It’s Alcon acquisition of Aerie Pharma for $770 million, the third deal in the past two years to bring commercialized glaucoma products to the eye care giant’s portfolio.
According to financial terms announced Monday night, Geneva, Switzerland-based Alcon will pay $15.25 for each Aerie share, a 37 percent premium to the stock’s closing price Monday. Airy became public domain in 2013 at $10 per share. Its share price peaked above $73 in 2018, buoyed by expectations for sales of its glaucoma drugs. However, the company’s stock price has mostly moved downward in the years since.
Glaucoma is an eye disease in which the accumulation of fluid leads to increased intraocular pressure, which damages the optic nerve. This damage leads to vision loss and eventually blindness. The damage cannot be reversed, but drugs are used to slow the progression of the disease and prevent vision loss. Standard treatment for glaucoma involves prostaglandins, an older class of drugs that increase fluid outflow, reducing eye pressure.
Aerie, a Durham, North Carolina-based company that spun out of Duke University in 2005, is tackling glaucoma differently. The company’s drugs target the trabecular meshwork, which is the primary fluid drainage for the eye. Netarsudil, the active ingredient in the drug Aerie Rhopressa, is a small molecule designed to increase the outflow of fluid from this drain. Doctors usually prescribe this drug Aerie together with prostaglandins or non-prostaglandin analogues in order to achieve a greater reduction in eye pressure.
Rhopressa, launched in 2018, is a once-daily eye drop. Aerie’s second commercialized product, another eye drop marketed as Rocklatan, launched in 2019. It combines Rhopressa’s active ingredient with latanoprost, a prostaglandin analog. Rhopressa and Rocklatan reported $112.1 million in revenue in 2021, a nearly 35% year-over-year increase. Aerie predicts that its glaucoma drugs will reach $130 million to $140 million in sales in 2022.
Aerie’s pipeline also includes AR-15512, which is in development for dry eye disease. The active ingredient in this drug candidate is designed to activate an ion channel that regulates tear production and blink rate. The company says this approach can also reduce eye discomfort by promoting a cooling sensation. AR-15512 is currently in Phase 3 testing. Programs in earlier stages of development cover retinal diseases and ocular inflammation. With the acquisition by Alcon, Aerie is poised to join a global eye care company with greater resources to market its glaucoma drugs and develop its pipeline candidates.
“We have a 75-year history focused specifically on the eye and offer a proven track record in development and commercial execution,” Alcon CEO David Endicott said in a prepared statement. “Aerie is a natural fit with products on the market and in development, as well as research and development capabilities, that offer the necessary infrastructure to expand our ophthalmic pharmaceutical presence.”
Alcon, the former eye care division of Novartis, went outside as an independent company in 2019. It divides its operations into two segments, surgery and vision care. Surgery reported $4.7 billion in revenue last year, while vision care, which includes products to treat glaucoma and other eye conditions, brought in $3.5 billion in sales. Alcon’s recent acquisitions have focused on adding new eye drop products.
Alcon paid $355 million last year to acquired by Novartis US rights to Simbrinza, an eye drop approved by the FDA in 2013 for the treatment of glaucoma. This drug brings another approach to glaucoma by reducing the amount of fluid produced by the eye. In May, Alcon agreed buy Eysuvis, Kala Pharmaceuticals’ corticosteroid, was approved by the FDA last year to treat dry eye disease. Alcon is paying $60 million up front for this eye drop. Glaucoma is now also part of the company’s surgical segment. Earlier this year, Alcon graduated Buyout of Ivantis for $475 milliona company that commercializes the Hydrus microstent, a device implanted to reduce eye pressure and treat mild to moderate glaucoma.
The boards of directors of Alcon and Aerie have approved the acquisition. It still needs the approval of Aerie’s shareholders and customary regulatory clearances. The companies expected to close the deal in the fourth quarter of this year.