at press time

AMO to Acquire VISX
Friendly Merger Seeks to Combine Strengths.

In a deal valued at more than $1.2 billion in cash and stock, Advanced Medical Optics (AMO) will acquire VISX, Inc., the market leader in laser vision correction systems. The strategic combination, already approved by the boards of both companies, will create a leading refractive surgical business with strong positions in excimer lasers, microkeratomes, and phakic and multifocal IOLs.

The key brands moving to AMO include VISX's Star Laser System and CustomVue custom ablation technology.

Jim Mazzo, AMO president and CEO
Liz Davila, VISX chairman and CEO

The acquisition of VISX, when complete, will mark another major step in the remarkable growth of AMO since it was spun off from Allergan in July of 2002. At the time of the spinoff, AMO had annual sales of about $500 million. With the addition of Pfizer's ophthalmic surgical business in June for $450 million in cash, and the impending acquisition of VISX, AMO expects to record more than $1 billion in sales in 2005.

In VISX, AMO will be acquiring a company that has long been identified as a prime takeover target. VISX's attractions as a takeover include its dominant position in the laser vision correction market, its cash hoard of more than $120 million, and its debt-free balance sheet. In 2000, famed corporate raider Carl Icahn bought a large stake in VISX, intending to act as a catalyst in forcing the sale of VISX to any of the major medical device companies. However, VISX was able to fight off Icahn and he eventually sold his shares back to the company.

"VISX is the manufacturer of choice in laser vision correction," said Jim Mazzo, AMO president and CEO. "Adding its robust product platform to our existing refractive business represents a bold step forward to achieve one of AMO's core strategic goals -- to build a leading refractive surgical business. Joining forces will enable us to better serve practitioners and patients with a full range of surgical technologies, while continuing to deliver improving returns to our shareholders."

"This merger is a compelling strategic, financial and cultural fit," said Liz Davila, VISX chairman and CEO. "By taking advantage of AMO's global distribution network, we can expand our laser vision correction business into new markets. At the same time, we can enhance surgeon understanding and adoption of AMO's new refractive IOL technologies. The result will be an expanded opportunity to give ophthalmic surgeons an increasingly broad set of options for treating myopia, hyperopia and presbyopia."

Upon close of the transaction, Davila will join AMO's board of directors, and Doug Post, VISX president and chief operating officer, will become president of AMO's Americas region. All other AMO officers will continue to serve in their current management positions.

In acquiring VISX, AMO does face some major challenges. VISX's long-held market-share dominance in excimer lasers has recently been somewhat eroded by the entry of new platforms into the marketplace, particularly Bausch & Lomb's Zyoptix system. The most recent quarterly reports from VISX and Bausch & Lomb show strong growth in B&L's refractive business, while VISX reported a slight dip in year-over-year revenue, leading to a sharp 1-day drop in the price of VISX stock. It will be up to AMO to deal with the reality of increased competitive pressures.

Terms of the merger will enable VISX shareholders to exchange each VISX share for 0.552 shares of AMO stock and $3.50 in cash, or a total value of $26.52 per VISX share based upon the Nov. 8 closing price of AMO stock. This represents a 47% premium to VISX shareholders, as VISX stock closed at a price of $18.10 on Nov. 9, the day the deal was announced. The total price paid for VISX will amount to 29 million shares of AMO stock and $184 million in cash.

With the addition of VISX, AMO still expects to earn $1.65 to $1.75 a share in 2005. VISX is expected to contribute to AMO earnings in 2006 as the combined companies achieve substantial cost synergies and create operating efficiencies.

Oklahoma OKs O.D. Scalpel Use
State Is Again Focus of Scope-of-Practice Battle.

"The implementation of this regulation presents serious patient safety concerns and knocks Oklahoma to the bottom rung of the ladder with regard to patient quality of surgical care," said H. Dunbar Hoskins Jr., M.D., the American Academy of Ophthalmology's executive vice president.

State O.D.s had asked for the new regulation after Oklahoma Attorney General Drew Edmondson earlier this year confirmed that optometrists had no formal authority to perform procedures designated as "surgery."

David A. Cockrell, O.D., president of the Oklahoma Board of Examiners in Optometry, says the new regulation was necessary to allow Oklahoma O.D.s to continue to perform lid procedures, remove foreign bodies from the eye, and insert punctal plugs, which are classified under CPT codes as "surgery."

"I don't see how anyone can call this an expansion of our scope of practice," Dr. Cockrell told Ophthalmology Management. "This is simply a formal ruling clarifying the fact that optometrists in Oklahoma will be allowed to continue doing the procedures we have already been doing."

"The governor's decision ignites the Academy's determination to inform the public, lawmakers and government leaders about what this regulation really means," said Ann Warn, M.D., president of the Oklahoma Academy of Ophthalmology. "Unknowing consumers will now be placed in a situation to have delicate surgical procedures performed on their eyes by people who have not graduated from a 4-year medical or osteopathic training program, have not completed a 1-year hospital internship, and have not completed a 3-year hospital residency program studying diseases of the eye and advanced surgical training."

"It's a question of patient care," added Cynthia Bradford, M.D., Academy secretary for State Affairs. "Surgery should only be performed by medical or osteopathic surgeons. Education and training do make a difference. The education and training that's required to become a surgeon can't be ignored without potentially serious negative ramifications for patients."

