Alcon predicts its surgical products and services will fuel 3% to 5% constant currency growth in 2019, the company said in its first quarterly results since becoming independent of Novartis.
The full year outlook reflects rising sales of Alcon's PanOptix intraocular lenses, offset by loss of vision care market share.
Alcon is looking to Precision 1 daily disposable contact lenses and other new devices to revitalize its vision care business but is currently being held back by a shortfall in manufacturing capacity.
Alcon struggled for much of the eight years it was wholly-owned by Novartis but its fortunes improved toward the end of that period, resulting in sales growth of around 5% in 2018. Alcon continued its momentum into 2019, reporting 4% constant currency growth for the eye care unit as part of its own financial results, Novartis revealed last month.
On an earnings call Thursday, Alcon confirmed and expanded on results shared by Novartis in its first set of financials as a newly independent company.
In the first quarter, mid-to-high single digit growth across Alcon's surgical implantables, consumables and equipment business drove an uptick in company-wide sales. Alcon CEO David Endicott told investors on the call the above-market growth in surgical sales was led by demand for the trifocal advance intraocular lens PanOptix, which it touted as performing well in Brazil, Canada and some Asian markets.
Alcon filed for FDA approval of the device in the first quarter and expects to get the green light to sell it in the U.S. by the end of 2019 or early 2020. Buoyed by international performance and belief the device will be the first trifocal lens available in the U.S., Alcon is confident in PanOptix's ability to sell well in the U.S. market.
Demand for PanOptix offset weakness in other parts of Alcon's business in the first quarter. Sales at the vision care unit, which makes contact lenses and ocular health products, grew 1% on a constant currency basis and declined 3% on a reported basis.
Endicott said the results suggest the unit is underperforming the market, which he attributed to it losing “some share due to lack of product flow.” Alcon has a new contact lens, Precision 1, cleared for sale in the U.S. that may help to turn the business around but it is yet to hit the market. The delayed launch is the result of the need to build up inventory and ramp up manufacturing capacity.
"We were late to the game in getting money invested into manufacturing lines and as a consequence of that, we're still bringing those lines up. So, we'll be doing that all of this year and all of next year," Endicott said.
The constraints will keep Precision 1 off the U.S. market for most, or maybe all, of 2019, meaning Alcon expects to continue to rely on the surgical unit to drive growth over the rest of the year.