Alcon Stock

Alcon Inc. researches, develops, manufactures, distributes, and sells a full suite of eye care products worldwide.

The company operates in the global ophthalmic surgical and vision care markets.

Segments

The company operates through two segments, Surgical and Vision Care.

The company’s Surgical and Vision Care products are used in treating multiple ocular health conditions and offer leading eye care solutions for patients throughout their lives.

Surgical segment

The company holds the number one position in the global surgical market, offering implantable products, consumables and equipment for use in surgical procedures to address cataracts, vitreoretinal conditions, refractive errors and glaucoma. The company’s Surgical business has the most complete line of ophthalmic surgical devices in the industry.

The company’s Surgical segment focuses on ophthalmic products for cataract surgery, vitreoretinal surgery, refractive laser surgery and glaucoma surgery. Its broad surgical portfolio includes implantables, consumables and surgical equipment required for these procedures and supports the end-to-end needs of the ophthalmic surgeon.

The company’s Surgical portfolio includes equipment, instrumentation and diagnostics, IOLs and other implantables and a broad line of consumables, including viscoelastics, surgical solutions, incisional instruments, surgical custom packs and other products.

Cataract, vitreoretinal, refractive and glaucoma surgeries are generally performed in hospitals or ambulatory surgery centers and are supported through a network of eye clinics, ophthalmic surgery offices and group purchasing organizations. The primary ophthalmic surgical procedures for cataract, vitreoretinal and glaucoma surgery are broadly reimbursed in most mature markets. Third-party coverage or patient co-pay options are also available for refractive laser correction and AT-IOLs (advanced technology intraocular lenses).

Cataract Suite

The company’s strong installed base of equipment and extensive clinician relationships drive the sale of its IOLs and consumables. The company’s Cataract Refractive Suite covers every stage of the surgical workflow from clinical planning to cataract removal and post-operative optimization.

In 2013, the company launched its Centurion vision system for cataract surgery. This system includes Active Fluidics technology, an automated system that optimizes anterior chamber stability by allowing surgeons to proactively set and maintain target IOP (intraocular pressure) within the eye during the cataract removal procedure, thereby delivering an unprecedented level of intraoperative control.

The company also sells the LenSx laser system. The first femtosecond laser to receive FDA (the U.S. Food and Drug Administration) clearance for use in cataract surgery, LenSx is used to create incisions in the cornea, create a capsulorhexis and complete lens fragmentation as part of the cataract procedure. This enables surgeons to perform some of the most delicate manual steps of cataract surgery with image-guided visualization and micron precision.

The company’s Verion reference unit and Verion digital marker together form an advanced surgical planning, imaging and guidance technology designed to provide greater accuracy and efficiency during cataract surgery. The company’s ORA System also provides key intra-operative measurements to improve the placement precision of an implanted IOL during cataract surgery, for example, by aligning the rotation of a toric IOL to the axis of astigmatism. Post-operatively, the company’s ORA System aids with outcomes analysis and ongoing optimization for improved outcomes.

In 2019, the company launched its Argos biometer, which offers an integrated image-guided solution for every step of the surgical process from post-operative measurement to surgical planning and intra-operative guidance for optimal IOL positioning. Argos biometer provides efficient measurement, simplified workflow, precise measurement via swept-source OCT (SS-OCT), and integration with the rest of the company’s cataract refractive suite.

Finally, the NGENUITY 3D visualization system provides surgeons improved visualization by combining a high-dynamic 3D camera, advanced high-speed image optimization, polarizing surgeon glasses and an ultra-high definition 4K OLED 3D display that offers improved depth perception. Within visualization, the company also sells the LuxOR surgical ophthalmic microscope with its proprietary ILLUMIN-i technology, which provides an expanded illumination field with a 6x-larger, highly stable red reflex zone.

Implantables

The company’s AcrySof IOL is the most implanted IOL in the world. AcrySof IOLs are made of the first material specifically engineered for use in intraocular lens.

The company has a longstanding record of innovation within the IOL market. In 2005, the company introduced a new class of IOLs to correct presbyopia with its multifocal AcrySof ReSTOR offering. In 2006, the company also launched the AcrySof Toric IOL, designed to correct various levels of preexisting astigmatism in cataract patients. In 2009, the AcrySof IQ Toric lens was launched globally, incorporating the aspheric technology into a toric design.

