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Allergan Completes Split into Two Companies
Surgical Products, Contact Lens Care Businesses Are Spun Off.

Allergan Inc. is now purely a specialty pharmaceutical company. The ophthalmic surgical products and contact lens care businesses that were previously part of Allergan now form a newly created company called Advanced Medical Optics, Inc., based in Santa Ana, Calif. Advanced Medical Optics began trading on the New York Stock Exchange on July 1 under the symbol AVO.

Wall Street analysts said Allergan initiated the spinoff because management recognized that it was operating two separate and unrelated businesses. The high-growth specialty pharmaceuticals business, with such brands as Lumigan, Alphagan and Alphagan P, has become even more visible recently with the successful launch of Botox anti-wrinkle treatment. Meanwhile, the slower-growth surgical products and contact lens care businesses had to compete with Botox for much-needed research and development funds.

	James V. Mazzo

James V. Mazzo, president and CEO of Advanced Medical Optics, said in a July 1 conference call that one of his priorities is to increase R&D spending for the new company from about 5.5% of sales to 7-8% of sales. Advanced Medical Optics' businesses had total sales of slightly more than $500 million in 2001, led by products such as the Sensar foldable IOL, the Array multifocal IOL, the Sovereign phacoemulsification system and the Complete line of contact lens care products. Mazzo noted that Advanced Medical Optics currently holds the number two position worldwide in market share for both ophthalmic surgical and contact lens care products.

Mazzo, who previously headed the surgical and contact lens care businesses for Allergan, said Advanced Medical Optics is in a strong position to benefit from the rapidly increasing number of people over the age of 60 worldwide. He said the favorable demographics will benefit company products used in cataract surgery.

As part of the spinoff, Advanced Medical Optics has taken over former Allergan manufacturing facilities in Puerto Rico and China, and three R&D centers in the United States, the United Kingdom and Japan.

The spinoff was accomplished by giving Allergan shareholders one share of Advanced Medical Optics for every 4.5 shares of Allergan they owned.

Wills Eye Hospital Moves to New Quarters
The State-of-the-Art Facility Features a High-Tech Research Center.

Philadelphia's Wills Eye Hospital, long recognized as a leading ophthalmic teaching hospital, celebrated its 170th anniversary by moving into a new building in the city's downtown area on July 1.

Wills Eye Hospital has a new home.

Originally established in 1832 through a bequest from James Wills, a Quaker merchant, nonprofit Wills Eye Hospital has earned a reputation as a worldwide referral center for difficult eyecare cases. Wills is also known as an institution that fosters innovation, having developed revolutionary cataract procedures and pioneered the use of plastic IOLs in the United States in the early 1950s.

The new hospital, an eight-story, 125,000-square-foot facility, is designed to provide a full range of eyecare services in a modern setting. It's equipped with numerous leading-edge advancements, including education and conference facilities with broadband computer wiring, teleconference capabilities, a fully automated auditorium and breakout classrooms.

The hospital is also equipped with eight operating rooms, five of which are already in use. The operating rooms have built-in videoconference capability to facilitate teaching and continuing medical education efforts.

"With this new state-of-the-art facility, Wills will be better able to continue delivering quality patient care while carrying out our education and research mission," says William Tasman, M.D., the hospital's ophthalmologist-in-chief.

"A key feature of the new building is a high-technology research center, with resources for laboratories, conference rooms and extensive database management to conduct genetic research," Tasman notes. "Researchers will apply molecular genetics, gene identification and gene sequencing to study new ways to identify and treat illnesses that cause serious visual impairment and blindness."

Wills Eye Hospital is affiliated with Jefferson Medical College, also located in Philadelphia, and serves as the department of ophthalmology for the College. 

A New Requirement for a Medical License?
New Physicians May Be Judged on How They Communicate with Patients.

If a pilot program now being conducted by the National Board of Medical Examiners (NBME) goes smoothly, medical students graduating in 2005 will have to demonstrate they can communicate effectively with patients as part of their licensing exam.

