Wesley Jessen’s
Tale of Two Mergers
Jeffrey S. Eisenberg
Senior Editor
The contact lens industry had its own version of March Madness last
month with a dizzying wave of merger mania. Now it’s up to Wesley Jessen
VisionCare’s shareholders to decide between a proposed $900 million merger
with Ocular Sciences Inc. or Bausch & Lomb’s offer to acquire WJ for
$34 a share. WJ shareholders will hold their annual meeting May 6.
WJ’s strengths include proprietary technology and advanced automated
tinting processes as well as distribution strength among private practitioners.
OSI’s strengths include its clear disposable lens design, manufacturing
capabilities and branding strategies. B&L has focused its efforts on
the SofLens66 disposable toric and PureVision continuous wear lens.
WJ Chairman Kevin Ryan says a WJ-OSI merger would offer wearers of OSI
disposable lenses a color tint option. WJ would expand penetration of OSI’s
new Hydrogenics 60 disposable lens among private practitioners.
B&L sees similar synergies between itself and WJ. “Our PureVision
product along with our Sof- Lens66 toric in combination with the WJ tinted
lenses, I think, is a very attractive portfolio of products to the independent
O.D.,”says B&L Chairman and CEO William Carpenter. “We also believe
that there are distribution synergies and customer service leverages that
come from being able to provide a full range of products for the independent.”
B&L wants to take advantage of WJ’s distribution strengths among private
practitioners while offering WJ greater access to optical retailers and
a stronger international position.
Either deal should mean accelerated new product launches. But will it
also mean higher prices? Not necessarily. “Ocular Sciences’ clear lenses
compete in a very competitive segment where there is little pricing power
such that they could increase price,” Andrew Jay, a director of First Union
Securities, says. Given the synergies a WJ-B&L merger would offer,
he doesn’t anticipate any impact on pricing if that deal goes through,
either.
WJ’s board rejected B&L’s offer, and B&L said it would begin
a tender offer on April 3 to acquire WJ’s outstanding shares for $34 a
share in cash. B&L also plans to nominate three directors to Wesley
Jessen’s board at the annual meeting. Mr. Carpenter says B&L has no
interest in acquiring Ocular Sciences.
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Check Your Wallet: VisX Drops Royalty
Fee for LASIK
Rich Kirkner
Editor-in-Chief
What happens now that VisX has reduced the per-procedure royalty fee
for its STAR excimer laser by 60%? It depends on whom you talk to, but
it could be like throwing gasoline on the already-heated price competition
among refractive laser centers.
And, it could make retreatments more problematic for doctors and surgery
centers. The new $100 per-procedure fee does not cover retreatments while
the previous $250 fee did, VisX says.
Look for the fee reduction to benefit patients mostly in the form of
lower prices, says optometrist Kenneth Taylor, a vice president with Arthur
D. Little Consultants. “Clearly, reducing the royalty fee makes U.S. practitioners
more competitive with their Canadian colleagues in pricing with consumers,”
he says. Many centers in North America are moving toward what Dr. Taylor
calls a “low-cost model.”
That could come back on the comanaging doctor in lower comanagement
fees and give O.D.s an opportunity to quote lower fees to patients. Or,
the surgery center could pocket the difference.
“If the fee to the patient is reduced by $200, it may not affect comanagement,
since the [royalty] savings are not related to pre- or postoperative care,”
says Paul Karpecki, O.D., clinical director of corneal and refractive surgery
studies at NovaMed-Hunkeler Eye Centers in Kansas City, Mo. “Having said
that, many comanagement situations are based on a percentage of gross (i.e.
20%) and $200, if passed on to the patient in savings, would be $40 less
per eye” for the comanaging doctor.
At least one laser center company plans to funnel the savings down to
patients. “A lower cost base will have a positive effect on our bottom
line and give us greater flexibility in our pricing strategy,” says Thomas
P. Lewis, president and CEO of Vision America Inc., which has 16 VisX STAR
S2 systems in its network.
Another possibility is pricing “stratification,” Dr. Taylor says. Some
arrangements may move toward à la carte pricing with separate fees
for pre-op, procedure, post-op and royalty, or different fees for different
procedures.
VisX announced the royalty reduction days after the International Trade
Commission issued a final ruling dismissing its patent infringement claim
against Nidek Inc.
