Investor Insights - Issue 1
April 04, 2012
Investor Perspective: Alcon
How do you properly model the Alcon Division?: This was the question posed most often by investors to Kevin Buehler (Division Head, Alcon) and Stuart Raetzman (Area President USA, and Vice President, Global Marketing, Alcon) at the Leerink Swann and Cowen & Company healthcare conferences in the first quarter. Or, as one investor said, "Do I model from the weeds up, or from 35,000 feet?" The recommendations from Kevin and Stuart were clear: first, be sure to consider all three parts of the business, not just ophthalmic pharmaceuticals. Second, refer back to what Novartis said are expected to be the near-, medium- and long-term growth drivers for Alcon:
- Vision Care is expected to be a key near-term driver. Novartis currently retains the number two market share position globally in this segment. Going forward, Alcon now has the broad portfolio and commercial capabilities in place to drive top- and bottom-line growth. As stand-alones, we believe that both CIBA Vision and Alcon were under-indexed in the $8 billion vision care segment. We think it is important to consider this newly created critical mass when modeling the Alcon Division.
- The Surgical business is a med-tech model with multiple revenue streams. Specifically in cataract surgery, it is important to consider the installed base (capital equipment) and the disposables (primarily the intraocular lenses) coupled with the number of procedures, and how those could shift to higher value by way of the installed base. In the medium-term, it is anticipated that enhanced market access outside the US will provide patients the desired standard of care. We are already beginning to see the "tipping point" in the Netherlands and Germany, where dual-aspect reimbursement is now available for cataract surgery, as it is in the U.S. Alcon is also leveraging the Novartis network in an effort to expand access in the emerging markets.
- In Pharmaceuticals, territory dynamics are a key growth engine. In glaucoma, ex-US demand for combination products should provide sustainable global growth in the near-term. Further out, the expected launch of a new combination product in 2013-2014 should meaningfully contribute in all geographies. Longer term, access to the compound library at the Novartis Institutes for BioMedical Research provides the platform for potential significant growth. Combining Alcon’s strong development expertise and proprietary models to screen compounds with NIBR’s early-stage research capabilities introduces the opportunity for multiple shots on goal.
In summary, it’s important not to focus on one single item; all these elements, together with the merger-related cost synergies, support the aspirational growth shared at the capital markets event in London last year.
Awards and Recognition
Novartis was honored to have recently been awarded Best Investor Relations in Europe in the Pharmaceutical sector by the Buy-Side in Institutional Investor Magazine’s 2012 ‘All Europe Executive Team’ awards. Novartis was also awarded the top CFO by the Buy-Side and top IR Professional by the Sell-Side for 2012.
We would like to take this opportunity to thank our investors for their continued support. We appreciate the trust you put in us each day. In turn, we continually strive to enhance the way in which we interact with the investment community.
These awards are consistent with Novartis’ goal of fostering a shareholder-centric investor relations program.
Novartis was also recently ranked as one of the "Global 500 most valuable brands" and one of the top brands in the Pharmaceutical/Healthcare sector by Brand-Finance.
In addition, Novartis was recently rated, as the Company was last year, the top Pharmaceutical company in Fortune’s ‘World’s Most Admired Companies 2012’.
Novartis recently launched an ‘Investor and Media’ App for the iPad.
The iPad App provides direct and easy access to news, recently published documents (including quarterly results releases and presentations), presentations from investor events, and detailed share price information.
The achievement of a best-in-class investor relations program is a top priority for Novartis.
The launch of this App is reflective of those efforts. The App provides investors and analysts with easy access to all of Novartis’ news releases and relevant investor materials in a convenient manner and enhances our ability to provide timely information to the market in a highly accessible format.
The App is available to download free from the App Store or by clicking here.
This presentation contains forward-looking statements that can be identified by terminology such as "expected," "anticipated," "could," "will," "should," "potential," "opportunity," "aspirational," "opportunities," "goal," or similar expressions, or by express or implied discussions regarding potential new products, potential new indications for existing products, or regarding potential future revenues from any such products; or regarding potential future sales or earnings of the Novartis Group or any of its divisions; or by discussions of strategy, plans, expectations or intentions. You should not place undue reliance on these statements. Such forward-looking statements reflect the current views of the Group regarding future events, and involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. There can be no guarantee that any new products will be approved for sale in any market, or that any new indications will be approved for any existing products in any market, or that any approvals which are obtained will be obtained at any particular time, or that any such products will achieve any particular revenue levels. Nor can there be any guarantee that the Group, or any of its divisions, will achieve any particular financial results. In particular, management's expectations could be affected by, among other things, unexpected regulatory actions or delays or government regulation generally, including the potential outcomes of our ongoing discussions with health authorities concerning Rasilez/Tekturna® as a result of the ALTITUDE study, and including the outcome of health authority reviews of the benefits and risks of Gilenya®; unexpected clinical trial results, including additional analyses of existing clinical data or unexpected new clinical data, including any potential new analyses of the ALTITUDE study which may occur; the Group's ability to obtain or maintain patent or other proprietary intellectual property protection, including the ultimate extent of the impact on the Group of the loss of patent protection on key products which commenced last year and will continue this year; unexpected product manufacturing issues, including the potential outcomes of the Warning Letter issued to us with respect to three Sandoz manufacturing facilities, and the potential outcome of the shutdown of the OTC manufacturing facility at Lincoln, Nebraska; government, industry, and general public pricing pressures; uncertainties regarding actual or potential legal proceedings, including, among others, actual or potential product liability litigation, litigation regarding sales and marketing practices, shareholder litigation, government investigations and intellectual property disputes; competition in general; uncertainties regarding the after-effects of the recent global financial and economic crisis; uncertainties regarding future global exchange rates and uncertainties regarding future demand for our products; uncertainties involved in the development of new healthcare products; the impact that the foregoing factors could have on the values attributed to the Group's assets and liabilities as recorded in the Group's consolidated balance sheet; and other risks and factors referred to in Novartis AG's current Form 20-F on file with the US Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected. Novartis is providing the information in this presentation as of this date and does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise.