Good morning, everybody. Welcome to day two of the JP Morgan Conference. I'm David Adlington. I head up the European Medtech and Services Research Team in London for JP. It's my pleasure to introduce, we've got David and Tim on stage. Over to you guys.
All right, thanks. Let me start with just a little bit of introduction. If you're not familiar with Alcon, we are an eye care company. We do a little bit of everything in eye care. We have the pleasurable purpose of dealing with what is, generally speaking, one of the most severe concerns of elderly folks. After memory loss, vision loss is the number one concern of folks as they age, and we work on refractive error. We work on presbyopia, dry eye, if it's in the eye, or if it's a malady from the eye. We are working on it. We have a very, very simple strategy, which is we focus on eye care. We're a specialist.
And what we're trying to do as a comparative advantage is know more about the eye, the technologies of the eye that apply to the eye, and the markets and how they're going to develop. And if we deploy capital quickly and efficiently at that, we can be competitive and more competitive than folks around us. So we spend a lot of time thinking about how do we develop and retain expertise in this area, how do we develop products that work on the big problems in eye care. And obviously, then we commercialize globally. We create data. And obviously, we do that to reinvest into the eye care. We are the largest investor in developing eye care right now. We spend about $1 billion a year developing programs and products that help people see brilliantly. I'll start with the surgery business today.
Our surgical business has had a very solid market. It continues to be a good market for us. We expect it to continue for a long period of time. As people age, as cataracts continue to be kind of underserved around the world, the population has come forward, and the surgeons continue to expand outside the U.S. And then, of course, a little bit in the U.S. was a strange year last year, but I think we expect a revision to the mean. This market typically has grown over the long period of time, plus or minus a couple of points on 4% or 5%. So very solid market. Through the years, we have spent a lot of time building out our portfolio of products that treat cataract surgery in particular.
You can see a number of products both on the IOL space and then recently in the phacoemulsification and vitrectomy space. But we have products that address almost all of the needs in eye care. So we have a new retina product. We have a new glaucoma product. We work in refractive surgery. We've got a lot of different things that have gone on. And we are coming through a period of innovation productivity that is particularly unique. So we are certainly prepared as we go into this next couple of years to launch probably 10 to 15 new products that will get full exposure to the markets around the world. So we're going to talk a little bit about the IOLs and our UNITY platform today in this business. And I think that'll be of interest to most everybody.
As we kind of reflect on where we are going, we've said for a number of years that we are trying to develop, and we are in the process of rolling out now an ecosystem of equipment that does some really important things around efficiency. First and foremost, our UNITY platform, our diagnostic, which we'll really pilot late this year and then launch next year, is a UNITY singular platform that creates efficiency in the office but moves all of the data required for cataract surgery into a cloud planner. That cloud planner moves that data into a new microscope that, again, we'll have late this year, early next, that will give you visualization of the eye in unique ways and unique guidance around the procedural plan. That's combined with our UNITY VCS and CS phacoemulsification vitrectomy machine to create the most efficient cataract surgery in the world.
I think when you do that, it'll also attach to our inventory planner, which is in theater, which will in real time give us information on what's been consumed and replenish that stock for the OR, ultimately with the patient coming back to the diagnostic and getting a post-op refraction, a post-op look at how that surgery has performed. And then that recalculates in the cloud the formulas for the surgeon as they move forward, which will improve outcomes and obviously contribute a great deal to patient satisfaction. So the UNITY VCS and CS program has been a real success for us. We obviously started this last year with retina, which is the most complicated of the businesses. And VCS is the most complicated piece of equipment in ophthalmology. And I do think that we've had a terrific year with retina folks where we've got a new entry system.
We've got a new four-spot laser. We've got a 30,000-speed cutter. We've got a new fluidic system, so there was a lot of energy put to the retina folks who do the most complicated, the most durable surgeries in ophthalmology, and I do think that when you see the results of this, what you find is that we are getting what we had thought about, which is we were trying to get very significant efficiency gains in retina and cataract. We're getting both of those right now, so if you were doing five surgeries a day in retina, maybe five vitrectomies, you can do six, and when you do that, the economics that are profound for both the surgeon and the surgical center, so the purchasing value of the unit is quite high.