At the same time, a Boston law firm filed a securities fraud lawsuit
against VisX, claiming that the royalty reduction would affect the company’s
revenue growth. The suit, which was filed in federal district court in
northern California, is without merit, VisX says.
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Pseudomonas Strain Stirs Debate
Over Solution
John Murphy
Senior Editor
Have you heard the news that ReNu multipurpose solution has little
effect on a resistant and virulent strain of Pseudomonas? It was published
recently in a non-refereed contact lens magazine and picked up in the lay
press.
But it’s a mistake—or at least the results are, according to one other
scientist as well as the manufacturer, Bausch & Lomb.
Researchers at Indiana State University tested a strain of Pseudomonas
aeruginosa and found that some multipurpose contact lens solutions had
difficulty killing it. The investigators singled out Bausch & Lomb’s
ReNu as by far the most impotent. The two researchers—one of whom is a
life sciences undergraduate and optician, the other an assistant professor
of life sciences—describe it as a particularly virulent strain that can
cause blindness in 36 hours if left untreated. Their results were published
in January.
But the study has problems, says Suzanne J. Fleiszig, O.D., Ph.D., of
University of California-Berkeley. Dr. Fleiszig had originally isolated
the virulent strain. She repeated the ISU experiment and found both bacterial
strains the ISU researchers used were killed “very nicely” by ReNu.
Michael J. Miller, Ph.D., B&L’s director of biological and surgical
sciences, said the ISU study was “flawed, false and misleading.” It didn’t
adhere to accepted FDA and industry testing standards. It didn’t identify
its methods. It used 10 times the amount of bacteria the FDA guidelines
call for. And it didn’t grow the strains correctly.
Dr. Miller says his lab duplicated the study using the FDA-stipulated
number of bacteria, as well as the higher number used by the ISU researchers.
His lab followed FDA procedures to the letter, and ReNu killed virtually
all the bacteria even at the higher amount.
But the FDA guidelines don’t reflect bug strains in the real world,
says ISU researcher Kathleen Dannelly, Ph.D. She says she and her co-author,
Thomas Tsai, used a higher number of bacteria than would normally be found
on a contact lens.
However, the bacteria she used was “fully alive, fully pathogenic,”
she says. FDA-style testing uses stock strains that are weak, and require
that half the testing organisms aren’t actively growing and the other half
are dead, she says. The strain she used from Dr. Fleiszig came from an
infected eye, not transferred through generations in a lab.
Dr. Miller scoffed at the ISU researchers’ methods, and says that lab
strains in FDA tests are plenty potent and are no more than five generations
from origin. B&L will release its response detailing its methods soon.
Dr. Fleiszig says that all the research still hasn’t shaken out. Besides,
she’s found other organisms that resist the bactericidal activity of all
the multipurpose solutions.
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No Link Between Night-lights
and Nearsightedness
Good night. Sleep tight. Don’t let the night-light give you myopia? Actually,
leave it on if you wish. That’s what researchers say about the risk of
night-lights contributing to myopia in toddlers.
Two recent studies funded by the National Eye Institute contradict a
report published last year by University of Pennsylvania and Children’s
Hospital of Philadelphia researchers.1,2 The earlier study found
that children younger than 2 who slept with a night-light on were more
likely to develop nearsightedness as they grew up.3
But that study had two problems, says researcher Karla Zadnik, O.D.,
an associate professor of optometry at Ohio State University College of
Optometry. It didn’t take into account parental myopia, and it included
a clinical, not a representative, population.
When trying to duplicate the study, Dr. Zadnik and Jane Gwiazda, Ph.D.,
of the New England College of Optometry, separately found no link between
night-lights and myopia. They each found that the prevalence of myopia
in children was about about 20% whether the children slept in dark or light.
They also found an association between parental myopia and the use of night-lights.
“It may just be that nearsighted parents turn on the night-lights,” Dr.
Zadnik says.
References for this story
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1. Zadnik K, Jones LA, Irvin BC, Kleinstein RN, Manny RE, Shin JA, Mutti
DO. Myopia and ambient night-time lighting. Nature 2000 Mar 9;404(6774):143-4.
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2. Gwiazda J, Ong E, Held R, Thorn F. Myopia and ambient night-time lighting.
Nature 2000 Mar 9;404(6774):144.
