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Novartis Buys Minority Share in Alcon

TWO-PART DEAL ENABLES NOVARTIS TO BECOME MAJORITY OWNER

Novartis Ag, a Switzerland-based pharmaceutical company that owns CIBA Vision and has an ophthalmic branch, has agreed to purchase a 25% share of Alcon Laboratories for $11 billion. Alcon is the maker of travaprost ophthalmic solution (Travatan) and Opti-Free Replenish contact-lens solution, among other eyecare products. The transaction is expected to be completed in the second half of this year. As part of the agreement, Novartis has the option of buying Nestle's remaining 52% share of Alcon for $28 billion by July 31 of 2011.

The top brass at Nestle, a company known for its chocolate, Poland Spring Water and Lean Cuisine frozen meals, as well as other food products, has been making increasing comments for the past several months that Alcon Laboratories was no longer a strategic part of the company's business.

"When you look at where some of the synergies could lie, this deal makes a lot of sense," says Jeffrey D. Johnson, O.D. and senior medical technology research analyst for Robert W. Baird & Co, a Milwaukee-based investment firm. "Alcon's portfolio of contact lens-care products fits nicely with Novartis' large contact-lens business and could generate some selling synergies for the two products on a combined basis, while Alcon will benefit from Novartis' know-how regarding back-of-the-eye research, especially with regards to age-related macular degeneration given their [Novartis'] experience with Visudyne (verteporfin for injection) and Lucentis (Ranibizumab injection)."

Novartis Chief Executive Officer (CEO) Daniel L. Vasella, M.D., says of the stock purchase, "This acquisition furthers our strategy of accessing high-growth segments of the healthcare market while balancing inherent risks. The strategic fit of Alcon and Novartis is excellent with our complementary product portfolios and R&D [research & development] synergies. Eye care will continue to grow dynamically as there is a growing unmet medical need driven primarily by the world's aging population."

"I believe this deal validates Alcon's leadership position in eyecare, the tremendous record of performance that has led to that leadership and also the future opportunities that exist for the eyecare industry as a whole and for Alcon specifically," says Cary Rayment, Alcon's chairman, president and CEO. "If the next step of the deal occurs, Novartis would bring the resources of a world-class research and development capability that could lead to new and innovative compounds for Alcon to develop and market, as well as additional distribution channels for our products."

As an aside, Novartis sold Nestle its Gerber Baby Food business for $8 billion last year.

Task Force to Examine Quality of Life

FDA ESTABLISHES PANEL TO STUDY LASIK RESULTS

■ Golf phenom Tiger Woods is one of the estimated 95% of LASIK patients who say they're satisfied with the procedure. However, the Food and Drug Administration (FDA) recently expressed concern about the few LASIK patients whose expectations weren't met by the procedure.

In response, the FDA has established the Joint LASIK Study Task Force, which includes participation by the American Society of Cataract and Refractive Surgeons (ASCRS), the National Eye Institute (NEI), and the American Academy of Ophthalmology (AAO). The task force will examine quality-of-life issues, that is, the LASIK patients' postoperative experiences with tasks, such as driving, work, sports and other activities in their daily routine.

Few LASIK studies have addressed quality of life, of which "satisfaction is just one component," says Kerry Solomon, M.D., ASCRS co-chair of the task force and professor of ophthalmology, Medical University of South Carolina. "Even though there are few dissatisfied patients, the more we can learn from that rare occasional patient, the better this procedure can be for everyone."

According to ASCRS, possible study outcomes could include a more "holistic approach" to patient screening and education, including consideration for patients' physical and psychodynamic factors, as well as factors that impact quality of life.

Between 1998 and 2006, the FDA received a total of 140 comments relating to LASIK dissatisfaction, representing less than 1 in 10,000 U.S. LASIK patients. In 2006, the FDA re-evaluated symptoms and satisfaction data and reaffirmed that while the vast majority of LASIK patients were satisfied with their outcomes, a few weren't.

The FDA estimates that about one in four patients who seek LASIK aren't a good candidate. Perhaps 1% or fewer patients suffer from side effects including worsened vision, severe dry eye, glare and the inability to drive at night.

As a preliminary step, the NEI will conduct a pilot study that will assist the FDA and NEI in developing adequate tools to assess the quality of life related to LASIK outcomes.

Gene Therapy Restores Vision in Young Adults

HOPE FOR RETINAL DISEASE PATIENTS

■ Researchers from The University of Pennsylvania have used gene therapy to safely restore vision in three young adults who have Leber congenital amaurosis (LCA). While the patients haven't achieved 20/20 vision, the results suggest further studies of an innovative treatment for this and possibly other retinal diseases.

A team led by The University of Pennsylvania, The Children's Hospital of Philadelphia, the Second University of Naples and the Telethon Institute of Genetics and Medicine (both in Italy) and several other American institutions reported their findings in The New England Journal of Medicine. (For the full study, visit, http://content.nejm.org/cgi/content/full/NEJMoa0802268?resourcetype=HWCIT.)

Albert M. Maguire, M.D., associate professor, Department of Ophthalmology, University of Pennsylvania School of Medicine and a physician at The Children's Hospital of Philadelphia and his wife, Jean Bennett, M.D., Ph.D., professor of Ophthalmology at Penn and senior investigator at the F.M. Kirby Center for Molecular Ophthalmology at Penn's Scheie Eye Institute, have been researching inherited retinal degenerations, such as LCA, for 18 years.

LCA, a rare form of congenital blindness, is a group of inherited blinding diseases that damages the retina's light receptors. It usually begins in early childhood and causes total blindness by a patient's 20s or 30s. Currently no cure exists.

In the study, patients' vision improved from detecting hand movements to reading lines on an eye chart.