Friday, December 10, 2010

The Second Ophthalmic Innovation Summit

Last October, the Second Ophthalmic Innovation Summit (OIS) was held just prior to the 2010 AAO Meeting in Chicago. As was the case last year, my old friend, Larry Haimovitch,an ophthalmic industry veteran, who attended the meeting and wrote about it for the sponsor’s website, Healthcare Syndicate has given me permission to reproduce his writeup in this space.

(To see Larry’s writeup from the First Ophthalmic Innovation Summit, held just prior to the 2009 AAO Meeting, just follow this link.)

2nd Annual Ophthalmology Innovation Summit

By Larry Haimovitch
Healthcare Syndicate Contributing Writer
October 14, 2010

CHICAGO - The second annual Ophthalmology Innovation Summit (OIS) took place in Chicago on October 14, just prior to the 2010 annual meeting of the American Academy of Ophthalmology (AAO). In every respect, it was an enormous success, with attendance nearing 600 delegates, representing a 50% increase over last year's meeting, which was held in San Francisco. Organized by International Business Forum, and chaired by Emmett Cunningham of Clarus Ventures, along with Bill Link from Versant Ventures and Gil Kliman of InterWest Partners.

The purpose of this conference is to support innovation by facilitating deal-flow and business partnerships between the leading CEOs, venture investors, corporate strategic executives, physicians and academic scientists in the field of ophthalmology.

The format was similar to last year, with the morning sessions devoted to crisp, 8-minute presentations from 12 device companies and 13 biotech/pharmaceutical companies. All the presenting companies are privately-owned and mostly venture capital-backed.

In addition to the numerous company "pitches," there were a handful of lively panel discussions with savvy participants. The topics were tailored and highly relevant to the audience, including reimbursement, funding and exit trends, "do's and don'ts" in negotiating a deal, commercialization outside the U.S.A., a discussion on the hugely promising femtosecond laser-assisted cataract surgery technology and a focus on drug delivery.

The private device and biotech/pharmaceutical companies section included some returnees from last year's OIS, which was interesting because it gave returning participants an opportunity to assess the progress these companies had made in the past twelve months.

The device companies were represented by both the anterior and posterior chamber of the eye. The former included the refractive surgery companies AcuFocus, ReVision Optics, PowerVision and NuLens, and two surgical companies, Wavetec Vision Systems and Ocular Therapeutix. The latter group included companies like Transcend Medical and Glaukos Corporation that have developed innovative devices to alleviate glaucoma. In addition, three companies -- SecondSight Medical Products, Intelligent Medical Implants and Retina Implant -- devoted to restoring functional sight to the blind -- also presented their stories.

Another posterior segment company, OD-OS, kicked off the proceedings in the morning with a discussion by their CEO Winfried Tiewes about the company's innovative retinal navigation system trade-named the Navilas.

According to Tiewes, their technology will soon become the "standard of care in the posterior segment" because of its superior attributes. Navilas is designed to replace today's cumbersome multi-step technology with an integration of both the diagnostic and therapeutic functions. Tiewes ticked off the numerous advantages of Navilas over standardized laser therapy which include:

●    Higher accuracy, through better targeting and laser guidance

●    More comfort for both the patient and physician, as a result of ergonomic design and touch screen
●    Convenience for the doctor and because of infrared light and no need for contact glass for the patient
●    Increased safety arising as a result of a larger field of vision
●    Transparency, through therapy documentation of fundus images
●    Last but certainly not least, more speed through faster execution and shorter treatment times

The company, which used the slogan "bringing navigation to retina" on the AAO exhibit floor, has attained both CE Mark and FDA approvals and is now marketing directly in both Germany and the U.S.A. It is also beginning to set up distributors in several European countries and in the Middle East.

CEOs Ed Peterson of AcuFocus and Randy Alexander of ReVision Optics, whose companies have both developed intrastromal implants (often referred to as corneal inlays) provided the audience with an update on their progress in the past year.

