SAN CLEMENTE, CA — Glaukos Corp. plans to acquire Avedro Inc. in an all-stock deal, the companies announced.
The transaction, which has been approved by the board of directors of both companies, is expected to be completed in the fourth quarter. It is subject to Avedro (Nasdaq: AVDR) stockholder approval along with other customary closing conditions and regulatory approvals.
Glaukos (NYSE: GKOS) is an ophthalmic medical technology and pharmaceutical company focused on therapies for the treatment of glaucoma, corneal disorders and retinal diseases. Avedro is a hybrid ophthalmic pharmaceutical and medical technology company focused on treating corneal disease and disorders.
The acquisition “combines two complementary, hybrid ophthalmic pharmaceutical and device organizations and establishes the cornerstone for Glaukos’ new corneal health franchise, providing synergistic avenues for potential long-term growth in large, underserved markets,” according to the release.
“Avedro is an ideal fit for Glaukos’ core strengths in creating and disrupting ophthalmic markets with novel therapies that address important unmet clinical needs of practitioners and patients,” said Thomas Burns, Glaukos president and CEO. “Avedro has in place many of the same strategic attributes Glaukos used to pioneer MIGS, including proprietary paradigm-changing solutions, extensive clinical validation, broad reimbursement and first-to-market status. Our combined organizations can possess the essential expertise, scale and reach to maximize these opportunities, drive further commercialization of Avedro’s bio-activated pharmaceuticals and establish another synergistic and durable Glaukos franchise to fuel potential near- and long-term growth and shareholder value.”
Avedro’s platform uses its proprietary bio-activated, single-use Photrexa drug formulations to strengthen corneal tissue and halt progression of keratoconus, a degenerative corneal ectatic disease that affects approximately 1.1 million eyes in the U.S. Conventional treatments address symptoms but the Avedro platform is the first and only FDA-approved therapy that can stop disease progression, according to the release. Avedro estimates the total U.S. opportunity for its keratoconus therapy to be approximately $3 billion.
“Avedro is extremely pleased with the potential to become part of Glaukos, a highly-respected ophthalmic organization with a successful track record forging new markets with disruptive technologies like our keratoconus pharmaceutical therapies,” said Reza Zadno, Avedro president and CEO. “Glaukos already has deep customer relationships with the majority of our target accounts, and a large, seasoned field organization that can unite with our team to accelerate awareness, adoption and utilization of our novel platform. In addition, Glaukos will bring its extensive clinical and regulatory resources to bear to help advance our promising pipeline therapies. I believe this transaction can benefit customers, employees and patients, while creating value for shareholders through ownership in a combined company with the expertise, scale and resources to drive meaningful future growth.”
Under the terms of the merger agreement, for each share of Avedro common stock they own, Avedro shareholders will receive an exchange ratio equivalent of 0.365 shares of Glaukos stock.
The transaction represents a 42% premium for Avedro shareholders, according to the release. Upon closing, Glaukos shareholders are expected to own approximately 85% of the combined company, with Avedro shareholders to own the remaining 15%.