In 2015, the company launched the AcrySof IQ PanOptix trifocal IOL in select markets outside the U.S. This novel diffractive optic sends light to three foci to support near, intermediate and distance vision. In 2017, the AcrySof IQ PanOptix Toric lens was launched in select markets outside the U.S. to address both astigmatism and presbyopia. The company launched the AcrySof IQ PanOptix trifocal IOL in the U.S. and Japan in 2019. The company also launched the AcrySof IQ Vivity non-diffractive extended depth of focus (EDoF) IOL in Europe and Australia in 2019, in South America in 2020 and in the U.S. in 2021. This optic design allows for extended range of vision and presbyopia correction with the visual disturbance profile of a monofocal IOL.

The company has also introduced several innovations to the delivery device used for introducing an IOL into the capsular bag during cataract surgery. Its UltraSert pre-loaded IOL delivery system 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 into the cataract patient's eye.

In 2017, the company received a European CE Mark for the Clareon IOL with the AutonoMe delivery system followed by FDA approval in 2020. AutonoMe is the first automated, disposable, pre-loaded IOL delivery system that enables precise delivery of the IOL into the capsular bag in patients undergoing cataract surgery. The new device is being introduced with the Clareon IOL, a new material with an advanced design that enables sharp, crisp vision, low edge glare and unsurpassed optic clarity.

The company’s AT-IOLs (those that correct for refractive errors, such as presbyopia and astigmatism) provide significant visual benefits to patients above standard monofocal IOLs. Accordingly, the price for these AT-IOLs is higher than the price for monofocal styles. This impacts the market penetration of AT-IOLs in the majority of countries, as patients must pay incremental charges above the cost of traditional cataract surgery to obtain an AT-IOL and, in some markets, must pay out-of-pocket for the entire surgical procedure and the AT-IOL.

In the U.S., the company’s monofocal IOLs are generally fully covered by medical insurance providers or government reimbursement programs, whereas certain of the company’s AT-IOLs may only be partially covered. This payment model was established by two landmark rulings issued by the Centers for Medicare & Medicaid Services (CMS) in May 2005 and January 2007. The CMS rulings provide Medicare beneficiaries a choice between cataract surgery with a monofocal IOL, which would be reimbursed as a covered benefit under Medicare, or cataract surgery with an AT-IOL, which would be partially reimbursed under Medicare and partially paid out-of-pocket. Many commercial insurance plans mirror the CMS rulings, although commercial plans may vary based on third-party payor. The bifurcated payment for the implantation of AT-IOLs has increased the market acceptance of the company’s AT-IOLs in the U.S. Outside the U.S., payment and reimbursement models vary widely from country to country, generally depending on the policy adopted by the relevant local healthcare authority on coverage and payment.

Consumables

To provide convenience, efficiency and value for ophthalmic surgeons, the company offers Custom Pak surgical procedure packs for use in ophthalmic surgery. Unlike conventional surgical procedure packs, its Custom Pak surgical procedure packs allow individual surgeons to customize the products included in their pack, which results in less waste in the environment. The company’s Custom Pak surgical procedure packs include both its single-use products, as well as third-party items not manufactured by the company. Its Custom Pak offering allows ophthalmic surgeons to improve their efficiency in the operating room, while avoiding the complexity and cost of having to kit surgical items for each respective procedure. The company offers more than 10,000 configurations of its Custom Pak surgical procedure packs globally.

Vitreoretinal Suite

The company’s vitreoretinal surgical product offering is one of the most comprehensive in the industry for surgical procedures for the back of the eye. The company markets its vitreoretinal surgical products in substantially all of the countries in which it sells products.

For vitrectomy procedures, the company sells its Constellation vision system globally. This system delivers a higher level of control to the physician through higher vitreous cutting rates and embedded laser technology. The Constellation vision system platform continues to drive the company’s market share in the global premium segment of vitrectomy packs.

In addition to the company’s Constellation vision system, the company sells a full line of vitreoretinal products, including procedure packs, lasers and hand-held microsurgical instruments, as well as the company’s Grieshaber and MIVS lines of disposable retinal surgery instruments. The company also sells a full line of scissors, forceps and micro-instruments in varying gauge sizes, as well as a range of medical grade vitreous tamponades, which replace vitreous humor during many retinal procedures.

