so that we can actually analyze big data for the first time using echo. Right now we're in a position where we have all states and territories.
For those of you that don't know, Australia's land mass is exactly the same geographical size as the U.S.A. It's a big country. It's got a tiny amount of people, but it's a big country. We've been able to get people from all over the place, and we've really united that, and we're actually in a position now, the red centers are just about to put their data in, that we'll have more than 1 million patients in this database, more than 1.5 million studies and more than 50 million parameters to be able to link to mortality. This is across all structural heart disease, all valves, everything that the echo produces.
What I want to do in the next 10 minutes is talk to you about some work that we published about two months ago in the Journal of the American College of Cardiology, so-called JACC, that deals with a phenomena that's really revolutionizing and changing the way that we see this patient population, and that is that we've uncovered that there's a poor-survival outcome for those patients with Moderate Aortic Stenosis. What have we done? We've used observational data, we've linked it to mortality. We've used a modified version, Australians like to modify everything, we've used a modified version of the ICD-10 code, and we've linked that to all-cause mortality.
We've linked it to cardiovascular mortality, in fact, we've linked it to all of the secondary and antecedent causes of death across a 17-year period. Importantly, we removed all of the patients that had had an intervention for this study. This is only native aortic valves. This is actually, again, if you look up the PubMed pages and go and try and find a natural history study about patient journeys, I think you've got to get into page 50 out of the 10 pages, about 500 studies before you find someone looking at the patient journey.
We wanted to figure out what's going on with this population. We had two hypotheses. The first one was that we wanted to look and see whether the survival, according to the conventional definitions of mild, moderate, and severe aortic stenosis, we wanted to see if there was a gradation of increasing mortality. Further, because we've got big data, because we've finally got the numbers that can help us understand this population, we wanted to look at what the true statistical distribution of this patient population truly is and find a more precise threshold for where mortality starts to change. I just want to make a couple of points here on this presentation here.
Just note the numbers between those with moderate disease and those with severe disease. If you've got a mean gradient between 20 mm and 40 mm of mercury, so this is the difference between flow on the way through, on the way out of the aortic valve, and if you've got a velocity through that valve of between three and 3.9 m/s , you don't get treated. You're told to wait, we'll watch you for a while, and we'll see how you go. If you're one meter per second or 0.1 m/s on the other side of that, now you've got a pressure. Oops, you've got a velocity of 4 m/s , now you do get treated.
If you've got a gradient of 40 mm of mercury, now you do get treated. If you're 38 mm, you don't. It can't make sense. What we wanted to do is we wanted to understand that gradient, and then we wanted to look at the true statistical distribution and see where we end up. Okay. What have we got? In this particular analysis that was published a couple of months ago, we've got 340,000 individuals, 530,000 presentations, investigations, sorry. 314,000 people after we excluded those that were under the age of 18. We excluded 6,500 patients that had had a previous intervention, which left us with 241,000 individuals. I'll come back to that.
Both men and women had a similar profile from an age perspective, and so we analyzed the patients together. We end up with a population that's never been studied before. The size of this hasn't been seen. We've got 16,000 patients with mild and about 10,000 patients with either moderate or severe aortic stenosis. That leaves us with just under 26,000 individuals across that spectrum of disease. Remember, this is embedded in a cohort study of more than 1 million person years of follow-ups. We've got just under 50,000 case fatalities.
This is a big data set. If you remember to the second slide that I presented, looking at the numbers that the guidelines are based upon, you might remember that the largest one there was 622 patients. We did two things, as I said. We did a conventional analysis looking at through the grade of increasing both gradient and velocity, and we wanted to see if there was a difference across that spectrum. Then we looked at the true statistical distribution. First one is the conventional cut point.
Like everything we do in medicine, if we do exactly what we've been told to do and cut the data in the way that we were taught, surprise, we get the same answer. It's called confirmation bias, right? We just confirm what we wanted to see, so we cut it exactly the same way. This is that 40 number and the 4 m/s . You can see that those with severe aortic stenosis do bad, and those that aren't do better than they do. Traditional analysis. If you look at this across the spectrum of disease, you'll notice that in the purple line, these are the patients with what is termed today as Moderate Aortic Stenosis, and my guess is that in the future, that term may disappear.
Versus those in the black line that have what's called today severe aortic stenosis. If you're on the purple line, you don't get treated, you get to be sent away, watchful waiting, all that kind of stuff. If you're in the black line, you get sent off to have some kind of intervention. I don't know about you, but if I'm sitting in front of a physician and I've got that problem and I'm pretty close to those two trajectories, I'd like some other options. More importantly, there's a lot of clinical information here that there's a low flow phenomena, which you guys would all be aware of, and so that the left ventricle can't generate enough forward flow through the valve.
The valve's still stenotic, and so they're called that low flow phenomena. We thought maybe they were in the purple group. What we did is we did a new analysis adjusting for the aortic valve area as a continuous variable. Instead of dichotomizing above and below a mean or median, as has been done throughout history, we just looked at the aortic valve area as a continuous variable and said, "Okay, well what picture does that play?" Actually what that does is it shows a very clear dichotomy of outcome, of survival outcome with these patients.
You'll notice that you can't see the purple line anymore, and the reason for that is that it's superimposed over the black line, implying that the outcome for those patients with moderate disease, so-called moderate disease, is exactly the same as those with severe disease. That's encouraging, concerning. Let's have a look at what the true statistical distribution of this data tells us. On the left-hand side of this is velocity, and on the right-hand side is gradient. The important point of this is what we've done is we've split this into five groups.
We call them quintiles, and we've looked at the upper quintile, and that upper quintile is really very low. You're talking about a peak velocity of 1.73 m/s and a mean gradient of nine-point, is it nine, six? I can't possibly read that from here, millimeters of mercury. It's really low. We were bemused by this, that the patients in the upper quintile of this huge data set would show a divergence in survival outcome at that low level. What we wanted to do then, and again, because we've got big data, we were able to do this, we separated that upper quintile.
The black line, we separated that into deciles, we looked across the spectrum of that gradation of increasing disease or increasing severity of disease, we were able to demonstrate that actually you have a fairly flat mortality until you reach somewhere around about 22 mm-25 mm of mercury, then you have an increasing mortality. Once you get into the moderate range, you then flatten out, survival remains consistent from there on in. Perhaps the pivot point that we should be looking is way further left of the spectrum than our current thinking. This is the same for cardiovascular disease-specific mortality as well. The first one was all-cause, this is cardiovascular specific.
What we're left with is one-year survival in black and five-year actuarial survival. This is not Kaplan-Meier imputation. This is actual survival data with actual patients. This is real data from real labs, real-world environment of actual outcomes of those patients for that period of time. You can see that when you look at those with moderate disease, so-called moderate disease, you can see that there's actually only about a 10% difference, and these data actually work out to be, when you group those two, the last four bars or the last two bars each, it's 56% versus 67%. It's really alarming. There are a couple of limitations that we need to cover.
I'm almost out of time, basically, we only had the echo, and we need to go and get more clinical information. This is generating some real desire to go and dig into this patient population more. There is a potential that there's a systematic underestimation of the gradient. We don't believe that's true, but there's always a potential for that. I think the most important here, because I'm almost out of time, is that we're not able to imply causality at this point, and there's more work to be done. These data, for the first time, represent the largest study ever looked at for severe aortic stenosis, and they clearly confirm that severe aortic stenosis is really bad.
Moreover, they provide a clear signal for those patients with native valves that present to physicians with a mean aortic valve gradient above 20 mm of mercury, and those with a peak velocity above 3 m/s , that there's a clear signal here that something's going on. What we need to do is we need to do large cohort studies, dig deep into this population, understand the granularity of all of the things that are happening to these patients, and really tease out exactly when intervention really should start. I think that this provides an impetus, really, for a really thorough contemporary evaluation of this patient population. I think the key message really is the publication. This is poor long-term survival evidenced in patients with moderate aortic stenosis. Thanks for listening.
Thanks, Geoff. Please grab a seat.
Thank you.
I'm sure folks are going to want to ask some questions. We're going to have a little Q&A. We've got Larry and Geoff here available to do that.
Sure.
Please let the audience know who you are.
Great. It's David Lewis from Morgan Stanley. Maybe just two questions, kind of related on the last presentation. Larry, for you, just the RECOVERY trial at AHA, I just wonder if you'd kind of talk about how that informs your views around early TAVR, specifically given the patient populations are a little different, and then maybe related to the doctors, this combination of we were making a case of moderate aortic stenosis versus severe aortic stenosis, and maybe give us a sense of the relative patient populations of work you've done, Larry, on how moderate is relative to severe.
Well, they're different. The early TAVR patients have severe aortic stenosis. They're, from just a pure disease standpoint, they're at the severe point of the disease. What I think Dr. Strange is talking about is patients that haven't progressed to severe yet, without any discussion about symptoms or anything, is having that disease at the moderate point, is that problematic? I think what his evidence is suggesting is even moderate disease may be problematic.
They're two different populations of patients, and if you were going to study them, you'd have to study them a little bit differently. Obviously, we've embarked on the EARLY TAVR trial, where we're looking at those asymptomatic patients. We're still in the thought process of moderate patients. How would we study that? What would a trial look like? We're really passionate about it. We're really interested in it.
The research is newer, and I think just getting deeper on it and figuring out how you'd run such a trial, we have some spade work to do before we'd be ready to do that. Well, RECOVERY is very encouraging. It's obviously surgical patients, and it's a smaller cohort. All the data that we've seen. I haven't seen any paper, since probably Braunwald, that says asymptomatic patients with severe AS do fine. Every paper that's come out has said asymptomatic patients don't do fine. We just don't have that randomized trial to change the guidelines, and that's what we're embarking on with EARLY TAVR. Every other data set that we've seen basically says it is a problem.
Thank you. Larry Biegelsen, Wells Fargo. One for Larry, one for Dr. Strange. Larry, the 12%-15% TAVR guidance for 2020, what are you assuming for the market? It was a little bit higher than we expected, given your comments on the Q3 call of low double-digit procedure growth for the market. Is that being informed by something you're seeing, the momentum in Q4 continuing from Q3? I have one follow-up for the doctor.
Well, obviously, all the data that we went into went into our guidance for next year. We try to capture everything. I think we did. In our assumptions, we do assume there is going to be some competitive pressure, and there could be some pressure on share. That's why we established the range that we established. That's how we arrived at that number.
The market a little bit faster than the 12%.
Market a little bit faster, and also recall just the way that 2018 developed. Likely, the market growth rates in the second half of the year are going to be lower than the market growth rates in the first half.
Is that higher than you were thinking on the Q3 call? Market a little bit higher?
It's still going to be a big difference between the first half and second half. Yeah.
Dr. Strange, a couple of questions on your data. First of all, I don't know if you showed whether those patients were propensity matched across the groups. There were significant differences across those groups or not, besides just the level of aortic stenosis. Just lastly, how would you design a trial for TAVR in moderate AS?
I didn't bring my pen. I should.
Yeah. What's going on? They're not propensity matched because this is an open cohort study, right? We've just taken all those patients that presented. This is a non-selected population. It's all comers that come to an echo lab, and we've just taken them, and we've stratified them. We've adjusted for age, we've adjusted for sex, we've adjusted for the presence or absence of left ventricular dysfunction. We've adjusted for the presence or absence of aortic regurgitation. We've used the dimensionless index to analyze this patient population.
I really think there's not a lot more, without being a little bit too overzealous on looking at the data that we can do. Really what we've got to do is find a definitive and granular clinical population, and propensity match that to our outcomes, and see whether we've got a true indicator of what we all probably think, that if you're 1 mm of mercury under versus 1 mm of mercury over, it can't possibly be that your outcomes are that different.
Thank you. Bob Hopkins from Bank of America. Two questions. Larry, to start with you, just curious in your experience with EARLY TAVR and just generally in the population, what percentage of the patients that are asymptomatic become symptomatic on a stress test? Is that 10% or 20% or 30%? Maybe we'll start there, one follow-up.
Yeah. We haven't gone that deep into it. We do know just from the screening process, a lot of patients do show up with symptoms when they go on the treadmill. I think we see a lot of variability site to site even, and I think that speaks a little bit to how patients move through the system and how good at people are ascertaining symptoms just already on their own. Just anecdotally, one of my doctors, he says patients say they're asymptomatic all the time, and he says, "Okay.
Let's walk up to my office. It's just two flights up," and they take the stairs, and they get on the first landing, and the person can't breathe. He goes, "Perhaps, maybe." I think some centers are better at doing that in their current practice, and other centers aren't. We see huge variability site to site. I wouldn't want to put a % on it till the trial's done. There are a number of patients that fall out when they hit the treadmill.
Dr. Strange, thank you very much for the presentation. Really interesting. Just a very basic question. How symptomatic are moderate AS patients versus severe? Do they present the same, or is there a difference?
Okay. I'm a health services researcher, and I'm not going to talk on clinical things today. I think that would be unwise of me in this particular audience. What I do know is that talking with my colleagues, there's a number of discrepancies between the way people describe it, and I think it probably pertains back to what Larry was just talking about, that our confirmation bias and the way that we look at the patient in front of us is different between individuals. The subjectivity of symptomatology is really difficult. There's been a number of studies that have come out recently that show that your perceived view of what you're doing.
For example, looking at pulmonary hypertension across the risk strata. You determine by clinical intuition that this patient's in high risk or low risk. Actually, 50% of the time you're wrong when you look at the objective evidence that's behind that. I think it's complicated. A lot of people in moderate levels of aortic stenosis in my discussions are going to be in that phase of their disease for some time. Whether that's right or wrong, we'll need to prove that.
