Alcon reports double-digit sales growth for 2003

HUNENBERG, Switzerland — Alcon’s global sales increased 13.7% to $852 million in the fourth quarter of 2003 compared to the same quarter the previous year. Net earnings for the quarter increased 57.5% to $134 million.

For the full year, Alcon reported global sales growth of 13.2% to $3.4 billion as well as a net earnings growth of 27.5% to $595 million

Alcon’s senior management attributed the growth in its first full year as a publicly traded company to the launch of several new products. The sale of its contact lens care manufacturing plant in Madrid also accounted for a pretax gain of $8.2 million, the company said in a press release. In addition, 2002 earnings had been negatively impacted by the recall of the SKBM microkeratome, which resulted in a $5.9 million write-off.

Favorable foreign exchange fluctuations also attributed to the earnings growth, the company said.

Research and development expenses declined in the fourth quarter of 2003 and, at $95 million, were $1.1 million lower than in 2002.

“2003 was something of a watershed year for us because it was the first full year in the public domain,” said Tim Sear, Alcon’s president and chief executive officer, during a conference call. “It also marked a year of tremendous progress. While 2003 was a year of product launches, I expect 2004 to be one of product filing.”

On the pharmaceutical side, Alcon launched anti-infectives Vigamox (moxifloxacin) and CiproDex (ciprofloxacin and dexamethasone), and on the surgical side, the Infiniti phacoemulsification system and the AcrySof Natural IOL.

The launch of dry eye lubricant Systane helped contribute to a 25.5% increase in sales on the consumer side.

Pharmaceutical and surgical sales grew 21.3% and 10.7% respectively.

According to Mr. Sear, Alcon plans to complete its phase 3 trial of Retaane (anecortave acetate) ahead of schedule in August. The trial includes a head-to-head comparison of Retaane with photodynamic therapy. Investigators have enrolled 500 patients with predominantly classic and 100 patients with minimally classic choroidal neovascularization in the trial, with a dropout rate of 5%, he said.

The company has also filed a New Drug Application for a travoprost-timolol combination glaucoma therapy and file for premarket approval of the ReStor IOL (which is also being tested for presbyopia) and a viscoelastic. Alcon is also requesting regulatory approval to treat an expanded range of astigmatism with the LADARVision CustomCornea system.

Jacqualyn Fouse, Alcon senior vice president and chief financial officer, said the company expects earnings to decrease in 2004 as marketing expenses increase in preparation for the 2005 product launches.

In addition, sales and earnings growth may be adversely affected by the expiration of the patent on Ciloxan (ciprofloxacin), Ms. Fouse said. She estimated that 76% of ophthalmic practitioners and 49% of other healthcare providers have already converted from using Ciloxan to using Vigamox.