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| A depiction of the CyPass Micro-Stent (gold) being implanted under the eye--Courtesy of Transcend Medical |
Changes are afoot at Novartis' ($NVS) struggling eyecare unit, where sales fell 13% to $2.3 billion during the previous quarter. Novartis CEO Joe Jimenez in January warned that Alcon has a "gap here that we're going to need to supplement."
On cue, the company just announced an agreement to purchase Menlo Park, CA's Transcend Medical to get its hand on minimally invasive glaucoma surgery (MIGS) devices to treat glaucoma. It's the first acquisition under new Alcon CEO, Mike Ball, the former head of Hospira. The move counters Allergan's ($ACT) $300 million purchase of glaucoma microstent company AqueSys, announced in September.
Transcend's CE-marked CyPass Micro-Stent can be implanted in conjunction with cataract surgery, and treats less severe glaucoma by "enhancing part of the natural drainage pathways of the eye with minimal tissue disruption," Novartis said in a release. According to the Transcend website, about 20% of patients receiving cataract surgery also have glaucoma.
"We expect the MIGS technology to be a great addition to our device pipeline and to establish Alcon's presence in this new surgical category to treat glaucoma," Ball said in a statement. "If approved, it will provide a less invasive means of lowering IOP than traditional invasive glaucoma surgery, with the goal of lowering the dependency of topical ocular medication. This acquisition also expands Alcon's leadership in glaucoma and cataract treatment as part of our surgical business."
Transcend has filed for the FDA's stringent PMA approval, after a 897-person randomized controlled study in May met its clinical endpoint, demonstrating that the Micro-Stent resulted in a more than 20% reduction in intraocular pressure. The control group received only cataract surgery.
And in November the company settled patent litigation with Glaukos ($GKOS), agreeing to pay a 1% dollar and time-capped royalty to its competitor on sales of the CyPass. Along with an undisclosed strategic (or corporate) investors, a plethora of VCs funded the company to the tune of $22 million in a 2014 Series C round.
Novartis is clearly betting on technology to turn around Alcon amid rumors that the unit will be spun off as an independent company. Last year, Novartis said it plans to test a prototype of its "smart" contact lens for glucose monitoring and presbyopia (age-related farsightedness) on humans in 2016. It's being developed with Verily (formerly Google Life Sciences).
In the short term, Alcon plans a $200 million marketing push to increase sales of its traditional contact lenses, FiercePharmaMarketing reports. It competes in the market with Johnson & Johnson's ($JNJ) Vision Care, Valeant's ($VRX) Bausch + Lomb and CooperVision.
- read the release