Cochlear Revenue Plunges 60 per cent in April 2020
While it was a general understanding that the deferral of elective surgeries would hit Cochlear hard, the magnitude remained uncertain. Yet, as of 11 May 2020, the scale of these impacts was reflected clearly in the implant supplier’s first-quarter results. Since the company announced the deferral of elective surgeries on 16 March 2020, sales revenue across its businesses have plummeted approximately 60 per cent, relative to the previous corresponding period. Specifically, revenues from implant unit retreated by close to 80 per cent across developed markets such as the USA and Europe. Meanwhile, in China, surgeries have reconvened since late February and are now operating close to pre-pandemic rates even as the largest surgery facility in Beijing remains closed.
Meanwhile, Cochlear’s remote service ability continues to be of great help to clinicians and users. Back in April 2020, the firm had successfully obtained US Food and Drug Administration (FDA) approval for its Remote Check solution. Remote Check is the first telehealth patient assessment tool meant for patients who are awaiting hearing implants. Specifically, the tool is designed in a way that allows individuals with Cochlear Nuclear 7 Sound Processor, to conduct a series of hearing checks within the comfort of their own homes. Besides, the test can be accessed through the Nucleus Smart App via a compatible iOS device. Following the completion of these tests, results will automatically be sent to the patient’s clinic for review by the respective health practitioners. Consequently, clinicians can quickly decide if a patient has been progressing well or require further attention.
Remote Check will be executed in the US by phases and will potentially be used in countries where regulatory approval has been granted. This includes the United Kingdom, Canada and Europe. More notably, the implementation of Remote Check will potentially benefit both users and clinicians. On the one hand, recipients using the tool will be faced with additional cost savings as Remote Check reduces the need for individuals to travel to a clinic. On the other hand, clinicians can also re-allocate in-clinic time to manage patients who require immediate attention.
From a broader perspective, Cochlear has since enhanced its liquidity position through its $1.1 billion capital raising as well as a $225 million increase in debt facilities. Meanwhile, the firm will continue engaging in a series of cost-savings measures until it witnesses a steady, consistent increase in surgeries. These include the reduction of capital expenditure, a temporary halt in talent acquisition as well as temporary pay cuts for both senior management and Board members across the firm. Moving forward, Cochlear continues to take a prudent approach when it comes to identifying the rate at which the business will recover. As surgeries are gradually resuming in countries such as the US, Australia and Germany, Cochlear is therefore confident of weathering the storm alongside the above-mentioned measures it has actively adopted.
By Caroline Wong
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