Thank you for taking the question. Jason Mills, Canaccord Genuity. First, for Larry and Mike, the comments about share, could you talk about those from a geographical perspective? Given low-risk approval in the United States, there are only two competitors. That's going to define the market seemingly more than share. Talk about maybe your commentary with respect to share from the U.S. versus outside the U.S. perspective, and then one follow-up on Japan.
Not trying to be cagey. I really hate getting into the share discussions. I think it's pretty clear, and you guys probably estimate share as well or better than we do because you probably have as good of sources as we do. I think when we start talking about share, we start turning it into us versus them, one company versus another company. When we look at the number of people that are treated with aortic stenosis today, it's one in 10, one in nine. There's just such a huge untreated patient population. Our focus is really how do we educate, how do we move those people through the system?
We believe our technology holds up very well. We believe we have best-in-class technology. We believe we'll get our appropriate share, and that's really where we focus our energy and attention. It's obviously my job to make sure we always have the best technology, but I really try to not get our team focused on that, not be focused on it personally. I really try to focus on how we continue to grow this opportunity by getting these patients who need the therapy properly and get them high-quality outcomes.
Jason, just to get a sense for what's behind the assumptions, you got to remember that some of these companies are new competitors in the U.S. We've seen them for some time outside the U.S. Where we're more likely to see the impact is where they're a new competitor.
Thank you for that. In Japan, thank you for the updated information with respect to procedures per million. That's a striking differential between Japan and the U.S. and Germany. The initiatives you laid out are interesting, but I guess the basic question is When will we see an inflection point, and which one of these initiatives do you think are most apt to drive that, given that Japan does consume interventional procedures, it just hasn't consumed this one as fast?
Yeah. I'd say the headwinds that we've run into in Japan, I think were a little bit surprising to us just because we watched how things like stents took off in Japan, and the stent utilization in Japan is much, much higher than, for example, in the United States compared to CABG. I think there's some guidelines there in terms of cases have to be done in a hybrid OR, and the way the heart team has to function there that I think just really has put sand in the gears in terms of how patients can move through the process. I don't think there's one silver bullet.
I think we need to work on policy, and there's things we need to work on to change there, and I think we need to do that as an industry, not just as Edwards. I think we need to work on that to streamline it for patients. I think they do need more hospitals. I think there are just some cultural challenges there. Some of just the hierarchical things with the hospitals that we're just going to have to work our way through and do it. I think we have work streams down each one of those. It's going to take some time, but as you point out, when you look at those rates and you look at those differences, it just tells you how big the opportunity is there.
Rick?
Rick Wise, Stifel. Larry, just to follow up on your emphasis on the SAPIEN 3 CE mark for all severe aortic stenosis patients, what's really important to start to see the impact in 2020, you said. How do we think about that impact, how do we think about that impact on growth? Do we imagine that it's going to sustain the kind of European growth we've seen or accelerate it? Just to quickly follow up on the Ultra comment on the delivery system, is that system fully available now, or do you need to ramp manufacturing? If it's not fully ramped, when is that fully available to anybody who wants it? Thank you.
Yes. The first question again, sorry.
And-
Sorry. Obviously, our growth projections, that's all built into our overall number, and that takes into account globally. Reimbursement's a much bigger driver. In the U.S., when you get an approval and you expand your indication, reimbursement comes at that exact same moment. It just gets covered by CMS, people are able to change their practice immediately. We have some countries in Europe right now that don't even provide reimbursement open for intermediate risk patients. There's restrictions and caps and those sorts of things. It's going to take time for that to adjust. It's not the same sort of process that we have in the U.S., it really does vary country by country.
When you look at Europe, it's amazing how it's still growing. It's still growing after all these years, after all these launches with heavily penetrated countries like Germany and France, which are similar to the U.S., and so you feel like their adoption rates are pretty good. You still have all these under-penetrated countries, and it continues to grow quite well. I think it just speaks to the undertreatment of the disease and what the opportunity still is in front of us. On Ultra, the system is available. We are rolling it out to sites. We're probably much farther ahead of that process in Europe now, and we're just really beginning to re-roll it out in the U.S. Again, next year, we expect the majority of our sales to be Ultra.
Thanks. Chris Pasquale, Guggenheim. One question on the moderate opportunity. Mike, there was a trial that wasn't actually an Edwards trial, I think it was a CRF trial, TAVR UNLOAD or UNLOAD TAVR, that was looking at moderate patients, specifically with advanced heart failure. What do you guys think you need to do to open up this piece of the opportunity? Is that study a good start? Is it going to get you all the way there, and how do you think about the clinical pathway?
Yeah. There's work to do. I think Larry sort of headlined it. We're real students of moderate risk patients at this point and really trying to have a deeper understanding. The work that Dr. Strange has done and others has given us some insight. We want to be smarter on this before we actually embark on a trial. It's going to be a significant trial to cause people to change their mind on something that is imbued as the top Google searches, right? If there's anything that's in the hearts of doctors, they feel like they know this, and this is a rock, and we need to move that rock. We're going to think about this deeply before we take it on. It's in our future somewhere to understand it.
Okay. Larry, you talked about the opportunity outside of the three major geographies for TAVR over the next five years. Are you guys today in the countries that you expect to lead that mix shift, or are there key milestones we should look for over the next couple of years to open that up?
We're certainly not in all the countries that we think are going to contribute to that. As we look at Rest of World over a longer period, Rest of World, we think, is going to become increasingly important to us over time.
Nothing in the timeline that we should look for that we're going to be getting into X country at this time, and that's going to be important.
The rest of the world countries are going to grow, as Larry indicated. Most of it, we're all concentrated in U.S., Europe, and Japan right now. Especially Asia in general is going to become more significant, probably become the fastest-growing component, but still be a minor part of the total pie even when we get to 2024. Hi, Raj.
Thanks. Raj Denhoy from Jefferies. Maybe I could ask about the NCD. You mentioned you're encouraged by the outline of the NCD. What are you seeing in terms of new centers coming online, and are those new centers centers that are previously referred, or are they actually additive to what you're seeing in the overall treatment pool?
One of the things we've learned throughout is there was a mindset early on, I'll tell you, when we first had a limited number of centers in the U.S., and you'd have one center in a city or maybe two centers. Whenever we'd say, "Hey, we're going to open the next two sites," the existing sites would all go tilt, and they'd say, "Oh, shoot. You're going to kill all my referrals. I get all these patients from that side of town, and you're going to completely destroy our program." We've seen that happen exactly zero times. Whenever we start a new program, what we find out is they were never referring those patients to the center across town.
They might refer them to Florida, but they're never referring them to a center across town. It's just not the way the People have these closed networks, and they just don't refer. That was true even when it was high-risk patients. Now that we're into low-risk patients, the idea that low-risk patients are going to flow from hospital A to hospital B, one has TAVR, one doesn't, it's just not reality. It's just not realistic. As we add these new centers, they do build their own programs, and it doesn't come at the expense of the existing centers. It typically is new patients. These patients, they don't want to travel great distances. They don't want to travel far. It's just the reality we have.
We all had impassioned pleas to CMS, and there were a lot of different views on it, but we were very pleased that CMS really focused on patients and access, at the same time, embracing the TVT registry to make sure that we are tracking those outcomes and to make sure that we don't go too far and hurt results. We have a great balance here of making sure we're protecting safety at the same time we expand access.
Just as a follow-up, you mentioned one of the pressures is healthcare spending pressure, potentially, one of the things you factored into your guidance. There has been times when you've talked about pockets of pricing pressure that have bubbled up in Europe. What are you seeing currently on pricing, both in the United States and Europe? Is there any talk about pricing coming down at all?
Yeah. The way that we've structured the U.S. particularly is we have a volume rebate structure. Everybody's sort of at the same price point, and then we have volume rebates based on the volume that people do. As centers get bigger and as they do greater volumes, they get greater rebates and they get greater discounts, and we're very consistent around that, around centers. There's always pricing pressure. No matter what price somebody's paying, they want to pay less. There's always pricing pressure.
The thing is, I think TAVR delivers great value. I think as centers have gotten more efficient and they can do more TAVRs in the same space, I think most centers have figured out ways to make their TAVR centers profitable and have a very positive contribution margin. I think overall, TAVR remains a great value for centers and for patients, and that's really what we try to focus on is the value.
Thanks . Josh from Cowen. Thinking about the evolution of the SAPIEN platform and the next generation valve. You have Ultra out there. Also thinking about the low-risk data and just what can be improved upon. Is it safe to assume that the goal is to reduce mild PVL? Is that going to be a metric as you get into younger low-risk patients or the biggest metric to improve on? Just on SAPIEN Ultra to begin with, are we ever going to see data on what got that approved, and is it safe to assume that mild PVL or even overall PVL rates are reduced with SAPIEN Ultra?
We limit these to seven questions. I think as it relates to where we're focused on, we're still focused on anything that can happen. We still focus on, even though the mortality rates and the stroke rates are incredibly low, we still think about that, and you got to make sure any changes you make, you don't take a step backwards. That's a huge part of our focus. Durability is still this theoretical thing, but we focus a lot on durability. How do we make these valves more durable? We can do some of that on the tester. We can do some of that in animal studies. We do some of that other places, but we're really focused on those things.
Right now our current platform doesn't have the RESILIA tissue on it, so that's an opportunity to add our RESILIA tissue, which we have on our surgical valves. We really are focused on all the things that can improve outcomes. Paravalvular leak, as you bring up, I think paravalvular leak remains. Even though we've taken those paravalvular leak rates way down, I think we need to get to a point where we leave everybody with trace.
That's the goal. Are you ever going to get there? I don't know that you're ever going to get to everybody, but we need to get as close as possible. The number that I look at all the time that I tell our teams is zero. I want zero complications, zero mortality, zero PV leaks, zero, zero across the board. Until we reach that, we're not done.
Just to follow up on Chris's question about OUS opportunities, I thought I saw a TCT presentation about SAPIEN 3 China approval in 2020. Just wanted to see if that's actually on the table for next year.
No, we have not put a marker out there to say that's when we're going to have approval in China. It's certainly something we'd like to have, but this is one that is subject to a lot of variability, and we just don't have certainty around it at this point. Thank you. Last question, Matt?
Thanks. Matt Miksic, Credit Suisse. One follow-up for Professor Strange and one for Larry. Just on moderate, one of the things I don't know if I missed it, but what did you learn about how patients kind of move through moderate into severe, or when they land in moderate, is it a quick transition to severe? You talked about the geometries, maybe any color that you could provide on that.
Yeah. That's one of the things that we need to do from a natural history perspective is to find exactly the time point that you spend in each phase. These data don't give you that. These data give you at any point in time, if you present with those levels of hemodynamics, then you should expect that kind of outcome. It doesn't say that you could have been at 10 mm- 15 mm of mercury for 10 years. We don't know that yet. There's more work to be done to quantify exactly the transition period from moderate to severe. We've got that data. We just haven't got to analyzing it yet. We've got multiple patients that have had multiple echoes over a long period of time, and we just need to now look at that transition from moderate to severe.
Great. Thank you. For Larry, just on the European opportunity for some of these lower penetration countries, one of the things we hear, obviously, some of these geographies, they'd love to use more Edwards, but the price, you hold a pretty hard line on the price. Maybe if you could talk a little bit about that strategy and what implications are for some of these countries and maybe emerging markets, maybe China. If I could just, I know you won't say much, but when you say additional precision and control on X for any hints or subtle comments you can make about what that might mean.
Yeah. Larry, I'm keeping an eye on this clock, so let's make this short.
Okay, I'll try to go quick. Price is a challenge, and we do command a premium in Europe. It's unfortunate that other people have chosen to discount the way they have in an effort to compete. We think there's great value in TAVR. We think TAVR at the price point that we have it at is a great value. Frankly, I don't think if you have an undisciplined competitor on price, if we lower our price, they lower their price, it's a race to the bottom. I don't see that there's real value in us engaging in that.
All right. Thanks very much. Thanks particularly to Larry and Dr. Strange. We appreciate it. At this point, it's my pleasure to introduce Daveen Chopra, who runs our global surgical business. Daveen?
Thank you. Thanks, Mike. Thank you so much, Mike. Good morning, everyone. It's a real pleasure today to talk to you a little bit about the Edwards Surgical Structural Heart business. I'll start off by saying our surgical therapy, our surgical business is forecasted to grow, despite continued TAVR impact, especially in the developed market, we just heard from Larry. Really, our strategy is driven by really focusing on being the partners of choice for cardiac surgeons and continuing the leadership role that we currently have today by continuing to deliver a pipeline of patient-focused surgical innovations and by really focusing on the growth segments that we still see in the surgical space out there, and there are many of them.
I'm going to start a little bit by first talking about adult cardiac surgery. If you look at adult cardiac surgery at kind of a macro level globally, we actually see that adult cardiac surgery procedures are expected to continue to grow in the mid-single digits into the coming years. This is still at a macro level, a growth area for adult cardiac surgery procedures. Specifically, you look a little bit more in the U.S. and adult cardiac surgery trends in the U.S., we see a couple different things. One is that procedures for physicians are actually becoming more complex. As a result, we see cardiac surgeons starting to more sub-specialize in certain areas of adult cardiac surgery.
Additionally, we actually see there's actually a lot of demand for cardiac surgery happening right now, especially for young surgeons coming out where they're getting multiple offers. There's a high demand. Places are currently hiring. Definitely there's a demand for cardiac surgeons in the U.S. If you look a little bit about some of our markets, first starting out with the surgical aortic valve replacement market, we actually look at the left kind of column. We'll start by saying in 2020, we see that in the U.S., the surgical aortic valve replacement market actually consists of a couple different segments of people.