Peterson noted that the Kamra Inlay, a tiny doughnut shaped device with 8400 miniscule holes to allow nutrients to reach the cornea, has now achieved significant clinical and commercial experience, with over 1000 clinical trial patients and about 1200 commercial sales outside the U.S.

Peterson described the Kamra global market opportunity in the $9 billion range, as it works effectively across several different conditions where improved reading vision is necessary. It has achieved CE Mark approval and the company intends to file a re-market application with the FDA before the end of 2011.

Finally, Peterson indicated that AcuFocus is now raising its "final" round of funding, which will carry the company through the FDA approval, full commercialization outside the US and to cash flow breakeven.

Alexander, a veteran of the ophthalmic surgical device market, described his company's Vue+ device as a hydrogel corneal inlay that is implanted after the creation of a femtosecond laser flap. It restores near (reading) and intermediate (computer or cell phone) vision in patients with myopia, hyperopia, and plano presbyopia.

The company has progressed significantly in the past year, it has garnered CE Mark approval and a commercial launch is underway. They have completed a Phase 1 feasibility trial in the US with 30 treated eyes at two centers. Recently, Revision received good news from the FDA, that its trial can be expanded to treat an additional 75 eyes at five more domestic centers.

Like Peterson, Alexander noted that his company addresses a huge market opportunity. For plano presbyopes (i.e., good distance vision but compromised near vision due to aging) he sized this opportunity at 90 million people in the "wealthy" nations of the world.

Alexander reviewed the excellent clinical data for its domestic trial, showing that patients achieved a tremendous gain in near vision almost immediately. He called this a "wow factor" and compared it to LASIK, where most patients immediately see dramatically better after their procedure. All 30 patients in the feasibility trial achieved outstanding visual acuity in the near, intermediate and distance categories. Importantly, all patients were very satisfied and would have the procedure again.

The company is also investigating the concurrent use of Vue+ and LASIK and preliminary results are quite promising, with patients gaining significant improvement in both their near and intermediate distance, as well as far distance from the LASIK itself.

The accommodating intraocular lens (A-IOL) space has been keenly followed, especially since two private companies (Eyeonics and Visiogen) were acquired in recent years for princely sums by Bausch & Lomb and Abbott Laboratories respectively. Two private A-IOL companies that are making significant clinical progress but are not commercial yet are PowerVision and NuLens.

CEO Barry Cheskin of PowerVision provided a succinct review of the company's progress in developing its FluidVision A-IOL. This proprietary device utilizes natural muscular accommodating forces in the eye to move fluids in the IOL. This results in shape change like the natural lens and creates an accommodative range of five to 10 diopters. Importantly, FluidVision will be injectable through a sub-four millimeter incision.

Early clinical results are encouraging. Data presented at the American Society of Cataract and Refractive Surgery (ASCRS) meeting in Boston in April showed an average of six diopters of accommodation in a small number of patients. Six month follow-up data confirmed this.

PowerVision plans further trials both outside and within the USA and is now well-funded, having raised over $20 million in the third quarter of 2010.

Tel Aviv-based NuLens, whose A-IOL is based on the known physics phenomena of material displacement, is also enjoying good progress, having implanted 40 patients since its human trials began. Further, there has been a sizable reduction in the incision size from 9 millimeters in the early trials to below 5 millimeters in recent studies. A sub 3.5 millimeter design is now in development.

All NuLens patients have demonstrated accommodative ranges of 4 to 10 diopters in objective measurements. Visually impaired patients have also demonstrated significant improvement and there is a possibility that this device could be marketed as a low vision aid.

NuLens CEO Ori Gal noted that the company plans to submit applications for an IDE in the U.S. and CE Mark during 2011 for both cataract and impaired vision devices.