Unlike the other components of the United States Medical Licensing Exam, which rely on multiple-choice questions administered by computer, the one-day communications skills component will involve one-on-one personal encounters in a clinical setting.

Students will be asked to gather information from patients, perform physical examinations, and communicate their findings to patients and colleagues as a requirement for receiving a medical license. The "patients" will be lay persons carefully trained to act like real patients in a doctor's office or clinic. Students will have about 15 minutes to conduct each examination and 10 minutes to record pertinent history, describe examination findings, list diagnostic impressions and outline any plans for further evaluation.

In the first phase of the pilot program, students from three Philadelphia medical schools are currently undertaking the communications skills assessment at a center in that city. A second phase, starting in the fall, will involve students from four Georgia medical schools.

The United States Medical Licensing Exam is the only examination accepted by state medical boards for licensure of all MD graduates.

FDA Warns Doctors on Clinical Trials
Violations Are Found.

The FDA recently issued warning letters to two physicians involved in conducting clinical trials for new drugs. The letters detailed such violations as inadequate monitoring and supervision, failure to follow clinical protocols, falsification of data, inadequate case history record-keeping, and, in one case, using a staff member's nasal swab for a patient who missed an appointment.

The FDA can impose a variety of sanctions for such violations, depending on the nature of the offense. Sanctions can range from ordering implementation of a corrective action plan to disqualifying offenders from receiving any federal funds, including Medicare payments.

"These warning letters are quite literally a warning shot across the bow to ophthalmologists and other physicians involved in clinical research," says William A. Sarraille, a partner in the Washington, D.C., law firm of Arent Fox, which represents a number of ophthalmology practices.

Sarraille says office-based doctors involved in conducting clinical trials are particularly vulnerable to being charged with protocol violations because they don't have the compliance mechanisms in place that the larger institutions have.

"With more office-based ophthalmologists now participating as investigators in clinical trials, it's important that you protect your human subjects, follow clinical protocols and not let conflicts of interest affect the conduct of clinical research," says Sarraille.

Bausch & Lomb Loses Contact Lens Patent Dispute
B&L Appeals Court Order to Halt Production of PureVision Lenses.

The United States District Court for the District of Delaware has ruled that Bausch & Lomb's 30-day and night continuous wear PureVision contact lens infringes on CIBA Vision's patent covering silicone hydrogel materials used in contact lenses.

The PureVision product competes directly with CIBA Vision's Focus Night & Day 30-day and night continuous wear contact lens, which is also made of silicone hydrogel.

In a ruling with stunning implications, the court ordered Bausch & Lomb to immediately discontinue the manufacture and sale of PureVision lenses in the United States. The court said B&L can't resume manufacture or sale of the product until at least 2005, the year CIBA Vision's patent expires. Because PureVision lenses are only manufactured in the United States, the ruling could affect Bausch & Lomb's ability to supply the product to international customers.

Bausch & Lomb responded by filing an immediate appeal of the ruling and requesting a stay of the injunction that prohibits manufacture and marketing of the PureVision lens.

"We are convinced that our product does not infringe CIBA's patent -- and in any case, we do not believe this patent is valid," said Robert B. Stiles, senior vice president and general counsel of Bausch & Lomb. "Our PureVision contact lens is the result of years of proprietary research and development by company scientists."

"This is the outcome we expected," said Scott Meece, vice president and general counsel for CIBA Vision. "We were quite confident in the validity of this patent and the infringement by Bausch & Lomb."

Four Enter Ophthalmology Hall of Fame
New Honorees Include "Father of Retinal Surgery."

Four ophthalmologists, including the Swiss physician who's considered the "father of retinal surgery," were inducted into the Ophthalmology Hall of Fame during the recent American Society of Cataract and Refractive Surgery (ASCRS) convention in Philadelphia.

The Hall of Fame was created by ASCRS in 1999, and now has Novartis Ophthalmics as its corporate sponsor. With the latest additions, the Hall of Fame now includes 24 honorees.