We see that same thing in cataract surgery, but to a lesser degree because cataract surgery is already so improved. But on a percentage basis, very high. On an actual time basis, maybe if you're doing 20 cataracts, you could probably do 21. So that's the kind of speed and economics and efficiencies that the market's desiring. And we're pretty excited about what we saw in our first year of launch. I'm going to show you a quick video here that gives you some sense of how the phaco machine works in a cataract.
This bench test helps demonstrate what is happening in the eye during cataract removal. It compares performance of UNITY 4D versus torsional ultrasound in an artificial eye with a grade 4+ cataract and minimal fluidics. UNITY 4D Phaco was shown to be 48% faster than torsional ultrasound, with 41% less energy delivered into the eye and 48% less dissipated energy at the incision site.
So the value of that, obviously, is time in the eye and obviously then a number of surgeries in a day. And so I think what we're really excited by, by the way, that is comparing to our existing Centurion machine, which has a very significant share in the U.S. It's the market leader by far. And so we've stepped out meaningfully from the current best-in-class thinking around phaco. So really excited about this program and will continue to move that. I'll switch to Pro. PanOptix has been a great product for us. It did really well. And we began launching an upgraded version of this with greater light utilization in the middle of part of the year, probably late Q2, really, when we got it going. So we're getting better contrast. We're getting less light scatter.
And when you look at these IOLs that are diffractive IOLs, that are multifocal IOLs, the number one concern of surgeons is, does it create scatter? Does it create halos and glare? We've decreased that with almost 92% light utilization, which leaves very little light for scattering. So significant upgrade from our PanOptix products has done very, very well. We're very excited about what we saw in the U.S. throughout the rest of the second half of the year. So looking forward, we will move this product internationally: EU, Japan, Korea, all coming in 2026. And we'll continue to build out the portfolio around the world. So excited with that. Secondly, on the IOL front, TRUEplus, we are launching this year a next-generation Monofocal Plus and Monofocal Toric Plus. So what you're expecting to see here, I think, is a new improved intermediate vision.
So one of the things that we've tried to do is improve our monofocal, our base lens, by adding a little bit more of that intermediate reading vision, which has been terrific for us. We also have really important edge dynamics. And I think what you're seeing here is a lens that doesn't compromise distance to get intermediate. And I think that will be an advantage over the existing Multifocal Plus product. Importantly, we'll have that in the Toric version as well at launch. So we'll look for that in the second quarter. And we're excited about what we see there in terms of our opportunities. I'm going to move to vision care quickly and just give you the same story, more or less, with the market first. Very solid markets, typically 4%-6% around the world. It's a very stable market.
Last year, probably not as much price as we've typically done. We took a lot of price through the post-COVID period. Almost all of our competitors did as well, and I think as you kind of look forward to this year, you should see kind of, again, on both markets, we expect kind of a revision to the mean, and we're very satisfied with the kind of stability of that market in general. The product flow for us has been the kind of key for it. We started early on in trying to fill out the lines with geometries and other elements of the product, but in vision care, we've expanded, obviously, with our pharmaceutical business, our eye drops business, and most recently with the acquisition of Aurion, our biopharma business with Vyznova. The going forward part of this is really exciting for us.
TRYPTYR, we just got out about the middle part of this year. So still early days, but very, very good response from the ophthalmic community. Our contact lens business is doing really well. We'll launch a Multifocal Toric coming up soon. I'll talk about that in a minute. We've got a new formulation of OPTI-FREE. We've got new Systane products. And we've got a new Vivity coming. So we've got a lot of stuff that's, again, OTC, pharma, contact lenses, all the things that we think are nice white spaces, nice high-growth markets. TOTAL30, we are going to launch a multifocal Toric, again, of a complicated lens design, but one that I think has a really unique positioning.
For a 30-day lens wearer who has toricity and is aging a bit and is going to have a little bit more dry eye, typically, you're going to get a better end-of-day comfort with this lens than other lenses. It's designed to have a value point that I think is appropriate for people in this particular category. So I think we're excited about getting that out. We'll put that out in the first quarter of this year. Systane, we're gaining a lot of share on the preservative-free market segment. Some of you may remember we've talked about the global market. The European market, in particular, is dominantly preservative-free. The U.S. market is moving that way. In the U.S. market, we've had and enjoyed a really nice run of change to the preservative-free, where we've been quite successful. So you see that market growing 20%.
