Alcon is acquiring Aerie Pharma for $770 million, the third deal in the past two years that brings commercialized glaucoma products to the eyecare giant’s portfolio.

According to financial terms announced Monday night, Geneva, Switzerland-based Alcon will pay $15.25 for each share of Aerie, a 37% premium to the stock’s closing price on Monday. Aerie went public in 2013 at $10 per share. Its stock price peaked at more than $73 in 2018, buoyed by sales expectations for its glaucoma drugs. However, the company’s share price has mostly moved downward in the years since.

Glaucoma is an eye disorder in which fluid buildup leads to an increase in intraocular pressure, which damages the optic nerve. That damage leads to vision loss and eventually, blindness. The damage can’t be reversed but drugs are used to slow the disease’s progression and prevent vision loss. Standard glaucoma treatment includes prostaglandins, an older class of medicines that increase fluid outflow, reducing eye pressure.

Aerie, a Durham, North Carolina-based company that spun out of Duke University in 2005, address glaucoma in a different way. The company’s drugs target the trabecular meshwork, which is the primary fluid drain for the eye. Netarsudil, the active ingredient in Aerie drug Rhopressa, is a small molecule designed to increase fluid outflow from this drain. Physicians typically prescribe this Aerie drug alongside either prostaglandins or non-prostaglandin analog drugs with the goal of achieving greater reductions in eye pressure.

Rhopressa, launched in 2018, is a once-daily eye drop. Aerie’s second commercialized product, another eye drop marketed as Rocklatan, launched in 2019. It pairs Rhopressa’s active ingredient with latanoprost, a prostaglandin analog drug. Rhopressa and Rocklatan accounted for $112.1 million in revenue in 2021, a nearly 35% increase compared to the prior year. Aerie projects that its glaucoma drugs will reach $130 million to $140 million in sales in 2022.

The Aerie pipeline also includes AR-15512, which is in development for dry eye disease. The active ingredient in this drug candidate is designed to activate an ion channel that regulates tear production and blink rate. The company says this approach may also reduce eye discomfort by promoting a cooling sensation. AR-15512 is currently in Phase 3 testing. Programs in earlier stages of development span retinal diseases and ocular inflammation. With the acquisition by Alcon, Aerie is set to join a global eyecare company with greater resources to market its glaucoma drugs and develop the candidates in its pipeline.

“We have a 75-year history focused specifically on the eye and bring established expertise in development and commercial execution, Alcon CEO David Endicott said in a prepared statement. “Aerie is a natural fit with on-market and pipeline products, and R&D capabilities that offer the infrastructure needed to expand our ophthalmic pharmaceutical presence.”

Alcon, the former eyecare division of Novartis, spun out as an independent company in 2019. It divides its operations into two segments, surgical and vision care. Surgical accounted for $4.7 billion in revenue last year while vision care, which includes products for treating glaucoma and other eye conditions, brought in $3.5 billion in sales. Recent Alcon acquisitions have focused on adding new eye drop products.

Alcon paid $355 million last year to acquire from Novartis the U.S. rights to Simbrinza, an eye drop approved by the FDA in 2013 for treating glaucoma. That drug brings yet another approach to glaucoma by reducing the amount of fluid produced by the eye. In May, Alcon agreed to buy Eysuvis, a Kala Pharmaceuticals corticosteroid approved by the FDA last year for treating dry eye disease. Alcon is paying $60 million up front for that eye drop. Glaucoma is now also part of the company’s surgical segment. Early this year, Alcon completed the $475 million buyout of Ivantis, a company that has commercialized the Hydrus microstent, a device implanted to reduce eye pressure and treat mild-to-moderate glaucoma.

The boards of directors of both Alcon and Aerie have approved the acquisition. It still needs Aerie shareholder approval and the customary regulatory clearances. The companies expected to complete the transaction in the fourth quarter of this year.

Photo by Flickr user Rakesh Rocky via a Creative Commons license