The most recent inductees, elected by their peers, include:

	Jules Gonin, M.D.

• Jules Gonin, M.D. In the 1920s, this Swiss ophthalmologist developed the first proven method for treating retinal detachments by cauterizing the area around the tear.

• Edward W.D. Norton, M.D. Dr. Norton founded and led the Bascom Palmer Eye Institute in Miami, which has become one of the world's leading academic and clinical research centers.
• Bernard Becker, M.D. A physician, scientist and educator, Dr. Becker played a key role in developing modern glaucoma treatment. He also built the ophthalmology department at Washington University in St. Louis into one of the most respected in the world.
• Arnall Patz, M.D. Dr. Patz saved the sight of thousands of newborns by proving that a common method of providing extra oxygen to premature infants led to retrolental fibroplasia. He later pioneered the use of argon lasers for treating retinal disease.

IN THE NEWS

Medicare reimbursement. The U.S. House recently voted by a 221-208 margin to reverse a potential 14.2% cut in Medicare payments to physicians over the next 3 years. Instead, the legislation calls for a 2% Medicare payment increase in 2003, and a more than 6% total increase over the next 3 years. Under the House bill, the 5.4% physician payment reduction that took effect on Jan. 1 will remain in effect for the balance of this year. The proposed legislation now moves to the Senate Finance Committee for further consideration.

Continuous wear. The FDA has approved Menicon Z Rigid Gas Permeable (RGP) contact lenses for up to 30 days of continuous wear. This marks the first 30-day continuous wear approval granted by the FDA for contact lenses made with RGP lens materials.

Pharmacia merger. Pharmacia Corporation, maker of glaucoma medication Xalatan, has agreed to merge with pharmaceutical giant Pfizer in a $52 billion deal that will give Pharmacia shareholders 1.4 shares of Pfizer stock for each share of Pharmacia they now own. Pfizer says the combination will create the world's largest drug company.

AMD treatment. Genentech has completed enrollment for a Phase I/II clinical trial for AMD-Fab for the treatment of wet AMD. AMD-Fab is an anti-VEGF (vascular endothelial growth factor) monoclonal antibody fragment intended to inhibit the growth of unwanted blood vessels in the eye.

Wilmer tops survey. The Wilmer Eye Institute of The Johns Hopkins Hospital was ranked number one in ophthalmology in the U.S. News & World Report annual survey of U.S. hospitals. The Johns Hopkins Hospital was named the best hospital in the United States for the 12th consecutive year.

Fire relief. CIBA Vision has donated more than 200 cases of its Solo-care contact lens solution and 2,000 cases of Focus Lens Drops for use by firefighters battling massive forest fires in Colorado and Arizona.

Visudyne approval. The Ontario (Canada) Health Insurance Plan will cover verteporfin for injection (Visudyne) treatment for the classic form of wet AMD in the province of Ontario.

Fighting trachoma. Novartis Ophthalmics, North America, has begun a pilot program to aid former President Jimmy Carter and the Carter Center in their work to prevent trachoma, a chronic bacterial infection that causes river blindness. Trachoma is spread through a parasite transmitted by the bite of black flies. Novartis is donating $50,000 and supplies of Eye Scrub cleanser for use in trachoma surgeries.

Grunwald award. Entertainer Harry Belafonte has received the second annual Henry A. Grunwald Award for Public Service, given by Lighthouse International to an individual who displays dedication to vision issues and vision rehabilitation. Belafonte has been active for years in eyecare awareness campaigns.

Overnight contact lens. Paragon Vision Sciences has received FDA approval for its Corneal Refractive Therapy contact lens, which is worn overnight for the temporary reduction of low-to-moderate myopia. The approved indications cover individuals with up to 6D of myopia with or without astigmatism up to 1.75D.

Funding received. Hydrogel Vision Corp., the manufacturer of Extreme H2O soft contact lenses, has received a new injection of capital to grow the product line. The funding came from a private equity partner who will receive a minority ownership interest in the company.