And we're growing a lot faster than that, obviously, in both the unit dose and the multi-dose. So I think we're excited about what's going on there. You should see and continue to see expected growth in that area. Ocular health, we're expanding into a new category. Obviously, there's a whitening category out there that's cosmetic at some level. That's an interesting market, nicely growing. It's easy for us to get into. So we have something, I think, that will give a real advantage to the market, which is something that lasts longer. It will last around 12 hours. Works very quickly in 60 seconds or less. And obviously, a lot of patients are interested in this. And you can see that this market is growing nicely through the years. We'll launch this next year about this time. So we'll talk a little bit more about that.
We've submitted that product to FDA in the end of last year. Lastly, TRYPTYR, off to a really good start. We're excited about what's gone on with the number of folks who have jumped on to prescribing this. The refill rate is very high. Our commercial lives covered are already strong. This is going to be a journey with all pharmaceuticals. The reimbursement cycle is long. So we'll look to see kind of full reimbursement, I would say, middle of next year. But for this year, we continue to work on both reimbursement and distribution. And we're seeing really nice take-up on this particular nice big market in the U.S. And again, I think we have a product that has a very unique mechanism. I'm going to give you a little bit of a look at that mechanism as we see it now.
0.003%. The only eye drop that rapidly increases natural tear production. Most other currently available prescription dry eye treatments are either anti-inflammatories or do not address the underlying disease state. TRYPTYR is a novel, first-in-class TRPM8 receptor agonist that stimulates nerve endings found on the cornea and upper eyelids. Stimulation of TRPM8 receptors directly activates the trigeminal nerve and the body's natural pathway for producing tears. This mechanism of action rapidly triggers the production of natural tears containing aqueous and proteins, lipids, and mucin. In phase III clinical trials, TRYPTYR demonstrated increased tear production as early as day one and sustained through day 90. TRYPTYR, approved and available by prescription in the United States.
Importantly, not a lipid layer supplement, not an aqueous supplement, but something that is agonistically driving the natural process of tear production. That's a very unique mechanism. We're very excited about it. I think it's a one of a kind idea that will have a big impact on this particular product. The market is well received right now. A couple of key takeaways. We've got, again, I think Alcon enjoys durable, resilient markets. We really believe that long-term eye care is a very solid, stable place to continue to grow. I think the underlying demand for eye care continues kind of running hot for us. Driving above-market top-line growth is the thesis. I think we kind of start with this notion that we can grow markets in that 4% range. We can grow a little faster than that if we invest properly and bring new product flow in.
I think we can kind of feel good about our ability to accelerate innovation around this space. So we've invested a lot of time and energy. You're seeing the beginning of a really long stretch of productivity for us. And I think last year, we've basically introduced about 10 products that will have full year effect this year. There's a few more that will come this year. So we'll have kind of by next year, a double-digit number of products that are contributing to growth. And I think we're expanding our margins as a consequence of that. So although we are investing, particularly in this year, to generate, get behind our product launches, our operating leverage has consistently been kind of that 150 basis points of operating leverage underneath all of that. So we continue to expect that.
And free cash flow, we continue to generate somewhere, as we said, a capital market, say, somewhere around $2 billion, a little short of that every year that we can use to do any number of things. So I think we're excited about where we are. And with that, I'll turn it over to questions. So thank you.
Great. Thanks, David. Maybe just kick off here. You sort of touched on it a little bit in the presentation. But maybe you could just expand a little bit in terms of the surgical business, what you're seeing in terms of market conditions. And obviously, last year, we saw a bit of a slowdown in the middle of the year, particularly in the U.S.
Yeah.
What do you think drove that and the outlook from here? You're expecting some normalization, but what's going to drive that?
Look, I mean, I think in the front half of the year, there was a very unusual year in the US, in particular. I don't think we'd ever seen a flat quarter. Second quarter was flat, which is pretty unusual. Our sense of it is that the productivity gains following COVID were very substantial. People filled up the OR. They filled up their days. Typically, busy surgeons will do two OR days. There is a realignment happening in terms of the amount of surgery per surgeon that has to happen. It's going to happen only because they begin to realign and put more time into the OR. They are doing that now. It took them a while, I think, to kind of adjust scheduling so that they were utilizing more OR time. What we typically do is they'll do a Monday or a Wednesday.
