Healthcare Monthly: AAPL Hearing Aids (+ ALGN, COO, SOON.CH, JNJ, and ZTS)

The top 10 trending expert call transcripts of September 2022 at Stream by Alphasense’s highlight a myriad of topics in Equipment and Services and Pharmaceuticals, Biotechnology & Life Sciences (PBLS.) 

Align Technology (ALGN), Cooper Companies (COO), Sonova Holding Ltd. (SOON.CH), Johnson and Johnson (JNJ), and Zoetis (ZTS) have standout interviews among the expert call transcripts published this past September. Let’s take a deeper dive on these top trends below, but first be sure to start your free trial of Stream to get complete access to our entire transcript library!

Top Ten Expert Call Transcripts: Health Care Equipment & Services

1. ALGN (Align Technology Inc) – Partner Believes the Aligner Market Will Grow but ALGN Will Lose Significant Share
2. IDXX (IDEXX Laboratories Inc) – Former General Manager Sees Structurally Lower Growth for IDXX
3. VEEV (Veeva Systems Inc) – Customer Thinks VEEV Looks For Opportunities to Challenge the Incumbents in the Marketplace
4. COO (Cooper Companies Inc) – Former President of APAC Believes COO’s CooperVision Will End up Being the Number One Contact Lens Player
5. ALC (Alcon Inc.) – Former Competitor Believes ALC Could Catch JNJ as the Leader in Contact Lenses
6. MCK (McKesson Corp) – Former Director Thinks AMZN Is a Competitive Threat for Distributors
7. SOON.CH (Sonova Holding Ltd.) – Former Specialist Expects SONVF Will Gain Share and Sees OTC as Neutral/Positive for the Industry
8. IDXX (IDEXX Laboratories Inc) – Former Regional Unit Head Sees Slowing Growth at IDXX With Share Loss to ZTS in Spain & Portugal
9. MDT (Medtronic PLC) – Competitor Thinks People Keep Rolling off MDT Making Opportunity for AXNX
10. ALC (Alcon Inc.) – Ophthalmologist Believes Accommodating Lenses Should Replace Multifocal IOLs

ALGN lands on our number one transcript spot as an expert suggests that ALGN will lose significant market share. The product gap is closing fast for clear aligners and this expert is bearish on ALGN’s stronghold of the market. 

The former Asia-Pacific President at COO believes the medical device company will be head to head with JNJ as the leading players for contact lenses. This playing field will be one to watch as new developments unfold.

“J&J has become the only real brand. Cooper has become the partner of the massively successful optical retail chains that have gone down their own brand and their own brands and again, to speak of Specsavers and GrandVision and all of the different subs of them. The more successful those chains are, then the more successful Cooper is because they’ve locked that up for the long term. B&L and Alcon still have to decide are they going to play that way or are they going to really invest the money that they need to take on Johnson & Johnson as a brand.

It’s a hard road there. This is me with the CooperVision head-on. It leaves me saying that to me, the companies that I think at least for the next 10 years will continue to be the leaders in terms of overall performance will be J&J and Cooper. I think they’ll be an interesting play out as to how which one ends up being number one as that unfolds.”

– APAC President, COO (Prior)

According to a former Associate Clinical Specialist at Advanced Bionics, Bose previously had trouble crossing over into the medical device landscape. The hearing aid market specifically is a difficult market because people usually don’t want to admit their need for it. Although this expert suggests that AAPL, Microsoft (MSFT), Samsung (005930.KR), or even Panasonic (​6752.JP) could move into the OTC hearing aid market despite Bose’s not so great experience.

“Bose really had an upper hand in their reputation for sound quality, so it seemed like all the pieces were coming together. Entering into the medical device landscape is also very challenging as well. Unfortunately, it didn’t work out for Bose the way they had planned.”

