[creativ_pullleft colour=”light-gray” colour_custom=”” text=”Episode 112″]
This has been a busy year for Thomas Frinzi, senior vice president of Abbott’s vision business. He took the helm of Abbott Medical Optics in January. In July, the FDA approved the company’s promising new Tecnis Symfony IOL. Then Johnson & Johnson agreed to pay $4 billion to acquire the vision device company in September. What’s next?
Thomas Frinzi is Senior Vice President of Abbott’s vision business, which includes a broad ophthalmology portfolio across the areas of cataracts, refractive surgery (LASIK) and eye health products.
Tom Salemi: Hey, everybody, welcome back to the OIS Podcast. This is Tom Salemi, your host. Thanks for joining us. Thanksgiving week is upon us. I hope you all have some great plans ahead with family and friends to enjoy some turkey and not talk about presidential politics. So I’ve got a challenging couple days ahead for myself. But it’s great to be sitting here talking ophthalmology today. I had a chance to talk with our old friend, Tom Frinzi, who is the Senior Vice President of AMO. And we’ve had Tom on here a few times. He keeps making news. We had him on six months ago when he joined AMO, and we had him on after that. I did a video interview with him to talk about his plans at AMO, what he’ll be doing there. Now, of course, we had the opportunity to speak with him about the news that Johnson & Johnson would acquire AMO. So lots of activity there. In this conversation, Tom talks a bit about the process that led to Johnson & Johnson’s acquisition, what it means for AMO’s vision business, or for Johnson & Johnson’s future vision business, and more personally, what it means for Tom Frinzi. So Tom lets us know what his own plans are. We talk of course about Tecnis Symfony and what it means for the company and what that roll out has been like. And then finally, we talk a little bit just more broadly about ophthalmology and sort of how it ebbs and flows with the rest of healthcare as times change in political and business world. So great conversation with Tom, very happy to have the opportunity to speak with him. He was supposed to talk at OIS@AAO, but he came down with a nasty flu and could not make the trip. So let’s hear from Tom Frinzi of AMO.
TS: All right, Tom Frinzi, welcome back to the Podcast.
Tom Frinzi: Oh, it’s good to be here, Tom.
TS: We were talking off line. You missed your first AAO in a very long time. What was that like? Does it leave you bereft of insights and connections, and now you’re just wandering around in the dark, kind of fumbling through?
TF: I think what it did allow me to do is get caught up on some long needed rest, and allow me to feel re-energized for the final push to the year. So certainly missed being at the OIS. I always find that a great way to start, whether it’s the AAO or the ACRS, to kind of network to colleagues and get a buzz of what’s happening both in the financial investment world as well as startups and strategics. So I heard you had another successful meeting, and I’ll look forward to participating on the front end of ASCRS.
TS: Jim Mazzo missed you tremendously. He just pined during the whole –
TF: I understand my buddy Mr. Mazzo was kind do me from the podium, so I always appreciate that.
TS: So let’s get back to business that we talked about six months ago, when you took over as Senior Vice President of Abbott’s vision business. And looks like we can’t leave you alone without a company you’re leading being acquired. That came quickly. We had the opportunity to speak with Ashley McEvoy from Johnson & Johnson a few months ago, and this was right when the deal was done. There were some – some time has passed since. I’m not sure if there’s a lot of clarity yet on the acquisition, but first off, did the acquisition come as a surprise to you, or was this sort of something that you were positioning AMO for?
TF: Well, I think it wasn’t necessarily a surprise, but particularly as Abbott made a decision to kind of reshape their portfolio, particularly from a medical device point of view, and focus more on the cardiovascular space, we had an asset that was certainly tracking in the right direction. So I think the pending transaction with J&J is really good for all parties involved. It was the right thing for Abbott at the time, certainly the right thing for Johnson & Johnson, wonderful for AMO. But more importantly, I think it’s great for our industry to have Johnson & Johnson back into the surgical side of ophthalmology. And I was heavily involved and engaged from day one in the potential of finding a new home for the asset. But I think Abbott came to that decision reluctantly, but again, I think consistent with their reshaping their portfolio, it was important to find the right home for this asset, and I think we did with Johnson & Johnson.
TS: It does seem like a perfect fit. Can you give us some sort of update on the acquisition? How have things gone for the last 2 months? It was announced on September 16, so we’ve had a little time.
