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.

Issue link: http://digital.ophthalmologybusiness.org/i/108440

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Page 11 of 16

continued from page 11 think you'll fail," he said. However, if the focus is on building a great company, great technology, and great outcomes, then chances are someone will want to acquire it. New investment territory The corneal inlay sector is only one of many trending high for investors in ophthalmology. Dr. Link sees companies emphasizing the posterior segment and drug delivery to the back of the eye for retinal disease as remaining a keen interest for investors. "The fact that Lucentis [ranibizumab, Genentech, San Francisco] and other products are so successful financially and clinically has attracted continued attention here," Dr. Link said. Another area of importance, he thinks, is the glaucoma space. "There's a combination of surgical approaches with sophisticated miniaturized technology such as the minimally invasive glaucoma surgery that's evolving. Thanks to the recent FDA approval of the iStent [Glaukos Corp., Laguna Hills, Calif.], the company has become the leader there." Other companies pursuing such glaucoma innovations will likewise be rewarded. Drug delivery in this sector will also be important, Dr. Link believes. Another possible higher priority investment category is dry eye. "It's a sizeable market that's not fully served, so I would expect to see some continued investment and innovation in that space as well," Dr. Link said. Meanwhile, Emmett T. Cunningham Jr., M.D., Clarus Ventures LLC, Cambridge, Mass.; adjunct clinical professor of ophthalmology, Stanford University; and attending, California Pacific Medical Center, San Francisco, views the 12 biggest markets on the drug side as macular degeneration, diabetic macular edema, glaucoma, and dry eye. "On the device side they are looking at glaucoma devices, so-called ab interno like the Glaukos device," he said. "There are also some companies that are looking at devices for neovascular AMD." As examples, he cited NeoVista (Newark, Calif.) and Oraya Therapeutics Inc. (Newark, Calif.). Also, the femtosecond laser companies have garnered their share of interest. He pegs corneal inlays as another hot target. Besides AcuFocus, other companies in this sector include Presbia (Los Angeles) and ReVision Optics (Lake Forest, Calif.). "The biggest drivers to investor returns are size of the market and unmet need," Dr. Cunningham said. "Presbyopia is a huge market—right now the need is met by glasses, but people often don't like glasses." Likewise, with AMD and dry eyes, he sees a fair amount of unmet need. All the news in the ophthalmic sector, however, is not glowing. "It costs a lot of money and takes a lot of time, and there's a lot of risk— FDA risk and reimbursement risk—to get to an exit," Dr. Cunningham said. Also, there's a perception of ophthalmology being a hotter sector because the AMD market has exploded. "There was the introduction of VEGF inhibitors and then the creation of this massive ophthalmic market that pulled people into ophthalmology as an investment class," he said. "But really it has yet to be replicated in any major way." Still, people hope for a billion dollar drug such as one that can best latanoprost in the glaucoma sector or Restasis (cyclosporine ophthalmic emulsion, Allergan, Irvine, Calif.) in the dry eye market. Ophthalmology Business eZine • February 2013 Despite the current challenges, Dr. Cunningham remains optimistic about future innovation. In particular he holds hope for the "rho-kinase inhibitors" for glaucoma, now being studied by Aerie Pharmaceutical (Bridgewater, N.J.), Amakem Therapeutics (Diepenbeek, Belgium), and Altheos (San Francisco). Approved dry eye compounds being investigated by SARcode Bioscience (Brisbane, Calif.) and Eleven Biotherapeutics (Cambridge, Mass.) could be huge wins for investors and big milestones in the field. In addition, he views Ophthotech (Princeton, N.J.) as having promising data as an adjunct to VEGF inhibition. "I think there are some kind of near to mid-term milestones that could transform those aspects of ophthalmology and ophthalmology investing," Dr. Cunningham said. OB Editors' note: Dr. Cunningham has financial interests with Clarus Ventures, which has financial interests with Aerie Pharmaceuticals, SARcode Biosciences, and Ophthotech. Dr. Link has financial interests with Versant Ventures, AcuFocus, Bausch + Lomb (Rochester, N.Y.), ForSight Labs (Menlo Park, Calif.), Glaukos, Abbott Medical Optics (Santa Ana, Calif.), Alcon (Fort Worth, Texas), NeoVista, Neurotech (Cumberland, R.I.), Ocular Therapeutix (Bedford, Mass.), Second Sight (Sylmar, Calif.), and WaveTec Vision (Aliso Viejo, Calif.). Mr. Peterson has financial interests with AcuFocus. Contact information Cunningham: 650-238-5014, ecunningham@clarusventures.com Link: 949-729-4500, Bill@versantventures.com Peterson: 949-585-9511, epeterson@acufocus.com Back to TOC

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