Glaukos and Avedro Announce Definitive Acquisition Agreement as Glaukos Reports Q2 Financial Results

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SAN CLEMENTE, Calif.—Glaukos Corporation (NYSE: GKOS), an ophthalmic medical technology and pharmaceutical company focused on novel therapies for the treatment of glaucoma, corneal disorders and retinal diseases, and Avedro Inc. (Nasdaq: AVDR), a leading hybrid ophthalmic pharmaceutical and medical technology company, have announced that the companies have entered into a definitive merger agreement. Under the terms of the deal, Glaukos will acquire Avedro in an all-stock transaction. The transaction, which is subject to Avedro stockholder approval along with other customary closing conditions and regulatory approvals, has been approved by the board of directors of both companies and is expected to be completed in the fourth quarter of 2019.

The acquisition combines two complementary, hybrid ophthalmic pharmaceutical and device organizations and establishes the cornerstone for Glaukos’ new corneal health franchise, providing synergistic avenues for potential long-term growth in large, underserved markets, according to this week’s announcement. Glaukos plans to leverage its proven market-building expertise, global commercial scale and extensive clinical and regulatory infrastructure to maximize Avedro’s disruptive bio-activated pharmaceuticals and pipeline. The transaction also expands Glaukos’ R&D capabilities and is expected to strengthen multiple corneal health and vision correction development initiatives now underway across both organizations.

“Avedro is an ideal fit for Glaukos’ core strengths in creating and disrupting ophthalmic markets with novel therapies that address important unmet clinical needs of practitioners and patients,” Thomas Burns, Glaukos’ president and chief executive officer, said in the announcement. “Avedro has in place many of the same strategic attributes Glaukos used to pioneer MIGS, including proprietary paradigm-changing solutions, extensive clinical validation, broad reimbursement and first-to-market status.”

In a separate announcement, Glaukos said sales in the second quarter rose 36 percent to $58.6 million from $43.2 million in the year-ago period. The reported gross margin of approximately 87 percent in the quarter compared with a gross margin rate of approximately 86 percent in the year-ago period.

In addition, Glaukos said it has updated the 2019 net sales guidance to a range of $226 million to $231 million from the previous range of $225 million to $230 million. The updated guidance does not include the impact of the pending acquisition of Avedro, the company noted. The net loss in the second quarter, including in-process R&D, was $6.3 million, which compared with a net loss of $5.4 million in the second quarter of 2018, the announcement noted.

“We are very pleased with the company’s record second quarter financial performance, along with the significant clinical and regulatory progress we continue to make to advance and expand our transformative pipeline,” Burns said in the earnings announcement.