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Alcon's (ALC) Robust Product Line, Market Rebound Aid Growth

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Alcon Inc ALC is witnessing a recovery in the Vision Care business. The company’s focus on research and innovation is also encouraging. The stock currently carries a Zacks Rank #2 (Buy).

Alcon has outperformed the industry over the past year. The stock has rallied 41.6% compared with the industry’s 15%.

The company reported better-than-expected results for second-quarter 2021. The results marked the highest quarterly sales and earnings since the company’s spin-off from Novartis. Strong commercial execution related to the company’s product launches resulted in growth across all sales categories in Surgical and Vision Care from 2019 (pre-pademic level).

The strong market recovery in the United States is an added plus. Margin improvements and raised 2021 guidance buoy optimism. The company currently assumes the U.S. market to continue to grow relative to 2019 in the second half of 2021. It also expects that international markets will return to 2019 levels early next year. This bullish trend is accordingly expected to continue in the coming months.

ALCON INC Price

ALCON INC Price
ALCON INC Price

ALCON INC price | ALCON INC Quote

In Presbyopia-correcting Intraocular Lens (PCIOLs), Alcon currently leads the market with over 55% of global share and over 80% share in the United States. The continued adoption of Vivity and PanOptix is driving ATIOL (Advanced Technology Lens Implants) penetration above its historical rates. Further, Vivity is exceeding the company’s expectations in launch markets and is largely incremental to PanOptix sales. In this regard, the company noted that at the recent ASCRS conference in July, both PanOptix and Vivity earned a significant share of voice at the podium with many surgeons discussing the advanced quality of vision from both lenses.

In the equipment business, the company is currently piloting its comprehensive cloud-based digital health solutions platform, the SMART Suite, which is designed to create efficiencies in the cataract workflow. This platform seamlessly connects the clinic to the OR, enabling surgeons to improve productivity and patient outcomes. In Vision Care, Precision1 is the newest daily SiHy lens, which is gaining strong momentum. Precision1 sphere and toric are now available in the United States and Europe. The company has also introduced Precision1 sphere in Japan. In ocular health, Alcon saw strong retail and consumer interest for its Pataday allergy drop portfolio, led by the successful introduction of Pataday Extra Strength during a particularly strong allergy season in 2021. In dry eyes, the company’s sales continue to grow globally, strengthening its position in artificial tears. The company launched Systane Hydration Multi-Dose Preservative-Free during the second quarter in the United States.

With Alcon’s continued investment in innovation, the company sees a significant opportunity to increase preservative-free penetration in the United States and grow Multi-Dose Preservative-Free (MDPF) share internationally.

On the flip side, in the second quarter of 2021, in terms of end market, within Surgical, Alcon’s global cataract surgery market was down compared to the pre-pandemic level of 2019. Despite the United States showing solid growth over 2019, challenging conditions in the international market marred growth. In Vision Care too, international markets have not yet returned to 2019 levels. While updating its 2021 guidance, Alcon assumed that its international market will return to 2019 levels not before early next year with countries such as India and Japan remaining subdued.

Key Picks

Some other top-ranked stocks from the broader Medical space include Horizon Therapeutics Public Limited Company HZNP, Vertex Pharmaceuticals Incorporated VRTX and Moderna, Inc. MRNA.

Horizon Therapeutics, carrying a Zacks Rank #1 (Strong Buy), has a long-term earnings growth rate of 16.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Vertex Pharmaceuticals, with a Zacks Rank #2 (Buy), has a long-term earnings growth rate of 9.8%.

Moderna, carrying a Zacks Rank #2, has a long-term earnings growth rate of 29.1%.


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Vertex Pharmaceuticals Incorporated (VRTX) : Free Stock Analysis Report

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