Cowtown Angels score big with $465 million sale of Encore Vision

Novartis has revealed how much it paid to buy Encore Vision, a Fort Worth startup that has developed an eyedrop to treat presbyopia — and it’s an eye-opener.

In an SEC filing Wednesday, the Swiss pharmaceutical giant that owns Alcon put the preliminary fair value of the transaction announced last month at $465 million. Novartis reported that the deal includes an initial cash payment of $375 million “before ordinary purchase price adjustments,” plus $90 million due Encore shareholders over time “upon achievement of specified development and commercialization milestones.”

That’s a huge payday for investors in the company, including the Cowtown Angels, a Fort Worth angel investor network whose members along with a local venture capital fund put about $4 million into the company.

“Encore Vision is the first Cowtown Angels investment to be sold, and it’s a home run!” said Mike Butts, chair of the Cowtown Angels Steering Council, in a statement.

Bios Partners invested $3.7 million into Encore Vision and was its largest single largest shareholder, said Les Kreis, who co-manages the fund and served as an Encore director. About eight other Cowtown members invested the other $300,000.

Kreis declined to specify the size of its stake in Encore, but said it amounted to less than 20 percent of the company. He said he learned about the startup through the Cowtown Angels group, where he was a founding member. Encore raised money from a number of other investors as well, mostly private individuals.

“The Encore Vision investment is an excellent example of how local angel investors can work closely with institutional investors to share expertise and ultimately some success,” Kreis said.

Presbyopia is a hardening of the eye lens experienced by about 80 percent of people over the age of 45, which results in loss of near-distance vision and the need for reading glasses. Encore’s EV06 eye drop, which softens the lens, has shown positive results in phase I/II clinical trials.

Encore Vision was founded 10 years ago by Bill Burns, a former Alcon executive, who set up shop at TechFW.

Burns said last month that the eyedrop is still at least a couple of years away from the marketplace, with both Phase II and Phase III clinical studies to be completed.

Darlene Boudreaux, Executive Director of TechFW, a business incubator that helped form the Cowtown Angels group, said Burns pitched his company at their first meeting in 2012. “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,” Boudreaux said in a statement.