One Down: Alcon Laboratories’ Debuts; Employs 580 in OC
By VITA REED
The first of two public debuts of eye-device companies with Orange County ties came last week when Alcon Inc. completed a $2.3 billion initial public offering on the New York Stock Exchange.
Alcon, which employs around 580 people in Irvine, is a unit of Swiss conglomerate Nestle SA. Nestle offered 70 million shares of Fort Worth, Texas-based Alcon at $33 each under the symbol ACL. Nestle still owns 77% of Alcon.
In its first day of trading, Alcon’s stock closed up 3% in heavy trading on a mixed day for Wall Street.
Alcon, in a filing with the Securities and Exchange Commission, bills itself as the largest eye-care company in the world based on sales in 2001.
“We estimate that the worldwide market for ophthalmic products (excluding eyeglasses and contact lenses) is more than $11 billion with growth driven by a variety of factors, including an aging population, advances in medical technology, improved therapies and economic growth in emerging markets,” Alcon said in its filing. “Many ophthalmic conditions, such as glaucoma, cataracts, retinal disorders and dry eye, are strongly correlated with age.”
Last year, Alcon saw sales rise 8% to $2.8 billion, while earnings slipped 5% to $316 million.
Alcon should do well because of several factors, including its ophthalmic market share and a large number of patents, according to David Menlow, president of IPOfinancial.com, an Internet site that tracks new public offerings.
Alcon holds more than 2,250 patents with more than 1,350 others pending, Menlow said.
“It is a testimony to (Alcon’s) innovative theme and the talent that exists in the company” that Alcon can invent items that are patentable, Menlow said. “That’s a big statement,that they will not just squeeze their existing products, but introduce new products and new technology.”
Alcon’s debut precedes the spinoff of Advanced Medical Optics Inc., a surgical-instrument and contact lens-care company, from Irvine-based Allergan Inc. (see accompanying story). The Allergan business that will become Advanced Medical Optics and Alcon compete in ophthalmic device and contact lens-care product categories.
Alcon’s local operations are housed in a 189,200-square-foot leased facility on Alton Parkway in the Irvine Technology Center.
Kenneth Lickel, vice president and general manager, is Alcon’s top OC official. Lickel referred a call for comment to Alcon spokeswoman Mary Dulle, who declined comment in the run-up to Alcon’s stock offering.
Alcon’s OC activities mainly focus on the Accurus and Legacy device lines. Accurus is a surgical system for back-of-the-eye, or vitreoretinal, surgery. Alcon, in its federal filing, said that vitreoretinal surgery products made up $119 million, or 9% of its surgical sales in 2001.
Like Advanced Medical Optics, Alcon is involved in what’s called phacoemulsification for cataract surgery via its Legacy system. Phacoemulsification is used to help remove the natural lens in preparation for an artificial one.
More than half of the phacoemulsification systems installed in the U.S. are Legacy models, “and, during 2001, more than 60% of the cataract procedures performed in the U.S. used a (Legacy) system,” Alcon said in its federal filing.
Besides the Legacy system itself, Alcon’s line of single-use products for cataract surgery includes cassettes used in Legacy procedures, a line of viscoelastics that protect eye tissues during the procedures, surgical knives and surgical irrigation solutions.
While Alcon’s Irvine facility mainly focuses on ophthalmic devices, the company also is involved in the eye drug contact lens-care market, as is Allergan.
In fact, in January Allergan filed a lawsuit in U.S. District Court against Alcon and another rival, Bausch & Lomb Inc., in a bid to stop those competitors from selling generic versions of its Alphagan glaucoma treatment.
Alcon and Bausch & Lomb had applied to the Food and Drug Administration for permission to sell generic forms of Alphagan. Allergan, meanwhile, contends that the applications infringe on its patents for Alphagan.
Alcon’s contact lens-care products include OptiFree.
