07.20.23
Rank: #15 (Last year: #16)
$8.65 Billion
Prior Fiscal: $8.22 Billion
Percentage Change: +5.23%
R&D Expenditure: $702 Million
Best FY21 Quarter: Q2 $2.2 Billion
Latest Quarter: Q1 $2.33 Billion
No. of Employees: 25,000
Global Headquarters: Geneva, Switzerland
KEY EXECUTIVES:
F. Michael Ball, Chairman
David J. Endicott, CEO
Tim Stonesifer, CFO
Ian Bell, President, Global Business & Innovation
Sergio Duplan, President, North America
Rajkumar Narayanan, President, International
Sue-Jean Lin, SVP, Chief Information & Transformation Officer
Laurent Attias, Head Corporate Development, Strategy, Business Development and Licensing, and M&A
Imagine, if possible, a world in which the Alcon brand name is not associated with eye care.
Think hard.
Difficult, isn’t it?
Oddly enough, that world existed—but only for a brief time.
That time was the mid-1940s, the beginning of the postwar economic boom that gave rise to consumerism, import substitution, and the “Golden Age of Capitalism.” Among the untold number of businesses born during this time was a small Fort Worth, Texas, pharmacy founded by two pharmacists.
Naming the pharmacy after themselves (using the first syllable of their respective last names), Robert Alexander and William Conner nurtured their business for two years before incorporating specialty pharmaceutical manufacturer Alcon Laboratories Inc. on May 16, 1947. In the company’s early days, Alexander and Conner filled prescriptions by day and prepared sterile, injectable vitamins and oral products by night using a blender and pressure cooker.
Eye care was not on the pair’s radar.
At least not until they began traversing the United States to showcase their wares to doctors. They first presented their products to a Kiwanis International event in California, then to an American Academy of Ophthalmology and Otolaryngology conference in Chicago.
That conference completely changed Alcon’s focus. The Alcon the world has come to know (and depend on) for eye care was conceived at that meeting.
“They found out that nobody was specializing in providing or fulfilling the needs of the ophthalmologist, so it was an untapped market,” retired Alcon employee Tom McDonald told the Fort Worth Report in 2021. The 39-year employee has written a book on the company’s first 50 years.
“I think that very few people today realize that your average eye droppers that we use constantly in all sorts of medications have their roots right there in Alcon, and that’s part of why I say I think that it’s kind of a hidden gem,” noted LeAnna Schooley, executive director of the Center for Texas Studies at Texas Christian University. “I don’t know that a lot of Fort Worth natives realize the impact that the innovation rooted in Alcon has had on the whole world.”
That innovation has given the world the Droptainer eye drop dispensing bottle (1953); extended wear soft contact lenses (1990); an intraocular lens (IOL) made with advanced biocompatible material (1994); a water gradient daily disposable contact lens (2011); a monthly replacement color-enhancing lens with silicone hydrogel technology (2014); an intra-operative aberrometry system for cataract surgery (2014); and multifocal contact lenses (2016), among others.
Alcon maintained that pace of innovation last year with several new additions to both business segments.
First up was the DAILIES TOTAL1 for Astigmatism, a daily disposable toric contact lens for people with imperfect eye curvature. Debuting in January 2022, the lens is made with Alcon’s Water Gradient material, which gradually increases water content to approach 100% surface H2O; and the company’s proprietary SmarTears technology, which releases an ingredient found in natural tears for stabilizing the lipid layer of tear film.
Both the Water Gradient and SmarTears features incorporate Alcon’s Precision Balance 8|4 lens design, a configuration also found in the Precision1 and Air Optix plus HydraGlyde toric contact lenses. Additionally, DAILIES TOTAL1 lenses are designed to settle to the proper on-eye position in an average 37 seconds—roughly a quarter of the traditional two-minute positioning.
The U.S. and European rollout of DAILIES TOTAL1 for Astigmatism further diversified Alcon’s contact lens portfolio, providing premium dailies wearers with spherical, multifocal, and toric choices.
Alcon followed the DAILIES TOTAL1 introduction with the March 2022 launch of its Clareon intraocular lens portfolio in the United States. With that deployment, the company’s U.S. offering spanned Clareon Monofocal, Clareon PanOptix, Clareon PanOptix Toric, Clareon Vivity, and Clareon Vivity Toric IOLs.
The Clareon portfolio offers sharp, crisp vision with proprietary edge designed to help reduce glare and posterior capsular opacification. The lenses feature STABLEFORCE Haptics for superior axial and rotational stability. Alcon also made its Clareon Monofocal available in the next-generation, automated, single-use delivery systems called AutonoMe.
