The Wider View: Which dry eye targets could quench Alcon’s M&A thirst?

Alcon has indicated that it will be on the lookout for M&A to feed its pipeline and drive long-term growth, once it completes its spin-out from Novartis next year and become an independent, publicly-listed company once more. Dry eye is one area that the company highlighted as a significant market with untapped potential. So among the innovations in the diagnosis and treatment of this condition, who might pique Alcon’s interest?  


What’s happened

In the run-up to its imminent separation from Novartis, eye care specialist Alcon held a capital markets day in New York on Tuesday to provide a business update to investors and analysts and inform them of its plans for growth post-spinoff.

Innovation as a key growth driver was a recurrent theme in all the presentations given by the company’s top executives and CEO David Endicott indicated, during a Q&A session, that Alcon would look at M&A to feed its pipeline and enable it to expand into new and adjacent markets.

One area Endicott highlighted was dry eye, in particular "dry eye diagnostics and treatments."

The wider view

It is not surprising that dry eye has piqued Alcon’s interest. Alcon’s arch rival in vision care, Johnson & Johnson, has already placed its bets on this space by acquiring TearScience last year, a company that has developed a dry eye diagnostic imaging technology (LipiView) and a thermal pulsation technology (LipiFlow) to treat the condition. And the dry eye opportunity is significant. Factors such as the aging population, significant changes in lifestyle - namely the increased use of smartphones and computers - and also climate change combine to ramp up the prevalence of dry eye.  

Andy Pawson, president of Alcon’s global vision care business, told investors at the capital markets day that the global dry eye opportunity is expecting to grow from its current $2.8 billion to $3.5 billion in five years. In the short term, Alcon plans to consolidate its dominance in the over-the-counter dry eye products market with Systane, the current leading brand in artificial tear solutions. The company intends to ratchet up global commercialisation of Systane Complete, the latest addition to the Systane family that addresses both aqueous- and lipid-deficient dry eye.

But Systane only relieves symptoms of dry eye and Franck Leveiller, head of R&D at Alcon, indicated that what would be emerging from the pipeline in terms of dry eye would be more Systane products. In order to fully exploit this dry eye opportunity over the longer term, and to stay ahead of its vision care rivals like Johnson & Johnson (and Allergan, which has the neurostimulation-based dry eye therapy TrueTear), Alcon would need to expand beyond palliative care and, as Endicott pointed out, turn to external innovations for therapeutic and diagnostic solutions.


Possible targets

So who might be possible acquisition targets for Alcon’s dry eye business? Endicott had said at the investor meeting that the Alcon approach would be to buy in technologies and then have further development work done to the acquired assets. While it is unlikely the firm will take on very early-stage, high risk innovations, it may not be averse to technologies that have been de-risked to some extent but are still at a pre-commercialisation stage.

FirstWord MedTech selected a handful of dry eye companies that have hit the headlines in the last two years and do a quick assessment of their potential as M&A targets for the eye care giant:


Based in

Public or private


M&A hit or miss?

I-MED Pharma

Montreal, Canada


I-MED Pharma is an established company which already has on the market a broad offering of dry eye products. They range from symptom relief products like eye drops and a hot and cold therapy eye mask, to more invasive interventions like punctum plugs. It also has nutritional supplements and ocular hygiene products to support dry eye symptoms relief. The latest addtion to its dry eye diagnostic portfolio is the I-PEN Osmolarity System, a handheld device that measures tear film osmolarity levels associated with dry eye disease. The I-PEN is CE-marked, US FDA-cleared and has approvals in several other markets outside the EU and the US. I-Med has a number of distribution partners in place for the I-PEN.

The I-PEN might be a hit with Alcon; the technology looks to be easy to use by physicians and does not require significant investment in capital equipment. The test strips will also bring a source of recurring income. Unlikely Alcon would want to acquire the whole company.




TearLab, an archrival of I-MED, also has a dry eye diagnostic product based on tear osmolarity. The TearLab Osmolarity System consists of a handheld osmolarity test pen with a single-use test card, and a desktop analyser. The firm is commercialising the first-generation system and is working towards securing US FDA clearance for its next-generation TearLab Discovery platform that can assess multiple biomarkers in human tears with nanoliter volume tear collection. The US FDA had rejected the company's 510(k) application for the Discovery MMP-9 test due to insufficient evidence of substantial equivalence in October this year. Additionally, TearLab also lost a patent case against I-MED in February.

Probably miss. TearLab lost its patent tussle with I-Med, and it is uncertain how this will play out. TearLab system probably requires more investment from the physician/hospital as it includes an analyser component, in addition to the handheld measuring device; the I-PEN just requires one device to read the test strip.

Tear Film Innovations



Tear Film's iLux is a handheld device designed to treat evaporative dry eye caused by blocked meibomian glands. It is an in-office procedure in which light energy is used to soften the blockages of the meibomian gland orifices. The device was cleared by the US FDA end of 2017 and the firm raised $8.5 million in May this year to commercialise the product.

This is likely a hit. It is an in-office procedure that looks relatively quick and easy. It is FDA-cleared and a product like this would make a nice bolt-on and would benefit from Alcon's signficant sales and marketing network to ramp up adoption.

Sight Sciences

CA, US Private

Sight Sciences offers ophthalmic surgical technologies for managing glaucoma but it also has a product, TearCare, targeting dry eye. TearCare is a "wearable, open-eye and fully customisable eyelid technology" for performing the iLid procedure. TearCare is said to be software controlled and it delivers adjustable thermal energy to the meibomian glands and clear blockages, while allowing the patient to continue blinking normally. This, says Sight Sciences, differs from "closed eye" systems.

Works on a similar approach to Tear Film's iLux, in that it is using heat to unblock the meibomian glands and thus treat dry eye. Sight Sciences has called its procedure iLid, a clever name but maybe a red flag for potential legal trouble with Tear Film Innovations. TearCare does seem to have the advantage of increased patient comfort and there are all these "smart" components for more controlled treatment. But there seems to be more fiddly bits which may be a negative to physicians and the cost could be higher than iLux's. Could be a hit with Alcon, who might want to take this technology and further improve on it.

Azura Ophthalmics

Tel Aviv, Israel


Azura raised $16 million in October 2017 from a syndicate of investors - led by Orbimed, a familiar name in the VC world - to advance its drug therapy for meibomian gland dysfunction. The drug is delivered via a novel drug delivery system, but there is little details about the treatment. The company has kept low since this financing. Azura's management team has had a good track record in the ophthalmic technology space - CEO Mark Gleeson and chief medical officer Charles Bosworth are Allergan alumni, and the founder of the company, Yair Alster, has a number of ophthalmic technology exits under his belt.

This is likely a miss. This is fundamentally a drug therapy and would likely require a long development cycle. May not sit very well with the "new", more medtech-focused Alcon, with its "nimble and agile" culture that allows a faster-paced product cycle.


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