There are some patients that continue to be the isolated severe aortic stenosis market, patients we've traditionally treated, but they're kind of more of a minority. There's a larger group of concomitant aortic stenosis patients. This includes both severe as well as moderate aortic stenosis patients where you're treating the aortic valve as well as doing something else with the patient at the same time. Finally, there's a group of patients that are aortic insufficiency, where TAVR and the stuff are not indicated for.
If you look at different kind of trends, you'll see that in the developed world, we see that obviously the isolated severe aortic stenosis patients, the SAVR market is declining, as well as in combined aortic stenosis, we see that the simple TAVR, a patient might have been a surgical valve along with one or two vessel CABG now becomes a TAVR plus a PCI. However, even in the developed market, we still continue to see growth in the aortic insufficiency market. In the developing world, we actually see growth across all these segments, where transcatheter adoption, as we see, is generally slower, and it's still growing, as Larry's pointed out, but generally slower due to access.
We see growth in the surgical market across all these patient segments. As a result, we still see that the SAVR patient is there for many years to come. The top patient, Phil there, a 29-year-old father who really didn't want to have a mechanical valve and really thought INSPIRIS was the right product for him. The patient in the middle, Diane, who had endocarditis and needed two valves replaced in one procedure. [Sunoha Harason] from Japan at the bottom, an outdoor skier who really had aortic insufficiency where a surgical aortic valve made sense for him.
These patients are segments of patients that we see continuing into the future. Moving from the aortic valve market over to the mitral space, we actually see that the surgical mitral valve area has a lot of opportunity for innovation. Mitral regurgitation is not as actually a simple disease as aortic stenosis, aortic insufficiency that I showed on the previous slide. There are a lot of different etiologies, as many as seven different types of etiologies that have different treatments, both with repair and replacement from surgery today. Huge amount of concomitant disease in the U.S. Globally, 60% of people still get a mechanical valve. Huge opportunity for a mechanical-to-tissue valve conversion to occur.
The rate for mitral regurgitation of treatment is very low, under 2%. For us, from a strictly surgical space, we see that actually mitral valve replacement and repair offers great opportunities for innovations to continue to help patients. What we see happening with our strategy as we move forward into the future, we see that not only will the Surgical Structural Heart business continue to grow, but we'll see it become more diversified as we see both the mitral segment as well as the other segment continue to grow and become a greater part of our business. We really see that dependence less on the future. The key way that we're going to do that is really through our surgical portfolio of innovations.
As you look at this slide, over the next year and a half or so, we're intending to launch almost five new surgical innovations in different markets around the world. I'll dive into a little bit more detail on a couple of these key ones. Our foundation of our surgical pipeline really starts with INSPIRIS. This is a product that our flagship surgical aortic valve replacement be launched relatively recently in different markets around the world. This right now is our first of our class of RESILIA tissue valve, which has this RESILIA tissue technology, which really we believe adds anti-calcification properties to continue to improve durabilities in the tissue. It is currently the number one aortic implanted valve in both the U.S. and Japan.
The other key feature on the bottom of this is the VFit feature, which many of you have heard about. This is a feature of the valve that if in the future this valve does fail, and we know that over time, tissue valves do reach failure, it has the potential to expand the valve to allow for much easier TAVR in the surgical valve procedure. It's a key thing for aligning our patients for several procedures down the road that may be necessary. What we see about this valve, especially with the RESILIA treatment, is that patients for the first time are really increasing their engagement with this valve, and we see patients starting to ask for this valve and look for it as they talk to their surgeons for when they need a surgical valve.
We already have greater than five years of clinical experience that's come from our early feasibility studies in Europe of over 125 patients. It's great to see so far we're seeing favorable safety and efficacy performance over time. Building upon INSPIRIS, our next kind of RESILIA valve is the KONECT RESILIA aortic valve conduit. This is a pre-assembled, ready-to-implant tissue conduit. This is a product where you have a surgical valve along with a surgical graft, and it's really designed to treat really more complex patients, where you need to not only replace that valve, but you also have to do work on the root or the ascending aorta.
Again, this is a very complex patient group that's a little bit smaller. It's about 11,000 of these patients treated surgically in the U.S. or Europe a year, give or take a little bit. This is a product that we're excited to launch in the U.S. in 2020. Again, it's built upon this great RESILIA tissue, our proven design, and a proven surgical graft put together. Moving on to our next kind of innovation launching in late 2020. This is a product called SUTURFIX that's really designed to replace manual knot tying with automated suture fastening.
This is an exciting technology where a single physician can use this on their own, don't have to reload it or anything, and essentially implants these very flat nitinol fasteners that are kind of key to replace the normal manual knot-tying process. For us, this launch in late 2020 in the U.S. is actually entering a market today where we believe about 50% of all surgical valve replacements as well as repairs are actually already using current automated suture fastening technology. We believe this is an opportunity to enter into an already existing market and continue to grow its usage in different kinds of surgical valve replacements and repair across all the valves of the heart.
We anticipate actually very shortly, by the end of this calendar year, European regulatory approval of our HARPOON beating heart mitral valve repair therapy. This is an echo-guided beating heart repair procedure that we think really transforms the way certain degenerative mitral valve repairs can be treated by HARPOON, which is a very complex way of the surgical mitral valve repair today is a very complex art form that we hope to help standardize with this kind of great technology. This is kind of a low-profile, transatrial approach that we think will be a very significant growth driver to the surgical business in the years to come.
Currently today, across even the U.S., Europe, and Japan, we think there's about 30,000 patients who currently get mitral surgical valve repair that may be applicable for this technology. For us, as you look specifically into 2020, we have an underlying estimated sales growth of between 0% and 3%. Clearly, one of our key headwinds will be the continued TAVR conversion in both the U.S. and Europe, which we've talked a lot about. We think there's a lot of tailwinds. We think that the continued adoption of our INSPIRIS premium product will really help be one of our tailwinds, along with the adoption of a lot of these new product launches I just talked about.
How fast we can move up the curve of adoption of those technologies will be a key tailwind as we move into next year. Overall, in summary, us, the Surgical Structural Heart business at Edwards, we want to continue to advance our leadership, really as being the partner for the cardiac surgeon out there. We want to work very closely with cardiac surgeons. We want to continue to come out with a leading pipeline of patient-oriented surgical innovations, and we're going to keep focusing on the growth segments. There are a lot of growth segments out there in the surgical space, and we're going to keep adapting and growing with them to continue to drive growth into the future. With that, before we jump over the break, I have an opportunity for some Q&A. Please.
Thanks. Chris, Guggenheim. I'm just curious on the SUTURFIX product. That sounds to me like a mixed opportunity for you guys, basically a revenue per procedure opportunity within your existing cases. Can you quantify that at all and what that could mean?
I think from a strategy, that's exactly what it is. I think for existing cases right now where people are using surgical valve replacements, we plan to offer additional technology to streamline the procedure, make it easier for physicians, make the case faster, less cardiopulmonary bypass time, et c. That's a part of our strategy, but we don't release specific pricing yet at this point or anything.
Okay. Thanks. Larry Biegelsen, Wells Fargo. On HARPOON, can you remind us of what the issues were, how you've overcome them, and where are you with the percutaneous approach?
Sure. To give a little history on the HARPOON device, this is a product that came from an acquisition. As we originally acquired the company, before we had launched in Europe, we saw that there were some cases of cord breakages that occurred. Through a root cause analysis, we learned that essentially when you use the product in a way it wasn't designed, when you're trying to reduce the annulus diameter, which it was never designed to do or part of it, you could have this issue. It really was more about a training and getting the right patients involved.
We expected to launch this a little bit earlier in 2019, and what we saw is working with our notified body is that things have been going a lot slower than we kind of expected. With the transition to MDR or the new European regulations, we see that the notified bodies have been really busy in not only getting themselves essentially certified to be MDR, but a lot of companies are putting all these previous MDD or previous regulation submissions in to get the reapprovals.
It just made them really bogged down and slowed down our response time. That's really what we've seen. We haven't seen anything different than that since we've resubmitted to our notified body. Yeah, we're confident right now that the training would fix the issues. Obviously, the commercial experience will really prove that out. We've gotten a lot of confidence from our notified body in getting regulatory approval this calendar year in the coming weeks. Please.
Hi, good morning. Danielle Antalffy from SVB Leerink. It feels like one of the long-term growth drivers for the surgical business would be the undeveloped countries, emerging markets. Can you talk about what the mix of the business is today in undeveloped countries and how you see that evolving over the next, say, five years or so, and what the sort of market dynamics there are from a pricing perspective, et c?
Well, I think there's probably two different trends that are mixing together at the same time. The first one is, obviously, today the majority of our revenue comes from the developed world of our existing products. We see in that the growth rates in our emerging markets are much higher than the growth rates in the developed world, especially with TAVR cannibalization. That's obviously helping that mix to more international markets. The counter then you then see is that a lot of our new innovations are really about treating complex patients.
Our KONECT device, or maybe something like SUTURFIX, help facilitate cases today. Those actually probably have a greater opportunity in the developed world. Interestingly enough, we have this in our core business, emerging markets kind of growing faster, but then in kind of the new technologies, they probably have a greater opportunity in the developed world. We see those two things countering out, where our growth ends up being driven by both almost simultaneously moving forward. Thanks.
Good morning. Pito Chickering, Deutsche Bank. Two questions. How much focus is there today on valve durability of these mechanical valves?
How much focus is there on valve durability in general?
Yep.
Yeah, I think for us as a company, for us in the surgical business, we want to continue to improve valve durability. That's very important to us. Our innovation in the RESILIA tissue was key to that. That was a many-year innovation, large investment. As we look going forward, we're going to continue to try to improve tissue durability into the future. That's super important for us, whether it's surgical, transcatheter, or anywhere.
For a follow-up, for emerging markets, sort of a follow-up on that question, as you guys are developing new technologies, what percent of your pipeline is focused on making these products easier to use so you can keep on penetrating that market further?
What percent of our market is focused on easier to use?
Yeah, like of your pipeline within surgical valves is on ease of use for the emerging markets.
It's kind of a mix. You'll see that a lot of these technologies are actually focused, like KONECT is ease of use of this complex surgical procedure that's kind of a we're trying to do multiple things. SUTURFIX may be something where you're trying to smooth down a pipeline procedure, but then I have new technologies like HARPOON, where we're trying to essentially transform the way mitral valve repair is done in a brand-new approach. We actually see kind of a blend where there's both approaches of our technology being done. Right up here in the front.
Thanks. Robbie Marcus, JP Morgan. You guys have done a great job innovating and driving mix shift as volumes have declined over time. As you go forward, I see that aortic is going to be a smaller part, probably presumably as TAVR takes a greater share there, how do you think about volumes versus mix going forward, and how much opportunity is there still to grow from mix while volumes are declining?
Sure. From a unit perspective going forward, despite TAVR cannibalization in the U.S. and Europe, but a global unit mix, we actually expect to see slight growth still happening on a mix. We still expect our unit volume of AVR to continue to grow, but obviously more from an emerging market standpoint than necessarily from a developed world, which would be a little bit more declining. I think in our core markets, a key part of it is bringing out our new technologies and gaining those premium technologies in the developed world while unit mix is growing in our international markets. Right up front here.
It's David Lewis from Morgan Stanley. I just want to follow up on that a little bit here. Last year, you guided one to three surgical. This year, zero to three, which sort of makes sense because you had that low-risk push into 2020. That being said, you still have INSPIRIS mix, and you have two new products coming this year. I guess apples to apples, surgical valve growth in 2019 versus surgical valve growth in 2020, the underlying business, how do you expect those units to grow? It seems like those units are ticking down 2019- 2020.
There's a mix of, as I said, in the developed world, especially U.S. and Europe, you'll see that those markets are ticking down, but you'll see countered by a little bit of growth in the emerging market simultaneously that's absent of any of the new technology. On a global basis, our surgical units, our aortic business, ends up being pretty close to kind of flattish, with the developed world going down and developing world kind of growing a bit. Does that make sense? Right in the back, maybe.
Thanks. It's Matt Taylor from UBS. I was hoping you could talk a little bit about share dynamics. Who are you taking share from? Are you losing share from anybody? Does having the TAVR business or these other businesses help your heart valve market share?
Obviously, we believe with our premium products like INSPIRIS, we continue to do a great job in competing both against mechanical valves as well as tissue valves. We think it's a little bit across the board. For us, again, the exact dynamics are kind of tough to know exactly which competitor at what amount, but that in general is kind of who we see both growth against mechanical valve as well as against tissue valve. Maybe over here. Further.
Thanks. Jayson Bedford from Raymond James. The fourth quarter guidance implies a bit of a slowdown in growth, and I realize it's a tough comp, but I'm just wondering if you can comment on the impact on your surgical business from the low-risk approval, and have you seen, I know it's early, but have you seen any material impact on volumes?
Well, I think what we've been saying is that obviously the low-risk indication and the growth of TAVR, especially in the U.S. and Europe, is causing declines in the SAVR market. That's what we're seeing. Again, being countered by growth internationally as well as new technologies.
Has it stepped up?
Yeah, it definitely would've probably stepped up a little bit since the low-risk indication has occurred, which is kind of expected. Great.
Okay. Thank you, Daveen, and thank you, Paul. We're going to take a 15-minute break now. We'll reconvene at 10:20 Eastern sharp. Thanks. Super job, man. Thank you. You happy?
Yeah, really happy. Great job. Thanks.