I don’t think Bose’s decision should have any impact on an Apple, or a Microsoft, or whoever else. I think it’s just so having the right pieces in place and understanding the hearing aid landscape and understanding medical device sales and all the aspects that come along with that and all the procedures you need in place…

I don’t necessarily think it won’t happen. There’s always been rumors and inklings that Apple’s going to be the next to the market with some sort of hearing device. In my own opinion, I hope they do. I think there’s a lot of people out there that use the help who necessarily aren’t ready to step into a medical office to get hearing needs. I hope other companies are being optimistic and not being conservative because of what they saw happen with Bose.”

– Associate Clinical Specialist, Advanced Bionics (Prior)

In terms of distribution, most audiologists are unlikely to carry OTC aids, but we would should expect to see them at Best Buy (BBY), Walgreens (WBA), CVS Health Corp (CVS), and AAPL (if they release a product).

“I have to say it’s the lower end of the spectrum that audiologists are saying, ‘I want to offer these in my office. I want to help people who have chosen these devices.’ It’s maybe 75% of audiologists are just saying, “No way. I’m standing firm on prescription hearing aids,” and then there’s that 25% incorporating different ways to add OTC to their office as a revenue source.

My first thought is, our big tech stores, so your Best Buy. If Apple had something, I’d expect that we would see it in an Apple store. I do think your Walgreens, CVSes as well. It’s just going to be interesting to see what’s offered as marketing and displays. I think that’s what’s going to catch people’s attention. We know Apple and Best Buy can do a bigger and more elaborate display than our CVSes and Walgreens.”

– Associate Clinical Specialist, Advanced Bionics (Prior)

In the current competitive landscape however, the expert is bullish on SOON.CH, which is positioned well to gain more of the market share with its Roger technology.

“I will say Sonova has Roger technology which when some patients who are into that techie engineering, sound quality things, dig in, the Roger technology appeals to them through Sonova, whether that be in a cochlear implant or a hearing aid. Schools are also really liking the Roger technology in classrooms for kids. If I had to pick one of them that had a slight edge over the other, I think Sonova leads the way with their Roger technology.

I think Sonova is better positioned overall. When we look at them as an entire company, they have skin in the game with cochlear implants. They have a huge lead on pediatric products over Oticon, and then through their adult or conventional prescription hearing aid, with the Roger technology, they have an advantage there as well. It’s not just based on their recent launch.”

– Associate Clinical Specialist, Advanced Bionics (Prior)

Looking forward, the biggest challenge for these big tech companies moving into the medical landscape will be customer service by understanding the fine line between providing medical advice and device-related information. On the flip side, prescription hearing aids typically offer a solid warranty and consumers will be looking for the same from OTC.

Top Ten Expert Call Transcripts: Pharmaceuticals, Biotechnology & Life Sciences (PBLS)

1. TMO (Thermo Fisher Scientific Inc) – Former Associate Director Thinks That Supply Chain Reliability Is an Important Criteria for Customers
2. JNJ (Johnson & Johnson) – Former DePuy Synthes VP Believes JNJ’s Ortho Robot Is Well Positioned
3. REGN (Regeneron Pharmaceuticals Inc) – Former Competitor Believes Dupixent Will Lose Market Share to JAK Inhibitors in Adult Populations
4. ZTS (Zoetis Inc) – Veterinarian Thinks There Is Not a Significant Difference Between Vet Distributors but Continues to See Strong Customer Demand
5. ZTS (Zoetis Inc) – Former Sr. Director Is Bullish on Companion Animal Product Innovations at ZTS
6. TMO (Thermo Fisher Scientific Inc) – Former Manager Thinks TMO Should Increase Internal R&D
7. CRL (Charles River Laboratories International Inc) – Former Global Marketing Manager Sees Opportunity for Cell and Gene Therapy Growth if CRL Can Deliver a More Coordinated Offering to Customers
8. MRNA (Moderna Inc) – Infectious Disease Specialist Thinks Only ~20-30% of People Will Receive COVID-19 Vaccine Booster Shots
9. ICLR (Icon PLC) – Former Senior Director Thinks ICLR’s Clinical Side and Business Development Became Significantly Stronger with the PRA Health Merger
10. MRK (Merck & Co Inc) – Sleep Specialist Thinks QUVIVIQ’s Daytime Benefits May Place It as an Opportunity for Treating Insomnia

According to the former Vice President of DePuy Synthes at JNJ, the healthcare firm is able to compete at a small price premium with the lower-cost local and Chinese manufacturers due to its brand perception.

