Abbott (Abbott Park, Illinois) has agreed to acquire Visiogen (Irvine, California) for $400 million in cash, providing the company with a next-generation accommodating intraocular lens (IOL) technology to address presbyopia for cataract patients.
The deal was welcome news for Visiogen's largest investor, as well as others who follow the ophthalmology device industry.
"We're all very excited; I think the venture industry is excited actually about this acquisition," Jeani Delagardelle, managing director at New Leaf Venture Partners told Medical Device Daily. The firm's investments in Visiogen came out of the Sprout Group, whose healthcare technology investments are managed by New Leaf Venture Partners.
Delagardelle noted that this type of acquisition has been a little sparse lately, particularly for companies who have not yet achieved FDA approval. She said Abbott's purchase of Visiogen shows there is still an interest in acquiring venture-backed companies.
Visiogen's accommodating IOL, called Synchrony, is designed to deliver improved vision at all distances, potentially eliminating the need for glasses or contact lenses, reducing glare and nighttime halos, and improving contrast sensitivity.
Intraocular lenses are implanted in a patient's eye after the removal of the natural lens that has become clouded by a cataract. Conventional monofocal IOLs are designed to focus primarily at a distance and not to correct presbyopia, an age-related change in vision in which the eye's lens can no longer adjust its focal length to allow clear vision at different distances. A common symptom of presbyopia is blurry close-up vision. Presbyopia usually begins after the age of 40 and is estimated to affect more than 1 billion people worldwide, according to Abbott.
"We think it's definitely a great outcome. This is a company that we invested in very early when it was just the two founders," Delagardelle said. "This is a very large market, there are a lot of attractive things about it in the first place . . . self pay, very low reimbursement risk, which is very important particularly in today's market, [and] they built great management."
Visiogen's Synchrony accommodating IOL is a significant advancement in artificial lens technology, according to Abbott. The lens is designed to mimic the eye's natural capacity to change focus (accommodation), with the potential to deliver a full range of vision, the company said. Synchrony has been implanted in more than 1,200 eyes and has been the subject of extensive clinical studies both in the U.S. and internationally. It has received CE mark designation and has been available commercially in Europe since January 2009. It also is currently under review by the FDA.
"Their particular lens mimics what the eye does in terms of change of focus . . . the other lenses out there don't have the same mechanism of action," Delagardelle said. "We were convinced that this was going to be a winner."
She added that Visiogen's technology is a "great fit" with Abbott, now that the company has decided to get into ophthalmology "in a big way."
"This acquisition demonstrates Abbott's continued commitment to vision care and our desire to introduce and accelerate technologies that have the ability to make a difference in the lives of millions of people around the world," said John Capek, executive VP of Medical Devices at Abbott. "Combining Visiogen's accommodating lens technology with Abbott's existing medical optics portfolio expands our ability to offer a diverse set of refractive options to our ophthalmic customers and the patients they serve."
Abbott entered the vision care segment earlier this year with its acquisition of Advanced Medical Optics (AMO; Santa Ana, California) (Medical Device Daily, Feb. 26, 2009). The company reported in January it had agreed to acquire AMO for $22 a share in cash, or about $2.8 billion, including debt (MDD, Jan. 13, 2009).
"We are thrilled to join forces with Abbott to bring this much-anticipated technology to market," said Reza Zadno, founder and president/CEO of Visiogen. "The global clinical results with Synchrony are extremely encouraging, and the opportunity to leverage Abbott Medical Optics' extensive commercialization infrastructure means that many more patients will benefit from this exciting advancement in cataract and presbyopia correction."
Larry Haimovitch, president of Haimovitch Medical Technology Consultants (Mill Valley, California) and a regular contributor to MDD, said he had heard rumors that the price would be lower, given that Visiogen has not yet received FDA approval for Synchrony.
"None of us have seen the PMA data although I strongly suspect that it's very good because I've seen other data from Europe and other places . . . I have every reason to think they will get the FDA approval," Haimovitch told MDD.
However, he added, it makes sense that Abbott would be willing to pay big for Visiogen, a company Haimovitch says he has been following since it was founded.
"Why Abbott would have paid that much: A) it's a very hot space, there is tremendous potential and B) it is a best of class product at this point that they're acquiring and C) they don't have anything that's really, really competitive in IOL . . . they are clearly third in the race," Haimovitch said.
Delagardelle said the acquisition "was a competitive process" and that Abbott was not the only company that wanted Visiogen. She said the deal is important because it will further accelerate the growth of the segment because Abbott will be able to do a better job in terms of getting the lens into the market than a private company could do.
"Visiogen's Synchrony lens allows Abbott Medical Optics to enter the growing accommodating IOL segment and enhances our premium IOL portfolio that includes the Tecnis Multifocal lens," said Jim Mazzo, senior VP of Abbott and president of Abbott Medical Optics.
Abbott said the deal is subject to customary closing conditions and regulatory approvals and is expected to close in the fourth quarter of 2009. The company said the transaction does not impact its previously issued earnings-per-share guidance for 2009.
J.P. Morgan Securities acted as exclusive financial advisor to Visiogen.
Haimovitch said the purchase is Abbott's way of saying "we're in this for the long haul and we want to offer a full range of the best products."
David Lewis, an analyst with Morgan Stanley, wrote in a research note that Visiogen "fills a hole in AMO's product portfolio, addressing a concern in our investment thesis around the prior $2.8B AMO acquisition. We were supportive of the AMO deal as appropriate diversification into a robust area of devices, with the caveat that that the greatest competitive risk surrounded the IOL pipeline. Visiogen strengthens that side of the business and allows Abbott to leverage AMO's distribution with a more innovative product offering."
Lewis added that the deal provides access to an "accelerating segment of a growing market." He wrote that Morgan Stanley expects FDA panel for Synchrony in the first half of next year and anticipates FDA approval in the second half. He noted that the key competitor in the space is eyeonics (Aliso Viejo, California), which was acquired by Bausch & Lomb (Rochester, New York) early last year (MDD, Feb. 5, 2008), which markets the Crystalens IOL. That lens was the first IOL to receive FDA approval in 2003. According to Lewis, pipeline rivals include Lenstec (St. Petersburg, Florida), which completed a clinical trial for its Tetraflex IOL in June, and NuLens (Herziliya Pituah, Israel) yet to start U.S. clinical work.
In other dealmaking activity, Raland Technologies (Rochester, New York), a regulatory and professional services company, said it plans to merge with Premier Technical Services (Luray, Virginia) on Oct. 1. This merger comes about a year after the combination of Innovative BioPharm Solutions with Raland and continues to signal the "Raland commitment to growth," the company said.
Premier Technical Services serves many industries as a provider of technical communications. The merged company will retain the name Raland Technologies. It will have management additions as well as adding Premier's 15 fulltime associates, Raland said.
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