They'll do post-ops Tuesday, Thursday. They'll do a clinic day on Friday. What they're really doing now is they're beginning to use more paraprofessionals, more optometry, more PAs to do their general practice work. And the surgeons are doing more surgical work. And that's what's going to have to continue to happen. So I think we're seeing that adjustment. And I think we'll continue to see it. But there's a significant amount of cataracts that have kind of increased that are kind of waiting on the sidelines to be done. So we know that the demand for cataract surgery is there. It is a matter of now of surgeon productivity. And the other thing I think that helps a little bit is, obviously, part of our orientation to the cataract surgery business is to try and increase efficiency.
So if you are doing 20 surgeries a day today, you could probably do 21 tomorrow if you get one of our new units.
And technology units, how has the rollout of Unity gone versus your expectations? You talked about sort of managing the rollout very deliberately. Why are you doing that?
Well, we're doing it because it's a process of switching somebody from a unit they're very comfortable with in an ocular surgery that is very sensitive, particularly in the retina where you're peeling 5 micron, 10 micron fibers off the back of the eye, or you're messing around in areas that are very sensitive and very complicated. Any little glitch in a surgery like that by any of the equipment can cause real significant challenges. We've got a new entry system, which is new and different for them. We've got a new cutter, which is faster, and they need to understand how to use it. We have new settings on the machine. We have a new four-spot laser. Almost everything going into vitrectomy right now is new, and so for them, it's a little bit like when you get in a new Ferrari or whatever you got.
This is a car that you can drive really, really well, but you need to learn how to drive it for us to get the most out of this, and we also knew that if we got the retina guys, they're the hardest, and they are also the ones that have the most to gain on this, so the value to the retina specialist of this machine is very high, because I think the facility fee is about $3,000 a procedure. The surgeon fee is very significant, and so for the facilities doing this, if you want to get one of these sold, what you want to explain to them is how many surgeries can you do in a day schedule, and if you get the retina guys on side, I think you're going to be able to demonstrate to the facility why the economics of this makes sense.
And we're obviously charging a premium. We're trying to make sure that we position this as a premium answer that generates real efficiency and is worth it. So that's why we started it the way we did. But the year has been terrific, honestly. The revenue for us was real close to our plan. And I think we're excited about this year as well. We got the cataract standalone unit out in the fourth quarter, as we said we would. So kind of everything on plan.
You have a backlog of installations to do coming into this year?
Yeah, we do. Yeah, we've got a big funnel and a lot of people wanting the product, and we'll move that at an appropriate pace where we can install it and make sure we ensure success. One of the things you've got to remember is we have really, really great machines right now. I mean, everybody loves our machines today. This is a lot better, but you have to learn how to drive it. It is a process of making sure you know what to do with it to get the most out of it.
I know at another conference sort of September time last year, you put up a chart just showing directionally the numbers of installations. And some people are quite excited about the potential for growth in your equipment business this year. Do you still stand by that?
Yeah. Yeah, there's about 10,000. Sorry, there's about 30,000 installed base units. They turn over at about a 10-year cycle. So we've kind of, if you just average that, put a little more up front, put a little less in the back years, you get kind of roughly how we think about it. It's not going to be perfect. But then you've got to get the mix right, get the ASP right, decide which is how much of the retina machines versus how much of the. So there's a little more math to it than I think people put into that particular diagram. But what we were trying to convince people of, I think, is that this is a big market. It's a big opportunity. And I think directionally, most people have got it right.
Perfect. And then obviously, on the new machines, there is a consumable as well that you'll be selling. Should we be thinking about that as a volume and price opportunity and mix opportunity?
Mostly a price opportunity. I mean, the consumables, it will move with the number of procedures. So you'll see that kind of be it kind of depends on any particular facility, how they decided to purchase it, whether they've positioned pricing however they want to, whether it's capital budget or whether it's the operating budget, and we can work that out with them.
One of the questions I'm asking this week is just in terms of the uncertainty around the ACA subsidies might impact how that might impact the market, possibly drive some pull forward into Q4. Is that anything you've seen at all?
