Ophthalmology market eyed as key sector for investment dollars

By Larry Haimovitch

Medical Device Daily Contributing Writer

January 20, 2010

Download article: Ophthalmology_Innovation_Summit_2009.pdf

SAN FRANCISCO —Although the "main course" at last week's J.P. Morgan Healthcare conference was served up at the Westin St. Francis Hotel, some very interesting "appetizers" were available at the annual OneMed Forum conference  which was held nearby at the Sir Francis Drake Hotel.

Ophthalmology has been a fertile area for VC and corporate investment in recent years. Moreover, the entrepreneurial spirit is still very powerful, with many new startups and early stage companies.

A discussion panel of distinguished experts in the field proceeded several interesting presentations of privately-financed, early stage ophthalmic companies. The group included Andy Corley, currently president of the Bausch & Lomb (Aliso Viejo, California) Surgical Products division, which acquired his former company Eyeonics in early 2008, Reza Zadno, founder and CEO of Visiogen (Irvine, California), which was recently acquired by Abbott Laboratories (Abbott Park, Illinois), Steve Waite a venture capitalist from The Innovation Factory (Duluth, Georgia) and prolific ophthalmic inventor and ophthalmologist Gene de Juan, MD.

Since both Visiogen and Eyeonics were acquired at very lucrative valuations, an obvious question from the moderator David Cassak, a managing director, at Windhover Information, a business unit of Elsevier Business Intelligence (Amsterdam, the Netherlands) was "how did you decide when it was the right time to sell your company?"

Zadno's response was "the decision to sell was based on what we felt was right for our key constituents employees, shareholders and customers," while Corley said that when he and his board realized "how expensive and how difficult it would be to compete against the big boys' in ophthalmology" they knew the time was ripe.

All participants agreed that there will likely continue to be an active strategic alliance and acquisition market, as big companies seek new technology that is mostly developed by earlier stage companies,

"Small companies are more innovative because they always move faster and are willing to take more risk," said Corley.

Discussing the current FDA regulatory climate, de Juan said that the situation is "the worst I have ever seen ... and it will certainly get better because it cannot get any worse."

He also noted that despite the many advances in the field, "the opportunities in ophthalmology are still staggering." He cited several specific areas, including the correction of refractive error, age-related macular degeneration (AMD), glaucoma, dry eye and diabetic-related eye diseases.

The presenting private companies covered the gamut from cataract and refractive surgery, diabetic-related eye diseases and macular degeneration.

OptiMedica (Santa Clara, California) CEO Mark Forchette discussed his company's current business, the treatment of diabetic retinopathy with its proprietary PASCAL photocoagulator laser and its future enormous opportunity, a femtosecond (FS) laser that is targeted for the cataract market.

The former product has catapulted the company to the technological lead in its market, with close to 600 units shipped and 600,000 patients treated since its debut in October 2006. Forchette described this product as a "technological transformation in the retinal field" and discussed plans to leverage this prowess into the glaucoma market.

OptiMedica also plans to enter the FS cataract market, competing against two other private, VC-backed companies, LenSx (Irvine, California) and LensAR (Orlando, Florida). Forchette described this technology as a "revolutionary innovation that will transform cataract surgery."

FS laser technology will be accomplish several things in cataract surgery: (1) Segment and soften the natural lens; (2) Create a perfectly centered and sized refractive capsulotomy; (3) Create all required surgical Incisions with perfect dimension and architecture and (4) Provide a refractive solution to pre-existing astigmatism by creating precision corneal incisions.

The company recently completed a Series D preferred round of financing, raising in excess of $30 million.

Ocular Therapeutix (Waltham, Massachusetts) CEO Amar Sawhney, a successful serial entrepreneur, discussed his company's vision, which is to develop innovative therapeutic products for ophthalmology and ophthalmic surgery based on its proprietary hydrogel technology. Its current focus of product development is twofold: (1) The I-ZIP Ocular Bandage and (2) Hydrogel based drug delivery systems.

