Appeal of untapped ophthalmic markets continue to lure investors

By Larry Haimovitch

Medical Device Daily Contributing Writer

October 28, 2014

CHICAGO — This year's annual meeting of the American Academy of Ophthalmology (AAO; San Francisco) was upbeat, despite a discouraging regulatory climate at the FDA and continuing reimbursement cuts.

The AAO is by far the largest ophthalmic meeting of each year, typically drawing approximately 25,000 persons from around the world.

Preceding the AAO was the sixth annual Ophthalmology Innovation Summit (OIS), which is organized by the International Business Forum (Massapequa, New York). The stated purpose of OIS is to support innovation by facilitating deal-flow and business partnerships between CEOs of young companies, investors, corporate executives, physicians and academic scientists in the field of ophthalmology.

It is partially because of this tightly woven set of relationships, coupled with the fact that there are many diseases and conditions of the eye that are still not treated optimally that makes ophthalmology an attractive, relatively high growth segment of the medical device industry.

Jeff George, Global Head of Alcon (Fort Worth, Texas), delivered an excellent talk at OIS titled "Accelerating Innovation in Ophthalmology." Alcon is wholly owned by the pharmaceutical giant Novartis (Basel, Switzerland) and George has held leadership roles across four divisions of Novartis since 2007.

George, who developed an affinity for the industry as a youngster because he suffered from very high myopia, cited three key factors that underpin the strong growth potential of eye care. These are the aging of the world's population, a high unmet need in emerging markets and exciting technological and scientific innovations. He said that "innovation is not cheap," saying that the clinical trial costs per patient in ophthalmic-related products is $22,000, higher than any other area of medicine.

Clearly highly optimistic about the global eye care market, he noted that "ophthalmology has tremendous unmet needs," indicating that there are 20 million people globally who suffer from treatable cataracts, 25 million with age-related macular degeneration (AMD), 67 million with glaucoma and 1.7 billion with presbyopia.

He believes that innovations requires a "three pronged" approach: (1) A focus on patient and customer needs; (2) Organizing for success; (3) Making thoughtful choices.

George indicated that "Alcon's mission is built on patients' needs . . . and our goal is to provide innovative products that enhance the quality of life by helping people see better."

Indicative of his company's passion for innovation, Alcon spends approximately $1 billion in R & D annually. This level of spending translates into approximately 9% of its estimated $11 billion of annual global sales, a level that is higher than most medical device companies.

George mentioned that Alcon focuses on specific therapeutic areas of interest, rather than on specific technologies and has created a wide array of strategic partnerships in order to stay abreast or ahead of the innovation cycle.

"We are agnostic about whether innovation is from external or internal sources," George said.

George cited a wide range of innovative ophthalmic products, categorized into cataract, surgical glaucoma, vitreoretinal, retina/pharma and refractive areas. In the cataract arena, he expressed tremendous enthusiasm for Alcon's recently completed $350 million cash purchase of Wavetec Vision (Aliso Viejo, California), which will bolster its already dominant cataract surgery franchise. Another acquisition, the July 2010 cash purchase of LenSx Lasers (Irvine, California) has proven to be sagacious and well timed, as Alcon has enjoyed robust growth in the burgeoning femtosecond laser assisted cataract removal market.

In glaucoma surgery, George cited several technologies: Micropulse Laser Therapy, sold by Iridex (Mountain View, California) for laser trabeculoplasty, minimally invasive glaucoma stents, pioneered by Glaukos (Laguna Hills, California), with many others in hot pursuit, filtration procedures with its own brand, the ExPRESS shunt and shunts and valves for later stage surgery.

There were several vitreo-retinal technologies that were singled out for accolades. These included the DigiSight (Portola Valley, California) mobile digital screening systems, Carl Zeiss's (Dublin, California) intraoperative diagnostics and Alcon's own vitreo-retinal brands–Ultravit) for high-speed vitrectomy, the MIVS micro-vitrectomy systems and the Grieshaber Finesse Flex Loop device.

In the retina/pharma area, he noted that there have been huge strides in the treatment of wet AMD, diabetic macular edema and retinal vein occlusion with attractive products emanating from several different companies.

The refractive area has also seen numerous exciting improvements, including the Innovega (Bellevue, Washington) telescopic contact lens that can switch between normal and magnified vision by using slightly modified off-the-shelf 3D television glasses. It shows promise for severe vision problems like macular degeneration. Others mentioned included a very low cost portable refractor from Eyenetra (Somerville, Massachusetts) and the Oculus VR (Irvine, California) virtual reality headset to treat amblyopia.

George spent a few minutes discussing a relatively new initiative that he is personally very excited about—the strategic joint venture (JV) of Google (Mountain View, California) and Alcon. He candidly admitted that at first he was "very skeptical" about this venture but Google has "blown me away with their speed of innovation . . . and I am now very excited about this program."

According to George, this JV involves non-invasive sensors, microchips, and other miniaturized electronics and will strengthen Alcon's leadership in contact lenses and intraocular lenses. The initial focus of this "smart lens" technology will be on diabetes and presbyopia.

The goal with diabetic patients is to better manage their disease by providing a continuous, minimally invasive measurement of the body's glucose levels, measuring tear fluid in the eye and wirelessly connecting to a mobile device.

For people living with presbyopia the lens has the potential to provide accommodative vision correction in the form of an accommodative contact lens or intraocular lens as part of a refractive cataract treatment.

George said this project reflects one of his key management philosophies, that is, "we need to take big shots on goal."

2014 American Academy of Ophthalmology

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