Since the novel coronavirus (also identified as COVID-19) reared its ugly head in Wuhan in December 2019, the respiratory virus has continued to spread — both in China and internationally. In a continued effort to contain the spread of COVID-19, and to keep employees safe, many companies have imposed travel restrictions to China. International ophthalmology conferences scheduled to occur in China have also been postponed, including the 35th Congress of the Asia-Pacific Academy of Ophthalmology (APAO 2020) which was set to take place in Xiamen in April. Instead, it has been rescheduled for August 5-9.
As these restrictions continue into the indefinite future, companies doing business in China could feel an economic impact. CAKE magazine met with executives from U.S.-based CIMA and Germany-based Oculus at the recent 78th Annual Meeting of the All India Ophthalmological Society (AIOC 2020) in Gurugram to discuss how they anticipate the virus will affect their business. In addition, we reviewed Alcon’s Q4 2019 earnings call transcript to assess how COVID-19 is impacting one of the largest companies in ophthalmology.
Business Delayed Due to COVID-19
CIMA Vice President Dan Mattson said he expects the virus to affect their relationship with the Chinese market. “There was a big conference that was supposed to happen in April in China which is now delayed until August, and we also have a product registered in China so it’s setting us back there,” he explained.
Mr. Mattson also said that business trips to China have also been pushed back. “I was due to travel there to meet with distributors, and hopefully start selling product in the summer, but that’s all been delayed . . . who knows for how long.”
He hopes that he can travel to APAO in August to meet with suppliers, but is concerned. As he says, “A lot of Chinese nationals that were supposed to come to this show [AIOC 2020] or ASCRS in Boston have had to cancel because of the virus”.
Large Companies See Shortfalls
Large companies are also feeling pressure in China from COVID-19. For Alcon, five percent ($377 million) of revenue comes from China, which had been increasing by about 15 percent each year. Alcon does not manufacture in China, but it does have suppliers who serve its equipment business.
The transcript notes that January sales were in line with projections. However, Alcon is on track to make just 10 percent of its expected monthly revenue in February; they expect the same to occur in March. The company attributes this to the coronavirus, as non-emergency procedures are being canceled or postponed.
But Alcon is optimistic that business will regain some normalcy in April, although it doesn’t expect to make up for lost procedures.
Richard White, the managing director for Oculus Asia, noted that the virus is impacting Chinese eye hospitals, in terms of both business and patient care. “The eye hospitals are not getting an influx of patients . . . some are even shutting down in this time period,” he said. “Meanwhile, sales reps and distribution companies have been told to lower their business activities, so many are working out of home.”
However, Mr. White has his eye on the future, and said that now is the time to catch up and strategize. For the hospitals? He said once COVID-19 is under control, there should be a large push: “They haven’t been able to receive treatments, so the backlog of patients should increase.”
He predicts that it will take time to see the economic result from COVID-19: “The total economic depression — to see how it actually plays out in the market — won’t be seen now, but maybe toward the end of the year, or even next year.”