Companies forge collaboration for glaucoma, retinal disease treatment

March 3, 2021
David Hutton

Topcon Corp. will purchase exclusive rights to distribute Iridex Corp.’s retina and glaucoma products, while also acquiring a common equity stake in the company. Iridex will acquire Topcon’s PASCAL product line.

Iridex Corp. this week unveiled a strategic collaboration with Topcon Corp. which will see the Japanese-based manufacturer and distributor invest in Iridex by purchasing exclusive rights to distribute retina and glaucoma products in certain global markets and acquiring a 10.4% common equity stake in the company.

The collaboration nets $19.5 million of cash to Iridex, providing multiyear funding for strategic growth initiatives, particularly those designed to drive expanded market penetration of Iridex’s unique non-incisional glaucoma therapy products.

According to the companies, Iridex product portfolio to benefit from Topcon’s distribution strength in Asia Pacific and key EMEA markets, joining Topcon’s broad offering of diagnostic and treatment products for glaucoma and retina customers.

Under terms of the agreement, Iridex acquires Topcon’s PASCAL product line, combining Iridex’ MicroPulse technology with Topcon’s PASCAL laser platform, resulting in a leading market share for retinal scanning laser products, plus greater scale to generate design, manufacturing and marketing efficiencies.

“We feel energized entering into this important alliance with Topcon that advances the strategic positions of both companies on multiple fronts,” David Bruce, CEO of Iridex, said in a statement. “Joining Topcon’s comprehensive distribution network throughout Asia Pacific and key EMEA regions will help Iridex to significantly expand the market penetration of our marquee non-incisional glaucoma therapy.”

According to the comapnies, the collaboration between them includes three primary agreements, including an exclusive distribution agreement, an asset purchase agreement and an equity funding agreement.

Under the terms of these agreements, Topcon will acquire exclusive distribution of Iridex laser systems, delivery devices and disposable probes to be sold through its strong networks in Asia Pacific and key EMEA regions. Concurrently, Iridex will add Topcon’s PASCAL systems to its U.S. direct sales and rest-of-world distribution network. Further, Iridex will acquire the design and manufacturing operation of Topcon’s PASCAL product line.

Topcon will purchase $10 million of Iridex common shares at a price of $6.18 per share. The net cash proceeds to Iridex of these transactions are expected to be approximately $19.5 million before offering expenses.

According to the companies, Topcon can further capitalize on its already-strong distribution network by adding Iridex’s retina product portfolio to enhance the breadth of its ophthalmic system offerings.

Bruce noted that the alliance will enable both companies to benefit from the enhanced scale achieved by consolidating the design, manufacturing and distribution of two leaders in scanning laser retinal treatment. The infusion of $19 million in additional capital will provide Iridex with resources to drive its multiyear growth programs.

“We sought this alliance with Iridex to achieve significant benefits to our operating and distribution efforts. As leaders and innovators in advancing the treatment options for eyesight threatening diseases, we recognize a great opportunity to bring our strengths together,” Fumio Ohue, managing executive officer of Topcon’s Eye Care Business, said in a statement. “We are excited to bring Iridex’s retina

and glaucoma therapy products to our expansive customer base throughout Asia Pacific and key Europe, Middle East and Africa markets.”

Ohue noted that the alliance with Iridex is one of the major initiatives which Topcon will offer with its “Shared Care” program.

“We are confident that combining our new product design and development efforts will enhance our existing and future products in both retina and glaucoma,” Ohue said. 

“In line with our goal of ensuring the long-term adoption of our laser-based MicroPulse TLT procedure in the marketplace, we are gratified with the high-level commitment Topcon has made to our platform, and we look forward to a strong partnership that is beneficial for patients and eye care specialists around the world for years to come,” Bruce concluded in a statement.