We don't see it. We haven't seen it. And we haven't seen really. There was a big concern, I think, recently about reimbursement to physician and facility. The physician fee did get cut down on cataract. But the facility fee went up 3%. So I think the facilities are healthy. They've got healthy budgets. And there's a lot of them. A very, very significant number of ophthalmic surgery centers are owned by ophthalmologists. So the economics here are accumulating to the surgeon often.
Then again, you touched on it in the presentation. PanOptix Pro has been an important launch to you because you were losing a little bit of share, particularly to J&J with their new launches. Sounds like that rollout's been going in line with expectations. Just how you see the wider competitive environment from here?
Look, I mean, going forward, it's going to be a continued competitive environment in IOLs. There's a lot of IOLs out there. There's a lot of new players coming, many of them smaller players, but good products. Nothing wrong with any of them. I think you're never going to find a better lens than the lenses that we produce. But there is a market for price out there. There will be some price competition that comes, and Pro has been a really exciting development for us. I think probably did better than we expected it to do. We are looking forward to getting it out in Japan and getting it out in some of the other markets in Europe as soon as we can. We've actually had to delay some of those launches because the uptake in the U.S. was very strong.
And just on that, I think this time last year, we were talking about the relative pricing of PanOptix versus competition, particularly J&J, and then PanOptix Pro. How has the pricing ended up panning out versus expectations?
Yeah, pretty much as we'd expected. So I mean, similar, slight premium, but not a lot. I mean, I think the pricing is going to continue to be a challenge in the market. And we see that. So what we're trying to do is maintain pricing. We've always been the most expensive product, so to speak. But I do think that people, when they look and see what they're getting, really, you're going to find that the value here is not having to deal with that one or two patients who really come back with halo and glare that is unpleasant, is a problem. You're going to spend three or four. We talk about it all the time. How many days do you want to spend seeing that same patient? Ultimately, maybe you've got to take that lens out. It's not a huge number for competitors. But it's real.
And it's different than our lens. And so it is a matter of whether you're willing to put up with that or not. And that's the reason you pay more for ours.
Did you do anything on pricing on historic PanOptix, original PanOptix?
Not really. No. I mean, we've kept most of those lenses pretty close to where they've been.
Perfect. And then switching across to vision care, TRYPTYR obviously has been a big focus for last year. You talked about evolving reimbursement and full reimbursement sort of by the middle of next year. Happy with how the uptake's going versus expectations and how we should be thinking about growth there this year?
Yeah. No, TRYPTYR has been very, very well received. I think it has a very unique mechanism that I think appeals to people. Because we've been treating dry eye for years and years with either end of the problem solves like anti-inflammatories or cyclosporins or some other kind of product that's dealing with principally the inflammation. They take a long time to work. They are modestly effective. Or you're using supplements or artificial tears on the other end, and it just hasn't been anything that really attacked the basic problem, which is you're not making enough natural tear, and this is an agonist for production of tears in the eye, and that is a very unique idea. I think that really appeals to ophthalmologists, optometrists all over the world.
As we kind of work that through, I think the reception and the breadth of use on this early on has been very impressive to us. So we're excited about what we see there.
And payers are willing to buy into that mechanism as well?
Well, we'll see. I think so. I mean, we've got several already early. We'll see the Medicare players come on this year, hopefully. But there's a lot of work to be done there. So we'll see.
And then just switching across to contact lenses. You've had a bunch of new launches. You've been outgrowing the market. The market itself has actually been really robust, probably more robust than some of us were expecting. Why do you think it's been so robust given it's more of a consumer end of the market?
I mean, contact lenses, people kind of we've watched this one for a lot. And we did a lot of work on the 2009 recession kind of and just to look and see what happened. What really happens when money gets tight, especially if consumers get a little bit more sketchy, is they stop trading up. But they don't stop wearing their lenses. And so if you're a lens wearer, you're a lens wearer. And that's a habit. It's a normal part of your routine. And people really don't quit doing that. What changes usually is that you see a little bit of people who are using a monthly lens. And they were thinking about a daily lens. They just put that off. And that's about 2% of the market growth generally is the trade-up. Pricing has been the other piece that's been kind of slowed a little bit.
