James Mazzo says he now has resources he only could have dreamed of a year ago.
As head of what used to be Santa Ana-based eye device and contact lens solution maker Advanced Medical Optics Inc., Mazzo said he’s seen a lot more research and development spending and some hiring since becoming part of Abbott Laboratories.
In early 2009 Abbott, based in the Chicago area, paid $2.8 billion for Advanced Medical Optics, which now goes by Abbott Medical Optics Inc.
“If we feel we need to invest in something for a period of time that would have longer-term opportunities, I’m able to do that through the Abbott umbrella,” Mazzo said. “Before we were so scrutinized on every penny of earnings. It would have been more difficult to do.”
Abbott, a maker of drugs, diagnostic products and medical devices, bought Advanced Medical to get into the $22 billion yearly market for devices that treat cataracts and blurry vision.
The move left much of Advanced Medical—including former chief executive Mazzo—intact. He’s now president of Abbott Medical Optics and an Abbott senior vice president.
“I still run AMO with the direct reports I had prior to” the deal, Mazzo said. “Obviously, now I report to somebody rather than reporting to a board of directors.”
Mazzo now reports to John Capek, executive vice president of medical devices for Abbott.
“I’ve turned my focus more toward Chicago” than Wall Street, Mazzo said.
Abbott Medical has about 590 workers, up from 530 in August and down from 625 before the acquisition, when duplicate positions were cut.
The deal has paid off from a revenue standpoint. In the fourth quarter, Abbott Medical’s revenue was $317 million, up 12% from the fourth quarter of 2008, one of its last as a stand-alone company.
For all of 2009, Abbott Medical’s sales came in at $890 million, or about 3% of Abbott’s $30 billion in yearly sales.
Abbott doesn’t break out profit for Abbott Medical. Mazzo said the business is getting stronger through more sales, as well as being rid of costs related to being public, such as compliance with the Sarbanes-Oxley Act of 2002.
In 2010, Abbott projects sales of more than $1 billion for Abbott Medical, said John Thomas, the company’s director of investor relations, on a recent conference call with analysts and investors.
Being part of Abbott brings its own pressure, according to Mazzo.
“I still feel, and my team still feels, we have a shareholder responsibility,” he said. “That shareholder is the Abbott shareholder. Abbott invested $3 billion in this organization. Obviously, if we don’t perform, it will have an impact on Abbott.”
Mazzo said he is spending more time building up research and development as well as “corporate development,” including scouting for potential deals.
Late last year, Abbott paid $400 million for Irvine startup Visiogen Inc., a maker of replacement lenses for cataract patients that now falls under Mazzo.
Mazzo said he had concerns about being part of a big company that haven’t been realized.
“Abbott is a very fluid organization that knows how to move quickly and not let its size slow it down,” he said.
Abbott Medical has some things on its plate. It’s continuing to develop the Synchrony accommodating intraocular replacement lens for cataract patients it acquired from Visiogen.
The Food and Drug Administration could sign off on Synchrony next year, “based on the likely timing of panel review in the second half of this year,” Abbott’s Thomas said.
Down the road, Mazzo said Abbott Medical’s being part of Abbott would allow it to diversify by developing products to treat diabetic retinopathy, a disease that can cause blindness and is linked to diabetes. Abbott is one of the larger players in diabetes treatments.
One thing being part of Abbott hasn’t done is bring a lot of new customers to the business, Mazzo said.
“Just because I put Abbott on the business cards of our reps, do the doctors all of a sudden switch? No,” he said.
Abbott Medical still has to sell doctors on the merit and effectiveness of its devices, he said, despite Abbott’s larger sales force.
Mazzo’s role as one of the county’s most visible executives continues.
He recently served as master of ceremonies at the Newport Beach-based Forum for Corporate Directors’ yearly awards dinner and still serves on several boards, such as those of Chapman University, the University of San Diego and Octane, a technology booster group based in Aliso Viejo.
Mazzo also heads the UCI Foundation and works with the University of California, Irvine’s Gavin Herbert Eye Institute.
“I think I’m even more” visible, Mazzo said. “Sometimes, my wife (Kelly) looks at me like I have two heads.”
He said he can’t say no to some causes, particularly education.
“I love education. It was something that is built and ingrained in me, especially when I lived overseas,” Mazzo said.
During 22 years with Irvine drug maker Allergan Inc., Mazzo did stints in England and Canada.
The now Abbott Medical is on its third stint being part of a larger company. It got its start as part of American Hospital Supply Corp., now part of Baxter International Inc. American Hospital sold the business to Allergan in 1986.
Allergan spun off the business as Advanced Medical Optics Inc. in 2002.
