Abbott to Buy Eye Laser, Stent Companies for $560 MillionMichelle Fay Cortez
Abbott Laboratories agreed to buy two closely held companies, Idev Technologies and OptiMedica Corp., for about $560 million to expand its device offerings for treating blood vessel and eye diseases.
Abbott, the medical device and nutritional products maker that split off its drug unit on Jan. 1, will pay $310 million for Idev, gaining a stent to treat blockages in leg arteries, the Abbott Park, Illinois-based company said in a statement. OptiMedica agreed to be acquired for $250 million, plus $150 million for reaching certain development and sales targets, in a deal that will give Abbott a laser system for cataract surgery.
The acquisitions allow Abbott to expand in two of the fastest growing areas for medical device makers, as demand and prices for established technologies like heart stents continue to lag. The $500 million market for peripheral artery disease, a blockage in the leg arteries that affects about 27 million people in the U.S. and Europe, is fueled by rising obesity and diabetes rates. The aging population will continue to drive the need for surgery to treat cataracts, a clouding in the eyes.
“These technologies are leading edge and are going to add nicely to our existing vascular and ophthalmology businesses,” John Capek, executive vice president of medical devices for Abbott, said in a telephone interview.
The company plans to build on the new products, “allowing these technologies to be available to broader patient populations,” he said.
Abbott plans to close on the acquisitions of Webster, Texas-based Idev and OptiMedica, based in Sunnyvale, California, by the end of the year. They will have no impact on the 2013 earnings per share forecast, the company said.
Abbott rose less than 1 percent to $35.48 at the close of trading. The shares have risen 13 percent since Jan. 1, when the company split.
Idev’s Supera Veritas stent is under U.S. Food and Drug Administration review for treating blockages in the main artery in the leg and is currently available to treat a narrowing of the bile duct in cancer patients. The device, which is made with a woven wire technology designed to mimic the body’s natural movement, is already approved in Europe for use in the legs.
Abbott has completed enrollment for its first-in-man study of the Absorb scaffold, a dissolving stent, for use in the legs, Capek said. The company will have the results by the end of the year and will decide then whether to start the research needed for FDA approval.
The $4 billion cataract market is comprised mostly of the intraocular lens business, making up about $2.3 billion of the total, Capek said. In many cases, hospitals use lenses from the company that supplies the surgical products, he said.
Only about 20 percent of cataract surgeries are done via laser in the U.S. now, with surgeons making the incisions in the eye manually during most of the 22 million operations performed worldwide each year. The number of laser surgeries are growing rapidly because of the precision and control offered by the technology, he said.
Abbott’s sales of intraocular lenses and supplies for cataract surgery is about $600 million annually, he said.
“It’s the fastest growing and most profitable part of our vision care business,” he said. “This acquisition will augment and supplement what we have.”
After the Jan. 1 split, Abbott retained the original company’s medical devices, nutritional products, diagnostic tests and generic drugs. AbbVie Inc., based in North Chicago, Illinois, retained the brand name drugs, including the best-selling Humira for rheumatoid arthritis.