And generally speaking, during those stretches, companies didn't take price in 2009, 2010 because it was obvious it was sensitive. So you see a little bit of a downturn. But you never see a real you don't really see a regression in any way. You still see people coming into contacts. You still see people wearing them at an appropriate level. And again, we see a real robustness in that market. And if you look at these all of our markets broadly, again, I recognize and freely suggest that last year was a weird year. But if you really look at this thing over the long haul, we've had those years in the past. It's just almost there hasn't been a circumstance where it hasn't reverted to the mean. And so again, we're very confident about our long-term view on this.
One of your competitors here yesterday, and they were putting out that they think market growth in contact lenses last year was more towards the lower end of the four-to-six historically, but pointing towards a slightly better year in 2026. Is that something you'd?
We'll see. I mean, again, I think we would expect it to be, as we say, it's always going to be in that kind of four to six range for us. Whether it's four or six, I don't know. But I think it's likely it's not likely to be outside that range.
Perfect. Perfect. And then you've also got a number of new product launches coming through across the business. Maybe also a question for Tim as well. How should we be thinking about how much you need to invest in that and the dynamics around the margin over the next two to three years?
Yeah. As David said in his remarks, if you look at just the total business, we would naturally get historically 150-200 basis points of margin expansion. Next year, as we talked about on the Q3 call, there's probably going to be about 40 basis points of pressure driven by the Aurion investment as we continue to invest behind that, and then we still have tariff pressure, so I think we called out $50 million-$100 million of tariff pressure. So there is some incremental investments behind the new product launches. It's certainly not as significant as it was in 2025. And that's kind of baked into that, call it 150-200 basis points.
Perfect. And in terms of offsetting that tariff pressure, is there anything that you're looking to do? I know it's slightly unusual. It's tariffs on U.S. production into China, I think, mostly. Is there anything you can do to offset that either through pricing or shifting production?
Yeah. I mean, we do a variety of things. We're looking at our manufacturing footprint and where we can move things to locations that make more sense and help ease some of that pressure. That takes time. And that takes money. So we're being very thoughtful about it. What we're doing right now, what I would call sort of no regret moves. So if you look at our long-term goals that we laid out in capital markets, there were some moves in there that were on the back end of the plan. We're moving some of that forward. We are looking at price. We're not getting a lot of pricing traction, or we did not get a lot of pricing traction for tariffs in particular in 2025. And then we're looking at our supplier agreements and trying to work through those.
There's a variety of actions that we're taking that are trying to offset some of that pressure.
Perfect. And David, you mentioned in the presentation again that the free cash flow kind of coming through at about a couple of billion a year. Obviously, you tried to deploy some of that capital towards the STAAR acquisition. That didn't pan out as probably you hoped. Maybe you could just I think that proposed acquisition surprised people given the fact that you've got so much stuff coming through from your own portfolio. Why kind of complicate with the STAAR acquisition?
The acquisition wasn't complicated at one level. I mean, at some level, you kind of say it's a big number. It is. It's also a big product. But it was a single product company. And so for us, it would have been a very straightforward integration. And we'd have picked it up, put it in the bag. And we've got a refractive sales force. We would have merged the two of them. It would have been pretty easy to do. So we didn't see that as pretty. And that's typically been if you look at what we've acquired really over the last five years, almost always single product companies who have a good idea. They're struggling to scale. And we have a global footprint, which is our advantage in many ways.
And so I think with STAAR in particular, the challenge for STAAR is they don't have the resources or the scalability as a standalone single product company to do what they need to do. Obviously, a couple of their shareholders had a higher price in mind than we did. And obviously, we've been very disciplined about how we think about pricing.
Perfect. And so going forward for that capital allocation here in terms of additional M&A, is that something we should continue to expect?
We'll continue to look at M&A as part of our overall strategy. We're always looking for the best ideas in eye care but we're very disciplined about it as well, so I think I wouldn't forecast M&A per se. I think what we would be looking at is we see nearly everything going on in eye care. We try and do that and for the things that we think make a lot of sense and we started with this idea of how is it that we create comparative advantage? Why are we going to win in this space and it is that we have a very disciplined approach to the way in which we think about our own investments internally and our external investments.
And they are built on the knowledge of people who know those markets better than other people and know the technical risk associated with these assets as well. So we do a really good technical risk assessment. We do a really good market risk assessment. And then we put those together. If we deploy capital more quickly at it, we're going to be very effective. And I think we've been, I think, demonstrated a lot of discipline around several things that have not gone our way. But reasonably, we've moved on and gotten other things.
