BUSINESS Alcon to Acquire Aerie Pharmaceuticals, Inc., Enhancing its Ophthalmic Pharmaceutical Portfolio By Staff Wednesday, August 24, 2022 12:27 AM GENEVA & DURHAM, N.C.—Alcon (SIX/NYSE: ALC) and Aerie Pharmaceuticals (NASDAQ: AERI), yesterday announced the companies have entered into a definitive merger agreement through which Alcon will acquire Aerie. The transaction is expected to add broader pharmaceutical R&D capabilities to Alcon’s existing commercial expertise. Through the transaction, Alcon will add the commercial products Rocklatan (netarsudil and latanoprost ophthalmic solution) 0.02%/0.005% and Rhopressa (netarsudil ophthalmic solution) 0.02%, as well as AR-15512, a Phase 3 product candidate for dry eye disease, and a pipeline of several clinical and preclinical ophthalmic pharmaceutical product candidates.The transaction complements Alcon’s recent expansion into the ophthalmic pharmaceutical eye drop space, including acquisitions of the exclusive U.S. commercialization rights to Simbrinza from Novartis in April 2021 and of Eysuvis and Inveltys from Kala Pharmaceuticals in May 2022. “Alcon is passionate about innovative treatments in eyecare, especially in core disorders such as glaucoma and dry eye, which have significant patient impact,” said David Endicott, CEO of Alcon. “We have a 75-year history focused specifically on the eye and bring established expertise in development and commercial execution. Aerie is a natural fit with on-market and pipeline products, and R&D capabilities that offer the infrastructure needed to expand our ophthalmic pharmaceutical presence. As we continue to broaden our portfolio across glaucoma, retina and ocular surface disease, we are excited to help even more patients see brilliantly,” Endicott said. Raj Kannan, CEO of Aerie Pharmaceuticals, commented, “We are excited to be joining Alcon, a recognized leader in eyecare. I am so proud of the Aerie team and the innovation we’ve pioneered. Alcon is the right strategic and financial partner to maximize the potential of Aerie’s commercial franchise and our growing portfolio of pipeline assets. "Alcon’s global infrastructure, financial resources, and commercial capabilities will accelerate the standard of care by helping more patients have access to Aerie’s innovative products. I am confident that this combination with Alcon is in the best interest of patients and our shareholders.” Rocklatan is a fixed dose combination of the Rho kinase inhibitor, netarsudil, and a prostaglandin F2α analogue, latanoprost, indicated for the reduction of elevated intraocular pressure (IOP) in patients with open-angle glaucoma or ocular hypertension. Rhopressa is a Rho kinase inhibitor indicated for the reduction of elevated IOP in patients with open-angle glaucoma or ocular hypertension. In most markets outside the U.S., commercialization rights for both products have been licensed to Santen SA and its affiliates. The purchase price of $15.25 per share represents a premium of 37 percent to Aerie’s last closing price and represents an equity value of approximately $770 million. The transaction was approved by the board of directors of each company. Aerie’s most recent financial guidance for total glaucoma franchise net product revenue is $130 million to $140 million for full year 2022. The transaction is expected to be accretive to Alcon’s core diluted Earnings Per Share (EPS) in 2024. The transaction is anticipated to close in the fourth quarter of 2022, subject to the approval of Aerie’s stockholders and the satisfaction of customary closing conditions. J.P. Morgan acted as Alcon’s financial advisor for the transaction, and Alcon’s legal advisor was Skadden, Arps, Slate, Meagher & Flom LLP. Goldman Sachs & Co. LLC acted as Aerie’s financial advisor for the transaction, and Aerie’s legal advisor was Fried, Frank, Harris, Shriver & Jacobson LLP.