Alcon Inc.

Greetings, and welcome to the Alcon second quarter 2025 earnings conference call and webcast. At this time, all participants are in listen-only mode. If anyone should require operator assistance, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation, and you may be placed into question queue at any time by pressing star one on your telephone keypad. We do ask that you ask one question, one follow-up, then return to the queue. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Dan Cravens, Vice President, Global Head of Investor Relations. Please go ahead, sir.

Good morning. Welcome to Alcon's second quarter 2025 earnings conference call. Yesterday, we issued a press release, interim financial report, and presentation. You can find all these documents on our website at investor.alcon.com. Joining me on today's call are David Endicott, our Chief Executive Officer, and Tim Stonecipher, our Chief Financial Officer. Our press release, presentation, and discussion will include forward-looking statements, including statements about our future outlook. We undertake no obligation to update forward-looking statements, and as a result of new information or future developments, accept as required by law. Our actual results may differ materially from those expressed or implied in our forward-looking statements, and as such, you should not place undue reliance on any forward-looking statements. Important factors that could cause our actual results to differ materially from those in our forward-looking statements are included in our Form 20F, earnings press release, and interim financial report, which are all on file with the Securities Exchange Commission and available on their website at sec.gov. Non-IFRS financial measures used by the company may be calculated differently from and may not be comparable to similar measures used at other companies. These non-IFRS financial measures should be considered along with but not as alternatives to the operating performance measures as prescribed for IFRS. Please see a reconciliation between our non-IFRS measures with directly comparable measures presented in accordance with IFRS in our press release. For discussion purposes, our comments on growth are expressed in constant currency. In a moment, David will begin by recapping highlights from the second quarter. After his remarks, Tim will discuss our performance and outlook for the remainder of 2025. Then David will wrap up and we'll open the call for Q&A. So with that, I'd like to turn the call over to our CEO, David Endicott.

