Allergan to acquire nasal implant for dry eye

Allergan plans to buy device startup Oculeve for $125 million to acquire a non-invasive nasal implant designed to stimulate natural tear production in patients with dry eye disease.

Oculeve has completed 4 clinical studies on the device, known as OD-01, in more than 200 patients. The device is inserted into the mucous membrane of the nasal cavity and another inserted under the skin below the eyebrow. Rates of tear delivery are then adjusted manually through a wireless controller. Allergan also will gain an earlier-stage, undisclosed dry eye device that's in development.

"The OD-01 program has been shown to provide a strong safety and efficacy profile, and if approved, would provide an exciting new treatment option for patients that is complementary to our existing product offerings in this important treatment area,” said David Nicholson, executive vice president for Global Brands Research and Development at Allergan.

Allergan plans to conduct 2 additional trials before requesting FDA approval, which is expected is 2016 with a projected commercial launch in 2017.

Oculeve came out of the Stanford Biodesign program and counts Kleiner Perkins Caufield & Byers, New Enterprise Associates and Versant Ventures among its investors.