Alcon Inc. (NYSE:ALC) Q4 2022 Earnings Call Transcript

Operator: Our next question comes from the line of Ryan Zimmerman with BTIG.

Ryan Zimmerman: Congrats on your progress this year. So I want to talk a little bit about Hydrus. You guys have had for a few quarters now. I wonder if you could talk to us a little bit about kind of the attachment rate you’re seeing with your IOLs and whether you’re getting a lift in IOL sales as a result of entering the surgical glaucoma market because you really are the only player in the glaucoma space now that has that benefit of having both in IOL and then a surgical option in the combo cataract market.

David Endicott: Yes, it’s a good question. We’ve never actually looked at — I don’t know that we’ve ever looked at the actual attachment rates but I imagine it’s quite high because we were most ORs with surgeons. We’re doing cataract surgery and obviously, the market we’re going at is a combo procedure. I think what I can say about Hydrus is we’re pleased with what’s happened this year. We are pretty much right on our target. I think what we’re excited about is the efficacy of this product. I think it continues to play out that patients come off of medications, stay off medications. They are delaying the second surgeries that have been so common with other procedures. And I think as surgeons get more comfortable with the procedure they see the efficacy.

And I think over time, that will be the winning combination. I will say that the reimbursement landscape that did affect the visco injections around the canal have had a meaningful impact on the penetration. So the markets grow market has grown pretty nicely, actually a little bit better than we expected. The use of canaloplasty as a procedure has been also better than we expected. So I would say that the mix has been surprisingly strong to that procedure. I suppose one could speculate the reimbursement there is so positive relative to what is a little bit more complicated procedure in either the stent products that, that could be driving. And I think that will even out over time that people will come back to, hey, the reason we’re doing this is to get it better and to do something for the pressure.

The best idea there, I think, is going to end up being Hydrus. So we’re encouraged in the long run. We certainly were on plan for last year and we look forward to kind of finding — if there is some leverage in there, I’d love to find it. I don’t know whether it really is in there or not. I would tend to believe that this particular product is independently chosen.

Ryan Zimmerman: Okay, that’s very helpful. And then — as I think about guidance for ’23, this cataract growth is kind of below market, then I would assume consumables would be similar in that vein. And if equipment is moderating as well, then do we expect to see a more meaningful lift in implantables? And if I look at ocular health and the combination of Aerie, I just want to understand kind of the segment dynamics as it relates to your 6% to 8% growth, kind of what’s below what’s above assumed in your guidance?

David Endicott: Well, look, I think the best way to think about it is almost every one of the markets we’ve got with, again, plus or minus a little bit is in that mid-single-digit growth rate, right? So if you think let’s call it, 4% to 6% as the market, you back out organic — inorganic growth from the 6% to 8% on Aerie, you’ll pull off 2 points. Let’s just say you’re kind of right on kind of the market, so to speak. Now, if you say and we are that the market is going to soften a little bit, then we’re growing faster than the market consistently across all categories. So I would say kind of if you think about where the market dynamics sit then individually, we obviously plan to do a little bit better in IOLs, we plan to do.