April 21, 2020
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COVID-19 pandemic affecting valuations of some ophthalmic companies

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The COVID-19 pandemic may change the way industry leaders in health care markets invest in or acquire smaller to mid-sized companies, as the slowdown in the economy has forced down companies’ valuations, a speaker said during an Eyecelerator LiveStream presentation.

In the first of a series of events hosted by Eyecelerator, four ophthalmic industry leaders discussed their views of and strategies for investing in ophthalmic companies during the global pandemic. David Endicott, Alcon CEO; Warren Foust, Johnson & Johnson Vision worldwide president, surgical division; Jim Mazzo, Zeiss global president, ophthalmic devices; and Jag Dosanjh, Allergan senior vice president, specialty therapeutics, participated in the inaugural livestream, which was moderated by Eric D. Donnenfeld, MD, and Gil Kliman, MD.

“The valuations for most companies with things that were interesting were very frothy. We continue to be careful and judicious about the way we think about long-term investing. For us, it hasn’t been the right time to see those valuations. I hate to see things like this change valuations for people, but that’s the reality,” Endicott said.

Companies will be shorter on cash moving forward, and their liquidity will have a major impact on the way their valuation is viewed, he said.

Opportunism for acquisition will be evident during the pandemic, but Endicott said Alcon is still focused on long-term technologies and whether companies fit their strategy.

“I think it’s probably a good thing if some of the values come down generally because I think they were too high. I don’t wish that on anybody, but I think just as a matter of practical terms, that’s where we were,” Endicott said. – by Robert Linnehan

Reference:

Rethinking ophthalmology post-COVID-19: Business opportunities, challenges, and impact on innovation. Presented at: Eyecelerator LiveStream; April 15, 2020 (virtual meeting).

Disclosure: Endicott reports he is Alcon CEO.