Alcon to Acquire LenSx - Analyst Blog

Alcon Inc. (ACL) continues to expand its product portfolio with the company recently announcing its intention to acquire privately-held LenSx Lasers Inc. With this acquisition, Alcon will gain access to LenSx Lasers’ LenSx system that was the first femtosecond laser to receive US Food and Drug Administration (“FDA”) approval for use in cataract surgeries.

As per the terms of the deal, Alcon will make a cash payment of $361.5 million to LenSx shareholders on the closing of the transaction. The company could also pay about $382.5 million on the achievement of specified milestones.

This agreement is in line with the company’s goal to expand its product portfolio and pipeline. We are pleased to see the company’s commitment toward building its pipeline through in-licensing deals and acquisitions. The agreement with LenSx is the latest in the series of deals executed by Alcon to strengthen its pipeline.

Earlier this year, Alcon purchased the rights for two topical eye care products from Sirion Therapeutics Inc. In January 2010, the company completed the acquisition of Optonol Ltd., a privately-held medical device company. In late October 2009, Alcon entered into an in-licensing agreement with Potentia Pharmaceuticals for the development of medicines for the treatment of age-related macular degeneration (“AMD”). In September 2009, Alcon announced the acquisition of Swiss biotech company, ESBATech AG.

In July 2009, Alcon entered into a five-year collaborative research agreement with AstraZeneca (AZN) for the exclusive ophthalmic discovery and potential development rights to AstraZeneca’s compound library. Alcon also entered into a research and licensing agreement with PhiloGene Inc. for rights to a vascular endothelial growth factor (“VEGF”) protein, which will be developed for the treatment of wet AMD and diabetic macular edema. All these transactions should allow Alcon to strengthen its ophthalmic product pipeline.

We currently have a Neutral recommendation on Alcon. The company’s primary competitor in the ophthalmology market is Allergan Inc. (AGN).