No masking Cochlear’s unexpected boon from Covid-19, and Hollywood

Face masks are annoying but they delivered Cochlear an unexpected uplift during the global pandemic.

Lou Ferrigno, the original Incredible Hulk, received a Cochlear implant in February and hasn’t looked back.

Covid-19 has delivered hearing implant maker Cochlear an unexpected boon: more people are deafer than they realise.

And it is thanks to mandatory mask wearing. While face masks may not be the most pleasant thing to wear — sometimes triggering acne and breathing difficulty — they also present problems for the hearing-impaired.

Face masks prevent lip reading — the main way people compensate for their deafness, according to Cochlear chief executive Dig Howitt — and not even celebrities are immune.

Take Lou Ferrigno, the original actor to play the Incredible Hulk in the 1970s TV series. He received a Cochlear implant earlier this year and at age 69 he was not aware of all the sounds he was missing.

“He has had hearing loss since the age of four and relied very heavily on lip-reading and found through a pandemic that he couldn’t rely on lip-reading,” Mr Howitt said.

“He got a Cochlear implant in February and is doing incredibly well and saying ‘I didn’t know how much I was missing’.”

Ferrigno says he can now hear S’s and other consonants, as well as the whispers of his wife from 50 feet (15m) away. He says is surprised by the little, ambient noises he can hear now too, like tapping and ticking of home appliances, and is looking forward to hearing the cries of his new twin grandchildren

“I’ve not been able to hear consonants clearly for so long, maybe ever. I have better diction and speech clarity already. Now, I don’t have to try so hard to hear,” Ferrigno said.

His implant was part of the return of elective surgeries in many countries, which catapulted Cochlear’s full-year profit to $326.5m, a 237 per cent rise on the previous year. Revenue, meanwhile, jumped 13 per cent to $1.5bn.

The result meant Cochlear could resume its final dividend, paying investors $1.40 a share on October 18. This takes the total payout for the year to $2.55 a share, an increase of 59 per cent on 2020 and heralds a return to the company paying out at least 70 per cent of underlying net profit.

But challenges remain for Cochlear as Covid-19’s highly-infectious Delta variant threatens to overwhelm hospitals if vaccination targets are not met and spark a return to elective surgery bans.

American actor Lou Ferrigno, best known for his role in the TV series The Incredible Hulk.

As a result, Cochlear has “conservatively” forecast underlying net profit to rise 12-20 per cent to $265‐285m. The guidance was 9.5 per cent lower than consensus estimates of $304m, triggering Cochlear shares to fall 7.4 per cent to $237.05 on Friday.

Mr Howitt’s message was simple: get vaccinated.

“We have very strong supporters of vaccination. The evidence from the safety and efficacy of vaccinations is strong and getting stronger,” he said.

“We absolutely support people getting vaccinated. I do think that is a way for us to get a higher level of freedom in all countries around the world. And from a business perspective, high vaccination rates mean that people can be freer and ease the load on the healthcare system, which means elective surgeries can continue.”

Mr Howitt recognised there was vaccine hesitancy among some people, but said there was also hesitancy 40 years ago when Cochlear launched its first implant.

“Vaccinations have been around for longer than Cochlear implants, and Cochlear implants were seen as experimental. But we delivered enormous benefits to people, into society, to families.

“That shows that medical technology is amazing. It continues to advance. The data and the science that support medical technology and therapies grow day by day.

“And there are very, very rigorous procedures around approval of any therapy, whether it’s a device or vaccination for a drug that’s there to protect people and ensure that the science is there before something comes onto the market.”

Even the original Incredible Hulk was wary of having surgery for a Cochlear implant. “I heard a lot of misinformation about Cochlear implants over the years,” Ferrigno said.

“But a friend of mine received the device and went from 15 per cent word understanding before the implant to 95 per cent with the implant.

“I’m someone that has had profound hearing loss almost all my life, so if this Cochlear implant is working for me already, it can give other people hope too. I wish I would have entertained a cochlear implant sooner. There is no shame in hearing loss and getting it treated.”

Citi’s John Deakin-Bell said investors were unlikely to warm to Cochlear’s guidance.

“We expect the stock to respond negatively to FY22 underlying NPAT guidance being 9.5 per cent below consensus at midpoint as the recovery is taking longer than expected given the continued impact of Covid on surgeries in numerous markets,” he said.

Meanwhile, Shane Storey and Melissa Benson of Wilsons Equity Research said: “we see this as a conservative outlook laden with Covid-19 caveats”.

Cochlear shares closed down 7.4 per cent on Friday, at $237.05.