Tom Frinzi, who recently became the CEO of Wavetec Vision, discussed the company's ORange intraoperative wavefront aberrometer. This device addresses a major issue in today's cataract surgery world. More than one in three cataract patients still require glasses to see well at a distance after their surgery. On the other hand, LASIK is considerably more successful, with well over 90% of patients attaining 20/20 vision.

The key problem, Frinzi explained, is that there has been no way to assess the patient's optical system during surgery and thus determine the proper IOL power. As a result, surgeons must guess on the IOL selection and then may wait as long as 90 days to assess the outcome of their surgical decisions.

The ORange system addresses this issue, providing never-before-available intraoperative refractive information and enabling the surgeon to do an "on-the-fly" surgical course correction. The company's concept is "Get it right -right on the table." Clinical data is supporting Frinzi's assertion that the ORange really works, with approximately 80% of patients achieving spectacle-free vision.

For physicians who adopt the ORange, which has an automated per eye revenue model, they will not only provide a much better outcome for their patients but they will also enjoy increased revenue because they will be able to "up- charge" the patient considerably more than the "per click" fee that they pay to Wavtec.

Frinzi reported that since joining Wavetec, he has put several initiatives in place, including fundraising, implementing a high performance management system, completing key clinical trials and growing the current modest installed base of 100 today by targeting the 2500 domestic refractive cataract surgeons.

There were three interesting presentations from the CEOs of SecondSight Medical Products, Intelligent Medical Implants (IMI) and Retina Implant AG. These companies are all developing retinal implants which are designed to partially restore useful vision to people who have lost theirs due to degenerative and dreaded eye conditions such as retinitis pigmentosa (RP) or age-related macular degeneration. (AMD).

Swiss-based IMI's Intelligent Retinal Implant System (IRIS) device is based on an implantable retinal stimulator and two external components. It is designed for easy implant and ease of use. Early proof of concept, along with functionality and feasibility trials has gone well and the company hopes to start a ten patient pilot trial sometime in 2011.

Like the other retinal implant companies, German-based Retina Implant has had a lengthy development process, having begun its initial R&D into the project over a decade ago. Its "camera chip in the eye" or artificial retina has shown some excellent progress in human eyes, with good preliminary data on 11 eyes from Retina Implant's first clinical trial reported at a session at this year's AAO's Retina Subspecialty Day.

Retina Implant began its second clinical trial in Germany in May 2010 with up to 50 patients to be enrolled, with plans to expand the trial to other European countries. Pending positive results from this trial, Retina Implant intends to submit the results for CE Mark approval, hoping for approval in late-2011 or early-2012.

Second Sight is also targeting RP and AMD with its Argus ll device, which consists of an external camera system, a video processor and a retinal stimulator. The company is in the midst of a three-year international study in the US, Europe and Mexico.

The company which was founded in 1998 by legendary medical device entrepreneur Al Mann (Pacesetter, MiniMed, Advanced Bionics), has made excellent progress and data on 30 subjects who were implanted outside the US was reported at the Retina Subspecialty Day. 100% of the subjects reported visual precepts.

Transcend Medical and Glaukos offer a glaucoma treatment options for ophthalmologists and their beleaguered patients, who often are not successfully managed with drugs and laser therapy.

The Glaukos tiny iStent implant restores continuous physiologic aqueous outflow, creating a patent bypass through the trabecular meshwork to Schlemm's canal. It lowers intraocular pressure (IOP) and also works effectively in synergy with medical management.

Glaukos clearly has a "first mover" advantage as noted in the following comments, which were highlighted at the company's presentation:

●    First company to develop ab-interno glaucoma stents
●    Developed a glaucoma stent franchise and a deep product pipeline
●    First comparative control PMA trial for a glaucoma device for treating the full range of disease severities
●    First to achieve FDA Ophthalmic Devices Panel approval--July 30, 2010
●    Over 1200 clinical eyes implanted, with 17 peer-reviewed publications to date
●    CPT codes 0191T and 0253T established. Ambulatory payment classification panel approval and support for reimbursement class change to higher class rate

Transcend Medical's presentation showed that over half of glaucoma patients are on two or more medications. This burden is a major contributor to the fact that about 50% of the patients discontinue their medications within one year. More aggressive and invasive surgical options like trabeculectomy and external shunts often have poor outcomes and are fraught with surgical complications.