[Break]
Okay. Ladies and gentlemen, we're ready to resume again at this point. Thanks for your attention. It's my pleasure to invite Bernard to come up and share with you the latest going on globally in Transcatheter Mitral and Tricuspid Therapies. Bernard?
Thank you, Mike. Good morning, everyone. This is my second year leading this newly formed division, TMTT. I have a lot of exciting news to share with you. The progress we made this year and all of the things that we are planning to do next year and in the years to come. We have a very exciting vision, leading and transforming patient care for these mitral and tricuspid patients. As you can imagine, this is not one disease. It is very complex disease. It is not just one disease. It is a very cool vision. How are we going to do that?
First and foremost, we are going to bring the best technology. This is in the DNA of a company, correct? Bringing, first and foremost, the best technology. Given the learning we had for many years in the space, 60 years in the space, and all of the learning we had in the last few years with TMTT, we know that one therapy, one modality, is not going to be enough. We know that we will need basically a toolbox. We are going to back all of this with data. We project this opportunity to be about $3 billion by 2024, and this opportunity will grow even further, and way further than that, beyond 2024.
Let me start with a little bit about the patient. Patients are diverse, prevalent, their disease is deadly, and undertreated. What I mean by diverse, I mean there is basically a lot of disease within MR and within TR, there is no two patients alike. Prevalent, about 10% of the population in the U.S. over 65 have moderate or severe MR or TR. It is about 4.5 million people having the disease, moderate or severe. For sure, their quality of life is compromised, heavily compromised. About at one year, the mortality rate is about 20%.
Despite all of this, there is no solution. They are undertreated. It is why we believe we have a very exciting vision to transform patient care, and it is why we believe we need the portfolio to do that. Let's look at the portfolio. I'm very pleased to share with you, we have four mitral program, two repair, two replacements, and we have three tricuspid program, two repair, and a brand-new program replacement in the tricuspid position. This portfolio has evolved since last year. That's a leading portfolio.
I'm very pleased about where we are today. Starting with PASCAL. Leaflet repair as a modality is today a proven therapy for some patients only. What we believe is that with the current PASCAL, the one in the marketplace today, we can treat more patients and with a better efficacy. I like to start with the differentiation element of PASCAL. It is PASCAL as a spacer to be able to fill the area between the leaflet and basically avoid the backflow. PASCAL material is Nitinol, which is a flexible material, which is allowing basically leaflet mobility after the implants. Independent grasping is also very important in complex anatomy.
PASCAL has the ability to elongate itself, so again, to navigate through complex anatomy. All of these elements are what is making PASCAL a truly differentiated product. We brought this product, PASCAL, in Europe this year with a very disciplined launch. We talk about that at every quarterly update. Very pleased with the clinical outcome. We achieved this clinical outcome with our high-touch model. Like Larry described, we are involved, and we are supporting patient screening, case support, physician training.
We are involved in every case, every patient, in Europe. We believe we bring value with this device. Highly differentiated, coupling with our high-touch model, and therefore we apply a premium price strategy. This has moderated the rollout of a launch, but we feel confident that this is the right strategy long term. In addition of having great success so far with PASCAL in Europe, we have launched an unprecedented body of evidence with PASCAL. We have three randomized study running. One with DMR patient population, one FMR, and one for tricuspid.
Unprecedented again, never seen. For 2020, what we are planning to do. Obviously, we are thinking about the next gen. We are very pleased about the clinical outcome, but we want to do better. It is in the DNA of this company, correct? We are going to enroll across these three studies. We are aiming to finish an enrollment for CLASP IID by the end of the year next year. We plan to double the procedure adoption with PASCAL next year. Again, very pleased about the differentiation. We believe with our strategy, we are going to transform leaflet repair and being able to treat more patients and achieve a better efficacy.
Now let me share with you a little bit of the kind of clinical result we are having. On the clinical side on the left, core lab adjudicated, and on the right, real-world, you see that great result. 96% MR 2+ and less. The bar is going up for efficacy. Now everybody's looking at MR 1+ or less. With PASCAL, we are achieving between 75% and 82%. This number is very important because all the published data are showing basically a rate between 50% and 69%.
PASCAL is better already, early but better. We believe this data, these results, are impacting quality of life and also mortality. Very excited about where we are, very confident about our strategy with this platform. Now Cardioband. Cardioband is a well-established procedure on the surgical front. Annular reduction is well-known for a long time. What Cardioband gives to physicians is a real-time confirmation that the efficacy is achieved.
We have demonstrated that this year and last year in Europe and in the U.S. Frankly, we are not satisfied with the time of this procedure. Too long, we need to do better than that. What we have done is we change our strategy. We believe in the platform. We believe this platform is going to be a meaningful platform for a meaningful number of patients. We need to bring the next gen faster. The big next gen, breakthrough next gen. What we have done, instead of having a number of incremental innovation plan, we said, "No, let's move to this big breakthrough."
We are going, basically, in the meantime, partnering with some center of excellence in Europe. We are not going to expand necessarily. We are going to continue our EFS in the U.S. on the tricuspid side, and we are going to accelerate our next gen. When we will have our next gen, we will start our pivotal study. Not before. Don't have any timing for you right now, but obviously, we will update you. Here again, clinical results. On the mitral front, look at the results, MR 1+ or less, 79%- 77%. Big number, differentiated number of results. For tricuspid, maybe even better. Again, remember all of the tricuspid patient, it is a functional disease.
Look at the two grade reduction. More than about 90% of the patients have a two grade reduction after Cardioband procedure. We believe that, again, Cardioband is a meaningful therapy for patients, and we believe the strategy we have in place is the right one here. Let's step back and talk about what we are trying to achieve in TMTT. What surgeons do today, they do miraculous procedure, correct? They stop a patient heart, they open the heart, and they fix it. They do it very well, but it is very invasive, not easily teachable, not easily reproducible, and frankly, it is lacking Class I evidence. Our objective is basically to build on these surgical insights and address their limitation by making it teachable, reproducible, backed with a body of evidence.
I already talked about PASCAL and the leaflet repair, Cardioband annular reduction, and we also believe that replacement is key, is going to be important. Again, you remember my first slide about the patient, very complex, diverse, many patients. All of this modality, we believe, will be important. Now, we have two replacement platforms because we are very committed to leadership. I'm going to share with you some very exciting news on both platforms. First, SAPIEN M3. We made the decision this year to accelerate this program for a number of reasons.
First, it is based upon the SAPIEN platform, which is a proven and leading valve in the space. SAPIEN 3 has been used in more than 3,000 patients in the mitral position, valve-in-valve, valve-in-ring. SAPIEN M3 is basically a slightly modified SAPIEN 3, completely novel docking system and a novel delivery system. We are doing an EFS all year, this year, a little bit of next year with remarkable result. Early result, remarkable result. All of that gave us the confidence to start a pivotal study.
I'm very pleased to report that we received the first-ever transseptal, not a surgical TA replacement study. The first-ever transseptal replacement pivotal study. We received that approval. We are going to start enrolling the patient next year. We are confident about the platform. We are well-positioned here. EVOQUE, our second replacement platform. This valve also and this program, very pleased about it. Very pleased about the progress. We design the entire platform, the valve, the delivery system, completely in and out, having in mind, the mitral and the tricuspid patient anatomy. It is scalable. We have multiple sizes.
We get good outcome for the mitral patient population. We started this year a new program for the tricuspid patient. We have done some patients this year with remarkable results, which gave us confidence also, basically to start the program next year and to initiate an early feasibility study in the U.S. If I summarize our position on the replacement front, we are in a leadership position. We have the two best transseptal replacement program, SAPIEN M3 and EVOQUE. The first-ever transseptal pivotal approved in the U.S. with SAPIEN M3, and starting a very exciting tricuspid program with EVOQUE. What I want to do right now is to summarize, because I think, sometimes, we forget what we are doing here and to summarize our commitment to creating this market.
This is unprecedented. What we are going to have next year is four pivotal study, large pivotal study running, three on the mitral side, one on the tricuspid side. We are going to continue the learning with all of these early feasibility studies. That's unique, that's comprehensive. That's truly a leading body of evidence in a program that nobody has seen so far. Very excited about that. How you do that? Our way of doing that is also very unique. We decided to build a dedicated organization, a dedicated TMTT organization made of more than 700 people. 700 people in TMTT today, not necessarily focusing about this year or next year. Correct.
We are having in mind how to change practice 2024 and beyond. Very proud about all of these people in TMTT, basically focusing on these seven programs, four pivotal study next year, and making sure we are achieving excellent real-world results every day for every patient. As you can imagine, when you take on this kind of vision, this kind of challenge, we know that we are going to face some opportunity and challenges along the way, and we are ready for it. What you can expect from us is we are going to be focusing on both short-term, midterm, and long-term. For next year, our range is between $50 million and $70 million.
There is a couple of tailwinds that we see that might come, like more evidence on PASCAL next year, increase faster adoption in Europe for PASCAL, also some headwinds, IP litigation risk. We are running many studies. Some of our competitors are running also many studies. There is competing studies and having the patient could be a challenge. We feel very confident that we have a good plan, good management processes, dedicated team, very experienced team to be able to achieve this plan. Again, as I said, it is not about, for me it is, yes, 2020 is important.
When you think about changing practice, $3 billion in 2024 as a market overall, but I think about beyond that, and I know that this opportunity is going to be a big one. The way I see beyond 2024 is basically we are going to create a new standard of care for these patients, mitral and tricuspid patients. We will have, for sure, left repair, but also Cardioband and replacement will have a big role in a later stage of the plan. We will have a differentiated, highly differentiated, and diverse portfolio approved globally.
All of the evidence we are basically doing today are going to help patient awareness and for RP adoption. I'm very excited about, obviously next year, the next few years, but also the long term to make a big impact into the field and to change the practice of medicine. This is concluding my presentation about TMTT. Now I am very excited about introducing the next session. Ted, Dr. Smith, and Dr. Lim, please join me on stage. I'm going to introduce Dr. Ted Feldman first, and then Ted is going to moderate and introduce Scott and Rob. I'm very pleased to have Ted here moderating this session.
Ted has been an innovator in the valve space from the beginning. He has seen all of it. He has done all of it. I think every time I talk to him, he can talk about all of the technology that you can think about in the last 30 years. Very well-published. A great trialist involved in so many important trials. Maybe more importantly, he decided to join the company about a year ago. He's part of the TMTT organization, and he's making an impact every day, and it is truly a treat to have Ted with me on the team. Ted, thank you so much. Please let you moderate the next session.
Thank you very much, Bernard. I do want to amplify that it's been very exciting for me to move from practice into a role in industry where I really do very little that's different compared to my practice. Of course, I'm not treating patients every day. The patient-centered focus at Edwards and the commitment to clinical evidence are seamless with my own interests and commitments. I'm hugely excited to participate in a big enterprise like this that's going to transform care for many, many thousands of patients.
Our intention today is, with a couple of my colleagues, to have a conversation about this whole process of transforming care. I want to introduce Scott Lim, who is a Professor of Pediatrics and Adult Cardiology at the University of Virginia, Charlottesville, Director of the Structural Heart Program there. Rob Smith, who is the Vice Chair of Cardiac Surgery at the Baylor Scott & White Heart Hospital in Plano, Texas. Both bring unique and important perspectives to our field and this conversation.
Hopefully we'll give you some insights into how we think about what we're doing in this enormous enterprise of device development, therapy development, and trials. Rob, you have a unique perspective as a cardiovascular surgeon who also does interventional procedures. Tell us, you look at the world of cardiac surgery for particularly mitral therapy. What have you learned there that you're ready to carry forward into the world of interventional therapy?
First off, I appreciate this opportunity to come talk to everyone. My practice has been relatively unique in that, Daveen spoke to this earlier, too, where surgeons really are now becoming very super specialized, and my practice is largely mitral and tricuspid valve interventions, both surgical and interventional. What I've seen over the years and what I love about what I do is that I have this enormous array of tools that I can use to operate, fix the mitral valve and the disease that gets presented to me. In the large population of those patients who come to me for surgery, they're generally younger.
The average age of a patient who comes in with a degenerative mitral valve pathology is in their mid-40s, and that's a patient who's going to do really well from an operation. That's going to be a patient who's going to do relatively well from a motor vehicle accident. That's a young patient who's going to do great. There's now an increasing number of patients who've been presenting with degenerative valve disease who are in their late 70s, 80s, even 90s, who oftentimes are really debilitated, not only by their mitral valve disease or tricuspid valve disease, but their comorbid conditions that also are presented.
It's very frustrating getting to this point where you have a right surgical therapy or therapies that you can employ, an entire toolbox at your disposal that you can't really use in these patients because they're really too sick to undergo an operation, even though minimally invasive and robotic surgery is what I focus on. That's been the big foray into the mitral and tricuspid valve intervention world, is there's this growing toolbox that we have to treat different disease processes. That's really been fascinating, fun developing, and really broadened the number of patients that we can affect their lives with.
Maybe a couple of words on the biggest similarities and differences between surgical and catheter interventions in these populations.
I think right now, with the limited number of intervention tools that are available to us, really focusing on leaflet pathology has been the primary focus. What I'm hoping and looking forward to is this expansion of the toolbox so we can affect the greater, broader depth of the disease process that affects the mitral valve. As you guys heard earlier, it's an annular problem, it's a leaflet problem, it's a ventricular size problem, it's an interaction with all the elements inside the heart as well. As more and more devices come into the arena and need to be studied.
It certainly provides hope because these are all largely based on predicates that come from surgery. These are surgical analogs, things that we have a great deal of experience with. We can certainly see them being transformed into interventional models so that we can do this without arresting the heart, and the longer recovery periods that come along with surgery.
