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AMO seals IntraLase purchase, aims to boost patients' confidence
Banking on LASIK procedures increasing, company has invested $2.3 billion in laser vision correction technology in the past 2 years.
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Advanced Medical Optics recently completed the acquisition of IntraLase Corp., its third major purchase in the corneal refractive surgery market in the past 2 years.
IntraLase stockholders approved the purchase March 30 and closed April 2, in keeping with AMO's original timetable for completing the transaction early in the second quarter. Under terms of the agreement, AMO paid IntraLase $25 cash per share for a total of $808 million.
"Shareholder approval was expected," Ron Bache, global vice president of corneal refractive surgery for AMO, told Ocular Surgery News in a telephone interview. "I think everybody saw both the strategic value of the acquisition and the combination of the product with AMO, as well as the financial value that will be derived from this in the long term."
The second most costly of AMO's investments over the past 2 years, IntraLase is the developer of the first U.S.-approved femtosecond laser for flap-creation and cornea transplantation. In January, AMO announced its $20 million purchase of Wavefront Sciences, developer of a high-resolution Shack-Hartmann aberrometer. In May 2005, AMO also acquired VISX, including its STAR S4 excimer laser and WaveScan aberrometer for roughly $1.27 billion.
"AMO has invested $2.3 billion into the laser vision correction technology over the last 2 years," Mr. Bache said. "Our goal vs. our competition is constant improvement in the technology to deliver the best possible outcomes."
Part of a larger strategy
The company's combined technology suite, which now includes the IntraLase FS laser, the STAR S4 excimer laser and the WaveScan aberrometer, positions the company to offer an excellent safety profile and clinical results, Mr. Bache said. He noted that the acquisition of the Wavefront Sciences aberrometer will offer incremental improvements in efficiency, fidelity and accuracy.
"Even if there's a small incremental improvement we can make, we're going to invest in making it. If there's a large one, we're going to invest and make that too," he said.
AMO's billion-dollar drive to improve its technology is part of a larger strategy to win over patient confidence, Mr. Bache said. The company's market research shows that every year about 10 million patients plan to have LASIK within 2 years, but the actual numbers remain relatively flat. The problem is that consumers lack confidence in the technology, he said.
"The technology is important for the word-of-mouth referrals, to get all of those patients in who said, 'I was waiting, but I've decided no longer to wait. The technology is here today and I believe it's safe and effective.'"
By partnering with their physicians through complementary business managers and practice development teams, AMO aims to drive home the message that its refractive technology is safe and effective.
"We provide marketing material and messages to [our customers], so that we can harness a lot of spending that's going on already by the surgeons who invest a lot of their money into growing their businesses, to try to make one uniform message," Mr. Bache said.
Once patients are convinced of the safety of LASIK, Mr. Bache said he believes that procedure volumes will grow dramatically.
"We view a large opportunity over the long haul in getting laser vision correction to be a normal way of life on a global basis," Mr. Bache said. "Braces used to be a luxury, and now they're a rite of passage. Our goal is to make laser vision correction a rite of passage."
Four distinct customer groups
With the IntraLase acquisition, AMO now sees four distinct customer groups in the market: physicians with IntraLase and VISX lasers, physicians with an IntraLase laser without the VISX laser, physicians with VISX without the IntraLase and those with neither, Mr. Bache said. AMO considers all four groups valuable, he said, and seeks to put both types of lasers in refractive surgery offices worldwide.
"If you look at where we have VISX lasers and not IntraLase, our goal will be to put an IntraLase next to that VISX laser and make it simple for the surgeon to acquire the technology," he said. "And vice versa: Where there are strong IntraLase-installed bases next to a competing laser, our goal would be to install a VISX."
AMO is currently in the process of branding a combined IntraLase-CustomVue procedure, Mr. Bache said. He noted that AMO was set to exit the mechanical microkeratome business effective May 1, transferring the Amadeus II microkeratome back to its creator, Surgical Instrument Systems.
"AMO firmly believes the future is in femtosecond technology. We found it would be hard to differentiate between the two technologies. If you have one that's clearly superior clinically and superior from the safety profile, that's the one we want to lead with," he said.
Mr. Bache said the lasers will be offered as a package or as stand-alone units. Package pricing has not yet been determined, he said.
With the acquisition, AMO has also entered the cornea transplant market, Mr. Bache said. The company will continue rolling out Intra-Lase-Enabled Keratoplasty (IEK) on a domestic and international basis.
"We'll continue to work on perfecting the method, but it's superior to what's currently being offered out there, in terms of patient healing and accuracy," he said.
Preliminary results from ongoing studies by Francis W. Price Jr., MD, and Lucio Buratto, MD, have shown that IEK enables rapid healing, low astigmatism and a variety of donor button shapes for different surgical situations.
"There's a large opportunity for better penetrating keratoplasty. We will continue with that launch and reimbursement strategy," Mr. Bache said.
For more information:
- Ron Bache, AMO global vice president, corneal refractive surgery group, can be reached at Advanced Medical Optics, 1700 E. St. Andrew Place, Santa Ana, CA 92799; 714-247-8300; e-mail: ron.bache@amo-inc.com.
- Andy Moskowitz is an OSN Staff Writer who covers all aspects of ophthalmology.