Ophthalmology Business

FEB 2013

Ophthalmology Business is focused on business topics relevant to the entrepreneurial ophthalmologist. It offers editorial, opinion, and practical tips for physicians running an ophthalmic practice. It is a companion publication of EyeWorld.

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Venturing into new startup territory T hese days many are panning for ophthalmic gold in the form of the next great startup with answers for any of a number of widespread ocular conditions. Bill J. Link, Ph.D., managing director, Versant Ventures, Menlo Park, Calif., sees the ophthalmic sector as a highly attractive one for investors. "The market is big, the physicians, researchers, and clinical specialists are open-minded, and they're receptive to new technology," Dr. Link said. He pointed out that ophthalmology has enjoyed a series of startup successes over the last decade or so, validating the idea that the market will reward innovation. Tracking successful footsteps One ophthalmic company already glinting brightly in the sights of many is AcuFocus (Irvine, Calif.). This company offers the KAMRA corneal inlay, designed to restore near vision in presbyopic patients. Founded in 2001, AcuFocus has drawn over $125 million from investors over the years. The KAMRA corneal inlay is currently approved in 47 countries, according to Edward Peterson, CEO, AcuFocus. There has been ample opportunity for the KAMRA inlay to make inroads thanks to the huge presbyopic market. "Nearly everyone over the age of 40 will become presbyopic and it is expected that by the year 2020 this will represent 2.1 billion people worldwide," Mr. Peterson said. While there are other solutions to presbyopia, these have not satisfied many presbyopes due to the necessary tradeoffs in distance vision. The difference with the KAMRA inlay is that patients get improved near and intermediate vision, without compromising distance vision, Mr. Peterson said. Timing has also been favorable for the company. Mr. Peterson pointed to the rapid adoption of personal electronics that has further driven the market. "If you stop and think about what has happened in our world, the tools we now use daily have put a greater demand on reading vision," he said. "Our iPad, our iPhone, our computer—all of these are devices that we now carry with us to communicate with the rest of the world." This heightened reliance on near and intermediate vision make correction with the KAMRA inlay invaluable. One of the things Mr. Peterson thinks has helped to set AcuFocus apart from other young companies is the way it approaches data. Garnering input from an expert he brought to the company from the semiconductor field, who went on to become his COO, Mr. Peterson gained new insight on this. "He had never been in the medical business, and he said, 'The way you guys look at data is archaic,'" Mr. Peterson said. He further pointed out that the traditional data analysis methodology and data management systems limited the ability of a company to fully understand how its product works and the major external factors influencing outcomes. Offering an analogy, he urged Mr. Peterson to "walk around the statue"; it isn't enough to simply look at the front if you are going to fully understand what is before you. He recommended the company enlist an electronic data process used in his prior field that allowed for rapid multivariate analysis. The AcuFocus team has since applied this system to both its clinical trial and commercial data analysis programs in order to examine every point. "Anyone that comes to the company can sit there and ask obscure questions of this data and receive an immediate answer," he said. "This approach has also made it possible for us to release a vetted product to the marketplace where other companies rely upon commercial use to refine results." In his view, this novel approach brought the data to life, making the KAMRA inlay's capabilities clear. AcuFocus also gained traction by selling the inlay outside of the U.S. while simultaneously pursuing the FDA process. This has helped to provide the company with a commercial revenue stream in addition to early venture capital and strategic money. "You can't continue to finance these companies with venture cash alone because the timelines have gotten so much longer," Mr. Peterson said. "So going outside of the U.S. and starting to sell your product offsets this." Mr. Peterson urged others who would like to follow this blueprint to get the CE mark as early as possible to clear the way for sales to countries adhering to this standard. However, this step alone is not sufficient; it is still necessary to register in every country. "In order to reach markets that depend on a certificate of free sale, U.S. companies should consider ways to manage their supply chain to allow access to markets like China," he explained. While AcuFocus launched its international efforts initially in Europe, Mr. Peterson recommended that others take this further. "The Asian countries and some of the South American countries have the ability to reach more people more quickly," he said. Mr. Peterson urged other new CEOs to keep in mind the overall journey as part of the goal. "If you go in with the idea that you're going to focus on selling the company, I continued on page 12 February 2013 • Ophthalmology Business eZine 11

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