Replies to post #71311 on Biotech Values

[DewDiligence]

ABT in the ophthalmic device area? I didn't see it coming :)

Does this mean you did see it coming and you’re playing with us? Or perhaps you’re having fun with the double entendre on the word see? :- )

Seriously, it does seem odd for ABT to spin off HSP in order to get rid of its slow- growth business lines and then turn around and shell out a nice chunk of change for EYE.

[DewDiligence]

Here’s the WSJ take on the ABT-EYE deal. I wonder if ABT
got the idea for the deal from NVS’ partial purchase of Alcon.
After all, Big Pharma has been known to engage in groupthink :- )

http://online.wsj.com/article/SB123176723878473255.html

›Abbott in $1.36 Billion Deal To Buy Advanced Medical Optics

JANUARY 12, 2009, 11:56 A.M. ET
By JON KAMP

Abbott Laboratories agreed to acquire Advanced Medical Optics Inc. for $1.36 billion in a deal that launches Abbott into the eye-health market at a discount but also exposes it to a business that has slumped during the recession.

Abbott will pay $22 a share for Advanced Medical, a big premium to Friday's closing price of $8.85 but also a level where the stock was trading just four months ago.

Shares of Advanced Medical crumbled nearly 90% in September and October [!] as the market for laser-vision correction -- for which the company is the top equipment maker -- was severely damaged by economic pressure. Advanced Medical, which has been restructuring to lower costs, is also still recovering from a contact lens-solution recall in 2007.

But the company also has a big business for treating cataracts, which is an age-related issue and a market fueled by demographics. Overall, Abbott sees Advanced Medical's sales steadily growing in a high-single digits range.

Abbott, which will also assume $1.4 billion in Advanced Medical debt, expects the deal to be neutral to per-share earnings this year and positive next year.

The deal's value "is a fair price for what the acquisition brings to us," said John M. Capek, executive vice president of medical devices at Abbott, in an interview.

Abbott noted that 60% of people over 60 have cataracts and that the number of people with the eye problem is expected to grow nearly 50% in the next decade. The cataract business accounts for half of the revenue at Advanced Medical Optics, and 70% of its cataract sales are overseas.

Analysts asked Abbott executives on Monday about its outlook for the laser-vision, or Lasik market, in which lasers are used to correct vision. The procedures are expensive and paid out-of-pocket, making the Lasik market very vulnerable to economic slump.

But Abbott sees an opportunity for improvement due to Advanced Medical's leading position for Lasik equipment, which includes an increasingly used device that uses lasers rather than a blade to cut a flap in the cornea for surgery.

"Given their broad-base of equipment, they do stand to rebound considerably," Abbott's Mr. Capek said.

Advanced Medical, based in Santa Ana, Calif., has had problems outside of the Lasik market, however, especially in the market for multipurpose contact lens solutions that are used to clean and store lenses. The company pulled its major solution from the market in mid-2007 after health authorities found a link between the solution and a rare but dangerous infection called Acanthamoeba keratitis.

The company quickly reentered the market with an older product and has yet to regain the market share it lost to competitors including Alcon Inc. One question has been when it will roll out a next-generation solution.

Mr. Capek said Abbott sees potential for accelerating Advanced Medical's research and development pipeline. "As part of our due diligence we went through a full portfolio review," Mr. Capek said.

The lens-solution recall came right after Advanced Medical made a play to purchase eye-care rival Bausch & Lomb. The financial hit and stock-drop triggered by the recall made a Bausch deal much tougher to swing, however. Bausch & Lomb is now in private hands.

The major contact lens-makers include Bausch & Lomb, J&J's Vision Care business, Novartis AG's Ciba Vision and Cooper Cos. Major eye-drug makers include Alcon, Bausch & Lomb and Allergan Inc.

Abbott on Monday also reiterated its 2008 earnings target while projecting 2009 earnings, excluding items, of $3.65 to $3.70 a share. The earnings outlook fell within analysts' expectations.‹

[DewDiligence]

ABT Acquires Private Vision-Care Company for $400M

[This is ABT’s first significant acquisition in the vision-care market since the buyout of Advanced Medical Optics (the spin-off from Allergan) in Jan 2009 (#msg-34762429). Presbyopia-correcting IOL’s are a hot growth market, and this acquisition gives ABT something to compete with Alcon’s Restor® product line.]

http://finance.yahoo.com/news/Abbott-to-Acquire-Visiogen-prnews-3500915171.html/print?x=0

›Abbott to Acquire Visiogen, Expanding Vision Care Portfolio

Wednesday September 2, 2009, 4:05 pm EDT

ABBOTT PARK, Ill. and IRVINE, Calif., Sept. 2 /PRNewswire-FirstCall/ -- Abbott (NYSE: ABT ) announced today a definitive agreement to acquire Visiogen, Inc. for $400 million in cash, providing the company with a next-generation accommodating intraocular lens (IOL) technology to address presbyopia for cataract patients.

Visiogen, a privately held company based in Irvine, Calif., with European operations in Karlsruhe, Germany, is an ophthalmic medical device company specializing in the development of new vision alternatives for patients with cataracts.

"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 M. Capek, executive vice president, Medical Devices, 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."

"We are thrilled to join forces with Abbott to bring this much-anticipated technology to market," said Reza Zadno, founder, CEO and president of Visiogen, Inc. "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."

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.

Visiogen's Synchrony accommodating IOL is a significant advancement in artificial lens technology. The unique design of the Synchrony lens is designed to mimic the eye's natural capacity to change focus (accommodation), with the potential to deliver a full range of vision. 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. Synchrony has received CE mark designation and has been available commercially in Europe since January 2009. It also is currently under review by the U.S. Food and Drug Administration (FDA).

"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 vice president, Abbott, and president, Abbott Medical Optics.

Abbott entered the vision care segment following its February 2009 acquisition of Advanced Medical Optics. Abbott Medical Optics offers a range of cataract, refractive and corneal products designed to meet the needs of patients who suffer from a wide range of vision disorders and seek greater freedom from the limitations of eyeglasses.

This transaction is subject to customary closing conditions and regulatory approvals and is expected to close in the fourth quarter of 2009. This transaction does not impact Abbott's previously issued earnings-per-share guidance for 2009.

J.P. Morgan Securities Inc. acted as exclusive financial advisor to Visiogen.

About Visiogen

Visiogen, Inc. is focused on developing innovative products for cataract and refractive patients. Founded in 2001 and located in Irvine, Calif., Visiogen's first commercial application, the Synchrony, a 3-dimensional, dual-optic accommodating intraocular lens and pre-loaded injector, was commercially released in Europe in 2009. The results of the U.S. IDE study, completed in 2009, are currently under review by the U.S. Food and Drug Administration (FDA). More information about Visiogen and the Synchrony accommodating IOL can be found at www.visiogen.com.

About Abbott

Abbott is a global, broad-based health care company devoted to the discovery, development, manufacture and marketing of pharmaceuticals and medical products, including nutritionals, devices and diagnostics. The company employs more than 72,000 people and markets its products in more than 130 countries.‹