Written by Brenda Nakalema

Aerie Pharmaceuticals Stock Surges Amidst $770 Million Alcon Deal

Alcon (ticker: ALC) agreed to purchase the ophthalmic therapies company Aerie Pharmaceuticals (ticker: AERI) for $15.25 a share, putting the …

Alcon (ticker: ALC) agreed to purchase the ophthalmic therapies company Aerie Pharmaceuticals (ticker: AERI) for $15.25 a share, putting the company’s valuation at roughly $770 million.

The deal closed at a premium of 37% to Aerie’s last closing price of $11.15 a share on Monday. Shares of Aerie (ticker: AERI) climbed 35.6%, landing at $15.12 on Tuesday. Alcon shares declined 0.2%.

Under the deal, Alcon plans to add Aerie’s Rocklatan and Rhopressa eye drops, AR-15512, a phase 3 product candidate for dry eye disease, plus a pipeline of other clinical and preclinical ophthalmic pharmaceutical product candidates.

The expectation is that the deal will close within the fourth quarter. Alcon announced that the acquisition will increase its core per share in 2024. The boards of both companies were happy with the decision.

Despite this seemingly good news, Needham analysts lowered their rating on Aerie shares from Buy to Hold, citing “competitive bidding process seems unlikely to materialize before the transaction closes in 4Q22.”

“We believe AERI has long been exploring potential M&A exits for the company since the launch of Rhopressa/Rocklatan failed to meet expectations and financing the commercialization of the slow-growing glaucoma franchise became more challenging,” said the analysts, led by Serge Belanger. “Those efforts to find a bid likely increased when the original management exited in 2021.”