“If you ask me, a lot is in the branding, a lot is in the perception of a surgeon, as well as I would say even the consistent quality of the product. I have seen personally and myself…when you look at the instrumentation of local Chinese companies that are coming in and even companies which are made in India, the quality of instrumentation is far superior in multinational corporations than these local companies.”

– Vice President of DePuy Synthes, JNJ (Prior)

The price differences between their orthopedic instruments are marginal to the point that surgeons and patients alike are more inclined to opt for the upsell of a JNJ product because of its reputation of superior quality.

“It also depends upon the surgeon’s comfort level. A surgeon does not want to compromise on a patient just for a few meager dollars, they do not want to switch. If the price difference between a Johnson & Johnson product and a local Chinese product would have been $500, then definitely a surgeon would switch. Since the price difference is not hardly $100 to $150, surgeons don’t want to take a chance for $100 and $150.

Even the patients don’t want to take a chance. If you give a choice between a patient to ask which product they will use, most patients, except for which are being paid by the government reimbursement schemes, will obviously opt for a multinational corporation because they are ready to pay the $150.

The perception of brand, the persistence, and consistency and the surgeon being able to be very comfortable because so much of clinical publications and studies are there as well as many top-notch U.S. surgeons use those products, they feel the comfort. That’s the reason Johnson & Johnson or any multinational can compete very easily with a small price difference, as a small price premium versus the local companies.”

– Vice President of DePuy Synthes, JNJ (Prior)

The orthopedic market can be divided into four segments: joint replacement, spine, trauma, and sports medicine. In between you can throw in robotics which is part of both spine and mainly joint replacement. The expert is bullish on the Indian and Southeast Asian orthopedics markets and expects them to grow by up to 20% and 12% respectively.

“If you see the total market for India, it is I would say around $3 billion for orthopedics. It is growing at the rate of around 15%-20%…Overall, the market growth I will project for Southeast Asia growing around 10%-12% at a $1 billion marketplace…

Robotics is coming in a big way and is here to stay. Robotics in its present form will not be staying. It has to be much more simple, less footprint, much more speedier, and will be able to make ordinary surgery look extraordinary. That’s what’s going to happen in the future, including ligament balancing and soft tissue balancing which is very, very important, which many robotics still have not been able to manage.”

– Vice President of DePuy Synthes, JNJ (Prior)

A former Senior Director at ZTS is bullish on the company’s innovations of companion animal products and sees diagnostics as the next place to invest. Read more about the battlefield between ZTS and IDXX in Diagnostic for Doggos and our August Healthcare Monthly.

“IDEXX is the gorilla and the big share of the market. Zoetis sees a lot of expansion potential into diagnostics, rightfully so because a big part of the market is controlled by IDEXX. It’s not an easy, I would say, game but the relationship that Zoetis has with that clinic, there’s potential for a gain there, that’s for sure. If you’re a player in that segment, you have to be in diagnostics, and you have to invest wise-fully…”

– Senior Director, ZTS (Prior)

Overall, after following the clear aligner trend in the expert call transcripts, I see a similar sentiment with orthodontists shying away from direct-to-consumer products and staying loyal to incumbent manufacturers for products. It’s clear that doctors are resistant to change in product loyalty, we see this in clear aligners, hearing aids, and now orthopedic products. Doctors just don’t want to risk the success rate of their care and procedures for a marginally cheaper product. Which explains why some experts have spoken in the transcripts that most innovations have little shock value, because unless a competitor is able to produce a 100% substitute or put out something groundbreaking, doctors are hesitant to change.

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