Joseph Jimenez, CEO, Novartis
Jeff George, Division Head, Alcon
Harry Kirsch, Chief Financial Officer
Laurent Attias, Sr. VP, Head of Strategy
Sabri Markabi, Chief Medical Officer and Sr. VP, Research and Development
Ed McGough, Sr. VP, Global Manufacturing & Technical Operations
Sue Whitfill, Head, Global Quality
Camila Finzi, Region President, Latin America
Jim Murphy, President, Japan
Robert Warner, Global Head, Vision Care
Sergio Duplan, Region President, North America
NUMBER OF EMPLOYEES: 23,000 (122,966 total)
GLOBAL HEADQUARTERS: Ft. Worth, Texas (Basel, Switzerland)
Marketing professionals have a tough job. They are tasked with promoting brand image creatively yet sensitively through ad campaigns that command attention respectfully and pleasantly. They walk a fine line between opinion and controversy, entertainment and frivolity, individuality and normalcy, as they craft strategies to boost product sales and profits.
The best at their craft spin true marketing gold. Consider, for example, the ingenuity behind Absolut Vodka’s iconic print ads in the 1980s and 1990s. Surprisingly simple but impactful, the campaign featured Absolut’s non-descript glass bottle in various creative displays, with the brand name below in a two-word phrase suggesting perfection. The first ad (debuting in 1980) showed the product with a white halo above the bottle neck and the words “ABSOLUT PERFECTION” below; another depicted an aerial view of New York City with a bottle-shaped Central Park (“ABSOLUT MANHATTAN”). The bottle also manifested itself in traffic (via yellow taxicabs), the Brooklyn Bridge, a box of chocolates, jetliner entrails, lemon rind, and Christmas presents.
Absolut’s ads enjoyed an unprecedented 25-year run, during which time the now-recognizable bottle embodied everything from an ancient Greek column and stone chimney to beach chairs, a waterfall, basketball court, guitar, and land-line telephone cord (remember those?). By the time the campaign lost steam in the early part of the new millennium, Absolut had placed more than 1,500 print ads and drastically increased its U.S. sales from a paltry 10,000 cases in 1980 to 4.5 million annually, or half of all imported vodka in the United States.
The brilliance of Absolut’s marketing is evident in both its bottom line impact and its creativity. Indeed, the campaign’s success can be attributed specifically to the team’s ability to produce interesting branding from an unremarkable product (bottle).
Alcon attempted to replicate Absolut’s marketing magic last year by collaborating with Jacksonville University in Florida to study Generation X attitudes on aging.
Conducted online, the Age Perception Impact Survey found that one in four U.S. adults (aged 38 to 54) believe reading glasses—also known as readers—ages people 10 years. Nearly half of Americans polled said they would consider avoiding reading glasses if they realized it made them look older.
“Readers are ubiquitous, and I was curious about their effect on one’s perceived age,” Dr. Heather Hausenblas, survey leader, healthy aging expert, researcher, and professor at Jacksonville University College of Health Sciences’ School of Applied Health Sciences, said when the survey results were released last May. “In our culture where youth and beauty are prized, many decisions—like getting collagen fillers or staying fit—are carefully made, while others, like donning readers, may not be. The truth is...many people may not be aware that readers could be adding years to their appearance.”
Partnering on a survey that disparages reading glasses apparently is an odd marketing strategy for an eye healthcare company (cue the irony), but Alcon—like Absolut—is attempting to differentiate itself in an interesting way by tapping American (human?) vanity to fuel sales of its presbyopia-correcting multifocal contact lenses.
Alcon is eyeing a huge market. More than 110 million Americans suffer from presbyopia, otherwise known as farsightedness, and nearly 1.7 billion people globally suffer from the condition. Industry forecasts project the worldwide number of presbyopics to grow by 400 million in the next four years.
Presbyopia is an age-related condition believed to be caused by a gradual thickening and loss of flexibility of the eye’s natural lens. The thickening occurs within lens proteins and muscle fibers, causing the optic to become harder and less elastic, and consequently, lose its ability to focus up close.
“Most people aren’t aware of any other options for addressing presbyopia,” Hausenblas noted, “and so readers are a quick fix...”
But not the only solution. Alcon makes multifocal contact lenses and implantable lenses that correct all vision deficits (presbyopia and myopia), and its parent company, Novartis AG, is collaborating with Verily (formerly Google Life Sciences) on a “smart” contact lens for presbyopics that involves sensors, microchips, and other miniaturized electronics embedded within the lenses.
