Soon you"ll be dealing with a new supplier of contact lens care products: Advanced Medical Optics Inc., or AMO, which Allergan Inc. is spinning off.

The Complete line of lens care products will come under AMO"s umbrella, as will a line of foldable intraocular lenses for cataracts. Allergan expects to complete the spin-off in the next month or so. Allergan post-spin-off will concentrate on its pharmaceutical business.

James Mazzo, president and CEO of AMO, says the structure will enable the new company to focus on becoming the "experts" in contact lens care and medical optics. One way the new company will do that is by concentrating its research and development efforts on lens care and surgical products without competing with the faster-growing pharmaceutical unit.

Under Allergan, lens care and medical optics expenses on R&D were about 5%, Mr. Mazzo says. Under AMO, that share will move into the 8-10% range.

AMO will also continue establishing alliances for its contact lens care and surgical products, along the lines of that between Complete and Johnson & Johnson"s Vistakon contact lens division.

Two other key strategies of the new company:

Address the growing international markets. "This is a very attractive market place due to the demographics and increasing acceptance of contact lenses," Mr. Mazzo says. Currently AMO"s lens care products rank first in foreign sales but second in domestic sales. The Asian market is the fastest growing contact lens market in the world now, and AMO aims to leverage its position to gain more of that market.

Focus on optometry. "We"re going to spend more time with optometrists and in the optometry schools," Mr. Mazzo says. "I"m a strong advocate that this is a professional business, and that"s where we"re going to spend our time and energy."

AMO will utilize separate sales forces to service its contact lens care and surgical accounts.

At some point, Mr. Mazzo anticipates the new AMO will look to acquire other companies and technologies that could advance its product line. As a stand-alone company, AMO would have sales more than $500 million a year, the company estimates. (Sales of AMO operations were $571 million and $543 million in 2000 and 2001, respectively.) Allergan anticipates annual sales in excess of $1 billion.

Vol. No: 139:04Issue: 3/15/02