The company continues to advance its portfolio with smaller gauge (27+) instruments and higher cut speed vitrectomy probes. The company also sells Hypervit high speed vitrectomy probes, which operate at a speed of 20,000 cuts per minute (cpm). This increased speed helps reduce traction that can cause iatrogenic tears and post-operative complications.

Refractive Suite

The company’s refractive products include lasers, disposable patient interfaces used during laser vision correction procedures, technology fees and diagnostic devices necessary to plan the refractive procedures. The company’s WaveLight refractive suite includes the EX500 excimer laser, designed to reshape the cornea, and the FS200 femtosecond laser, designed to create a corneal flap and to deliver laser refractive therapy as part of the LASIK refractive procedure.

The company also launched Contoura Vision, a topography-guided LASIK treatment designed to provide surgeons with the ability to perform more personalized laser procedures for patients with near-sightedness, or near-sightedness with astigmatism. This procedure is based on the unique corneal topography of each eye, as measured through the WaveLight Topolyzer VARIO diagnostic device.

Glaucoma

In 2018, the Hydrus microstent device was launched in the U.S. by Ivantis, Inc. (Ivantis), which the company acquired in early 2022. Hydrus is approved and marketed in the U.S., the U.K., Germany, Canada, Australia and Singapore. The microstent is implanted into the Schlemm's canal to enhance outflow, reducing eye pressure for the treatment of primary open angle glaucoma (POAG).

The company’s EX-PRESS glaucoma filtration device is approved and marketed for refractory glaucoma in the U.S., Europe, Canada, Australia, and several other markets. This shunt is implanted under the scleral flap to enhance outflow of aqueous humor and reduce intraocular pressure in patients with open-angle glaucoma. The EX-PRESS glaucoma filtration device creates consistent and predictable outcomes when used as part of a trabeculectomy.

Vision Care segment

The company’s Vision Care segment consists of an extensive portfolio of contact lens and ocular health products. The company’s product lines include daily disposable, reusable and color-enhancing contact lenses. The company also offers a comprehensive portfolio of ocular health products, including products for dry eye, glaucoma, contact lens care and ocular allergies, as well as ocular vitamins and redness relievers. Alongside its products, the company provides best-in-class service, training, education and technical support for its customers.

The company serves its customers and patients through optometrists, ophthalmologists and other eye care professionals, retailers, optical chains and pharmacies, as well as distributors that resell directly to smaller retailers and eye care professionals, who sell the products to end-users.

The sale of the company’s contact lens and ocular health products are influenced by optometrist and other eye care professional recommendations, its marketing and consumer education efforts and consumer preferences.

Contact Lenses

The company’s core brands are TOTAL, PRECISION, DAILIES AquaComfort PLUS and Air Optix.

The company’s TOTAL product line with its water gradient technology reduces end-of-day dryness, as the water content approaches nearly 100% at the outermost surface of the lens, and is designed to be a super-premium lens positioned to compete at the highest levels across the contact lens market. The company’s TOTAL product line includes DAILIES TOTAL1, the first and only water gradient disposable contact lens in the market. The company launched TOTAL30, its premium offering in the reusable segment, in 2021 to encourage patients to trade up to a next generation, water gradient technology. DAILIES TOTAL1 in the multifocal offering provides a platform for expanding the presbyopia market, which is a potential multibillion dollar opportunity for market participants.

PRECISION1, the company’s new mainstream daily disposable silicone-hydrogel (SiHy) lens with aqueous extraction and surface treatment, is priced in between the super-premium DAILIES TOTAL1 and the more value-conscious DAILIES AquaComfort PLUS. PRECISION1 is designed for long lasting performance and delivers precise vision, dependable comfort and ease of handling. Following a successful introduction of PRECISION1 spherical lenses, the company introduced PRECISION1 for Astigmatism, a toric lens designed for astigmatic patients. In the U.S. and EU, PRECISION1 for Astigmatism features the PRECISION BALANCE 8|4 lens design for a stable lens-wearing experience.

DAILIES AquaComfort PLUS, the company’s most affordable daily disposable contact lens in monofocal, astigmatism-correcting and multifocal options, delivers dependable performance by working with tears to release moisture with every blink. This lens is designed for value-conscious wearers who want the flexibility and simplicity of a daily disposable lens.

