Abbott Medical Optics Inc. in Santa Ana will pump out a steady stream of new products this year in a show of research-and-development prowess that reflects the financial might of its parent.
“This year alone, [we’ll] introduce eight new products—these are eight new developments,” said James Mazzo, Abbott Medical’s president. “I don’t remember eight new products ever coming out in one year in AMO’s history.”
Abbott Medical competes with New York-based Bausch & Lomb Inc., among others.
It can focus on organic growth “because of the power and the financial acumen and the support of” parent Abbott Laboratories Inc., which has annual sales of $38.9 billion and a recent market value of about $95 billion.
“We’ve been able to increase the output of our R&D organically,” Mazzo said, adding that, “I had to do a lot more acquisitions” during Abbott Medical’s seven-year stint as an independent company called Advanced Medical Optics Inc.
Less Dependence
Abbott Medical’s in-house pipeline has lessened its dependence on such deals, although it will still look for potential acquisitions, said Mazzo, who also is an executive vice president of the Abbott Park, Ill.-based parent company.
“Our whole reason for being hasn’t changed from day one—it is to continuously (bring) new products through organic and business development,” Mazzo said. “When you have a parent like [Abbott Laboratories], you want to make sure you fulfill your promise.”
Abbott Medical sells devices and products used in cataract surgery, laser eye surgery and contact lens care. It was known as Advanced Medical Optics until 2009, when Abbott Laboratories paid $2.8 billion for the company as its entree into the ophthalmic market.
Abbott Medical accounted for $1.1 billion in sales last year, up 5% from 2010. A majority of that growth came from international sales, which jumped 9%, offsetting a 3% decline in domestic revenue.
Most of the new products expected to hit the market this year will be introduced overseas, with a group of replacement lenses front and center. One will be a new entry from its Tecnis product line—a toric multifocal lens, which corrects astigmatism. The multifocal lens will be introduced in Europe, with Food and Drug Administration approval for sales in the U.S. pending.
The combination toric and multifocal lens would open up a large market—some 30% of the world’s population has some sort of astigmatism, according to Dave Harmon, president of Market Scope LLC, a St. Louis-based ophthalmology industry research firm.
But “you can’t really put (in) a multifocal accommodating [intraocular lens] unless you solve the astigmatism,” Harmon said.
Abbott Medical plans to market another Tecnis lens in a preloaded injector. Sales are set for Europe and Canada, with expected U.S. introduction in 2013.
A low-cost lens called Sensar-1—a one-piece intraocular lens aimed at India and other developing markets—also is on tap.
“We’re really now learning to … start to design products by certain geographies,” Mazzo said.
Abbott Medical has seen strong growth in China, India and other emerging markets. The company has tripled the size of its sales force in those countries, he said, and plans to make a push in Brazil and other Latin American countries this year.
Abbott Medical plans to introduce an add-on for the laser eye surgery market. It will complement its current femtosecond lasers, which now are mainly used in vision-correction surgeries. The new product will allow doctors to perform laser-assisted cataract removal surgery.
An add-on approach could be appealing to doctors, Harmon said. He noted that current lasers for cataract surgery are pricey, averaging around $400,000. Doctors have “to be really careful with the economics” because they can only charge certain rates for cataract surgeries under Medicare, he said.
Also scheduled in the laser market is iDesign, an eye diagnostic device that will be introduced in Europe and Japan.
Abbott Medical also plans to introduce what Mazzo calls a “dispersive viscoelastic” called Healon EndoCoat in the U.S. this year. Doctors use viscoelastics to protect the eye during cataract surgery.
The company has other products in the pipeline.
One is a second generation of Synchrony, a much-touted premium intraocular cataract replacement lens that Abbott Medical got through a 2009 purchase of Irvine startup Visiogen Inc. Synchrony is sold outside the U.S., and the second generation is going to be introduced overseas later this year.
FDA Meetings
Abbott Medical has held “productive meetings” with the FDA concerning Synchrony, Mazzo said. He said the company is continuing to work toward U.S. approval.
No change is expected in the relationship with the parent company, which plans to spin off its branded drug business later this year to create a separate public company called AbbVie.
“The greatest thing is that there has been no change, meaning Abbott still has been a tremendous support,” Mazzo said. “I think the (Abbott) culture has been ingrained now.”
Abbott Medical’s predecessor, Advanced Medical, itself grew out of a split nearly from Irvine-based drug maker Allergan Inc. nearly 10 years ago.
