Ivantis Inc., the maker of one of the smallest medical devices in the world, is getting acquired at a big price.
Alcon Inc., the world’s largest eye care device company, announced Nov. 8 it plans to acquire the Irvine-based ophthalmologic device maker for an initial $475 million.
“Alcon has the ultimate commercial footprint of all eye care companies,” Ivantis Chief Executive Dave Van Meter told the Business Journal. “We get so excited thinking about the impact our technology can have when Alcon takes it to all the corners of the world.”
The transaction will expand Ivantis’ global footprint for sales from six countries to 140, Van Meter said.
Geneva-based Alcon, founded in 1945, sports a nearly $43 billion market cap (SWX/NYSE: ALC). It employs more than 23,000, including roughly 1,000 of whom work in its Irvine and Lake Forest locations.
Its OC facilities are used to make a variety of eye-related surgical equipment, including products used for cataract lens removal.
Ivantis, founded in 2007, counts some 200 workers in OC. As of last year, it had reported raising about $134 million in private funds since its inception.
Ophthalmologic Epicenter
Ivantis is the developer and manufacturer of the Hydrus Microstent, a minimally invasive glaucoma surgery (MIGS) device that is roughly the size of an eyelash.
It’s designed to lower intraocular pressure for glaucoma patients in connection with cataract surgery.
Glaucoma is the second-leading cause of blindness that affects an estimated 75 million people worldwide.
Van Meter has been with Ivantis since its inception, and was instrumental in bringing the then Minneapolis-based startup to Orange County.
“My main contribution was hiring the smart people and staying out of their way,” he said. “We knew we wanted to be in Orange County. That’s where you want to be if you’re an eye care company.”
He said the Hydrus Microstent is the most researched MIGS device. Its clinical study showed 65% of recipients no longer had to use daily eye drops to control pressure five years post-implant, he said.
Over 85,000 patients have received the Hydrus since it received FDA clearance in 2018. It reported $26 million of sales in 2019, its first year after getting regulatory approval.
Glaukos Competition
Ivantis’ main competitor for its MIGS product is another OC-based device maker, San Clemente’s Glaukos Corp. (NYSE: GKOS). Glaukos, maker of the iStent device and other products, reported about $221 million in sales for the first nine months of 2021.
Ivantis in September settled a patent dispute with Glaukos. It agreed to pay the San Clemente company $60 million in two installments before the end of 2022, as well as a 10% ongoing royalty every time a Hydrus Microstent is sold domestically or internationally through 2025.
Alcon had its own competing MIGS product three years ago, the CyPass Micro-Stent, but recalled it, citing “uncompromising commitment to patient safety.”
The recall came after researchers detected a dramatic rise in endothelial cell loss among patients who received the CyPass Micro-Stent during cataract surgery five years prior.
Glaukos’ stock surged after the 2018 recall of the competing Alcon device, and the company has been among OC’s dozen or so most valuable public companies since then. It is currently valued around $2.5 billion.
The Ivantis buy puts the Swiss eye care giant back in the MIGS stent business. The Hydrus device is already often used in conjunction with other Alcon products in cataract surgery.
This transaction “will allow us to add a uniquely effective product into our glaucoma portfolio around the world,” Alcon CEO David Endicott said in a statement. “Our global commercial footprint and development capabilities make us well positioned to build on the success of Ivantis and help even more patients see brilliantly with Hydrus Microstent.”
Fast Grower
Prior to the pandemic, Ivantis was one of the fastest-growing private medical device companies of the past 20 years, Meter said.
This year, the company rebounded with year-over-year sales growth of 90%, said Van Meter, who declined to reveal its most recent annual sales.
Lawsuit issues remain.
In September, ophthalmologic device company Sight Sciences Inc. of Menlo Park (Nasdaq: SGHT) said it filed its own lawsuit in a Delaware federal court against Ivantis, claiming infringement on four patents.
Sight Sciences, which has a $1.3 billion market cap, is seeking an injunction to prevent the manufacture, use and sale of the Hydrus Microstent, along with monetary damages for past infringement.
‘Uniquely Effective’
Ivantis and Alcon will continue to operate as separate companies until the transaction closes in the first quarter of 2022.
Alcon may be required to make additional contingent payments to Ivantis upon the achievement of certain regulatory and commercial milestones.
“Thanks to the relentless, unwavering commitment of Ivantis employees and our investors, we now have the opportunity to bring the clinically proven Hydrus technology to more glaucoma patients worldwide,” Van Meter said.