I would say it's probably fair to say that our philosophy around capital allocation hasn't changed. Organic investment will continue to be our primary focus. If you look at all the products that David just presented earlier, most of that's organic. We realize we can't develop everything. That's where the M&A comes into play. We have returning cash to shareholders.
Perfect. And then maybe a final philosophical question as well. I mean, in terms of the market ended up being, like you say, it was a funny year last year. Has that colored how you're thinking about giving guidance for 2026 in terms of maybe being a bit more conservative capturing?
Not really. No. I mean, look, we try and bracket what the number is generally. And last year, we were wrong on the market. But I don't think anybody was right on the market. So I think it was just an unusual year. I think we'll continue to try and pick a midpoint of a range and give that guidance the best we can given the assumptions that we have. We always lay out the assumptions so you can see those in the guidance. And you'll have to agree or disagree with those ideas as opposed to the guidance per se.
Are there any questions from the floor? Perfect. Please.
Quick question. I mean, regarding presbyopia, we see a lot of developments happening in the pharmaceutical space. Is Alcon interested in entering this space? Or what is your take on this?
The question was regarding presbyopia and the pharmaceutical space there. There's a couple of companies, three or four, I think, that have made efforts in that area. We've looked at all of them. It isn't currently of interest to us. The idea is of interest. I think the mechanisms I think we're careful about. I think mydriatics in particular come with decreased light perception and increased headache. And I think the side effects against the effectiveness is the question mark. If somebody can get that mix correct, it may be a valuable product. Obviously, the last couple haven't worked out that way. And so we've been I think, again, this probably demonstrates some of the discipline. We looked at all of those. We had option on one of them. And we didn't do anything with them.
And then maybe just a final one from me. Last year, one of the issues you pulled out was private equity coming around and actually buying quite a lot of the clinics. Is that a trend you expect to continue? Or are we beginning to see some?
It seems like it's slowed. I mean, I think with all respect to the private equity groups, I think they found that it's quite difficult to get the economics. And there hasn't been a lot of exits coming out of those deals. So I always joke that ophthalmologists are not terrific employees. They just aren't. They're surgeons by nature. And they're hard to control, I think. And I think they found that, again, this is not the first time that people have tried to bring ophthalmology and optometry together and try and create efficiencies in the back office, try and create some economic value by scaling or negotiating with suppliers and negotiating with payers. There was a big run at that in the late 1990s. It didn't work then. I'm skeptical still that they're going to find a lot of value in this.
But there was a stretch where they purchased a lot. And probably 20% of the volume in cataracts in the U.S., for example, is somewhere in that neighborhood is under the control of private equity groups. Those groups, unfortunately, have bought the most productive practices. And the guys who sold those practices were generally in their 60s and decided that that was enough. And the young guys that are taking their place are on salary. So they don't have the same incentives to work Thursday night till 8:00 PM getting that 23rd cataract done. It's just not the way they're thinking. That was a big issue for us for a stretch. I think that did contribute to some of the decline in productivity in practices. The demand for cataract surgery is still way out there. In fact, I was in Boston. We were in Boston with some of our folks.
And they were talking about the lists getting longer, not shorter. So there's plenty of cataracts to be done. It is a matter of OR time, discipline about surgeons wanting to do that surgery, and then finding enough room in their schedule to do that. And I think that happens because they're beginning to take on more in-practice folks. There's a segmentation of real surgeons doing a lot more surgery and other ophthalmologists taking on, or other optometrists taking on the primary care.
And presumably, the productivity gains that you offer with UNITY is an attraction for them too.
Well, that's obviously our intent, right? And so if you look through almost everything we're doing right now is about productivity. It's about economics in the practice. And we see what everybody sees. The health care system is expensive. There are inefficiencies in it. We are trying to find the ways in which we can contribute to making that more efficient, more cost-effective, and better outcomes. And that's what Valeda is about. That's what Voyager is about. That's what VCS is about. That's what almost all of the stuff that we're producing right now is about efficiency and trying to make an economic argument that says, this is better for the patient. It's a better outcome. But it's also better economics for the doc, for the patient, for the payer.
Perfect. Great. We'll wrap it up there. Thanks very much, guys.
Good to see you.
Thank you.
Thanks, Chad.