The company’s Air Optix monthly replacement product line features SiHy contact lenses in monofocal, astigmatism-correcting and multifocal options, as well as Air Optix Colors and Air Optix plus HydraGlyde contact lenses. Air Optix plus HydraGlyde brings together two innovative technologies—SmartShield technology and HydraGlyde moisture matrix—for a unique combination of deposit protection and longer-lasting lens surface moisture.

The company continues to experience market growth driven by trade-up to premium lenses, expansion of toric and multifocal specialty lenses, as well as increasing penetration in emerging markets.

Ocular Health

The company’s key brands in its ocular health portfolio include the Systane family of artificial tear and related dry eye products, including the Systane iLux MGD thermal pulsation system, Pataday family of eye allergy products, as well as the Opti-Free and Clear Care lines of multi-purpose and hydrogen peroxide disinfecting solutions, respectively. Select ocular health products include artificial tear and related dry eye products marketed under the Tears Naturale and Genteal brands, Naphcon-A and Zaditor eye drops for the temporary relief of ocular itching due to allergies and vitamins for ocular health marketed under the ICAPS and Vitalux brands.

The company holds a market leading position in artificial tears. The company continues to focus on core product performance while increasing promotion behind a best-in-class innovation portfolio under the brand leadership of Systane artificial tears. The Systane portfolio is a comprehensive offering of ocular health solutions, most of which are indicated for the temporary relief of burning and irritation due to dryness of the eye. The Systane portfolio includes products for daily and nighttime relief, as well as products for discomfort associated with contact lens wear. In 2021, the company continued significant international expansion for Systane Ultra multi-dose preservative-free (MDPF) and Systane Hydration MDPF. By adding the option of MDPF presentations to the company’s portfolio, it addresses a key need by many eye care practitioners for effective dry eye relief without preservatives. The Systane portfolio also includes the Systane iLux thermal pulsation dry eye device, designed to address the large unmet needs for dry eye and meibomian gland dysfunction patients.

In 2020, the company successfully switched from prescription to over-the-counter the Pataday family of allergy relief eye drops. Pataday Twice Daily Relief and Pataday Once Daily Relief eye drops were approved by the FDA and launched in the U.S. in 2020. Pataday Once Daily Extra Strength was approved in 2020 and launched in 2021. The Pataday brand contains olopatadine, the number one doctor-prescribed active ingredient for eye allergy relief.

In 2021, the company acquired exclusive U.S. commercialization rights to Simbrinza, a fixed combination of a carbonic anhydrase inhibitor and an alpha-2 adrenergic receptor agonist indicated for the reduction of elevated intraocular pressure (IOP) in patients with open-angle glaucoma or ocular hypertension. The acquisition of Simbrinza, combined with the company’s existing over-the-counter (OTC) eye drops, gives the company a strong ophthalmic eye drop portfolio and the opportunity to capitalize on both the large glaucoma market and the fast-growing dry eye preservative free and eye allergy markets.

The company is also a market leader in contact lens care in both multi-purpose (Opti-Free PureMoist) and hydrogen peroxide solutions (Clear Care and AOSEPT PLUS). The vast majority of the company’s contact lens care products are consisted of disinfecting solutions to remove harmful micro-organisms on contact lenses, with a smaller amount of sales coming from contact lens rewetting drops to improve wearing comfort for contact lenses. The company benefits from strong synergies between its contact lens business and its contact lens care products, and the company expects to see its contact lens solution sales benefit from the launch of its new TOTAL30 reusable lenses.

Finally, the company’s ocular health portfolio includes artificial tear and related dry eye products marketed under the Tears Naturale and Genteal brands, products for the temporary relief of ocular itching due to ocular allergies marketed under the Naphcon-A and Zaditor brands and vitamins for the maintenance of general ocular health marketed under the ICAPS and Vitalux brands.

The company’s ocular health portfolio is typically over the counter but, in a small number of its markets, certain of the company’s ocular health products are regulated as pharmaceuticals and require a prescription.

The company’s Surgical and Vision Care segments are complementary and benefit from synergies in research and development, manufacturing, distribution and consumer awareness and education. This allows the company to position itself as a trusted partner for eye care products across the continuum of care from retail consumer, to optometry, to surgical ophthalmology. For example, in research and development, the company can apply its expertise in material and surface chemistry to develop innovative next-generation products for both its IOL and contact lens product lines. Similarly, its global commercial footprint and expertise as a global organization provide the company with product development, manufacturing, distribution and commercial promotion and marketing knowledge that can be applied to both of its businesses.