The company's micro-stent, trade-named Cypass, is made from a biocompatible material (polyimide) and features a unique delivery system. The placement of the device allows for increased aqueous flow to the suprachoroidal space, with the goal of effective and sustained lowering of the IOP. Whereas Glaukos's device is placed in Schlemm's canal, Transcend's is placed in the supraciliary space.

The company's early clinical results, with the Cypass being placed in combination with cataract surgery, showed promising results, with a 42% IOP decrease and a 60% drop in medication use at six months.

Transcend's 480 patient domestic pivotal clinical trial, called Combination Cypass and Cataract Surgery Trial (COMPASS) combines the Cypass and cataract surgery. Enrollment began in the second half of 2009 and the company hopes to complete it by the end of 2011 or in early 2012.

In addition, the company has two other trials underway. Cypass Clinical Evaluation Trial (CYCLE) is a European prospective, non-randomized multi-center trial that includes "all-comers" with a goal to assess the Cypass in a broad variety of glaucoma patients. DUETTE is another European trial. Evaluating two different versions of the Cypass in a prospective and randomized study.

The biotech/pharmaceutical section included firms addressing AMD, (Eyetech and Ophthotech) glaucoma (Aerie Pharmaceuticals, Altheos and Inotek Pharmaceuticals) inflammatory disease regulation (Taligen Therapeutics, SARcode, and LuxBio Sciences), companies devoted to acquiring molecules from other diseases translatable to ophthalmology (PanOptica and iCo Therapeutics) and drug delivery as well Applied Genetic Technologies Corporation (AGTC).

Later in the day, four companies specifically using drug delivery technology to address ophthalmic diseases presented their stories. This group included EyeGate Pharmaceuticals (using iontopheresis or using electrical current to drive a drug into the tissues), Neurotech (implantable bio-reactor targeting AMD and diabetic macular edema), iVeena (implantable drug delivery within the natural lens capsule) and On Demand Therapeutics (sustainable therapies for back of the eye diseases utilizing implantable devices).

John Santini, CEO of On Demand Therapeutics showed two interesting charts. The first showed his view of the key needs of the "constituents" of drug delivery:

His second chart delineated the numerous drawbacks to the current state of affairs in ophthalmic drug delivery.

Needle Therapy

●    Effective treatment with injections every 4-6 weeks
●    Risk of infection is low (0.4%), but this complication (endophthalmitis) is very serious
●    Painful and burdensome for the patient
●    High volume, low reimbursement for the retinal specialist
●    One drug at a time--no combination therapy

 Implants & Depots

●    Continuous delivery "drug holiday" possible
●     High incidence of complications for some drugs e.g., steroids that may cause cataracts & glaucoma
●    Dosage not controllable by the ophthalmologist
●    Not compatible with large molecule drugs

On Demand was formed about 18 months ago as a joint venture between InterWest Partners, a leading venture capital firm, and MicroCHIPS, a developer of intelligent implant systems. It has a very innovative approach to delivering drugs into the periphery of the vitreous, using a biocompatible, injectable implant made up of multiple, sealed reservoirs to store and protect protein and macromolecular drugs. When ready, the doctor uses a laser to initiate the on-demand release of the drug to the back of the eye. This approach allows for multiple, physician- controlled administrations of drug for an extended duration of a year or more, through a simple, non-invasive, office- based laser procedure.

With its initial funding, the company has already demonstrated key features of the delivery technology in vivo. It is now proceeding to create relationships with pharmaceutical and medical device companies interested in developing differentiated ophthalmic products based on this breakthrough drug delivery platform.

