Allergan enters into agreement to acquire Aquesys and its XEN45 program

Allergan plc (NYSE: AGN), a leading global pharmaceutical company, and AqueSys, Inc. a private clinical stage medical device company focused on developing ocular implants that reduce intraocular pressure (IOP) associated with glaucoma, today announced that they have entered into an agreement under which Allergan will acquire AqueSys in an all-cash transaction. Under the terms of the agreement, Allergan will acquire AqueSys for a $300 million upfront payment and regulatory approval and commercialization milestone payments related to AqueSys' lead development programs, including XEN45.

"The acquisition of AqueSys and its XEN45 program builds on Allergan's deep and long-standing commitment to innovation in eye care," said Brent Saunders, CEO and President of Allergan. "Our eye care team has a strong track record of introducing novel treatments for patients with glaucoma. The acquisition of the XEN45 device demonstrates our commitment to alternative next-generation glaucoma treatments which are appealing to both patients and physicians and extend beyond conventional medication eyedrops."

The acquisition of AqueSys adds XEN45, a soft shunt that is implanted in the subconjunctival space in the eye through a minimally invasive procedure with a single use, pre-loaded proprietary injector. The proprietary XEN45 technology facilitates aqueous fluid flow to lower Intra-Ocular Pressure (IOP) while protecting against the potential for hypotony (IOP that is too low) that is associated with current subconjunctival procedures. The minimally invasive procedure is performed by ophthalmologists.

XEN45 has received a CE mark in the European Union where it is indicated for the reduction of intraocular pressure in patients with primary open angle glaucoma where previous medical treatments have failed. The CE mark allows treatment in conjunction with a cataract procedure or as a standalone procedure. XEN45 is also approved for use in Turkey, Canada and Switzerland. AqueSys is pursuing reimbursement in these countries. In the United States, XEN45 is in late-stage development, with the final US Investigational Device Exemption (IDE) clinical trial fully enrolled in the second quarter of 2015. Final approval by the U.S. Food and Drug Administration is expected by late 2016 or early 2017 via the 510K device pathway.

"The XEN45 program has been shown to provide a robust efficacy profile with minimal side effects, and if approved in the U.S., would provide an exciting new treatment option for patients, and one that is highly complementary to our ongoing portfolio and development programs in this critical treatment area," said David Nicholson, EVP and President, Global Brands Research and Development at Allergan.

"With its pedigree in the eye care space, its deep commercial network in eye care professional communities, and its commitment to being a leading provider of treatments for glaucoma, Allergan was a natural fit and a compelling partner for us to maximize the potential for the XEN45 technology platform," said Ron Bache, CEO of AqueSys. "The addition of the XEN45 technology to Allergan's world-class eye care development and commercialization organization will propel the potential use of this best-in-class technology by global ophthalmologists and the patients that they treat."

"The XEN45 platform is a minimally invasive reinvention of the sub-conjunctival outflow approach to the treatment of glaucoma, one used for many years by surgeons," said Robert N. Weinreb, M.D., Distinguished Professor of Ophthalmology and Director of the Shiley Eye Institute at the University of California San Diego. "XEN45 provides the advantage of a simpler and less invasive way of conducting a well-established procedure to treat our glaucoma patients, and if approved in the U.S., would provide an exciting new option for ophthalmologists."

Glaucoma is a group of diseases that damage the eye's optic nerve and can result in vision loss and blindness. Several large studies have shown that eye pressure is a major risk factor for optic nerve damage. In open-angle glaucoma, even though an ocular fluid drainage angle is "open", the fluid passes too slowly through a meshwork drain. When the fluid builds up, the pressure inside the eye rises to a level that may damage the optic nerve. When the optic nerve is damaged from increased pressure, open-angle glaucoma-and vision loss may result. In 2010, 60.5 million people globally were living with glaucoma. Given the aging of the world's population, the number of people living with glaucoma may increase to nearly 80 million by 2020.

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 fourth quarter of 2015.