TF: Sure, I’d be happy to. As you could imagine, the first task at hand is we have to get to close. So we have transition teams working through all of that detail as to how do we get to close. Obviously, that’s governed by a lot of the bureaucratic government regulatory activities, and they’re in full force. So we still anticipate closing sometime in early first quarter. Then the second priority is really how do we maintain business continuity day one so the transition teams have really been focused on that fairly extensively. How do we get to close, and then how do we maintain business continuity and minimal disruption for our customers day one? And then I think as we put those two in the rear view mirror, then it’s really about the full integration of how do we want to run and operate the organization going forward. And we’ll take that task on as the first two are behind us. So we feel good about where we are, and right now really focused on just bringing the business to a close, as I said, hopefully in Q1.
TS: Do you have a sense how this may be felt in the doctors’ offices? Will they see different people? Will they feel a change at all? Or is it going to be fairly seamless for those customers?
TF: Well, I think it’ll be fairly seamless from that perspective. As you think about Johnson & Johnson today, they’re kind of eye health play is really on the contact lens side, and really have nothing on the surgical side. So these two businesses complement one another extremely well. And I think one of the real synergistic opportunities that are there for us to kind of better understand and explore is how can we leverage J&J’s relationship in the optometric community to forge a very productive bridge to ophthalmology, and take advantage of the brand equity that J&J has in Acuvue together with, as an example, the leading brand equity we have in Tecnis IOL platform and our recent approval of Symfony. So I think it’s going to be fun to pursue those kind of synergistic opportunities. But I think from a customer point of view, we’re certainly working hard to make it very seamless.
TS: And I would think from a cultural perspective, it must be a boost. It’s like the baseball player being traded from a team where perhaps he was sitting on the bench to a team that really wanted him, and sees a bright future. There’s a different sort of energy behind you.
TF: Yeah, absolutely. Again, as I said, this transaction is good for all the parties involved. And J&J is certainly passionate and excited about eye health, and it’s nice to have that kind of committed parent to the eye health world. And we’re excited to be, hopefully soon, part of Johnson & Johnson.
TS: And the question I had asked Ashley McEvoy, and the answer wasn’t available yet, was what’s Tom Frinzi’s role in the new venture? Is this something you still want to be part of?
TF: Yes, I do. And we’ve worked through that, and certainly J&J, you know, this transaction from a personal as well as professional point of view is kind of, in a sense, a coming home for me. I started my career in med device with Johnson & Johnson in 1980, and worked with Johnson & Johnson till 1995 when we sold at the time Eyelab to Chiron. And that’s where I began my association with Bill Link. So for me now to come full circle some 22 years later back to Johnson & Johnson does feel a little bit like coming home. And J&J has made me feel very welcomed, and I look forward to continuing to lead the organization going forward. So for me personally and for J&J, we’ve agreed that I will stay on and run the business.
TS: That’s great news. Good. Glad to hear it. We’ll get into the Tecnis Symfony in a moment, but I just wanted to – going back to the Podcast we had 6 months ago, when you were first joining AMO, what has the last 6 months been in terms of just taking a look at the franchise and making any changes? Have you made any wholesale changes within the group, or anything you can talk about?
TF: Yeah. Nothing at this point that’s certainly public knowledge. But in general, my approach has been to kind of come in, listen, assess. Quite frankly, the last 4 or 5 months of my tenure has been consumed with this transaction. So but it’s given me an opportunity to understand where our strengths are, and certainly now as we close the transaction and create the new company, if you will, I think I’m in a much better place to really ensure both culturally and from a practical sense we have the right people in the right positions in order to take this company to the next level.
TS: On one hand, I was thinking it’s probably very difficult to manage sort of both aspects, coming in, managing downward to your staff, and then having J&J coming in and having to manage upward with the transaction. But in some cases, I bet it’s probably beneficial to get this all done with at once.
TF: Yes. I think so. And again, a lot of my vision is very consistent with what J&J is thinking. So as we mentioned earlier, a lot of synergy and a lot of opportunity, and more importantly, just a lot of excitement. And the initial reaction from the ophthalmic community, I think, has been very positive. So now it’s up to us to fulfill that excitement.
TS: And just were there other bidders for AMO? Maybe you’re not going to talk about specifics, but my question is, are there other players out there who are not at J&J, who maybe aren’t well known to ophthalmology right now, but are looking to get into this space? What is that sort of neighborhood like? Are there other players looking to get into this specialty?
TF: Yeah, I would say so. We ran a competitive process. And again, when you think about the field of eye health and ophthalmology in general, the demographics are very attractive, and I think it attracts companies that want to put their money to work in this space. So our process was as competitive as you might imagine.
TS: Did any of those companies rhyme with Oogle? Just kidding.
