Alcon to buy Swiss biotech firm for up to $589 mln

* Alcon to buy ESBATech for $150 mln in cash

* Contingent payments up to a further $439 mln

* Deal closesly follows recent agreement with AstraZeneca

ZURICH, Sept 14 (Reuters) - Eye care company Alcon ACL.N said late on Sunday it had entered into a definitive agreement to buy Swiss biotechnology company ESBATech AG for $150 million in cash.

Alcon, majority owned by Swiss food group Nestle NESN.VX, will also make contingent payments of up to a further $439 million based on the achievement of research and development milestones at the clinical stage biotech company.

“Combining ESBATech’s proprietary antibody fragment technology with our expertise in ophthalmic formulation and capabilities in global development will strengthen Alcon’s leadership position in ophthalmology,” said Alcon chief medical officer Sabri Markabi in a press statement.

Alcon said the agreement to acquire ESBATech includes all rights to the biotech company’s technology for therapeutic application to the eye, and that substantially all the company’s staff would join Alcon when the acquisition is finalised.

Alcon said the deal would expand its research capability beyond small molecules to the fields of proteins, antibodies and other large molecules.

The acquisition follows the recent announcement of an agreement with AstraZeneca AZN.L pairing Alcon's ophthalmic research capabilities with the drugmaker's drug libraries in a collaborative effort to treat eye diseases.[ID:nN21249966]

Last year, Alcon's majority shareholder Nestle sold 25 percent of Alcon for $11 billion in cash to Swiss drugmaker Novartis NOVN.VX, which has an option to buy Nestle's remaining 52 percent stake between January 2010 and July 2011 at a likely price of $181 per share.

Reporting by Martin de Sa’Pinto; editing by Simon Jessop