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3. Quinn GE, Shin CH, Maguire MG, Stone RA. Myopia and ambient lighting
at night. Nature 1999 May 13;399(6732):113-4.
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Blacks Get Less Glaucoma Surgery
Than Whites
Blacks with glaucoma are about half as likely as whites to undergo argon
laser trabeculoplasty, even though African-Americans are six times
more likely to develop the disease, a team of researchers at UCLA’s Jules
Stein Eye Institute reports.
The researchers, led by Uday Devgan, M.D., studied Medicare claims for
ALT procedures for 30,495 black and 160,792 white patients, all 65 or older.
The claims were filed between 1991 and 1994.
Following similar research in the late 1980s and early 1990s, this study
suggests that the disparity is narrowing. But the results are still troubling.
The rate of surgery for blacks was 47% less than researchers had expected.
The authors of the study, published in the February 2000 issue of Archives
of Ophthalmology, suggest several reasons for the disparity. Among them:
lack of access to health care, and racial and socioeconomic biases. The
researchers also note a lack of education among both patients and general
practitioners.
“An excellent job of educating the public has been done with regards
to breast cancer,” Dr. Devgan says. “But ask the general public what glaucoma
is and the vast majority of them will not know.”
The study did show increasing rates of ALT among black Medicare beneficiaries
in the latter two years, 1993-1994, suggesting that the gap may be narrowing,
researchers conclude. However, to close gap any further may take what the
researchers call, “a major change in the public health policies in the
United States.”
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Study Confirms Women More Vulnerable
to Dry Eye
In the largest-ever study of its kind, researchers at Boston’s Brigham
and Women’s Hospital looked at the prevalence of dry eye among some 48,000
health professionals nationwide. The study confirms what optometrists have
long known anecdotally-that dry eye syndrome is widespread and more prevalent
among women.
The mailed-in questionnaires—part of the broader Physicians’ Health
Study and Women’s Health Study—showed that 8.1% of women and 3.5% of men
55 and older experience dry eye symptoms “constantly” or “often,” or have
been diagnosed clinically with dry eye.
The researchers also aim to determine risk factors for dry eye. They’ve
already discovered that one risk factor is hormone-replacement therapy.
Women on estrogen treatment have an 80% higher risk of dry eye. Those taking
a cocktail of estrogen and progesterones—currently the most common form
of hormone-replacement therapy—have a 30% higher risk. There’s no evidence
of a causal link, Brigham & Women’s epidemiologist Debra A. Schaumberg,
O.D., Sc.D, cautions. It may be that those suffering from dry eye are simply
more likely than others to take hormone-replacement therapy.
Over the next year, Dr. Schaumberg and her associates will examine some
200 of the respondents to determine objectively the clinical status of
their eyes. That will further validate the survey’s findings. It’s also
an opportunity to look at biological risk factors that may correlate with
dry eye. Meantime, Dr. Schaumberg and her crew will review lifestyle factors
such as prescription drug use, smoking, alcohol use and diet to see how
they relate to dry eye.
“The long-range goal is, number one, to draw increased attention to
the scope of the [dry eye] problem in the United States,” Dr. Schaumberg
says. “Another is to understand the impact that these symptoms are having
on people’s lives. And the third area that would have potential clinical
benefit is a better understanding of the pathogenesis of dry eye.”
A better handle on what causes dry eye may lead to an effective treatment
and maybe even a means of preventing it. If so, studies like the one at
Brigham & Women’s may one day be unnecessary.
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In the News
The therapeutics bill in Georgia, reported
here last month, was defeated. The Georgia Optometric Association will
try again next year.
Have you noticed your contact lens dispensing
slipping? 1-800 Contacts Inc. reported sharply higher sales—$31
million—for its first fiscal quarter. The company attributes growth in
part to rising online orders.
William E. Fleischman, O.D., has died.
Dr. Fleischman served on dozens of clinical investigative panels and was
a frequent lecturer. He was a pioneer in the contact lens field, and his
1968 monovision paper was among the first ever published on that subject.
A new eye drop that halts the growth of leaky
blood vessels in retinal degeneration was unveiled by InSite Vision.
The active ingredient, batimastat, demonstrated an anti-angiogenic effect
in human and animal studies. Clinical trials for diabetic retinopathy will
begin later this year.
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