Annual Report 2010/11 - Sonova

THE HEARING IMPLANTS SEGMENT
In the 2010/11 financial year, the hearing implants segment
posted sales of CHF 70.8 million, accounting for 4% of the
total sales of the Sonova Group.
The Sonova Group took a strategic step towards expanding
into the market segment of inner ear implants with its
acquisition of Advanced Bionics, the leading U.S. manufacturer
of cochlear implants, in December 2009 and the
integration that commenced in January 2010. Advanced
Bionics initiated a voluntary temporary recall of the
HiRes 90K cochlear implant device in November 2010. This
was a precautionary measure based on two instances in
which the product was removed for safety reasons due to a
very rare malfunction. The product recall resulted in lost
sales of around CHF 60 million in the current financial year.
Advanced Bionics received CE certification from the European
notified body TÜV for changes to the manufacturing
process of the CI HiRes 90K and approval to resume
distribution of the implant in European markets in April 2011.
The implant will be reintroduced on the U.S. market
following pending approval from the FDA.
Sonova is also developing the Ingenia middle ear implant
under the Phonak Acoustic brand, designed for individuals
with moderate to severe mixed hearing loss. Ingenia is
currently still in the development phase, and implants in
initial patients in the test phase have been successful. As
Ingenia has not yet been launched, no sales were recorded
in the 2010/11 financial year.
THE GROWTH MARKET FOR HEARING IMPLANTS
The largest market for hearing implants is currently that
for cochlear implants. While systems such as the Ingenia
middle ear implant are considered to have high potential,
this market has yet to be established and developed.
Further hearing implants such as bone-anchored hearing
instruments and other middle ear implants are not considered
in this segment reporting, as the Sonova Group is
not active in these areas.
The market for cochlear implants is still relatively young.
The first cochlear implant only gained FDA approval in
1984. Since then, around 240,000 cochlear implants have
been sold worldwide. This figure is very low considering
there are more than 200,000 potential new cochlear im-
HEARING IMPLANTS
plant patients each year. Around 50% of them are children
– either babies who were born deaf or children with hearing
loss acquired between the ages of one and six years. The
remainder of the patients are adults with hearing loss due
to aging, accidents, illness or ototoxicity.
Global market volume is estimated to be more than 33,000
cochlear implants sold annually. North America accounts
for roughly 40% of the global market, while around 35% of
implants are sold in Europe, 15% in the Asia/Pacific region
and 10% in the Latin America region. Advanced Bionics has
an estimated global market share of more than 15%.
Sonova expects average annual unit growth in the cochlear
implant market of around 10–15% over the coming years.
Medium-term growth potential, however, is limited by a
number of market factors. Both the number of cochlear
implant centers and capacities to perform the post-surgery
fitting process are limited. In many emerging markets,
reimbursement of cochlear implants by health insurers is
not yet established, and quite often, patients are not
informed that they are a suitable candidate for a cochlear
implant system. Tests such as newborn screenings are
increasingly conducted in developed countries, but the
awareness and the lack of information on cochlear implants,
especially in emerging countries, offers considerable
potential.
A MARKET WITH SPECIFIC NEEDS
Cochlear implants enable people with profound hearing loss
to deafness to participate in the world of hearing and
communication. In particular, the large proportion of children
who are born deaf or lose their hearing plays a central
role in treatment with cochlear implants. The topic is an
extremely emotional one: parents are often shocked to
learn that their child suffers from such severe hearing loss
that surgery will be needed to achieve the best possible
development of their hearing and speech center. For adults
too, however, the operation is one associated with fear
and apprehension.
This is why one of Advanced Bionics’ major concerns is to
respond optimally to the needs of cochlear implant patients
and guarantee maximum safety. With these aims in mind,
the company works closely worldwide with clinics and specialists
with a view to ensuring seamless care and maximum
quality in all aspects of cochlear implant provision.
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