The former addresses the cataract surgery market, which Sawhney sized at 4.1 million procedures and $335 million in the U.S. alone in 2010. He said I-Zip's "value proposition" is premised on the rising rate of endophthalmitis, which has significantly increased with mounting use of sutureless clear corneal incisions. Endophthalmitis is a dreaded infection and can lead to blindness if not swiftly resolved.

The I-Zip bandage is easily and quickly applied, is totally compatible with ocular tissue and disappears after three-to-five days in the eye. The recently completed 420 patient trial, which was used to support its 510(k) application in 2009, showed that treated eyes had less post-op inflammation and edema and afforded better patient comfort.

Its drug delivery platform employs two sites the punctum and subconjunctival areas of the eye. The punctum is targeted toward anti-infectives like Vigamox while the latter will serve as a long acting carrier for glaucoma drugs like latanoprost, which suffers for poor patient compliance.

PowerVision (Belmont, California) CEO Barry Cheskin described his company's FluidVision accomodating intraocular lens (IOL) as a "dramatic improvement over existing IOLs." It utilizes natural muscular accommodating forces in the eye to move fluids in the IOL, which results in shape change, like the natural lens and creates an accommodative range of 5-10 diopters. This is far larger compared to currently available products.

The company has successfully completed both animal and blinded human eye trials and hopes to commence its first sighted eye trial sometime this year. It also intends to raise more money around mid-year.

Barry Linder, MD, presented on behalf of Clarity Medical Systems (Pleasanton, California), indicating that the company is expanding from its dominant position in pediatric ophthalmology with its RetCam product line into the major adult market segment of cataracts.

According to Linder, "our rich product pipeline includes three additional product technologies in advanced development that will address very large market segments with breakthrough product technology."

The big future opportunity is its Holos wavefront technology, which will provide continuous wavefront data that is expected to facilitate better patient outcomes for glasses, contact lenses and IOLs. Clarity hopes to enter these markets beginning in late 2011.

NotalVision (Tel Aviv, Israel) CEO John Moore described his company's FDA-approved ForeseeHome AMD home monitoring system, which is designed to ensure the earliest possible detection of the progression of this disease.

It is the first device of its kind in the eye care industry that allows patients with the dry (early) form of AMD to monitor themselves in the convenience and comfort of their own home with data transmitted to the patient's eye care physician and the NotalVision data monitoring center. It is ergonomically designed for patient comfort and ease of use.

Moore said that "this is the first ophthalmic device providing real time diagnostics via the internet linking the patient to the doctor."

Its business concept is that most wet macular degeneration patients suffer irreversible vision loss by the time they are diagnosed and that early detection will result in better visual outcomes,

The company, which has developed a recurring revenue model that it hopes will lead it to early positive cash flow and profitability, plans to launch in the U.S. the shortly.

AcuMEMS (Menlo Park, California) CEO Doug Lee discussed his company's implantable wireless sensor technology for the management of glaucoma.

Lee said that he hopes that his company can "revolutionize ophthalmology with a miniature sensor product that detects and monitors true intraocular pressure (IOP), a proven cause of glaucoma."

It is well-known that direct and continuous measurement of intraocular pressure is lacking. In addition, compliance with glaucoma medications, due to the "silent" nature of the disease, is very poor.

The availability of the patient's IOP, which is transmitted wirelessly to the ophthalmologist, will facilitate the management of this dreaded disease, which is the leading cause of irreversible blindness in the world.

Lee expects that the company will market two products based on MEMS technology that wirelessly communicates with a handheld reader. The first is a device implanted during trabeculectomy surgery and the second is a device implanted as a standalone procedure for patients who require continuous monitoring. Both products enable the patient to control their IOP at a prescribed target pressure by the ophthalmologist.

AcuMEMS kicked off its first round of financing efforts for a Series A preferred at last week's J.P. Morgan conference.


2010 OneMedPlace Conference

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