“Clareon is the result of robust R&D efforts at every level—inventive material science, advanced manufacturing techniques, and novel delivery systems—to deliver long-lasting clarity,” Alcon Global Business and Innovation president Ian Bell said upon Clareon’s U.S. launch. “At Alcon, we are consistently pushing the boundaries to deliver transformational innovation to cataract surgeons and their patients.”
“Transformational innovation” for cataract surgeons and patients also arrived last year via strategic acquisition and a limited market release of the Fidelis Virtual Reality Ophthalmic Surgical Simulator. Fidelis offers a high-fidelity, virtual operating room environment with haptic feedback to simulate the look and feel of cataract surgery, helping new surgeons hone their skills. The simulator can be used from any location worldwide with the ability to invite others to join virtual instruction and training sessions.
Introduced in select markets last May, the Simulator features a VR headset, two haptic engines, and an integrated Centurion footswitch; a realistic virtual OR environment, complete with Alcon equipment; and real-time feedback and performance tracking over time. The Fidelis Simulator also offers virtual reality experiences on ocular anatomy and physiology to help educate eye care professionals.
Alcon’s ready-made innovation came from Aerie Pharmaceuticals Inc., Kala Pharmaceuticals Inc., and Ivantis Inc. The Aerie and Kala deals enhanced the company’s ophthalmic portfolio, while Ivantis bolstered its surgical capabilities.
Ivantis developed and manufactured the Hydrus Microstent, an eyelash-sized minimally invasive glaucoma surgery (MIGS) device designed to reduce eye pressure in glaucoma patients. The microstent is implanted in Schlemm’s canal, where it expands the lymphatic-like vessel and allows fluid to drain to the circulatory system.
Ivantis designed the Hydrus Microstent to lower intraocular pressure for open-angle glaucoma patients in connection with cataract surgery. A five-year study showed a 60% reduction in the need for secondary glaucoma procedures; in addition, nearly two-thirds of microstent patients remained medication-free five years after receiving the implant.
Approved by the FDA in August 2018, the Hydrus Microstent is used in the U.S. to reduce intraocular pressure in adult patients with mild to moderate primary open-angle glaucoma. In Australia, Canada, Germany, Singapore, and the United Kingdom, the device is indicated for primary open-angle glaucoma in conjunction with cataract surgery and as a standalone procedure.
“...we look forward to introducing Hydrus microstent on a broader, global scale in the near future to help even more patients see brilliantly,” Alcon CEO David J. Endicott said upon the Ivantis deal’s closing in January (2022). “We believe this transaction will further strengthen our global surgical portfolio and help provide a platform for more growth in the glaucoma space.”
Time will determine whether that growth arises, but Hydrus has already proven its worth in Alcon’s Surgical segment: Endicott said the microstent helped boost sales 7% (13% constant currency) to $5.04 billion. Growth in the segment also was driven by continued strong demand for Alcon’s offering of advanced technology intraocular lenses and cataract equipment.
Such desire for cataract equipment likely contributed to the 4% rise in surgical equipment sales (to $821 million), but that growth was tempered by declines in refractive equipment and unfavorable currency impacts.
The latter growth blockers impacted Implantables and Consumables sales, though both product franchises still posted solid fiscal 2022 gains. Higher procedure volumes helped increase Consumables proceeds 5% (10% constant currency) to $2.49 billion, while improving market conditions and robust demand for advanced technology intraocular lenses sent Implantables revenue surging 13% (20% constant currency) to $1.72 billion, according to Alcon’s 2022 annual report.
Similar forces were at play in the Vision Care segment, where FY22 sales climbed 3% (8% constant currency) to $3.61 billion, buoyed by increases in both product franchises. Contact lenses revenue rose 2% (9% constant currency) to $2.19 billion, driven by silicone hydrogel lenses, including the PRECISION1 and TOTAL product lines. Ocular health proceeds swelled 3% (7% constant currency) to $1.41 billion, bolstered by Alcon’s eye drops portfolio. The increases in both Vision Care segments were somewhat offset by unfavorable currency impacts, although Ocular health also faced headwinds from supply chain challenges in contact lens care products.
Overall, Alcon’s 2022 net sales expanded 5% (11% constant currency) to $8.65 billion, driven by market improvements in most geographies, product innovation, and sales from its acquisitions. “As I reflect on 2022, I’m extremely proud of what we’ve accomplished, especially given the challenging geopolitical, macroeconomic and supply chain headwinds we faced,” Endicott told analysts on a Q4 2022/full year earnings call earlier this year. “In surgical, we grew the business double digits, driven by technology, solid execution, and continuing international recovery.”
Alcon’s gross profit rose 2% last year to $4.75 billion and operating income ballooned 165 to $672 million. Operating margin climbed 0.7 percentage points, core operating income increased 9% to $1.57 billion, and core basic earnings per share grew 4% to $2.25. Alcon generated $1.2 billion in net cash from operating activities and $581 million in free cash flow.
