BLCO Q2 2024: Miebo Weekly TRx Jumps to 15k, Peak Sales Seen >$500M
- Robust Dry Eye Portfolio: The Q&A highlighted strong Miebo growth with weekly TRxs increasing from about 6,000 to roughly 15,000, and expectations for peak sales well over $500 million, supported by positive market expansion and synergistic dynamics with Xiidra.
- Market-Leading Contact Lens Segment: Executives emphasized exceptional performance in the contact lens business, noting that the Daily SiHy portfolio grew by 72%, with multi-region gains (e.g., 18% growth in the U.S. and 12% internationally), positioning the company to capture increasing market share.
- Sustained Innovation and Operational Excellence: The leadership’s focus on continuous product launches, integration of advanced digital sales tools (like Glimpse and new DTC platforms), and strategic investments in operational improvements provide a strong foundation for maintaining long-term revenue growth and margin improvements.
- Margin and Free Cash Flow Pressure: Several Q&A responses highlighted that heavy investments—in particular escalating CapEx, working capital consumption (e.g., roughly $250 million from December to June in working capital use), and intentionally elevated inventory levels—are negatively affecting free cash flow (reported as –$48 million in the quarter). This heavy reinvestment may pressure short-term margins and cash metrics.
- Xiidra Performance Uncertainty and External Headwinds: Management lowered guidance for Xiidra revenue and acknowledged uncertainties such as the potential impact of the Inflation Reduction Act in 2025 and ongoing managed care challenges. These factors, along with initial variability in TRx tracking, raise concerns over the sustainable growth of this flagship product.
- Reliance on Execution Amid Uncertain Market Dynamics: Although management expressed strong execution across products, questions raised about adjustments needed in IQVIA TRx data for Miebo and potential issues with market dynamics (such as cannibalization concerns and an 11% float trading at a discount) underline risks that operational execution may not fully translate into long-term financial improvements.
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Growth Sustainability
Q: Sustainable double-digit growth into '25?
A: Management stressed broad-based, constant currency growth of 20% driven by diversified business segments, ensuring a durable growth platform for the future. -
Miebo Performance
Q: Is Miebo outperforming expectations?
A: Executives noted Miebo’s strong sequential uptake—from around 6,000 to 15,000 TRx weekly—demonstrating robust market acceptance beyond initial forecasts. -
Margin Outlook
Q: What EBITDA margin is expected?
A: The team expects a steady EBITDA margin near 18.4%, balancing heavy investments with disciplined cost management despite some near-term pressures. -
Xiidra Guidance
Q: How is the Xiidra launch progressing?
A: Management explained that after a brief setback, Xiidra has stabilized with mid-single-digit TRx growth, and they see no significant cannibalization from Miebo. -
Margin & Free Cash Flow
Q: Will growth investments hurt margins or cash flow?
A: Leaders affirmed that not all upside will be reinvested immediately; they target sustainable margin improvement even if free cash flow remains near breakeven or slightly negative due to current working capital use. -
Share Float
Q: Will the 11% float discount normalize to 100% float?
A: Management is confident that the share float will eventually normalize, though they provided no specific timeline, focusing instead on execution excellence. -
Contact Lenses
Q: How are Daily SiHy lenses performing?
A: The contact lens portfolio is strong, with Daily SiHy growing by 72% on a constant currency basis and encouraging early global launch results. -
Surgical Strategy
Q: What’s the strategy for surgical innovation?
A: The plan includes accelerating premium IOL innovation—with premium segments up 36%—and introducing new advanced technology lenses to capture greater market share.
Research analysts covering Bausch & Lomb.