Abbott (ABT) yesterday entered into a definitive agreement whereby it will acquire Visiogen, Inc., a privately-held company, for $400 million in cash. Visiogen is focused on the development of innovative products for cataract and refractive patients.
The deal will provide Abbott with access to Visiogen’s next-generation accommodating intraocular lens (IOL) technology, which helps address presbyopia in cataract patients. Visiogen’s first commercial application, Synchrony, is currently available in Europe and under Food and Drug Administration (FDA) review in the U.S.
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.
This deal is in-line with Abbott’s goal of strengthening its ophthalmic portfolio. As a reminder, Abbott entered the ophthalmology market earlier this year with its acquisition of Advanced Medical Optics. The acquisition of Advanced Medical Optics should help Abbott build its strong medical device business and diversify its product base and geographical reach. Primary players in the ophthalmology market include Allergan Inc. (AGN) and Alcon Inc. (ACL).
The addition of Visiogen’s Synchrony lens to its portfolio will not only allow Abbott Medical Optics to penetrate the growing accommodating IOL segment, it will also strengthen the company’s premium IOL product offering that includes the Tecnis Multifocal lens. Abbott should be able to capitalize on the growing demand for cataract treatment among the increasing elderly population as well as the strong demand for LASIK procedures.
The deal is scheduled to close in the fourth quarter. The company does not expect the deal to impact its financial guidance for the year. We have a Neutral rating on Abbott.
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