$8.65 Billion
Prior Fiscal: $8.22 Billion
Percentage Change: +5.23%
R&D Expenditure: $702 Million
Best FY21 Quarter: Q2 $2.2 Billion
Latest Quarter: Q1 $2.33 Billion
No. of Employees: 25,000
Global Headquarters: Geneva, Switzerland
KEY EXECUTIVES:
F. Michael Ball, Chairman
David J. Endicott, CEO
Tim Stonesifer, CFO
Ian Bell, President, Global Business & Innovation
Sergio Duplan, President, North America
Rajkumar Narayanan, President, International
Sue-Jean Lin, SVP, Chief Information & Transformation Officer
Laurent Attias, Head Corporate Development, Strategy, Business Development and Licensing, and M&A
Imagine, if possible, a world in which the Alcon brand name is not associated with eye care.
Think hard.
Difficult, isn’t it?
Oddly enough, that world existed—but only for a brief time.
That time was the mid-1940s, the beginning of the postwar economic boom that gave rise to consumerism, import substitution, and the “Golden Age of Capitalism.” Among the untold number of businesses born during this time was a small Fort Worth, Texas, pharmacy founded by two pharmacists.
Naming the pharmacy after themselves (using the first syllable of their respective last names), Robert Alexander and William Conner nurtured their business for two years before incorporating specialty pharmaceutical manufacturer Alcon Laboratories Inc. on May 16, 1947. In the company’s early days, Alexander and Conner filled prescriptions by day and prepared sterile, injectable vitamins and oral products by night using a blender and pressure cooker.
Eye care was not on the pair’s radar.
At least not until they began traversing the United States to showcase their wares to doctors. They first presented their products to a Kiwanis International event in California, then to an American Academy of Ophthalmology and Otolaryngology conference in Chicago.
That conference completely changed Alcon’s focus. The Alcon the world has come to know (and depend on) for eye care was conceived at that meeting.
“They found out that nobody was specializing in providing or fulfilling the needs of the ophthalmologist, so it was an untapped market,” retired Alcon employee Tom McDonald told the Fort Worth Report in 2021. The 39-year employee has written a book on the company’s first 50 years.
“I think that very few people today realize that your average eye droppers that we use constantly in all sorts of medications have their roots right there in Alcon, and that’s part of why I say I think that it’s kind of a hidden gem,” noted LeAnna Schooley, executive director of the Center for Texas Studies at Texas Christian University. “I don’t know that a lot of Fort Worth natives realize the impact that the innovation rooted in Alcon has had on the whole world.”
That innovation has given the world the Droptainer eye drop dispensing bottle (1953); extended wear soft contact lenses (1990); an intraocular lens (IOL) made with advanced biocompatible material (1994); a water gradient daily disposable contact lens (2011); a monthly replacement color-enhancing lens with silicone hydrogel technology (2014); an intra-operative aberrometry system for cataract surgery (2014); and multifocal contact lenses (2016), among others.
Alcon maintained that pace of innovation last year with several new additions to both business segments.
First up was the DAILIES TOTAL1 for Astigmatism, a daily disposable toric contact lens for people with imperfect eye curvature. Debuting in January 2022, the lens is made with Alcon’s Water Gradient material, which gradually increases water content to approach 100% surface H2O; and the company’s proprietary SmarTears technology, which releases an ingredient found in natural tears for stabilizing the lipid layer of tear film.
Both the Water Gradient and SmarTears features incorporate Alcon’s Precision Balance 8|4 lens design, a configuration also found in the Precision1 and Air Optix plus HydraGlyde toric contact lenses. Additionally, DAILIES TOTAL1 lenses are designed to settle to the proper on-eye position in an average 37 seconds—roughly a quarter of the traditional two-minute positioning.
The U.S. and European rollout of DAILIES TOTAL1 for Astigmatism further diversified Alcon’s contact lens portfolio, providing premium dailies wearers with spherical, multifocal, and toric choices.
Alcon followed the DAILIES TOTAL1 introduction with the March 2022 launch of its Clareon intraocular lens portfolio in the United States. With that deployment, the company’s U.S. offering spanned Clareon Monofocal, Clareon PanOptix, Clareon PanOptix Toric, Clareon Vivity, and Clareon Vivity Toric IOLs.
The Clareon portfolio offers sharp, crisp vision with proprietary edge designed to help reduce glare and posterior capsular opacification. The lenses feature STABLEFORCE Haptics for superior axial and rotational stability. Alcon also made its Clareon Monofocal available in the next-generation, automated, single-use delivery systems called AutonoMe.