Principal Markets

The company serves consumers and patients in over 140 countries worldwide.

Research and Development

The company invested approximately $842 million in research and development in 2021.

Marketing and Sales

The company conducts sales and marketing activities throughout the world. During the year ended December 31, 2021, 44% of its sales were in the U.S. The company is present in every significant market in the world where ophthalmology and optometry are practiced, with operations in 60 countries supported by over 3,500 associates dedicated to direct sales and with products sold in over 140 countries.

In addition to direct promotion of the company’s products, its sales representatives provide customers with access to clinical education programs, data from clinical studies and technical service assistance. The company’s selling models also include focused efforts in key channels, including strategic accounts, key accounts and pharmacies.

In each of the company’s markets, the company relies on its strong relationships with eye care professionals to attract and retain customers. The company engage healthcare professionals to serve as clinical consultants, to participate on advisory boards and to conduct presentations regarding its products. In addition, the company has established or sponsors several long-standing programs that provide training and education to eye care professionals, including providing training support at over 70 state-of-the-art interactive training centers around the world. These facilities introduce ophthalmologists to the company’s surgical equipment and cataract products through hands-on training in surgical techniques while exposing them to leading ophthalmologists.

While the company markets all of its products by calling on medical professionals, direct customers and distribution methods differ across the company’s business lines. Surgical products are sold directly to hospitals and ambulatory surgical centers, although the company sells through distributors in certain markets outside the U.S. where the company does not have local operations or a scientific office. In many countries, contact lenses are available only by prescription.

The company’s contact lenses can be purchased from eye care professionals, optical chains and large retailers, subject to country regulation. Its ocular health products can be found in major drugstores, pharmacies, food stores and mass merchandising and optical retail chains globally, with access subject to country regulations, including free-sale, pharmacy-only and prescription regulations.

Intellectual Property

As of December 31, 2021, the company owned approximately 1,900 patent families.

Strategy

The company’s strategies are to maximize the potential of its near-term portfolio by growing key products; accelerate innovation and deliver the next wave of technologies; capture opportunities to expand markets and pursue adjacencies; support new business models to expand customer experience; and leverage infrastructure.

The company’s strategy is to develop patent portfolios for its research and development projects in order to obtain market exclusivity for the innovative features of its products in its major markets.

Government Regulation

Many of the company’s devices are Class II or III devices that require premarket review by the FDA.

The primary pathway for the company’s Class II devices is FDA clearance of a premarket notification under section 510(k) of the Federal Food, Drug, and Cosmetic Act. With a 510(k) submission, the manufacturer must submit a notification to the FDA that includes performance data that establish that the product is substantially equivalent to a ‘predicate device’, which is typically another Class II previously-cleared device. The company’s Class III devices require FDA approval of a Premarket Approval application.

The company also markets products that are regulated in other product categories, including lasers, drug products, dietary supplements and medical foods. These products are also subject to extensive government regulation, which vary by jurisdiction. For example, in the U.S., the company’s drug products must either be marketed in compliance with an applicable over-the-counter drug monograph or receive FDA approval of a New Drug Application.

Regulations of the FDA and other regulatory agencies in and outside the U.S. impose extensive manufacturing requirements, as well as postmarket compliance and monitoring obligations on the company’s business.

The company is subject to health care fraud and abuse and anti-bribery laws and regulations in the U.S. and around the world, including state and federal anti-kickback, anti-self-referral and false claims laws in the U.S.

Competition

Surgical

The company primarily competes with Carl Zeiss Meditec AG, Bausch Health Companies Inc., Hoya Corporation, Glaukos Corporation, and Johnson & Johnson Surgical Vision, Inc. in the surgical market.

Vision Care

The company’s primary competitors are Johnson & Johnson Surgical Vision, Inc.; Bausch Health Companies, Inc.; and The Cooper Companies, Inc. Allergan, Inc. is a competitor in ocular health.

History

The company was founded in 1945. It was incorporated in 1971. The company was formerly known as Alcon Universal S.A. and changed its name to Alcon, Inc. in 2001.