Part of inherent in those comments is the idea that surgery is highly effective, and catheter therapy today has limitations and may not be as effective. It is certainly easier, and in the older patients, a lot safer. That leads us to the next big task that we have. Scott, I'll ask you, how do we put all of that into a cooker and look at evaluating outcomes? I'll say also, Scott's been involved with the trials for mitral valve catheter therapy since the very earliest days of the MitraClip experience, so now pushing a decade and a half in this trial world.
The other piece I would add on to this is over the years, I've also watched my surgical colleagues with the predicate concepts and what you've been doing. You have so much, so many different things you can do that inevitably there's artwork that comes into there. While I appreciate the artwork, there's a variability that comes with that artwork, and therefore, I think that's been one of the challenges of trying to bring wider adoption of surgical repair technologies to across the U.S. and Europe and other places. With inevitability, with variability, comes differences in outcomes and so forth, and it makes it harder to study.
I think that's one of the advantages we have in the transcatheter world is hopefully we're doing it in a way that we can decrease some of that variability, and therefore lead to wider adoption, too. That behooves us. What I think Ted's getting at is we have to study that. We have to be very thoughtful and do this in a stepwise fashion. I really appreciate the tremendous energies being put into doing multiple large randomized trials in this space so that we can really develop the evidence and say, how are we doing this, and is doing this in the right way to really change practice to make it better for our patients.
Randomized trials we view as the pinnacle of the evidence base and the gold standard for trials. You want to talk about some of the challenges in executing randomized trials? We're doing four randomized trials in parallel in TMTT.
Yeah. It consumes a tremendous amount of resources, both not just financially, but in terms of personnel, both on the industry side and Most of my colleagues in different other aspects of industry, they mount one of these large trials at a time, and to tackle three of them really speaks to the dedication, the focus, and the energy being put into this. There's also a lot of work that goes into this on from the sites about we have to screen, on average, to get one patient in one of these clinical trials, 10 or more.
There's a lot of work to find who are the right patients to fit into these to help us answer the questions of, to get the evidence of how to change practice in a positive way. There's a tremendous amount of effort, and I really want to applaud my colleagues here at Edwards for putting that energies into these. We're going to make a difference in this aspect of our world.
One thing that you touched on a moment ago was the art of surgery and the greater reproducibility of results in interventional therapies. Rob, maybe you want to speak to that and why that's important and how trials develop that?
Yeah. First off, I think one of the downsides about an art form is not everyone can become a Picasso. That's the downside about surgery, is it is not only not always reproducible, not always teachable, which Bernard was talking about earlier. I think when we want to provide great, excellent care to a large patient population, we need to have something that's fairly reducible and in a reasonable time period, and that's where the nice thing about an intervention is it's done on a beating heart as opposed to a surgery.
In a surgery, you go through an effort of stopping the heart, doing a lot of different therapies to the valve itself, and then you restart it, and then you get to see what the effect of that has been. In someone who it's taken a long time to do, there's no chance to redo or retry. In the setting of an intervention, you have all sorts of opportunities to reevaluate, retry, try different technologies. I think as the portfolio expands of what's there, just looking at different technologies that you'll be able to use.
I think that in this setting of trying to have reproducibility, we have much more opportunities because we're doing this in a live situation of a beating heart, so we can see exactly what's happening. How does this go into a trial is we've got to individually look at each piece of this procedure to see what is effective, and then as it grows and becomes more popularized, what other elements can we add to it to make it better, more durable? All these kind of elements are going to come in over time as we study each aspect of the repair portfolio.
I've always summarized this idea by saying that the surgeon says, "In my hands," and the interventional cardiologist says, "With my device," which I think captures the idea that these therapies level the playing field and really do allow the opportunity to bring therapy to more patients. Another thing that came up in this discussion is commitment, and I want to talk about commitment on the Edwards side and on the trialist and investigator side.
Small disclosure to open this part of the conversation, Rob and Scott, like many of our colleagues, do consulting for multiple companies, make very small amounts of money in terms of honoraria, but all the trial work is uncompensated, and the time invested dwarfs any of the compensated interactions with industry for guys like this who are PIs of significant trials. Screening calls two to four hours a week, probably, and then intermittent all kinds of other calls, emails, document editing. All that said, why would you do this when you could just peacefully stay at home and practice? I'm going to ask you both to comment.
I think at the end of the day, it's part of because what I do day in, day out is sit with a patient, a person, and their family members, and I try and give them my best advice. They're faced with a significant issue in their life, and we really need data to help guide that conversation and guide that advice. This data has to come from these types of collaboration between industry and physicians in these clinical trials. At the end of the day, that's really what it's about. It's how are we going to do better to help advise our patients and their families.
Yeah. I think one of the real key pieces to this is the total professional piece of what we are as physicians. Every day we go into work, we operate, intervene, see patients in clinic, but that's not the cumulative of what we do. We have some administrative sides of things. The other thing that we are called upon to do is advance the specialties that we're in, and part of that advancement is taking part in clinical trials, leading clinical trials, so that we can be a part of advancing the overall care for our patients so that they live longer, live better.
Doing that, and what I love the commitment here from Edwards has been, is really promoting the heart team approach towards this. This is not just an interventional cardiology discipline. This is not just a surgical discipline. This is the mix of the two working together to try to come up with really great solutions, longer-term solutions, that come up as a team approach. As Scott was saying, to come up with the evidence so that when we sit down with a patient, we can give them the data, our experiences, and come up with a shared decision-making for their future care.
The other challenge we have with trials is that the trials are absolutely necessary to move the dial on our understanding of the therapy, eventually on guidelines and certainly informing us of how best to perform these procedures. The trials aren't enough. The TAVR journey is a great example, that PARTNER 1 was a resounding trial endorsing TAVR as a therapy in very high-risk patients, and it was, in some respects, the beginning of the journey. Where are we with that with TMTT? At the end of the day, how much more are we going to have to do before a noticeable piece of this couple of million mitral regurg patients, for example, are actually being treated?
I think it's a really good opportunity to put forward some reasonable expectations. Aortic valve disease, in many ways, in the therapy, is a bit binary. Our patients live or they die with it. We treat it and we succeed or not. Mitral valve disease, I tend to think of that we're aware that it's a spectrum, and with that spectrum, there's great complexity, and it's going to take us a while. We're just barely learning how to parse it out and to figure out where our therapies should be and how they impact. If we add tricuspid into the mix, tricuspid is also a spectrum. I don't even think we fully understand the nature of that spectrum and tricuspid disease and the RV and everything.
I think it requires a quiver of different arrows in our ability to figure this out, and that's why I think, as you've seen, there's an important role for these early feasibility studies. There's an important role for these larger IDE trials, an important role for what comes after the post-market studies. This is going to take us a while, and I think we are very much in the beginning part of our journey, and I fully intend that it's going to occupy the remainder of hopefully my long career. There's a lot here.
I echo that. The one simple great part about transcatheter aortic valve replacement is it's transcatheter aortic valve replacement. It is one therapy for a disease process. In the mitral space, certainly from surgery, we've used multiple tools to make that happen to reduce or eliminate mitral regurgitation. As we move into this, it's going to take several studies to evaluate the different pieces of the valve pathology to see that we're making continued improvement on what we're able to do to the valve.
There's already three ongoing mitral valve trials going on right here that are pivotal trials. Compared to TAVR, where it was one trial, maybe two at a time, now we've got three happening at one time. The potential for this rapidly developing is there, but it is going to, in all honesty, take some time to figure out what each component does and then what each component does together.
Fantastic. I'm going to summarize very briefly. We'll go into a Q&A, but I think we hit a couple of big themes. One is that a portfolio of devices, a toolbox we think is really necessary. We have a huge commitment on the part of Edwards and TMTT. As or more importantly, from our partner investigators to develop a body of evidence to figure all this out and prove these therapies. It's a really enormous effort. I want to take one minute to thank both of you for taking time on top of all the trial efforts to fly to New York and probably memorialize the concept there's no such thing as a free lunch. That's about all you get out of this. A special thank you. We'll have questions- and- answers. Thank you.
All right, let's jump into a little Q&A. David , kick us off.
Thanks. David Lewis, Morgan Stanley. Just two for Bernard. I guess the first question is just Cardioband performance. It's very good performance in the hands of a few. How do we get it to be very good performance in the hands of many, and can we achieve that without making significant design modifications? Then a quick follow-up.
Sorry, could you repeat?
Cardioband.
Sorry, Cardioband. Very good performance in the hands of a few physicians, but not in the hands of a lot of physicians. How do we get that broader adoption, and can we do that without a significant design change?
Yeah, no, it is exactly what we are doing. We like the performance of it. Today, only a few physicians can achieve a good performance in a reasonable timeframe. It is why we need the next gen. We need a breakthrough innovation. We are working on it. The next Cardioband is going to be very different. I have seen the concept, very exciting, promising. Too early to share the detail. What we are planning to do is accelerate this breakthrough innovation so that more physicians will be able to use it and have basically a procedure which is going to be competitive to all of the transcatheter procedure time, about an hour.
Can we see the design before 2021?
It is tough to give you right now a timing. It is going to take us sometimes to finalize the design. Then, what we do usually is we finalize the design, we do some first in man, and when we are confident, then we share all of the details. Correct. I'm not sure I can give you a time right now.
Okay. Just second question is the TMTT guidance for next year, $50 million-$70 million seems lower than expected on the low end of the range. Mike, you had talked about doubling that performance. To get to $25 million in 2019, which would double to $50 million next year, sort of implies that mitral business could be down sequentially in the fourth quarter. Is it possible the TMTT business could be down into the fourth quarter sequentially? What drives, in your mind, the low end of the range of $50 million-$70 million for 2020? Thank you.
This year, we talk about our launch rollout that has been moderated by our premium pricing strategy. Very pleased about what we did. We have a disciplined launch, great outcome. We are supporting all of the cases. For sure, when you are a second entrant in the marketplace, you come with a premium pricing because this is aligned with the value we are bringing. This has a little bit mitigated the rollout of a launch.
This is about this year. We are planning to double our adoption next year compared to this year. Doubling is a big objective. The shift was, it was a small manufacturing issue. You heard about that. Patient safety for us is very important. We made the decision, we communicated, we were able to get back to the marketplace in a record time. Basically, we are already back right now in the marketplace. Yes, it is going to slightly impact Q4, for sure.
Thanks. Chris Pasquale, Guggenheim. A question for the physicians. One of the distinguishing features of the current surgical mitral intervention market is how few surgeons actually do a lot of these procedures, and the big variability in outcomes from high-volume sites to low-volume sites. This kind of ties into the Cardioband discussion, but the technologies that are here today on the transcatheter side and coming soon, are those easy enough to use to be democratizing in terms of this market, or is it just going to lead to a new group of very sort of specialized operators?
I think one of the differences that has to come into that mix is we can't do things if we can't see them. Therefore, by its very nature, that means for mitral and tricuspid procedures, it can't be a solo operator thing. For the most part, TAVR has moved to maybe not solo, but limited the number of operators there. I still see tricuspid and mitral interventions as requiring a team approach, both before the procedure and in the procedure. I don't see this as being able to spread to the 800+ centers in the United States.
I see this still as needing to be concentrated at places where at my institution to do the procedure, I've got two people doing the echo side of things, but they're getting reimbursed for a TEE, which takes normally five minutes versus my procedure's taking them an hour or something like that. That can only be done at larger centers where people are willing to cost share and things like that. I don't see it as going as quite as broad as the aortic area has.
Compared to surgery and the democratization there, I think comparatively so there'll be far more sites that are able to perform it rather than high-volume surgical centers that perform high-volume mitral valve interventions. What you define that number on, currently looks like about 75 mitral procedures per year is considered a high volume, high outcome or good outcome center. I think you'll be able to reproduce at least basically what we've seen with some of the edge-to-edge therapies better, and less variance in outcome with a broader set of centers compared to a small number of centers that perform over 75 mitral valve operations per year by one or two surgeons.
I can add a little bit to the idea. I love the phrase democratization of the therapy. In the surgery world, there's a clear volume outcome relationship for mitral valve surgical repair. No question, the more that an operator or site does, the better the outcomes. We're seeing some data out there now that demonstrates that there is not such a relationship beyond a short learning curve of a dozen cases or so for catheter-based mitral repair. That it is by the sites that are equipped, easily adoptable, and very quickly reaches a point where the volumes don't distinguish one site from another in terms of good outcomes. We've seen that in our European commercial experience, which is, for PASCAL, all early experience with immediately really remarkable outcomes.
Hi, it's Kristen Stewart from Barclays Bank . I just had a couple questions on the trial designs, if you will. On SAPIEN M3, you'd mentioned that you did receive approval by the FDA. I was wondering if you could just talk to what that trial looks like and the potential, I guess, timelines for approval. Just a clarification on PASCAL as well. You talked about completing enrollment in the PASCAL 2D. On ClinicalTrials.gov, it looks like 2D and 2F are combined. I think Dr. Feldman, you had talked at TCT about that trial also being combined together.
It looks like the primary outcome doesn't complete until 2023. I'm just trying to understand what the timeline for potential approval could look like in the U.S. for PASCAL. Lastly, just thinking about what's going on with Cardioband. Looks like for SAPIEN M3, you talk about next generation designs for SAPIEN M3. Could we be in the similar standpoint there, where we find that you want to integrate in, I don't know if you've built in for iterative approaches like you have in other trials to fold in next generations for SAPIEN M3 into the design too? Thanks.
