Shares in NicOx SA surged almost 35 percent Wednesday on news that the company had taken its first concrete step toward becoming a late-stage development and commercial player in opthalmology by entering a cash-and-shares acquisition agreement with Altacor Ltd. that could be worth as much as £19.5 million (US$30.9 million).

"That doesn't mean that we stop here," CEO and Chairman Michele Garufi told BioWorld Today. "We have several ongoing parallel discussions. We hope to be able to finalize one of them in the near future."

NicOx, of Sophia Antipolis, France, is acquiring Cambridge, UK-based Altacor in a stepwise fashion. It is paying £2 million cash initially for an 11.8 percent stake, and it has an exclusive option to acquire the company outright for another £9 million, which it must exercise by May 31.

The remaining £8.5 million on the table is payable on the attainment of agreed milestones, within agreed time frames. Those include a U.S. filing and approval of Altacor's ocular surgical antiseptic ALT-005.

NicOx can opt to make all of the additional payments – the £9 million and the £8.5 million – in either cash or shares, or as a combination of both.

NicOx has long articulated an M&A growth strategy, fueled by a strong balance sheet. It exited 2011 with €93. 1 million (US$122. 1 million) in cash and picked up another $10 million recently as a milestone payment from Rochester, N.Y.-based Bausch & Lomb Inc., its partner on glaucoma drug BOL-303259-X. (See BioWorld Today, March 14, 2012.)

The timing of the Altacor deal couldn't be sweeter, as NicOx paper is now worth almost 2.3 times more than it was month ago, when it was changing hands at just €1.86 per share. The staggered deal structure is a regulatory requirement – the potential issuing of new shares requires shareholder approval – but it is also an opportunity to communicate the benefits of the deal to shareholders, Garufi said.

ALT-005 already is partnered in the U.S. with an unnamed specialty pharma company. The first of two planned Phase III trials is under way, and regulatory filings in the U.S. and Europe are planned to occur before year-end. NicOx would commercialize the product in Europe on its own. Altacor already markets a range of prescription and over-the-counter dry eye treatments, called Clinitas, which racked up sales of £660,000 in the UK and Ireland last year.

Altacor also is developing a device, called SOLO, which is used for the insertion of intraocular lenses. Its nonexclusive commercial partner, Monrovia, Calif.-based Staar Surgical Co., is due to file for European approval later this year.

NicOx plans to retain the six-person Altacor team. "They are an important asset for us," Garufi said. The organization will serve as the company's platform for expanding into the UK. Meanwhile, it is also considering other potential acquisitions that could bring it into other European markets.

The strategy is somewhat different in the U.S., where there are few, if any, opportunities to acquire smaller ophthalmology firms. "The negotiations in the U.S. are much more around the acquisition of products or the in-licensing of products," Garufi said.

The company has named Jerry St. Peter executive vice president and general manager of its U.S. subsidiary, NicOx Inc.

Shares in NicOx (PARIS:COX) closed Wednesday at €4.22, up €1.11.