TF: All right, probably not. Let’s get back to business. In July, you had some great news with Tecnis Symfony being approved. What has the roll out been like? Tell us a bit about Tecnis Symfony, the IOL, and what its benefits are, and what has the roll out been like for you in terms of sales and marketing and getting the product out there?
TF: Yeah, sure, I’d be happy to. We’ve certainly been pleased with the initial launch of Symfony. It’s really exceeded our expectations. And when you think about rolling out a new technology, if you believe as I do that probably the best barometer of future performance is your past experience, and we had at AMO the advantage of observing Symfony being launched in several markets outside the United States back in 2014. So we certainly learned what worked and what didn’t work, and how to effectively roll out a technology from that experience. The FDA obviously gave us an approval earlier than anticipated, so it really had us in a hyper mode to be able to prepare appropriately. So we engaged early on with our investigators and KOL’s around the country to seek their input. We certainly aligned internally with our supply chain colleagues to ensure that we had proper inventories to launch. And last, but not least, we certainly made sure our commercial organization from a sales and marketing perspective really put together a thoughtful, targeted, focused approach to rolling out this technology that I think is incumbent when you’re rolling out and establishing a new category of IOL’s, like extended depth of focus that Symfony represents. So as we prepared for that, the reaction that we’ve seen based upon that kind of holistic approach has been very encouraging. The anecdotal comments back from docs have been unbelievably favorable in terms of the overall patient experience. And I would tell you in our first, I guess now, maybe 8 weeks of activity, we’ve sold over 10,000 units across some 700 plus accounts. And the reaction is consistently very favorable. So we’re excited. And more than anything, I think Symfony allows us the opportunity, as we spoke a little bit off line, to really grow the private pay aspect of cataract surgery. That channel, as you know, has been relatively flat for a number of years, and I think a product like Symfony really has an opportunity to grow that channel. And again, so far, early on, the positive feedback coming from our user base is indeed they’re seeing a wider swath of patients coming into that premium channel, if you will. And that’s really encouraging. And if that happens, I think the whole industry benefits.
TS: We’ll save any hardcore political talk for the Thanksgiving dinner table, but I’m just curious as to ophthalmology itself. With the changes going on at the Federal level, and ophthalmology having such a strong private pay aspect, as you talked about, or at least a major part of it is that, is there any sort of – how does it respond to larger changes in either the political level or to healthcare? Is it fairly immune to the forces that might throw other specialties this way or that? Or does it sort of ride along with the rest of healthcare, and whatever impacts healthcare overall impacts ophthalmology just as much? From your experience.
TF: Yeah. I think ophthalmology is not immune from all those external forces putting pressure on the healthcare environment. But I think it just adds more credence to the fact that as ophthalmologists think about their future to diversify their revenue streams into much more of a patient participation segment makes an awful lot of sense. And we certainly want to continue to invest and develop in innovation that can grow that. And as we started earlier, I think Symfony is a great example of a technology that has the opportunity to do that. So I think anyone that is looking to have sustainable growth, you have to be looking at that channel and the ability to grow that channel long term.
TS: Great. Well, it’s a pleasure to have you back here. I’m happy to hear that you’re going to be staying with AMO at J&J. That’s great news for us. And I certainly look forward to seeing you at the next OIS@ASCRS. It’s on May fourth in 2017 in LA, which is very convenient for you. You don’t have any good excuses not to make this one, Tom.
TF: I look forward to it, Tom. And it’s always a pleasure to talk with you.
TS: Excellent. Thanks so much, Tom.
TF: OK. Take care, now.
TS: Well, that’s a wrap. Tom Frinzi, thanks for joining us on the OIS Podcast. Very happy to hear you’ll be part of the division going forward under J&J. It’s been a homecoming for yourself, as you noted. And hopefully we’ll have a chance to talk again very soon at an OIS and on the OIS Podcast. Thanks again to our listeners for tuning in. If you like what you heard, you can do a few things for us. You can subscribe to the OIS Podcast. We always like to see that. We can – you can also go on iTunes or whatever platform you’re listening to and please give us a rating and a comment about the podcast. We love to hear how we’re doing, and helps a great deal when you do that. And of course, if you want to continue to receive this Podcast to your inbox, go to OIS.net and sign up for the Eye on Innovation Newsletter. All we need is your email. Just to go OIS.net. So thanks again for joining us. Happy Thanksgiving to everyone. I hope you have a great holiday with friends and family, and tune in next week for another great tale of innovation from the OIS Podcast.