Let me answer the last one. I don't think you should draw any analogies between SAPIEN M3 and Cardioband. I mean, they are two totally different therapies. I wouldn't necessarily make any connection. Bernard, maybe you want to comment on SAPIEN M3 and also on PASCAL.
For sure, first, we are very pleased and excited to have basically the first-ever IDE approval with the transseptal replacement program with SAPIEN M3. We received that lately. We are still talking with FDA about the trial detail and the design detail. I'm not ready to give you all of this design detail right now. Soon, as soon as we are going to have it is going to be posted on clinicaltrials.gov very soon, but not for today. Your second question was?
Timelines of when we would expect for these trials to take place in terms of enrollment and U.S. launches. Just ideas about when next generation designs would come in, if it's built into the study to be enrolled within there-
Okay, yeah.
...PASCAL, you said 2D enrollment at the end of this year.
Listen, only six per customer.
I only get one shot. I'm rolling it all in now, since I rarely get questions.
CLASP IID, we are planning to finish the enrollment of CLASP IID by the end of next year, the end of 2020. Think about a year to follow up the patient, data collection, and then think about a year to get an approval. Sometime in 2022. That's the way to think about PASCAL approval in the U.S.
Okay. Very good. Thanks, Kristen.
Suraj Kalia from Oppenheimer. One question for Bernard and one question for the clinicians. Bernard, if memory serves me right, MitraClip is about 1.6 devices per case. PASCAL was 1.5. Does design innovation, is there a way to get to a single device per case? That's for you. For the clinicians, I think so I heard Dr. Lim talk about 10 patients being screened to get one enrolled. What does that talk about patient selection bias, if any? What does that talk about real-world patient flow? Thank you.
Let me take the first one, and maybe Ted, you can take the second one?
Yeah.
On the number of PASCAL pair patient, in our commercial experience in Europe, you know that we have this high touch model where we are supporting all the cases. Our number is way below 1.5. It is not one, but it is way below 1.5. We believe physician can achieve this kind of number of implant per cases below 1.5 because of all of the differentiation that PASCAL is having. Together with having great outcome, correct? The MR 1+ or less is in the 75%-80%. It is less than 1.5. Do you want to add anything here on that topic, Ted?
No, that's what we're seeing.
Yeah
is a substantially lower rate of implants per case, and in apparently similar anatomy.
Yeah. The second question was?
Enrollment challenges.
Oh, maybe you want to take that one.
Let me just make a couple of points about the trial versus real-world populations. There are several publications now that have estimated that the proportion of the functional MR population that is COAPT indicated is probably no more than 15%, that's a mix of anatomic and clinical exclusions. That just comes right back to our discussion of, let's say you double it in practice, that people ignore half of the COAPT caveats or exclusion population of patients, and that's where the idea of a toolbox becomes so critical.
That's also, I think, a big part of why with Cardioband, we see consistently good clinical outcomes in patients that would be difficult or impossible to treat with other approaches. That drives both our investigators and us to continue to develop that therapy. If you guys want to comment on population size.
Yeah. I think one of the difficult parts of a trial is we're looking at one piece of a puzzle when we're evaluating an edge-to-edge therapy or an annular modification device. Oftentimes we have patients where we would like to treat all of those aspects, and they may not fit right into the very narrow criteria of a study. I think that makes screening somewhat difficult.
Also the other piece that goes into this is the clinical trial is very rigorous for these patients who are oftentimes elderly and have transportation issues. Part of being in the clinical trial, I sit down and I say, "Hey, you have to be willing to keep coming back and seeing me, being my good friend once a year for five years." Several of these patients come from many hours away. There's lots of different reasons why 10 walk in the door, and we only get one in the clinical trial.
Jason?
Thank you for taking the question. Jason Mills, Canaccord Genuity. Dr. Smith, towards the end of the moderated session, you seemed to ask or talk about the $64,000 question, sort of what devices are going to be used where and when are they going to be used. I guess I'll ask more of a long-term question based on what you know now, incomplete information. What do you think the mix ultimately will be five, seven years from now, replacement versus repair? Also, if you could talk about the average age of these patients, severe mitral regurgitation patients, relative to what we see in TAVR today. Do you think they'll be younger?
Kind of two parts to that. Currently in surgery, we use multiple components to fix a valve problem. Ultimately, I think we will need multiple components to create great long-term durable results. It's going to take time to get there because we have to make sure each one of those components work, and that is the important work that's being done on a trial standpoint. How long that takes is difficult to say, but it will take some time to not only make sure that all those individual pieces are effective and safe, but they can also work together.
Yes. Do I think that that will eventually become part of this in the repair model? Yes. There's always going to be a very significant role for replacement as well. Who those exact patients are always going to be is, it's a spectrum. A lot of patients who always fit in that role, there's going to be some here in the middle that we're going to use these big trials to figure out as well. I think mitral valve replacement with transcatheter technologies is going to be a significant game changer when it comes compared to surgery, because you're going to have a valve that definitively works immediately without needing to do an operation. That's not complex multi-component.
Okay, last question right here.
I apologize. We'll end on a non-clinical note here. Bernard, you mentioned as one of the headwinds potentially for 2020 for Mitral would be PASCAL IP litigation. Maybe you could just remind us what are the potential milestones and things we could hear about on the IP litigation front in 2020. Thank you.
First, we are confident in this platform innovation. The milestone in front of us are the following. Early in the year, we are going to have a U.K. trial, and then mid-year, U.S. and Germany. Obviously, we are going to defend ourselves. We believe in innovation as a company. We have been in the space. We have been talking about that a lot. We have been in the space, in the mitral space for many years. It is a very crowded space. For sure, 2020 is going to be a busy year on the IP litigation front.
Okay. Thank you very much to all of our physician guests and Bernard. Great job.
Now it's my great pleasure to introduce Katie Szyman to the stage to talk to you about what's happening in the exciting world of critical care. Katie.
Thank you. As Mike talked about earlier, one of the big trends that's happening in healthcare is this transition to digital healthcare. We see Edwards Critical Care as being that kind of window into digital healthcare for Edwards. In critical care specifically, we're working on driving growth and leadership with smart recovery, and I'm going to talk to you more about what smart recovery means to us, but it's about digital and advanced innovation.
What smart recovery means is that we can expand and Look, today we focus on treating high-risk and moderate-risk patients, but with our advanced algorithms making it easier to do advanced monitoring on patients, we see the ability to move more into the moderate-risk surgeries. Let me tell you the story of Kira, who's shown here. Kira needed to go in for her third high-risk surgery.
It was a seven-hour procedure, and she is a swimmer at Duke. Similar to what Larry talked about in his slide earlier, her biggest goal of getting the surgery was, one, to feel better, and second, to be able to get back to swimming as soon as possible. When you think about what we do in critical care in terms of the advanced monitoring that we provide for patients like Kira, we try to give physicians the best information, the most accurate information, and now moving into the future, predictive information, so that they can deliver the best therapy to Kira so that she can feel better faster, get out of the hospital, and have the least amount of complications.
In the near term, really the key components to making us do that is to develop predictive analytics and advanced algorithms to roll out our HemoSphere platform, and third, to get all of our sensor technologies onto HemoSphere so that we can combine as many of those technologies into one to create the best algorithms for physicians and patients. Specifically enhanced surgical recovery, what we do today, we thought about it as an organization and said, "Okay, we're trying to get more smart. We're trying to get more predictive in our algorithms."
We want to predict hypotension or very high-risk low blood pressure events for patients. We want to try to close the loop so that physicians will be able to know how much fluid should be delivered at any given time. We think today what we do is mostly descriptive monitoring. We tell physicians how a patient is doing right now. What we want to do in the future is to tell the physicians how the patients are going to be doing in the future. Enhanced Surgical Recovery, we're about 20% penetrated into that opportunity today, meaning high to moderate-risk surgical procedures where they're very long like Kira or very high risk.
When we expand to Smart Recovery, what we're going to be doing is being more predictive, using more of our advanced algorithms, and then being able to apply those algorithms to more moderate-risk surgical procedures so that expands the opportunity or the number of patients that we can impact. What we need to do in order to do that is develop smarter tools. We need to take each of our sensors and make them IQ sensors so that they're actually able to use our algorithms on them, that allows us to broaden that patient population. The last thing we need to do is develop clinical evidence to demonstrate to physicians that these algorithms work and that they will reduce complications and reduce the length of stay for patients.
HemoSphere has really driven our growth in these last couple of years. It's been a fantastic platform for us. The vision for HemoSphere was to get all of our sensors onto one monitor. We have two or three different monitors out today, and if we could get it all onto one monitor, it saves room in the operating room, it's much more efficient, and it also allows us to get the right sensor on the right patient with the most advanced algorithm at any given time. HemoSphere is all-in-one.
It's connected. It's going to be connected wirelessly to all the hospital systems, and it's artificial intelligence-enabled. So far on our journey, we've already integrated our Swan-Ganz FloTrac, our HPI advanced algorithm, and then this year we integrated the cerebral oximetry technology onto HemoSphere. This next year, we're going to finally have the very last sensor onto HemoSphere, which is our ClearSight, and we truly will have all of our sensors onto one platform.
This past year in April, we acquired CASMED, and we were able to integrate the ForeSight cerebral oximetry sensor onto our broad range of sensors that we have. You see our traditional standard of care Swan-Ganz technology being a little bit more invasive, going all the way to non-invasive technology such as the ClearSight and the ForeSight, which are attached to patients non-invasively. Physicians in the future with everything on HemoSphere will be able to see every patient, look at them in an advanced way, and then use the right sensor for those patients at any time.
We'll also start with the IQ technologies to be selling more software. As we offer more advanced algorithms, we're going to start to sell software as a separate category that will include the packages of our algorithms as we develop them. I'm really proud and happy with the acquisition that we did of CASMED this past year. In my experience, I've done quite a few acquisition integrations in the past, and this is probably the fastest one where we closed the acquisition in April and we launched a combined product where CASMED, you can see the cable is connected to HemoSphere, and we're able to display the cerebral oximetry values on our monitor already here in the third quarter.
Within four or five months of the acquisition, we were able to launch a combined product, which is a record in my experience. What this does is we call it like the namaste or the kind of yoga type of acquisition. You're able to really see how your brain is doing, how the brain is receiving the oxygenated blood that the heart is giving out, right? We measure cardiac output, and now we're able to measure how that brain is receiving. You can see this beautiful screen here is our newest screen, which again, we've already got out commercially, and it shows the heart, and then it shows the brain so physicians can really see the full picture of a patient's oxygenation.
In the future, what we'll do is take those sensor values and develop predictive analytics or predictive technologies and use our AI to actually predict how the brain is going to be doing in the future. Right now, we're just integrating and getting the baseline data, and then we'll develop AI around it. This shift to smart recovery, what does it mean, right? You see standard monitoring is sort of the biggest part of our business and has been, but enhanced recovery or our less invasive and more advanced monitoring technologies has really been the biggest driver of growth for us, combined with HemoSphere in recent years.
We see as we look to the future, that you'll see a 50/50 mix, that there's going to be standard monitoring and that smart monitoring is where the world is going to go. With digital healthcare, we'll be able to build more and more smart algorithms. You'll see a percentage of that will become predictive, then you'll have smart recovery as a broad category, then you'll still have smart monitoring, and that's how we see the future growth for our business. As we look to next year, you see the annualization effect of HemoSphere.
The growth estimates for next year are 6%-9%, still in the same range of where we've been growing this year, really driven by strong HemoSphere sales, the integration of ForeSight into our monitor. What we see as far as the challenge is to drive that growth into the future with smart recovery, we need more clinical evidence, and we're trying to build that evidence. We have two clinical trials ongoing, and we'll start to see as we get approval for those indications, we can publish those trials, and that will drive adoption and hopefully impact physician behavior. In closing, what I'd like to say is just that it's just a fantastic time to be in critical care.
We have so much growth potential. This ability to develop artificial intelligence really makes our world incredibly interesting. We were the first to get hypotension prediction launched and approved through the U.S. FDA. We continue to develop those advanced algorithms, and with the integration of ForeSight, we're going to be able to develop even more advanced algorithms in the future. Together, we'll be able to make patients like Kira feel even better as they go through their surgeries. Thank you very much, and I'll be turning it over to Scott Ullem, our Chief Financial Officer. Scott?
About the clarity and confidence that we have in our strategic plan. We also have confidence in the financial model that helps guide decisions that we make inside of Edwards. We'll talk about historical performance and our plans for 2020 through the lens of that three-pillar model. The first of which is exceptional sales growth. In the last five years, Edwards' compounded annual growth rate on the top line has been 15%. At the same time, and what's been driving that is about $3 billion in collective investment in research and development programs.
The second pillar is strong profitability, and in the last five years, our average adjusted gross margin, 75%. We've been growing the bottom line by about 25% in the last five years on an annualized basis. The third pillar is robust cash flow and disciplined allocation of capital. We've been growing cash flow at about 20%, and during the last five years, we've reduced the net shares outstanding by about 8 million. We're pleased with the past performance, but we're even more focused on what the future has in store, and so let's talk about that.
The sales growth focus, this first pillar of our financial strategy, is really focused on using durable leadership positions supported by a strong base of clinical evidence to drive exceptional sales growth that exceeds the medtech sector. Last year at this time, a year ago, we set out guidance for TAVR of 11%-15%. In October, when we gave our third quarter results and provided guidance for the balance of the year, we guided to nearly 20%. Obviously, a much better year than we originally envisioned a year ago when we provided guidance.