REFRACTIVE SURGERY UPDATE

Laser in clinical trial. A U.S. clinical trial for Carl Zeiss Meditec AG's MEL 80 excimer laser system has begun.

The MEL 80 system features a 250-Hz, 0.7-mm Gaussian scanning spot and active eye tracker. The system is designed to provide aberration-optimized custom ablation profiles based on wavefront measurements.

VisiJet receives financing. VisiJet, which develops innovative technologies for the ophthalmic surgical market, has received $2 million in new financing. The funds will be used to support the company's distribution of the Gerbauer line of epi-LASIK surgical devices, and to continue the development of devices that use VisiJet's proprietary waterjet technology for cutting LASIK flaps and removing cataracts.

VisiJet Inc. recently announced that it has received FDA approval for its EpiLift System, a next-generation, ophthalmic surgical device designed for separating corneal tissue during the epi-LASIK procedure. "The EpiLift System provides a revolutionary new method to perform refractive surgery," said Randy Bailey, president and CEO of VisiJet. "The EpiLift System will make epi-LASIK a mainstay procedure for the correction of myopia, hyperopia and astigmatism. It provides the safety, control and better visual outcomes vital to both physician and consumer acceptance."

Microkeratome approved. Schwind eye-tech-solutions, a privately held German maker of excimer laser systems, received FDA clearance to market the Cariazzo Pendular Microkeratome in the United States. This new microkeratome, developed by Ceasar Cariazzo, M.D., has a unique pendular cutting motion allowing a no-tension automated smooth cut and a full view of the cutting surface.

Ophthalmologist Fails to Win House Seat
Dr. Melissa Brown Loses for Third Time.

If there were prizes for persistence, Melissa Brown, M.D., would be on her way to Washington in January to take her seat in Congress representing the 13th Congressional District of Pennsylvania.

The large margin was somewhat surprising, as Dr. Brown gave popular incumbent Democrat Joseph Hoeffel a strong battle in 2002, taking 47% of the vote in a district that includes northeast Philadelphia and more affluent suburban areas. With Rep. Hoeffel giving up his seat to run an unsuccessful race for the U.S. Senate against incumbent Arlen Specter, many political observers gave Dr. Brown a good chance to win against the lesser-known Schwartz.

However, in a contentious campaign characterized by negative ads on both sides, Schwartz won the endorsement of the Philadelphia Inquirer and several key suburban newspapers.

Commenting on her loss, Dr. Brown said she was "relieved" that the contest was over.

"I never wanted to be a politician," she wrote to supporters. "I have learned that I am not good at what it takes to be a politician. This campaign has clarified one fact for me: that the lines that have been crossed by some in the heat of political battles are lines I will never cross. They relate to false personal attacks upon candidates and their families. I likely will never be a Congresswoman."

Dr. Brown is currently an adjunct assistant professor of ophthalmology at the University of Pennsylvania and serves as director for the center for Value-Based Medicine. She's also co-chief editor of Evidence-Based Eye Care.

IN THE NEWS

Distribution agreement. Alimera Sciences Inc. announced that it has entered into a co-promotion agreement with Vistakon Pharmaceuticals for Alimera's recently launched Soothe brand of emollient dry-eye drops. The Vistakon sales force is now distributing the Soothe artificial tear product to its customer base of eyecare professionals.

Talia appointment. Daniel D. Biondi has been named president of Talia Technology's North American operations. Biondi was formerly senior vice president of Olympus America, a subsidiary of Olympus Optical Ltd. Of Japan.

Talia Technology develops and markets retinal imaging instruments for the diagnosis and monitoring of glaucoma and various retinal pathologies.

Istalol gets nongeneric status. ISTA Pharmaceuticals, Inc. said the FDA has determined that its Istalol glaucoma medication isn't therapeutically equivalent to other commercially available timolol maleate solutions and has granted Istalol a "BT" rating. This means that prescriptions for Istalol can't be substituted legally at pharmacies with generic products. ISTA has launched an extensive campaign to notify retail pharmacists of the FDA's granting of the "BT" rating to Istalol.

Alcon grant. Alcon has committed $1.125 million over 5 years to back the Seniors EyeCare Program of EyeCare America, the public service arm of the Foundation of the American Academy of Ophthalmology. The Seniors EyeCare Program provides dilated eye examinations and up to a year of treatment at no out-of-pocket cost to eligible seniors.

The program is designed to help individuals age 65 or older who haven't seen an ophthalmologist in 3 years, and who don't belong to an HMO or the VA. Those eligible for the program are referred to one of EyeCare America's 7,500 participating volunteer ophthalmologists.

Inspire's Mossinghoff resigns. Inspire Pharmaceuticals, Inc., a developer of ophthalmic drugs and Allergan's partner in the marketing of the dry eye treatment Restasis and Elestat eye drops for allergic conjunctivitis, said its president, Gregory J. Mossinghoff, has informed the company that he will resign from his position to pursue other opportunities.

Mossinghoff will remain in his current position through June to ensure a smooth transition of his responsibilities to existing members of the management team. There are currently no plans to fill the position of president. "We are grateful to Greg for his many accomplishments and contributions over the last 6 years," said Christy L. Shaffer, Ph.D., Inspire CEO.