“Clareon is the result of robust R&D efforts at every level—inventive material science, advanced manufacturing techniques, and novel delivery systems—to deliver long-lasting clarity,” Alcon Global Business and Innovation president Ian Bell said upon Clareon’s U.S. launch. “At Alcon, we are consistently pushing the boundaries to deliver transformational innovation to cataract surgeons and their patients.”
“Transformational innovation” for cataract surgeons and patients also arrived last year via strategic acquisition and a limited market release of the Fidelis Virtual Reality Ophthalmic Surgical Simulator. Fidelis offers a high-fidelity, virtual operating room environment with haptic feedback to simulate the look and feel of cataract surgery, helping new surgeons hone their skills. The simulator can be used from any location worldwide with the ability to invite others to join virtual instruction and training sessions.
Introduced in select markets last May, the Simulator features a VR headset, two haptic engines, and an integrated Centurion footswitch; a realistic virtual OR environment, complete with Alcon equipment; and real-time feedback and performance tracking over time. The Fidelis Simulator also offers virtual reality experiences on ocular anatomy and physiology to help educate eye care professionals.
Alcon’s ready-made innovation came from Aerie Pharmaceuticals Inc., Kala Pharmaceuticals Inc., and Ivantis Inc. The Aerie and Kala deals enhanced the company’s ophthalmic portfolio, while Ivantis bolstered its surgical capabilities.
Ivantis developed and manufactured the Hydrus Microstent, an eyelash-sized minimally invasive glaucoma surgery (MIGS) device designed to reduce eye pressure in glaucoma patients. The microstent is implanted in Schlemm’s canal, where it expands the lymphatic-like vessel and allows fluid to drain to the circulatory system.
Ivantis designed the Hydrus Microstent to lower intraocular pressure for open-angle glaucoma patients in connection with cataract surgery. A five-year study showed a 60% reduction in the need for secondary glaucoma procedures; in addition, nearly two-thirds of microstent patients remained medication-free five years after receiving the implant.
Approved by the FDA in August 2018, the Hydrus Microstent is used in the U.S. to reduce intraocular pressure in adult patients with mild to moderate primary open-angle glaucoma. In Australia, Canada, Germany, Singapore, and the United Kingdom, the device is indicated for primary open-angle glaucoma in conjunction with cataract surgery and as a standalone procedure.
“...we look forward to introducing Hydrus microstent on a broader, global scale in the near future to help even more patients see brilliantly,” Alcon CEO David J. Endicott said upon the Ivantis deal’s closing in January (2022). “We believe this transaction will further strengthen our global surgical portfolio and help provide a platform for more growth in the glaucoma space.”
Time will determine whether that growth arises, but Hydrus has already proven its worth in Alcon’s Surgical segment: Endicott said the microstent helped boost sales 7% (13% constant currency) to $5.04 billion. Growth in the segment also was driven by continued strong demand for Alcon’s offering of advanced technology intraocular lenses and cataract equipment.
Such desire for cataract equipment likely contributed to the 4% rise in surgical equipment sales (to $821 million), but that growth was tempered by declines in refractive equipment and unfavorable currency impacts.
The latter growth blockers impacted Implantables and Consumables sales, though both product franchises still posted solid fiscal 2022 gains. Higher procedure volumes helped increase Consumables proceeds 5% (10% constant currency) to $2.49 billion, while improving market conditions and robust demand for advanced technology intraocular lenses sent Implantables revenue surging 13% (20% constant currency) to $1.72 billion, according to Alcon’s 2022 annual report.
Similar forces were at play in the Vision Care segment, where FY22 sales climbed 3% (8% constant currency) to $3.61 billion, buoyed by increases in both product franchises. Contact lenses revenue rose 2% (9% constant currency) to $2.19 billion, driven by silicone hydrogel lenses, including the PRECISION1 and TOTAL product lines. Ocular health proceeds swelled 3% (7% constant currency) to $1.41 billion, bolstered by Alcon’s eye drops portfolio. The increases in both Vision Care segments were somewhat offset by unfavorable currency impacts, although Ocular health also faced headwinds from supply chain challenges in contact lens care products.
Overall, Alcon’s 2022 net sales expanded 5% (11% constant currency) to $8.65 billion, driven by market improvements in most geographies, product innovation, and sales from its acquisitions. “As I reflect on 2022, I’m extremely proud of what we’ve accomplished, especially given the challenging geopolitical, macroeconomic and supply chain headwinds we faced,” Endicott told analysts on a Q4 2022/full year earnings call earlier this year. “In surgical, we grew the business double digits, driven by technology, solid execution, and continuing international recovery.”
Alcon’s gross profit rose 2% last year to $4.75 billion and operating income ballooned 165 to $672 million. Operating margin climbed 0.7 percentage points, core operating income increased 9% to $1.57 billion, and core basic earnings per share grew 4% to $2.25. Alcon generated $1.2 billion in net cash from operating activities and $581 million in free cash flow.