MAJOR ACQUISITION

Bausch+Lomb (B+L), the 160-yearold giant of eye care is now part of Valeant Pharmaceuticals International Inc, a publicly traded multinational company that specialises in dermatology, eye health, neurology and branded generics. Completed in early August, the cash transaction totalled $8.7bn, or about €6.4bn at current exchange rates. Cashing in on the brand cachet of its latest addition, Valeant will integrate its existing ophthalmology businesses into a newly established B+L division. With 2013 projected pro forma net revenue of more than $5.7bn, or about €4.19bn, the unit will nearly double Valeant’s annual sales, which totalled $1.5bn, or about €1.11bn, in the third quarter of 2013.

That quarterly figure represents a 74 per cent increase from the same period in 2012. Organic sales growth accounted for four per cent of the increase in developed markets and 14 per cent in emerging markets. Reflecting Valeant’s aggressive acquisition strategy, revenues from newly acquired products contributed the rest, according to the firm’s financial filings. As with many acquisitions, Valeant hopes to increase its returns by reducing overhead at B+L, including a 10 per cent to 15 per cent reduction in staffing. Moves to achieve this include transferring B+L’s historic headquarters in Rochester, New York, to consolidated division offices in New Jersey.

Integrating distribution

Valeant also hopes to halve B+L’s operating expenses, which reportedly reached 40 per cent in recent years, according to published accounts. This may be done by integrating distribution with other Valeant products and renegotiating distribution agreements. The firm also hopes to leverage B+L’s established presence in emerging markets, particularly the Far East, to promote its other products, including its oral care and aesthetic skincare and topical acne franchises, which have seen strong sales growth in recent quarters.

So far, financiers have embraced Valeant’s growth and consolidation strategy. From announcement of the B+L acquisition in May through early October, Valeant’s stock price jumped from about $75 to more than $110, continuing an upward trend dating from late 2008, when the price dipped below $10. Analysts have pegged the stock’s target price as high as $115 to $130 in recent weeks, following second quarter earnings of $1.30 per share, which beat the consensus estimate by $0.08.

One thing the merger won’t alter is B+L’s historic focus on cutting-edge ophthalmic products, promises Calvin Roberts MD, Valeant’s chief medical officer for ophthalmology and eye health. “Valeant shares Bausch+Lomb’s commitment to providing exceptional service to customers and patients, and it is strongly committed to building a sustainable eye health business.”

Valeant plans to rapidly expand B+L’s global presence with new or added products in several categories, Dr Roberts says. “These next few months will be exciting both for Bausch+Lomb and for doctors as we launch PureVision 2 for presbyopia contact lenses in Europe and Asia, and xpand Biotrue ONE Day contact lenses to Russia and France. In the Asia Pacific region, we recently launched Biotrue Multipurpose Solution in Taiwan, Naturelle contact lenses in Singapore, and Ocuvite 50+, PreserVision and PreserVision with Lutein in Australia.”

Cataract and cataract refractive surgeons can look forward to advanced intraocular lenses from Valeant, according to Dr Roberts. “We continue to grow our IOL global business with enVista and enVista Toric, our PhysIOL line of IOLs, plus Trulign, our newest toric IOL.” Retinal surgeons around the world will soon have an integrated laser in Stellaris PC, along with new valved cannulas, he adds.

Valeant is also committed to B+L’s pharmaceutical development programme, Dr Roberts says. “Building the pipeline, which already includes a novel glaucoma drug and a first in category antiinflammatory drug, is a high priority. In July, we acquired an option to secure an exclusive global license for an investigational compound currently in Phase 2 development for the treatment of dry eye syndrome.”

The dry eye compound, called MIMD3 and developed by Mimetogen, has the potential to be the first in a new class of agents called TrkA agonists. Currently available dry eye therapies work to increase tear production, but do not address tear quality. MIM-D3 stimulates the production of mucins, which are essential for ocular lubrication as well as removal of allergens, pathogens and debris, and corneal epithelial healing. MIM-D3 may also improve neural function, which may improve corneal sensitivity and integrity. A Phase 3 trial is slated for late this year.

Valeant also will strengthen B+L’s close relationships with surgeons, Dr Roberts predicts. “We will continue to listen and value the input from our doctors as we continue to strive to improve eye health all over the world.”