Hence, the logic behind Alcon’s participation in the “readers” survey. The poll, in fact, was a clever attempt on the company’s part to promote its presbyopia-correcting contact lenses and in turn, boost sagging sales. Overall revenue fell 9 percent last year to $9.81 billion (including divisions outside the medical device scope) due to flat sales in Japan, softening markets in Asia and Russia, and a 3 percent dropoff in North American proceeds. Operating income plummeted 50 percent, and core operating income, which excludes certain items, tumbled 20 percent, having been hammered by lower sales, higher spending (primarily on marketing and sales), product development investments, and increased provisions from bad Asian debt.
Alcon’s dismal financial performance extended to its three reporting divisions in 2015 (year ended Dec. 31), with each reporting significant losses compared with 2014. (Editor’s note: MPO’s Top Companies revenue total for Alcon combines sales from its Surgical division and contact lens sales from its Vision Care segment—the majority of proceeds generated by medical devices.) Ophthalmic pharmaceutical revenue slid 9.5 percent to $3.81 billion, with gains in fixed-dose combination products offset by generic competition for monotherapies.
Surgical sales declined 9.1 percent to $3.69 billion, as intraocular lens (IOL) sales fell victim to competitive pressures, a Class I recall, and waning equipment purchases in the United States and emerging markets, particularly Asia. The voluntary recall was triggered by an increase in reports of postoperative inflammation, and affected nearly 90,000 ReSTOR intraocular lenses and AcrySof IQ ReSTOR Multifocal Toric intraocular lenses sold in Japan.
The division, however, potentially can reverse its financial fortune with the help of several products that received approval last year, including the AcrySof IQ ReSTOR +2.5 Diopter IOL and AcrySof IQ PanOptix trifocal IOL for cataract patients. The former product enables vision correction at all distances in cataract patients with or without presbyopia; it is already used in Australia, Canada, Europe, Japan, and Central and South America, and has been implanted nearly 27,000 times. The AcrySof IQ PanOptix lens also corrects vision at all distances.
Another potential cash cow for the Surgical Division is the UltraSert Pre-loaded Delivery System for cataract patients, which received both U.S. Food and Drug Administration and CE mark approval last year. The system, according to Alcon, combines the control of a manually-loaded device with the safety and convenience of a disposable, pre-loaded injector to optimize the implantation of the AcrySof IQ Aspheric IOL.
The UltraSert device features the TensionGlide Plunger, a spring-controlled mechanism that ensures a smooth, controlled delivery of the AcrySof IQ lens into the capsular bag. The UltraSert system also contains a plunger tip designed to support consistent IOL folding and precise placement into the eye’s capsular bag. In addition, the product design helps to create a less invasive corneal incision during cataract surgery. The smaller nozzle tip allows for an incision as small as 2.2 millimeters, while the Depth Guard nozzle prevents the device from being inserted deeper into the opening than necessary, preserving the size of the original incision.
“There are many surgeons who are highly interested in pre-loaded devices, and UltraSert represents a major step forward in pre-loaded delivery system technology,” practicing ophthalmologist Robert Lehmann, M.D., FAACS, said in a news release about the product’s approval. “…In testing this device, I was immediately impressed with its smooth control and single hand delivery. I believe it will give the surgeon excellent control during the procedure to ensure a consistent delivery of the IOL into the eye.”
With only one new product release last year, a turnaround in Alcon’s Vision Care unit is far more uncertain. In March 2015, the company extended its line of Air Optix Colors contact lenses to include plus power lenses for patients with hyperopia (farsightedness) across the full range of colors. The power range was expanded to include +6.00D to -6.00D (0.25D steps; including plano) and -6.50D to -8.00D (0.50D steps).
Launched two years ago in the United States, the Air Optix Colors lenses (available in nine colors, ranging from subtle to vibrant) are the first monthly replacement, daily wear color lenses available in America on a silicone hydrogel platform, allowing up to six times more oxygen through the contact lens compared to the leading, older technology color contact lens, according to Alcon.
The Air Optix Colors contacts were among the Vision Care unit’s best-selling lenses in 2015, but their popularity (and profitability) were stymied by declines in older products. Overall division sales fell 9.4 percent to $2.3 billion, with contact lens solution revenue tumbling 14 percent to $600 million, beset by ongoing market shifts to daily disposable lenses and U.S. competition.