TMTT, we expect to come in below the guidance target of around $40 million for the year. Structural heart, we forecasted a 1%-3% growth for 2019. Our guidance in October is unchanged. In critical care, again, 5%-7% was the original guidance. We updated and increased that guidance during the course of 2019. That is still unchanged from the 8%-10% guidance we provided to you in October. Below the sales line, here's how our 2018 investor conference guidance compares to what we forecasted at our third quarter call in October. Sales around the top end of our $4 billion-$4.3 billion range. The FX impact on sales is a little bit less than what we originally guided to a year ago.
Gross profit margin, for the year, we expect to be consistent with year-to-date, so trending in the lower half of the original 76%-78% gross margin range. EPS $5.50-$5.65, and we expect our free cash flow now to be above the top of the $800 million-$900 million range. Again, unchanged from October guidance. Looking back at overall consolidated sales, it wasn't too long ago when Edwards had $2.5 billion in total sales. In 2020, we expect somewhere around a range of $4.75 billion in sales, again, driven by the aggressive investing and successful investing we've done in research and development. We do expect the second half of 2020 to be slower growth than the first half of 2020. If you think about it, we're just coming off a really big Q3.
It's going to be hard to lap that year-over-year number that we posted in 2019. Expect the first half to continue to show pretty strong growth rates and the second half to show relatively lower growth rates in 2020. Today, based upon current exchange rates, we're expecting a headwind of about $40 million to the top line. By group, our growth forecast for 2020, you can see in the right-hand column. You just heard all about those from the earlier presenters, so I'll skip the details. Diving into TAVR, as you know, we've been growing the sales base for TAVR rapidly, and so our sales growth rate has come down as the denominator has gotten bigger.
We're still expecting very nice growth of 12%- 15% in TAVR in 2020, driven by the ongoing launch of SAPIEN 3 Ultra and this addition to the body of clinical evidence that came with the PARTNER 3 results earlier this year. Other assumptions that go into that 2020 guidance. First, overall therapy growth drivers that affect everybody, clinical outcomes, expanded indications, and just generally increased awareness of the disease and therapy alternatives. We are expecting new competitive entrants in the U.S. to impact Edwards, and to result in some modest share compression. As Larry said before, that's really not our focus so much as growing the overall field, growing the overall adoption of this important therapy.
We expect that SAPIEN 3 Ultra, our fourth generation valve, will be the majority of our sales in the U.S. and Europe in 2020. We do expect some modest average selling price compression as centers hit higher volume thresholds. For Transcatheter Mitral and Tricuspid Therapies, originally for 2019, we expected about $40 million. We guided to below $40 million in our third quarter call. As Bernard just mentioned in the Q&A, we expect that this interruption in November will impact negatively our sales for the fourth quarter. We believe that 2020 looks like $50 million-$70 million in sales for TMTT. Again, our focus is this disciplined launch expansion of PASCAL in Europe and remaining focused on optimal patient outcomes.
The assumptions behind the 2020 TMTT guidance include the focus on PASCAL, building enrollment in the SAPIEN M3 pivotal trial, which does contribute clinical revenues to that guidance range. We're planning to initiate the TRICUSPID FS and continue the MITRAL FS for EVOQUE. We are not including any potential litigation risk in this guidance. The $50 million-$70 million assumes no interruption from potential activities surrounding litigation. Turning to Surgical Structural Heart. It's pretty remarkable that the business has continued to grow over the last five years, even as TAVR has grown so rapidly. You can see in 2016 is the one year when the business came down. It was connected to a supply interruption in the beginning of 2016.
That was the year when the INTERMEDIATE trial results were released for SAPIEN 3. What you can see in 2017 was the growth came back. The business grew 4% in 2017. We expect a similar dynamic in 2020, where there are going to be headwinds from the continued growth in TAVR. We expect the rollout and the continuing adoption of INSPIRIS to be able to overcome that and still achieve growth in the business. Longer term, the four launches that Daveen mentioned earlier will contribute to sales growth in surgical and help that business continue to grow. In critical care, you just heard from Katie. It's interesting, if you look back to 2015, this is a business that was growing in the low single digits.
Now it's a business that's growing in the low double digits or high single digits. We're pretty excited about the prospects for that business to continue to contribute to Edwards. The second pillar of our financial strategy is profitability. For profitability, we start with gross margin, of course, and I'll talk about that in a minute. We're also continuing to fund investments in the field force. These are Edwards employees who are supporting clinicians in cases in Europe and in the U.S. Gross profit margin.
The biggest contributor to gross profit margin, of course, is the mix benefit as TAVR continues to grow quickly. We've been seeing a mix benefit of anywhere from 50 basis points-100 basis points annually, and 2020 is no different. We expect some mix benefit to come from TAVR's growth. In terms of the global supply chain, we put a lot of energy into improving the redundancy and the capacity of our production facilities worldwide, and those come with a cost, both in the form of brick-and-mortar investments and supply interruptions that happen when we're moving production around.
We're also investing in our quality systems. Those costs are also offset by now getting some returns and some benefits from investments that we've been making in things like lean and agile activities in our shop floor production. In foreign exchange, we expected this year to actually get a little bit better contribution from hedge contracts than we ended up getting. It's the reason why that original 76%-78% guidance for gross margin will probably come in at the lower half of that for 2019. For 2020, we expect to get less benefit from FX than we got in 2019, but we also expect some benefits from other operations activities and contributions from our global supply chain.
All in all, it mixes out to in the 76%-77% range, which should be similar to where we end up in 2019. Turning to research and development. Research and development has grown to now 17%-18% of sales. Oftentimes we get asked the question, is R&D going to keep going up, or is it going to come down? Have you reached the high water mark? We've come to this fortunate problem where we have a lot of good results from these different early-stage technologies. We're going to continue to invest in those and continue to plant seeds to help drive the top line in the years ahead. 17%-18% in R&D. About 1/3 of our research and development investments today get targeted towards clinical trial activities.
For selling, general, and administrative expenses, I mentioned before, we're going to continue to invest in the feet on the street that we have and the field resources in Europe and the U.S. and other places around the world. 28%-29% is our guidance for SG&A as a percentage of sales in 2020. This does not assume any cost of the medical device excise tax coming back. Right now, if nothing changes, MDT is scheduled to come back on January 1st. That would likely cost us somewhere in the neighborhood of $45 million-$50 million, and that hits us on the SG&A line.
If the MDT is not further suspended or repealed, we are prepared to take action in terms of addressing programs that we had scheduled for innovation and investing in R&D and take action around plans that we have for employment. We're hopeful that MDT does get resuspended or better yet, repealed. This assumes that that's the case. Just to bridge to earnings per share, to just hit the highlights here. This year, our guidance for the full year 2019 is $5.50-$5.65. Improved operations are the biggest contributor to that EPS growth, and it's partially offset by FX and tax and shares going in the other direction than they have gone in 2019.
On foreign exchange, it starts with this $40 million headwind that I mentioned before for sales. We get a little less of a benefit. We're still getting contributions from hedge contracts paying off in next year at today's rates, but it's less of a contribution than we saw in 2019. We've got some natural hedges that will benefit us on the FX line to the tune of about $10 million between R&D and SG&A combined. Tax and shares, the difference versus 2019, we expect a little bit higher bottom line tax rate. This year, our guidance is for the low end of 12%-14%.
In 2020, our guidance is for 12%-14%, and that includes about a 500 basis point contribution from the excess tax benefit associated with employee stock option incentive compensation accounting. 2020 guidance of $6.05-$6.30. The third pillar of our financial strategy is cash flow. We're expecting another very strong year of cash flow at Edwards in 2020, $1 billion-$1.1 billion. We're spending about $400 million in 2020, is the plan, and that's further investment in brick and mortar.
That's going to be up from about $350 million as our forecast for 2019. In terms of diluted shares, we expect some leakage from employee stock option exercises in 2020. Our guidance for 2019, the midpoint is 212 million. We expect 212 million-214 million in shares outstanding on average for 2020. As you know, we have an active share repurchase program. We're disciplined and strategic and opportunistic in using that to offset the impacts of dilution as well as to, over time, reduce the net shares outstanding. Finally, to roll this all together, just a quick window into the overall guidance summary. I'll point out two things in particular.
One, the tax rate I just mentioned before. The underlying tax rate, if there were not an excess tax benefit, accounting benefit, would be about 16%-20%. We think that the ETB represents about a 4 percentage point- 6 percentage point benefit, and that's how we get to the 12%-14% all-in estimated effective tax rate. The other thing I'll mention is these are all non-GAAP numbers. We are expecting that we'll have a special charge that will be reflected in our GAAP results in the fourth quarter relating to the actions that Bernard mentioned earlier on Cardioband.
We intend to impair some of the remaining book value of Cardioband, and we'll quantify that when we report our fourth quarter earnings in 2020. Finally, we don't give quantitative long-term guidance, but we wanted to offer some direction qualitatively about what to expect. For underlying sales growth, that's the first pillar of our financial strategy, and we expect to continue to invest aggressively to have top-line growth that exceeds the medtech sector.
Gross margin, we expect that mix and production efficiencies will continue to benefit the long-term gross margin. Research and development as a percentage of sales, we're going to continue to invest aggressively, that's probably not an area where we're going to get a lot of leverage over time. Certainly, we'll look for opportunities to do that. As clinical trials roll on and roll off, there will be some shifts in that overall R&D ratio. SG&A, we're actively controlling general administrative and overhead expenses, we think that's going to help benefit our overall cost profile over time so that we also can get some benefits to operating margin where we expect a minor expansion over time.
It'll shift quarter- to- quarter, over time, our objective is to continue to inch up the EBIT margin. Tax rate, we think there's some upward pressure coming. You've seen that in our 2020 forecast of 12%- 14% versus about 12% in 2019. Outstanding shares, we'll continue to opportunistically look for ways to drive down that share count. With that, I'll wrap up discussions about the financial forecast and turn it over to Mike for closing remarks before we do Q&A.
All right. I hope you found the morning to be valuable in giving you some additional insights into what Edwards is doing and where we're going. I can tell you, I feel very encouraged about the future, and I'm as confident in this strategy as I've ever been. It's not only delivered results in the past, but I'm more excited about the promise of it delivering results in the future. This idea of being focused is one that we think is very powerful and differentiated, and allows us to be deep, allows us to be agile, allows us to just be better at what we do because we don't diversify ourselves all over the place. That's very meaningful. I think it ends up making a difference.
We're going to continue to be aggressive investors in changing the way that medicine is practiced and willing to take on leadership, but I'm optimistic of what that means for us in the future. You could ask the question, gee, are there going to be enough opportunities here by staying focused? We'd say, absolutely. There are so many underserved patients out here. There's incredible opportunity. Just to recap the businesses quickly, and you had a chance to get deeper on this. I always have to step back when we get to transcatheter aortic valve replacement and say, wow, what a procedure.
There's not many times, certainly never before in my career, is there a procedure where you can replace a heart valve in under an hour, patient not even anesthetized most of the time now, recover very quickly. Just miraculous. That's been a fabulous success story. We think we can make it better yet. We think we can help our customers get even better and better at this. More importantly, there are so many patients today that still aren't treated. It's frustrating for us that we can't make the practice change faster, but medicine just kind of changes slow.
That's kind of the bad news, but it's also the good news. I think that this is going to continue to be strong growth for a very long time, well beyond our horizon. By the same token, mitral and tricuspid patients are tremendously underserved today. Agreed. These diseases are diverse, they're complex, they're difficult to visualize during these procedures, so it just makes this tough. Having said that, we've gained a lot of confidence. We have a lot of expertise.
We have a great group of engaged physicians ready to tackle this, and we think we can make a giant change in treatment in this area. We think it's an unbelievable opportunity. You can see how aggressively we're investing on it. We stay focused on the long term because that's really what's going to matter here. We think this is a very big opportunity to have a big impact on patients. Surgical structural heart is fascinating. This is a time when most of our competitors say, "Oh, surgery, that's going away. Oh, that's getting smaller." We really don't believe in that approach at all. Actually, our strategy is to be the best friends of the heart surgeons.
They're going to play a critical role in the future, and we're committed to get them tools and innovations that they haven't had in the past so they can be even more effective. We're confident that even though we'll lose some volume because of TAVR, which will be fine, that we'll play a meaningful role and be able to grow into the future. As Katie shared, in critical care, the advent of artificial intelligence is going to take our monitoring that was always kind of best in class because it was very accurate and make it a more powerful tool in decision-making in the future.
We're going to be able to use artificial intelligence to help give people better clues so that they can make high-quality decisions while they're trying to manage these folks that are critically ill or in very serious surgery. We're very optimistic about what that all means. You put it all together, we're looking forward to 2020 being a really nice year. Right? As Scott shared with you, we think the financials are going to be very healthy. More important than that, it's going to be another year of big investment, and it's going to be another year of learning for us. We're going to have achieved a number of milestones along the way.
We've got ambitious plans for things that we're taking on, and you'll be able to take the journey with us each time we're able to flip over another card and see more evidence on what the future might hold. You can see also that we stay aggressive investors in our future. We know that the seeds we're planting today and in 2020 are the ones that are going to make a difference in 2023- 2026, and 2030. It really is those kind of time frames that we deal with. You should feel good as a shareholder that Edwards' board is very committed.
This is a group of folks that not only utilize all sort of the latest and most modern corporate governance items to try and make sure that they're good leaders, but they're engaged. They really care. They're very proactive in terms of how we deal with our shareholders, and they're committed to shareholder value. They drive our performance-based compensation programs and make sure that those of us in leadership have a long-term perspective and are always focused on creating value. I'm very proud of this group.
