STAAR Surgical reported Sept. 26 that its second largest active stockholder, Soleus Capital Master Fund, with 6 percent of outstanding shares, intends to vote in favor of Alcon’s acquisition of STAAR.

The move follows multiple announcements by Broadwood Partners, STAAR’s largest investor, opposing the deal and urging other shareholders to do the same. New York-based Broadwood has 27.5 percent of outstanding shares.

Also opposed is Yunqi Capital, with 5.1 percent of outstanding shares.

Alcon’s Offer

Alcon announced Aug. 5 that it would purchase all outstanding shares of STAAR common stock for $28 per share in cash, a 51 percent premium to the closing price of $18.49 on Aug. 4.

Broadwood contends that $28 is too low; Alcon offered $55 per share and a $7 contingent value right in October 2024 in a first attempt to purchase STAAR.

Alcon withdrew that offer on Jan. 3, 2025, according to STAAR’s prospectus on the latest deal. STAAR says Alcon expressed concerns over the macroeconomic climate in China and projected levels of STAAR ICL sales, inventory levels held by distributors, and STAAR’s growth rate.

STAAR, of Lake Forest, California, needs more than 50 percent of shareholders to vote in favor of the latest deal at a virtual shareholder meeting on Oct. 23.

STAAR CEO Stephen Farrell said Sept. 26 that the company is confident the majority of stockholders will support the acquisition.

STAAR’s Declining Revenue

STAAR has had a string of bumpy quarters in late 2024 and 2025, due to falling demand in China for its phakic ICL, but lens surgeries using phakic IOLs are on the rise globally as a solution for refractive error, while laser surgery, such as LASIK, has fallen out of favor.

STAAR contended in its Sept. 26 announcement that sales in China had been dropping since 2023.

The issue wasn’t obvious in earnings reports. As late as Q3-2024, STAAR reported net sales of $88.6 million, a 10 percent increase over $80.3 million in Q3-2023.

STAAR’s earnings report raised red flags the next quarter, when Q4-2024 net sales were $49.0 million, down from $76.3 million in Q4-2023. Q1-2025 net sales were $42.6 million, down from $77.4 million in Q1-2024. And Q2-2025 net sales were $44.3 million, down from $99 million in Q2-2024. The declines were all attributed to fluctuating demand in China.

Phakic IOLs vs. LASIK

Broadwood in one announcement raised the idea that soon-to-be published study results comparing phakic IOLs with laser surgery would reframe the market for refractive surgery.

STAAR said Sept. 26 that there was no pending clinical study that would be “market moving news” or a “significant value creation event,” but rather an investigator-initiated trial sponsored by STAAR that was focused on early postoperative patient experience, not a comparison of clinical outcomes.

Other Suitors

STAAR tried to put to rest an argument over competing suitors not given a chance to bid by reporting on Sept. 22 that the 45-day “window shop” period had expired on Sept. 19 and no competing acquisition proposal was received, despite Broadwood’s active exploration of alternative buyers over the past 45 days.

Broadwood countered in its response that a “hurried and limited” window shop period was no substitute for a well-run strategic alternatives process.

STAAR’s latest press release says the board considered strategic alternatives for more than a year before the Alcon deal was made.

Projections for Future Net Sales

STAAR said Sept. 26 that its outlook wasn’t as rosy as Broadwood contended.

STAAR said: “If the Alcon merger does not move forward, we believe STAAR’s valuation will fall substantially, exposing stockholders to significant risk.” STAAR noted that procedure volumes continue to disappoint in China in Q3-2025.

Broadwood says STAAR’s own projections when considering the proposal in the summer of 2025 showed its prospects improving. Those numbers were unaudited and included in STAAR’s prospectus for the deal.

The prospectus estimated that STAAR’s revenue would increase to $340 million in 2026, $375 million in 2027, and $495 million by 2030, up from an estimated $260 million in 2025. STAAR revenue totaled $313.9 million in 2024, a 2.6 percent decrease from $322.4 million in 2023.

STAAR’s latest announcement said it faces ongoing business headwinds as a single product company. Factors that will continue to impact results include overweight exposure to China, increasing competition, a limited product offering, historical inability to penetrate the market beyond high myopia patients, and tariff risk.

Stockholder Opposition

The prospectus shows that STAAR knew as early as July 6 that a significant stockholder, called Stockholder A, likely would not be on board with the deal. STAAR tried to get Alcon to raise its price to address any concerns. STAAR suggested Alcon pay $29 per share, up from Alcon’s initial offer of $27 per share. Alcon came back with the current $28 per share.

STAAR insisted throughout negotiations with Alcon that STAAR would not pay Alcon a termination fee if shareholders did not approve the acquisition.

But there are termination fees for other deal-ending reasons. STAAR would pay Alcon $43.4 million in cash in a breakup fee, while Alcon would pay STAAR $72.4 million in cash.

Conflict of Interest?

Broadwood said some STAAR officials have a conflict of interest in the deal. STAAR’s executives are poised to earn about $55 million in immediate compensation if the deal is closed, with the CEO receiving $24 million in compensation.

In addition, three STAAR board members have close ties to Alcon, Broadwood said.

STAAR said Sept. 26 that the compensation program is customary, and board members’ consulting arrangements with many companies in ophthalmology do not impair their independence.

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