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Device Maker’s OC Operation Stays Intact After Buy

Aliso Viejo-based eye device maker WaveTec Vision Systems Inc.’s operations are expected to remain largely intact as it begins a new chapter in its corporate life.

Diversified eye health company Alcon Inc., a Fort Worth, Texas-based unit of Novartis AG, said late last month that it was acquiring WaveTec. A purchase price wasn’t disclosed.

The acquisition is part of Alcon’s mission of “seeking new ways to address the needs of cataract patients, particularly those who live with astigmatism and presbyopia,” said Jeff George, Alcon’s global head.

WaveTec will continue to “have a fairly significant presence,” said Tom Frinzi, the company’s president and chief executive.

He said he expects Alcon, which already employs about 800 people in Orange County, to keep WaveTec and its 70 or so workers as a separate part of its local base for the near-term.

“When Alcon made this acquisition, it was not just for the technology—it was for the talent [too],” Frinzi said. He said in an earlier Business Journal interview that big companies that dominate eye surgery devices, including Alcon, were “potentially strategic acquirers … it’s very complementary to their cataract portfolio.”

The deal, expected to close this year after antitrust and other reviews, would bring WaveTec’s “very positive nimbleness and talent” together with the “deep resources of Alcon Surgical,” Frinzi said.

WaveTec and Alcon work in a relatively large segment of the eye market—cataracts are a major cause of treatable blindness, affecting more than 240 million people around the world, and are widespread in those 55 and older, according to Alcon.

WaveTec makes ORA, a device used in surgeries that replace cataracts with intraocular lenses. ORA helps the surgeon diagnose the cataract and astigmatism and can be mounted directly on a surgical microscope.

ORA “provides intraoperative measurements which are not available with current pre-operative technologies,” George said.

Alcon said in a news release that ORA complements its Verion, a preoperative diagnostic device for cataracts. It added that it would incorporate ORA into its existing “armamentarium” for refractive cataract surgeries, including Verion; Centurion, a device used to help remove a patient’s existing natural lens in preparation for a replacement one; the Luxor LX3 microscope; and the LenSx femtosecond laser.

Alcon got LenSx through a $362 million buy of Aliso Viejo-based LenSx Lasers Inc. in 2010.

LenSx and WaveTec have some commonalities, including their Aliso Viejo bases and an investor in Menlo Park-based Versant Venture Management LLC, which has a Newport Beach office.

WaveTec raised well more than $60 million in venture capital backing in its time as an independent company, including a recent round of $2.9 million from an undisclosed venture investor.

It started in 1997 and existed on angel funding until Versant made its initial investment in the company in 2005.

Versant invested in WaveTec after it learned wave-front analysis technology—WaveTec’s core technology—could be used in eye surgeries.

“The distinctive element of the WaveTec opportunity, in our opinion, is the clinical impact we believe it can have,” said Charles Warden, a Versant managing director, in a 2011 Business Journal interview.

WaveTec has sold ORA in the U.S. since about 2009 and also sells in Europe.

The company doesn’t disclose its revenue.

Alcon has annual revenue of $10.4 billion and competes with a number of eye health companies that are either based in OC or have large operations here, such as Irvine-based drug maker Allergan Inc. and Abbott Medical Optics, a Santa Ana business unit of Chicago’s Abbott Laboratories.

Frinzi indicated that Alcon wanted WaveTec’s management team to remain with the company after it’s integrated into Alcon.

WaveTec made itself known to potential buyers, according to Frinzi.

“I’ve been in this business nearly 30 years. Over the course of my career, I’ve gotten to know a lot of the strategic players in our space,” said Frinzi, whose most recent stop was vice president of commercial operations at Bausch & Lomb Surgical, now part of Canadian drug maker Valeant Pharmaceuticals International Inc., which is attempting a hostile takeover of Allergan.

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