DUBLIN and SOUTH SAN FRANCISCO, Calif.—Allergan plc (NYSE: AGN) and Oculeve have entered into an agreement under which Allergan will acquire Oculeve in an all-cash transaction. Under the terms of the agreement, Allergan will acquire Oculeve, a medical device company that is developing treatments for dry eye disease, for a $125 million upfront payment and commercialization milestone payments related to Oculeve's lead development program OD-01. The agreement also includes the acquisition of an additional earlier-stage, dry eye device development program.

The acquisition of Oculeve adds novel, complementary dry eye development programs to Allergan's current eyecare research and development programs, including OD-01, a non-invasive nasal neurostimulation device that increases tear production in patients with dry eye disease. Oculeve has completed four clinical studies of OD-01 to date in more than 200 patients, showing positive safety and efficacy of the device. Allergan said it plans to conduct two additional pivotal trials prior to FDA submission, which is expected in 2016 with potential commercial launch in 2017.

"Allergan is committed to developing a broad range of innovations that help patients address dry eye," said David Nicholson, executive vice president, global brands research and development at Allergan. "The OD-01 program has been shown to provide a strong safety and efficacy profile, and if approved, would provide an exciting new treatment option for patients that is complementary to our existing product offerings in this important treatment area."

Michael Ackermann, president and CEO of Oculeve, commented, "Allergan's position and expertise in eyecare will maximize the development and potential commercialization of the OD-01 technology."

The transaction is subject to the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Pending approvals, Allergan anticipates closing the transaction in the third quarter of 2015.