Good morning, everyone, and thank you all for joining us today. We're entering an exciting phase at Alcon. Several major product launches are now underway and beginning to gain traction. Our innovation and commercial teams continue to deliver, reinforcing our leadership and eye care. and deepening our connection with patients and providers worldwide. While markets in the first half of the year were softer than anticipated, primarily in surgical, vision care remained solid. And although our second quarter results fell short of our expectations, we remain confident in the long-term durability of our end markets, the resilience of our customers, and our plan to accelerate growth. Looking ahead, we've never been better positioned for sustained growth. Our teams are executing with focus and agility. And as we discussed at our Capital Markets Day, our robust pipeline and strategic expansion gives us confidence in our growth trajectory into 2026 and beyond. I'll start my remarks today by discussing some of our recent business development and licensing transactions. At Alcon, our BD&L strategy is focused on acquiring transformative technologies in attractive white spaces that address unmet needs in eye care. In Glaucoma, we recently integrated the Voyager Direct Selective Laser Traveculoplasty device into our portfolio. This first non-contact laser therapy offers a streamlined, patient-friendly alternative to traditional SLT and positions us to accelerate global adoption of laser-first treatments. In refractive surgery, our agreement to acquire STAR will strengthen our offering with implantable columnar lenses, broadening our solution for high myopes. And in retina, we recently announced the acquisition of Lumathera and its Valeda light delivery system for early and intermediate dry age-related macular degeneration. Now, I'll take a few moments to discuss these last two transactions in a little more detail, starting with Star Surgical. As announced, we've entered into a definitive merger agreement to acquire Star and its market-leading Evo family of ICLs for vision correction. The boards of both companies have unanimously approved the transaction, which is valued at $1.5 billion. Upon closing, we expect the merger to be accretive to earnings in year two. ICLs represent one of the few sizable market segments in surgical vision correction in which Alcon does not currently have a presence. And STAR is the leader in this space, but remains underrepresented in several global markets. By combining forces, we can leverage Alcon's broader commercial infrastructure to accelerate adoption of the EVO-ICL platform. Furthermore, the EVO family expands our ability to address significant refractive errors because it can be used to treat high myopes Evo complements Alcon's laser vision correction platforms, which are typically used for patients requiring correction of six diopters or less. Importantly, this transaction brings Alcon a proven technology upon which to build. In longer term, our internal product development teams will collaborate with STARS experts to explore combining our advanced IOL optical designs with their columnar platform with the goal of developing a presbyopia correcting ICL. We expect this transaction to close in six to 12 months, subject to customary closing conditions, including regulatory approvals and Star's approval of shareholders. Until then, Alcon and Star will operate as independent companies. While EVO generates significant revenue in China, we remain confident in the long-term opportunity that that market presents. We recognize that there have been recent macroeconomic headwinds in China, but this transaction is about the future. Long term, we expect China to be the largest single eye care market in the world, and as the global leader in eye care, we expect to have a sizable presence there. Lastly, Evo's differentiated clinical profile positions us well to drive penetration and treat the myopia epidemic that's unfolding around the world. I'll now shift to our announced acquisition of Lumathera and the Valeda light delivery systems. We believe this product is a pivotal shift in the treatment of dry age-related macular degeneration, or AMD. Dry AMD is a progressive eye disease that leads to irreversible vision loss. It affects nearly 200 million people globally, and that number is expected to rise to over 280 million by 2040. Additionally, there are currently no widely adopted treatments for the early to intermediate stages of dry AMD, which is where the majority of patients sit today. The Valeta system is the first FDA-authorized medical device that uses a combination of light known as photobiomodulation to stimulate the retina's natural ability to heal and regenerate. It's a non-invasive, in-office therapy that has been shown in clinical trials to improve visual function and slow the progression of AMD. Most importantly, it's safe, scalable, and offers a completely new therapeutic option in an area with major unmet need. The pivotal LightSight 3 trial showed statistically significant improvements in best corrected visual acuity over a two-year period, and based on those results, the product received FDA de novo authorization in 2024, a key milestone that clears the path for U.S. market adoption. We also plan to pursue CMS reimbursement, and recent developments are favorable in terms of gaining coverage. If we're able to secure reimbursement and expand penetration, we estimate the peak recurring revenue could range between 100 to 150 million by 2030. As we continue to strengthen our portfolio through strategic acquisitions, we're equally focused on driving organic growth through our own innovation and execution. Our recent product launches reflect Alcon's commitment to delivering differentiated, high-performance technologies that meet the evolving needs of doctors and patients. I want to start with equipment where we're encouraged by the initial demand for Unity VCS, our next generation combined vitreo retinal cataract system. This device is the result of years of collaboration with surgeons worldwide. It's a fully integrated platform that unifies both anterior and posterior segment capabilities into a single intelligent console aimed at improving surgical workflow and efficiency. I'm pleased to report that the innovations like 40 FACO and the HyperVit 30K cutter are resonating well with both cataract and retina specialists. Unity has received regulatory approval in key markets, including the US, EU, Japan, Australia, and we began shipping in May. And while it's still early in the launch, our order book is strong. We're being deliberate with our installations. We're providing the best possible support to surgeons and clinicians as they adopt the latest advancements in FACO-Vit technology. Now turning to implantables, we're very pleased with the early market response to our latest innovation, Panoptix Pro. Building on the success of the original Panoptix, our latest advancement represents an important improvement in optical performance and patient outcomes. Panoptix Pro delivers 94% light utilization, which is the highest among trifocal IOLs. It also reduces light scatter by 50% compared to its predecessor. This translates to sharper, clear vision across all distances with enhanced contrast and reduced visual disturbances. Surgeon feedback has been highly encouraging, and we're seeing solid adoption trends in early launch markets. Importantly, Panoptix Pro is helping stabilize share in the U.S. premium IOL segment with a modest sequential improvement shown in the second quarter. This is a great example of how Alcon continues to leverage our innovation engine, global scale, and surgeon input to drive differentiated value-driven growth. Now, shifting to vision care, we continue to see solid performance in our contact lens portfolio fueled by innovation. During the quarter, we continue to advance Precision 7 sphere and toric lenses in the U.S. These lenses represent a significant step forward in our water innovations portfolio, designed to deliver all-day comfort and convenience for patients who prefer a weekly replacement schedule. Precision 7 is built on a novel silicone hydrogel material and features our proprietary active flow system. This unique technology embeds a water-loving moisturizing agent directly into the lens matrix and continuously replenishes that agent over seven days. We're seeing strong feedback from practitioners who appreciate the simplicity of the weekly schedule and the performance of the lens, especially for patients who may not be well-suited for daily disposable contact. Turning to ocular health, the headline in the second quarter was the FDA approval and subsequent launch of TripTier. our new prescription eye drop for the treatment of the signs and symptoms of dry eye disease. While most other dry eye treatments simply mask symptoms or supplement the tear film, Triptir addresses the root cause of dry eye. It's a first-in-class agonist neuromodulator that stimulates the eye's natural ability to produce tears. It's fast-acting and effective, with clinical trials showing meaningful improvement as early as day one. Triptir addresses a major unmet need. Despite over 35 million people in the U.S. suffering from dry eye, fewer than 10% are treated with a prescription product. We believe Triptir has the potential to expand the category, not just compete within it. Now, based on our strong clinical data and market dynamics, we estimate peak sales potentially of approximately 250 to 400 million. And while reimbursement timelines vary, we expect full reimbursement in about 18 months. We officially launched Triptir in the US in late July. While it's early days, we are encouraged by the initial feedback from physicians and patients. I look forward to sharing more details about the performance of this innovative therapy in the future. And finally, I'll briefly discuss market dynamics for the second quarter. In cataract, we saw a soft quarter for procedural growth with a modest improvement in the US. In total, we estimate that global cataract volumes grew approximately low single digits in the quarter and the first half of the year. For context, this compares to a historical average of approximately 4%. Additionally, global ATI oil penetration was up approximately 120 basis points year over year, equally balanced between the U.S. and international markets. In contact lenses, we estimate that the retail market grew mid-single digits. With that, I'll pass it to Tim. We'll take you through the financial results and discuss our outlook for the remainder of the year. Thanks, David.