There were numerous panels that captivated the audience during the day. One of the best, from its content as well as its humor was titled "The Do's and Don'ts When Negotiating with Big Pharma." It was led by Dr. David Guyer, a partner at the venture capital firm SV Life Sciences and formerly the CEO of Eyetech, which was acquired several years ago by OSI Pharmaceuticals.

With tongue in cheek, Guyer showed a list of the top ten "fibs" told by big pharma to a biotech company that it is negotiating to buy. Then he provided a second, equally amusing list of the top ten "fibs" told by biotech companies in negotiating with big pharma. These two lists were originally presented at a health care conference in 2004 by Len Schleifer, the CEO of Regeneron Pharmaceuticals.

Top Ten Fibs Told by Big Pharma to Biotech

●    We never participate in a bidding war
●    We have all the authority we need to do the deal on these terms
●    We believe in equal say in decision-making
●    Our culture is open and flexible, just like yours
●    We're in it for the long haul--also known as: we would never use the threat of termination to improve our deal
●    We can close a deal in 30 days
●    We cannot possibly close a deal in 30 days
●    This is our best and final offer
●    Our primary motive is to help suffering patients
●    We will treat your molecule like it was discovered by our own scientists

Top Ten Fibs Told by Biotech to Big Pharma

●    We have so many offers I can't keep track of them
●    While I support the deal, my board will never approve those terms
●    We have a fabulous patent position with complete freedom to operate
●    If you don't sign the deal today, the deal is off
●    You'll make a fortune on the equity
●    We expect to launch the product in 18 months
●    This is our crown jewel
●    Our scientists think your culture is just like ours
●    Our sales force will be as good as yours
●    We've done extensive market research that shows the product will be a multi-billion dollar product

After many good laughs, Guyer introduced David Redlick, a partner at the Life Science Group at the Washington, DC-based law firm Wilmer Hale. His talk, titled "Do's and Don'ts of Negotiating With Pharma Partners and Buyers" contained myriad nuggets of practical information and sage counsel on how to successfully prepare for and negotiate a deal with another company.

Some of his key questions, with a summary of his answers, were:

●    Are there special steps needed to get ready for a transaction?
    Yes, there are several key steps to prepare for a deal.

●    Do I want a detailed letter of intent?
    Most likely yes, especially for complex collaborations.

●    Should I try to auction the deal?
     Definitely yes because you will get far better terms if there is competition.

●    Do I need an investment bank to advise me?
    Maybe, much more important in a merger/acquisition (M & A situation than a collaboration.

●    How open should I be in diligence?
    Very, every program/company has diligence issues and it is much better to present the issue  along with the context and potential resolutions than to let buyer/partner find it.

●    What do I need to do to protect myself if the deal terminates or results in a dispute?
    Be very careful. Especially in an M & A situation, where you need to get a tight agreement to avoid the buyer having the ability to walk out.

Most ophthalmology industry pundits would readily agree that femtosecond laser-assisted cataract surgery (FLACS) is the hottest topic today in the field, as it has the potential to revolutionize cataract surgery. At last year's Ophthalmology Innovation Summit, then privately-owned, venture capital backed LenSx Lasers presented a very compelling story about its new femtosecond laser which would transform in cataract surgery, which remarkably is still heavily dependent on the surgeon's manual dexterity and skill.

This fledgling area was rocked in early July when industry juggernaut Alcon Laboratories announced that it would acquire LenSx for $361.5 million in cash at closing, plus maximum contingent payments of $382.5 million based upon the achievement and over-achievement of future femtosecond unit and procedure fee revenue milestones. This was a remarkable deal considering that LenSx had no revenue at that time and is not expected to generate any meaningful revenue until the last half of 2011.

