Abbott to buy cataract laser, leg stent businesses
(Reuters) - Abbott Inc said on Monday that it would enter the laser cataract surgery business by buying privately held OptiMedica Corp for up to $400 million and in a separate deal would pay $310 million for stent maker Idev Technologies.
The deals follow Abbott's spinout earlier this year of its branded prescription business into a separate company, AbbVie Inc. Abbott now focuses on medical devices, nutritional products and generic medicines.
Doctors perform most cataract surgeries by hand, but OptiMedica's Catalys laser system would allow them to replace some of the manual steps with its computer-guided technology.
The suburban Chicago company said it would pay $250 million for OptiMedica, net of cash, and make additional payments of up to $150 million upon completion of certain development, regulatory or sales milestones.
The Catalys system is approved for use in the United States and Europe in procedures that remove the crystalline lens, a part of the eye that can become clouded and impair vision.
Abbott said the laser could make a more precise incision, often in a perfectly circular shape, and then help break up the damaged lens - which is removed and replaced with an artificial one.
It will compete with cataract laser products made by Bausch & Lomb and by Alcon, a division of Novartis AG. Abbott earlier this year had been rumored as a potential bidder for Bausch & Lomb, an eye products company that in May agreed to be purchased by Canada's Valeant Pharmaceuticals International Inc.
Abbott said an estimated 22 million cataract surgeries would be performed globally this year. Abbott already sells other products involved in cataract surgery and care, including lenses used to replace the removed natural lens.
Its cataract products now generate annual sales of more than $600 million, reflecting growth over the past year in the high-single-digit percentage range.
The Catalys laser product could generate annual sales of "several hundred million dollars" within five years, John Capek, head of Abbott's medical device division, said in an interview.
Laser procedures are involved in about 20 percent of cataract surgeries, and that could rise to 70 percent over the next three to four years, he added.
In a separate announcement, Abbott said it would pay $310 million net of cash and debt for all outstanding equity of Idev and its Supera Veritas nitinol stent system. The product is approved in Europe to treat potentially dangerous blockages of major blood vessels of the leg due to peripheral artery disease.
Supera Veritas is only approved in the United States for treatment of narrowed bile ducts, related to cancer, but is awaiting approval for clots in the main artery of the thigh. If approved for that condition, Capek said the product would probably generate annual sales of "a few hundred million" dollars within three or four years.
Abbott expects the two deals to close before the end of the year, with no effect on its full-year 2013 results.
"We believe the transactions broaden Abbott's (product) offering and enhance its competitive position in vascular and vision care," Wells Fargo analyst Larry Biegelsen said in a research note.
Shares of Abbott were up 4 cents at $35.36 in midday trading on the New York Stock Exchange.
(Reporting by Ransdell Pierson; Editing by Gerald E. McCormick and Lisa Von Ahn)