We're fortunate that we're in the kind of business that naturally harmonizes on being a good corporate citizen. We've been very fortunate to get some external recognition. We don't do it for that reason. It's kind of built into natural culture of who we are. It makes sense, doesn't it? If you're going to do what we do for a living, which is to try and provide important and critical tools for patient care, that we would treat our employees and our communities and our customers and all those that we get a chance to touch in a kind of way that would be respectful.
We're proud of that. We're fortunate also to be a successful company. You can see that we're proud of our profitability, and we try and really do a great job of giving back. You may recall that we set a goal in 2014 that we were going to try and impact the global burden of heart valve disease by educating, screening, and treating 1 million patients by 2020. A couple of years ago, we were doing well enough that we bumped that goal to 1.5 million, and so next year we'll report out on that. We've made great progress.
I'm very proud of what we've been able to do, and we're now visioning what will be next. The other part is not related to actually the money that comes from the company, but actually the engagement of our employees. We have this aspiration that every single one of our 13,000+ employees do something of their own volition, that they care about charitable every year. Last time we surveyed, this was approaching 80% of our employees indeed do that.
It's just part of, I think, what makes it fun to be part of a growing medical technology company is to be able to give back as well. Finally, you can imagine, like many of you, we all have friends and family members that come to us when they have medical problems, particularly in the field of structural heart or critically ill. We take great pleasure in being able to share our network and share our expertise. If there's one thing that we feel most proud of, and I feel most proud of, is consistently what our employees insist for their own family is that you want to use an Edwards technology. We know what goes into it. We know what goes into it every day.
We have tremendous pride in that. We have story after story that I won't share with you right now of Edwards employees that share this with their own family, with their own friends. We do it with a lot of confidence. I'll just wrap up by saying, I feel like we're extremely well-poised for long-term value creation. This patient-focused culture is really important to us. It becomes the foundation in which we do our own work. This strategy of ours, which is focused and innovative, is differentiated. We think it really can make a difference and will continue to deliver results. We have a very powerful R&D engine at this point. We've got a great team that keeps getting stronger all the time.
They're totally engaged and turned on by just the opportunity to change the way that medicine is practiced in the future. We've been fortunate because of our past successes, to have the credibility and trust, to have great relationships around the world with all the folks that regulate us, and we're in a heavily regulated industry, and all the folks that do research, which puts us in a position to be successful. Finally, we don't necessarily think bigger is better. Actually, we try and act small.
By trying to do that and keep our hands on the business and stay in touch with what's most important, our patients and our customers, we think we're able to be nimble and adaptive and whatever kind of crazy changes are going to come tomorrow, we know that they're going to come on a regular basis. We think that our strategy is going to be a durable one that performs in the face of that. Having said that, I'll stop right here and let's go to some Q&A. Maybe I'll bring Scott back up to join me, and we'll take on some questions. All right.
Thanks a lot. Larry Biegelsen, Wells Fargo. One for Scott, one for Mike. Scott, can you comment on how much slower the second half growth will be versus the first half in 2020? Should we be thinking about it being kind of below the low end of the range in the second half? Mike, clearly the outlook for 2020 is strong. With the second half growth below the first half growth, people might start thinking about what catalysts you have in 2021. It looks like some of the big catalysts are more like 2022 with PASCAL in the U.S. and EARLY TAVR. How do you want people to think about kind of sustaining the strong growth here? Thanks.
Okay.
I'll go first. Just in terms of second half growth next year, it's a little bit early to try to precisely quantify every quarter. Yeah, there's a chance that, in one of the periods in the second half, we could go below the bottom end of the 10%-12% consolidated growth rate range. Again, it's early to say, that's a possibility.
In terms of, I don't know what was behind your question, it's almost like maybe 2020 is not exciting enough for us, but for us, it's very exciting. We've got so much going on. When I think about, and you saw the lineup of innovations in each one of our business, we're going to constantly be reporting out on the results of trials.
Every one of the clinical meetings, I think, are going to be meaningful in terms of what's learned. You can hear what we're progressing on in terms of new technologies that you're going to get a closer view of as we go. Even though there may not be one great big approval like there was in 2019, I think there's a lot of reason for continued value creation, and that'll happen in various catalysts along 2020. David?
David Lewis, Morgan Stanley. Just two, one for Mike, one for Scott. Mike, strategically, TAVR has been very linear development, and mitral has been sort of anything but that. One thing this company's done by being so focused is spend a dramatic amount of capital to still lead in mitral. With the benefit of hindsight, was the company too aggressive in some of these mitral investments because there have been a series of setbacks and, or should investors expect, look, you were aggressive, you're going to continue to be aggressive, and most of these issues have just been tied to the difficulties around mitral and your strategic rationale for doing. I'm curious how your behavior now in mitral from a cap deployment investment perspective is going to change the next two to three years.
Yeah. Sitting here in December of 2019, I'm more excited than I was even a couple of years ago. You know that I was excited then, too. I really believe that the mitral and tricuspid opportunities are very large. It feels like it's within our grasp. We never had the thought that everything that we tried in the mitral and tricuspid space was going to work. If we ever led you to believe that, we shouldn't have, right?
This was always going to be one where we tried some very aggressive strategies and a multiple number of them with the idea that we would ultimately prune some and add some. That it was going to be a journey to find our way. We feel like it's going to happen. We feel like we're that much closer. Yes, it's not in the sales numbers yet, but we're as optimistic as ever about what it means to the future. Yeah.
Just got some clarifications. You mentioned device tax, obviously not in the guidance, but you also mentioned some offsets if it were to be in the guidance. Were you basically trying to suggest that you can offset that $45 million-$50 million if we get the tax? That's question one. Question two, 17%-18% R&D, is that the high water mark for Edwards? Do you think R&D as a percent of sales ticks is flat to down from these levels?
For first on medical device excise tax, we'll first see what the decision looks like either between now and December 20th or if it gets pushed to early 2020. We do have different contingency plans and scenarios that we will put into place if the MDT comes back into play. Can't commit yet whether it would offset all of it or part of it, but we'll talk more if that ends up coming into play-
R&D.
...R&D, every year we have the same discussion. I mentioned before, we've got this fortunate problem where I think I would've predicted several years ago that we had fewer programs than we do now. We just had so many good technology successes that we keep wanting to put the pedal to the metal and investing aggressively in driving these things to the point where they can be commercialized. Over time, I think sales will grow faster than expenses overall, including in R&D. For the foreseeable future, this feels like a good modeling neighborhood.
Thanks, Raj Denh oy from Jefferies. Maybe a bit of a follow-up to David's question for you, Scott, because I think one of the things that people look to in your model is that with the mixed benefit on the gross margin side, potentially a limited number of customers that can use your Transcatheter technologies, yet there is significant leverage that could flow out of this model. Yet you've sort of talked about minor operating margin expansion going forward. Is there any way to quantify what minor means? In your mind, is there a period of time where maybe that becomes more significant?
Well, it could be significant tomorrow. If we wanted to increase our bottom-line results or our operating profit margins significantly, we could do that right away. Our number one priority, our number one objective, our first financial pillar is to drive top-line organic growth, and that's the reason why our P&L looks like it does. That said, we do want to try to demonstrate some leverage over time, but it's a second priority, not a primary objective.
Great. That's helpful. Maybe just one for you, Mike, just on the strategy behind mitral in Europe and the idea of being a premium price product. I guess I'm curious about kind of some of the thinking behind that. You have one major competitor there that owns that market. You're coming in and trying to take share. They're iterating what they're doing. The data you have so far is really in small numbers of patients. How do you kind of maintain that pricing strategy? Over time, do you maybe reconsider it to try and get a bigger portion of that market?
No, we realize that there is a strategy that says, "Gee, we could price lower," but we actually believe that our therapy is differentiated and offers more value, and that we should try and demonstrate that through our pricing. Yes, it's a challenge for people to work through, especially when they have budgets in a given year and so forth, and it makes the challenge of introducing more significant, but we're convinced that we're going down the right path.
The therapies that we're offering here are very meaningful. We think they can have a big impact on the lives of patients and on outcomes, and it can be better. The idea that we would give that away, you know what it takes for us to be able to bring these innovations into focus and make them work. You know how much data and evidence that we're committed to deliver. The only way that you get returns on that is for there to be really a fair compensation for the therapies.
Thanks. Josh Jennings from Cowen. I have just two questions on the TMTT franchise. First on the TAM $3 billion by 2024. I think, Mike, you said publicly starting at 2024, that that market starts to get going. Any incremental color you can talk about in terms of past 2024? Could that be a $6 billion TAM and bigger? Any incremental color would be interesting to hear.
Yeah, thanks for that. We clearly think that the potential of this is very large. How fast it goes is very difficult to see beyond 2024. By the time you get to 2024, some of the newer therapies will just be coming to places like the U.S. Replacement will still be probably relatively small in terms of scale of things. A lot of this is just going to depend on the quality of that clinical evidence. If that clinical evidence is really powerful, then you'll get a quick uptake. If it's not as powerful, it's going to go slower. I just hesitate to be able to put a number out there at this point, Josh.
Great. Thanks. Just on the TMTT guidance for 2020, $50 million-$70 million, you guys have. Four pivotal trials, around 10, I think, six feasibility trials. Could the clinical trial revenue in Mitral and Tricuspid be $20 million or $30 million? Thanks.
We're not ready to break out yet clinical versus commercial, but there will be a contribution from clinical trial activity in the U.S.
Yeah. it's smaller in- It'll be smaller than the commercial revenue coming out of Europe.
Yeah.
Thanks. Rick Wise, Stifel. This is for both of you, just really one question. Free cash flow. Scott said I should say that he's done a brilliant job. Free cash flow's more than doubled over the last three or four years. Probably is going to happen again over the next three or four years. The top priority seems like continues to be toward share repurchase, not dividend, obviously. Mike, maybe talk a little about, does your desire to remain focused preclude further, more meaningful M&A? Does the word focus mean just what you got? We should think about some of the cash going to sort of similar-sized technology acquisitions like you've done? No, maybe with this growing cash hoard, you could do more. Thank you.
Thanks. We're fortunate. You're right, we're generating a lot of cash. We're trying not to adopt an attitude that says, "Oh, well, we have more cash, it's going to burn a hole in our pocket. We need to go out and spend it." We're going to try and do that in a very thoughtful way. We're very serious about our strategy. We really think that there's a true power behind the focus.
Might there be adjacencies? Of course, there might be. For the most part, I think when you look at Edwards, you should think that we're going to be more like what you've seen in the past, which is to look for exciting technologies that can really make a difference and be those kind of acquisitions rather than some kind of a bolt-on to just get larger.
I would just add, our strategy does not depend upon M&A. We will continue to be active in the areas of making minority investments, purchasing options to buy companies, funding very early-stage companies, and that type of investment activity.
Thanks. Just two quick ones, I'll mention them upfront. First, Scott, on the long-term tax rate, I know there's a lot of moving pieces, but do you think you can keep the pressure from taking that tax rate long term above 15%-16%? Can you keep it in that range despite the pressure, is question number one. Question number two is back on mitral and PASCAL in the U.S. The rough guidance that was given for 2022 seemed a little conservative to me. I think it's only a six-month endpoint, and I'm curious as to where you are in the U.S. trial. I was thinking that maybe 2021 could be a year where you could get a U.S. approval.
I'll take the first one on longer term tax rate. I think if there were not the accounting impact of this excess tax benefit regulation, our tax rate would be somewhere in the neighborhood of 16%-20%. To your question about what's the long-term assumption, a lot of that depends upon what the ETB impact is every year. We've been running, this year in 2019, we're getting about five percentage points of benefit. We expect four to six percentage points of benefit in 2020, but that's the biggest swing factor in predicting our tax rate. The base underlying will be about 16%-20% with no accounting. I think that 12%- 14% is probably the right assumption for now, but there's more upward risk than there is downward risk on the tax rate.
Yeah. Maybe I can comment, Bob, on the PASCAL approval process. We hesitate at this stage to say anything firm, but in general, you think about once it's fully enrolled, you've got about a year to do the follow-up and collect the data, and then we assume maybe another year here to actually get through all the regulatory hurdles and actually be in the marketplace. That's what's driving the rates that you described. I think it's the last question, please. Right here.
Thanks. Robbie Marcus, JP Morgan. Scott, maybe on share repurchase. Guidance for 2020, has it going up? It'd be the first year in a while where shares would go up versus down. What's the view here? Is there anything to read into the attractiveness of shares here? Where else would you be putting the cash in 2020?
Yeah. It's tough to predict what the share purchase activity will look like. We've consistently, annually for the last several years, brought the share count down. We're modeling at this point for 2020 that maybe we'll get 1 million shares or so leakage. The impact to the bottom line is like $0.03, it's not a big driver of EPS dilution. It's something that we're going to keep monitoring regularly and be active opportunistically to buy back stock. We've got about $1.2 billion of authorization today, you should expect that as we have in years past, that in years ahead, we're going to continue to use that.
Just lastly, on CapEx, last year and this year are high levels of investment. You're building out several facilities. How do we think about that beyond 2020?
Yeah. In 2019, we expect our CapEx to come in around $350 million, growing to about $400 million in 2020. It's really directed at investments we're making both in the U.S. and outside of the U.S. in our production capacity and some of our other facilities. I think $400 million is probably on the high end of what we expect if you look further beyond 2020. Right now we're finishing up some new greenfield expansion that we started in the last year or two, and you'll see that hit the CapEx total in 2020 as well.
I want to thank everybody for your level of engagement and so forth. We're really honored to have you join us. We never like to end an Edwards presentation inside or outside the company without sharing a little story of how our work impacts patients.
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