Dr. Stephen Slade, a renowned cataract and refractive surgeon from The Laser Center of Houston, moderated the panel session, noting that cataract surgery has had minimal technology advances in the past 25 years and that FLACS is a "practice changing technology." Dr. Slade performed the first FLACS procedure in the USA in February 2010 and has reported stellar results, which include all patients having 20/30 or better vision at day one and also showing both reduced needs for phaco-emulsification power and a notable decrease in endothelial cell loss.

He also noted that his patients are particularly enthused, recently saying that "as impressive as the performance of the LenSx Laser was, the overwhelmingly positive response from the patients was even more exciting. Patients readily appreciate and choose laser refractive cataract surgery."

Now 100% owned by Alcon, LenSx did not present this year but two other privately-owned, venture-backed companies, OptiMedica and LensAR did. Both companies showed their systems at the AAO and are diligently working to get the required FDA approvals and begin shipments, which like LenSx, appear likely in the back half of 2011.

OptiMedica’s CEO Mark Forchette discussed the company's Catalys precision laser system, noting that it is designed to replace the least predictable surgical steps and to enhance the surgeon's precision. It is designed to perform four primary cataract surgery incisions:

●    Custom control of size shape and position of the capsulotomy
●    Optical coherence tomography (OCT) guided laser nuclear fragmentation
●    Limbal relaxing incisions for precise astigmatic control
●    Self sealing cataract incisions

Early clinical data clearly supports the ultra-precision of the Catalys system, with superiority demonstrated in the capsulotomy size and shape and ease of the lens disassembly.

LensAR CEO Randy Frey, who over a decade ago founded Autonomous Technologies (subsequently acquired) discussed his company's system and then showed a video explaining its features and benefits. Clearly, each FLACS system will likely have its advantages.

However, as recently expressed by Dr. John Vukich, it will be more than the technology that determines which company seizes the market leadership. Dr. Vukich is a noted cataract and refractive surgeon from the Davis Duehr Dean Center for Refractive Surgery in Madison, Wisconsin and is a member of OptiMedica's medical advisory board.

"All three of the platforms use similar concepts and view the market similarly in terms of the platform's appeal." Vukich said. "It will come down to the delivery of the unit, including such things as are the ergonomics consistent with OR flow? Is it easy to use? Is the interface friendly for the surgeon? Does it provide a rapid turnaround?"

The LensAR Laser System integrates proprietary ocular measurement technology with an advanced laser designed to deliver precise surgical incisions that are currently performed manually. Based on management's "pedigree" with Autonomous Technologies, it certainly appears that LensAR will be an important player in this potentially huge and transformative market opportunity.

The meeting concluded on a high note, with all participants enthusiastic about the prospect of another OIS meeting, scheduled for October 20 in Orlando, FL, just prior to the 2011 AAO Annual Meeting.

Editors Note: To view videos of the presentations, please follow this link.

2010 Ophthalmic Innovation Summit Sponsors Included:

Clarus Ventures, ForSight Labs, InterWest Partners, Kleiner Perkins Caufield & Byers, Morgenthaler Ventures, SV Life Sciences, Versant Ventures, Abbott Medical Optics, Eyetech Inc, Genentech, OptiMedica, Pfizer Ophthalmics, Allergan, Inc., iCo Therapeutics, ISTA Pharmaceuticals, Hoys Surgical Optics, iVeena, Merck & Co, Inc., ReVision Optics, Santen, Inc., Altheos, EyeGate Pharma, Inotek Pharmaceuticals, Lions Eye Institute, OD-OS, Ora, Ophthotech, PowerVision, PharmaLogic, Silicon Valley Bank, and Trial Runner's.

Larry Haimovitch

Larry Haimovitch is president of Haimovitch Medical Technology Consultants, a health care consulting firm based in Mill Valley, California. The firm specializes in the analysis of the medical device industry, with particular emphasis on the current trends and the future outlook for emerging medical technology.

Larry Haimovitch


At 5:11 PM, Blogger Gary M. Levin said...

Irv, quite a posting, well done. Your efforts are appreciated, indeed.


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