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Saturday, February 27, 2021

In Market: This home run is a big win for everyone

On December 20, 2016, Swiss pharmaceutical giant Novartis AG announced a definitive agreement to acquire Fort Worth-based Encore Vision Inc., a privately-held company focused on the development of a novel treatment for presbyopia, better known as farsightedness.

It was a big day for Encore Vision, and TechFW, the nonprofit tech incubator that has supported the startup, Cowtown Angels, the local angel network that has also supported the company financially, Fort Worth, North Texas and let’s not forget the many people who suffer from farsightedness.

No price was announced for the deal, but according to SEC filings from Novartis, the company has put up about $465 million for the company. Ironically, Novartis’ big push into the eye care market was supposed to come from a company just down Interstate 35 from Encore, Alcon. Novartis spent several years and more than $50 billion acquiring the Alcon eye-care company and is now considering options for Alcon, including a spinoff or initial public offering.

But Novartis officials clearly have their sights on eye care with the Encore Vision purchase.

Encore Vision was the first company to pitch when the Cowtown Angels group was being formed in August 2012. Over a three year period, Cowtown Angels members invested about $3 million into the company.

“When angel investors put money into a company, they also put their time and energy into helping the company grow, always hoping that someday they will earn a return on their investment,” said Mike Butts, chair of the Cowtown Angels Steering Council. “Encore Vision is the first Cowtown Angels investment to be sold, and it’s a home run.”

It should be noted that the success rate for most angel investments – defined as the earliest equity investments made in a startup – is not high. Stats are hard to come by, but the Angel Capital Association says that six out of 10 angel investments will lose money, a few will break even, and maybe one out of 10 really makes any scratch. So don’t look for this to happen every week, but when you get a home run, celebrate it. Or maybe this is more like soccer – when you get a goal, rip the jersey off.

Darlene Boudreaux, executive director of TechFW, said the founder of Encore Vision, Bill Burns, was a presenter at the Cowtown Angels orientation meeting. “He presented again in fall 2013 after the first several angel members had joined the program, and Encore Vision was one of the first investments that members of the group made together,” she said.

According to a Novartis news release, the acquisition adds a first-in-class disease modifying topical treatment for presbyopia to the Novartis ophthalmology pipeline. Encore Vision’s product provides “a potentially disruptive innovation to patients in a new therapeutic area of high unmet need and high prevalence.”

Novartis officials, like the Cowtown Angels, obviously see Encore Vision as a winner.

“Local company, plus local founder, plus local investments equal a win for the entire community,” said Hayden Blackburn, assistant director of TechFW and manager of the Cowtown Angels. “And when local investors make money, it means they have more money to invest in more good companies. This is good news for everyone.”

Robert Francis
Robert is a Fort Worth native and longtime editor of the Fort Worth Business Press. He is a former president of the local Society of Professional Journalists and was a freelancer for a variety of newspapers, weeklies and magazines, including American Way, BrandWeek and InformatonWeek. A graduate of TCU, Robert has held a variety of writing and editing positions at publications such as the Grand Prairie Daily News and InfoWorld. He is also a musician and playwright.

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