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Glaukos Continues its Evolution with Avedro Acquisition

The acquisition further cements the San Clemente, CA-based company’s plan to become a “hybrid surgical/pharmaceutical/medical device” firm.

Glaukos has been open about a plan to go beyond being a “just” a medical device company. During a presentation to investors at the 37th annual J.P. Morgan Healthcare Conference, San Clemente, CA-based Glaukos’ CEO Thomas Burns said the company was transforming into a “hybrid surgical/pharmaceutical/medical device” firm.

Glaukos is the frontrunner in Micro-invasive glaucoma surgery (MIGS) and was the first to have an approved device in the space. MD+DI named Glaukos’ plan to become a hybrid company as one of “Seven Key Moments that Defined the MIGS Industry.”

Last week, Glaukos made good on the plan by announcing it would acquire Avedro, a hybrid ophthalmic pharmaceutical and medical technology company in an all-stock transaction. The deal is expected to close in 4Q19.

Waltham, MA-based Avedro develops bio-activated pharmaceuticals that strengthen, stabilize, and reshape the cornea to treat corneal ectatic disorders and correct refractive conditions. Avedro’s suite of single-use drug formulations is applied to the cornea and bio-activated to induce a reaction called corneal collagen cross-linking.

“Avedro is an ideal strategic fit for Glaukos as evidenced by the striking similarities between our two companies - we are both … pioneering an entirely new market,” Burns said in a recent earnings call, according to a transcript from Seeking Alpha. “Like Glaukos, Avedro is first to market with novel solutions backed by a considerable body of compelling clinical data and like Glaukos Avedro has secured favorable reimbursement and developed a market expanding the pipeline to extend its leadership well into the future.”

The deal is also beneficial because it can give further exposure to Avedro’s Photrexa, a "photosensitive" solution used during the procedure to treat progressive keratoconus in adults and adolescents who are at least 14-years-old.

Burns said Avedro has 17 reps that help sell Photrexa, but when it combines with Glaukos there will be more than 90 people on deck to help get the product adopted. Glaukos estimated Photrexa represented a $3 billion opportunity in the U.S.

The deal comes on the heels of Glaukos closing the Dose Medical acquisition for $3 million. Dose created a drug-delivery technology for treating retinal diseases and was once a subsidiary for Glaukos. Dose Medical is the only completed acquisition from Glaukos, according to CrunchBase.

“Our goal of Glaukos is to build durable disruptive franchises and large and growing markets where we can leverage our core competencies in microscale surgical, sustained pharmaceutical and hybrid platforms across glaucoma, corneal health and retinal disease,” Burns said. “The acquisition of Avedro combined with our promising organic initiatives and other strategic expansion plans create a hybrid pharma and device ophthalmic leader, which we believe is ideally positioned to deliver sustainable long-term growth and create meaningful shareholder value for years to come.”

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