OCUMENSION "joins hands" with global ophthalmic leader Alcon, introducing 8 drugs

On August 13, OCUMENSION-B (1477.HK) announced plans to introduce Alcon's (Alcon, ALC.N) related rights in China for a combination of 8 dry eye treatment and surgical eye drops products.

These 8 drugs are Xinleiran, Leiran, Beiran, Aierkang, Lishede, Saifeijie, Siran, and the candidate pipeline AR-15512.

Doubling down on dry eye syndrome is a key reason for OCUMENSION-B's move this time.

Xinleiran, Leiran, Beiran, and the candidate pipeline AR-15512 are all used to treat dry eye syndrome; Siran is used to relieve dryness in the eyes.

The market prospects for dry eye syndrome are indeed vast.

Public data shows that the number of dry eye syndrome patients in China has reached 360 million, a condition that may cause eye discomfort and visual impairment.

Currently, OCUMENSION-B's layout in dry eye syndrome is relatively limited.

In commercial products, OCUMENSION-B only has "Ouqin" for treating dry eye syndrome; the tyrosine kinase inhibitor OT-202 in the pipeline can also be used to treat dry eye syndrome but is still in the preclinical stage.

TradeWind01 noted that there are differences in treatment strategies between OCUMENSION-B's existing products and the new products this time.

The main component of Ouqin is sodium hyaluronate, which has high water retention and viscoelasticity, providing lasting lubrication and moisturizing effects; while Xinleiran, Leiran, and Beiran mainly relieve dry eye syndrome by mimicking the composition of human tears.

"Through this transaction, the company will further enhance its competitive position in the field of ophthalmic drugs, especially strengthening its business competitiveness in the field of dry eye syndrome. Dry eye syndrome is a globally prevalent ophthalmic issue, and the company has accumulated a wealth of experience and market share in this field," OCUMENSION-B stated.

In terms of surgical eye drops, OCUMENSION-B introduced the topical local anesthetic eye drops Aierkang for corneal and conjunctival surgery anesthesia; introduced "Lishede" for diagnostic-assisted sterile intravenous injection; "Saifeijie" is an anti-cholinergic drug for local use in the eyes.

Currently, OCUMENSION-B's products do not yet cover surgical eye drops, and this introduction effectively fills the gap in this sector.

It is worth mentioning that this transaction is not a one-off deal, as Alcon is expected to become one of the major shareholders of OCUMENSION-B through this.

As the transaction consideration, OCUMENSION-B plans to issue 139 million shares to Alcon. Based on OCUMENSION-B's closing price of HKD 7.33 per share on August 12, the transaction consideration amounts to a high of HKD 1.02 billion.

After the issuance, Alcon's equity stake in OCUMENSION-B will reach 16.71%, second only to its largest shareholder 6 DimensionsCapital, L.P.

According to the assessment by intermediary agencies, the value of the related rights of these 8 products is HKD 1.28 billion, a premium of 25.51% over the transaction consideration.

If the transaction is completed, OCUMENSION-B is expected to further expand its performance space.

According to unaudited data disclosed by OCUMENSION-B, the total revenue of these 7 products in China from 2021 to 2023 is expected to be HKD 222 million, HKD 251 million, and HKD 279 million, respectively From a fundamental perspective, OCUMENSION-B has shown significant growth in performance. In the first half of 2024, the revenue was 168 million yuan, a year-on-year increase of 61.31%; while the net loss attributable to shareholders in the same period was 151 million yuan, a year-on-year reduction of over one-fourth.

This is the result of the rapid increase in sales of OCUMENSION-B's core product, OptiSert (fluorine light vitreous body implant), after being included in medical insurance. This drug is mainly used to treat uveitis.

With the improvement in dry eye syndrome layout this time, the market is eagerly anticipating whether OCUMENSION-B can achieve a turnaround soon