Allergan plc, a leading global pharmaceutical company, and Oculeve, a medical device company, have entered into an agreement under which Allergan will acquire Oculeve in an all-cash transaction.
Under the terms of the agreement, Allergan will acquire Oculeve for a $125 million upfront payment and commercialization milestone payments related to Oculeve's lead development programme OD-01. The agreement also includes the acquisition of an additional earlier-stage dry eye device development programme. Allergan's 2015 earnings-per-share forecast provided on May 11, 2015 is unchanged as a result of the acquisition. The company remains committed to de-levering to below 3.5x debt to Adjusted EBITDA by the end of the first quarter of 2016.
The acquisition of Oculeve adds novel, complementary dry eye development programmes to Allergan's current eye care research and development programmes, including OD-01, a non-invasive nasal neurostimulation device that increases tear production in patients with dry eye disease. Oculeve has completed four clinical studies of OD-01 to date in more than 200 patients, showing positive safety and efficacy of the device. Allergan plans to conduct two additional pivotal trials prior to FDA submission, which is expected in 2016 with potential commercial launch in 2017.
"Allergan is committed to developing a broad range of innovations that help patients address dry eye," said David Nicholson, executive vice president, global brands research and development at Allergan. "The OD-01 programme has been shown to provide a strong safety and efficacy profile, and if approved, would provide an exciting new treatment option for patients that is complementary to our existing product offerings in this important treatment area."
"Allergan's position and expertise in eye care will maximize the development and potential commercialization of the OD-01 technology," said Michael Ackermann, president and CEO of Oculeve. "I am extraordinarily appreciative and proud of the Oculeve team that has worked so hard to develop our exciting technology, and I am thrilled for us to partner with the Allergan team on the continued development, potential approval and availability of OD-01 to patients worldwide."
Chronic dry eye is a disease that can be caused by advanced age, contact lens wear, certain medications, eye diseases, other medical conditions or environmental factors. One type of chronic dry eye is caused by decreased tear production due to inflammation. Without enough tears, the film protecting the eye can break down, creating dry spots on the cornea. Chronic dry eye is estimated to affect 25 million patients in the US.
The transaction is subject to the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Pending approvals, Allergan anticipates closing the transaction in the third quarter of 2015.
Allergan plc, headquartered in Dublin, Ireland, is a unique, global pharmaceutical company and a leader in a new industry model - Growth Pharma. Allergan is focused on developing, manufacturing and commercializing innovative branded pharmaceuticals, high-quality generic and over-the-counter medicines and biologic products for patients around the world.
Oculeve, Inc. is a medical device company located in South San Francisco, CA, focused on new technologies for dry eye disease.