Taking an Innovation From Concept to Market

The ophthalmic arena has become a hotbed of new investment

By Jerry Helzner, Senior Editor

Ophthalmologists are known to be highly creative in designing new and improved instruments and devices that create greater efficiency, accuracy and cost savings in ophthalmic procedures. Browse through any instrument company’s product catalog and you will see nucleus splitters, manipulators, cannulas, glaucoma shunts, hooks and rings, most with the name of the inventor identifying the specific product. Some of these innovations have become almost household words in the ophthalmology literature — the Sinskey hook, Malyugin ring, Dewey phaco tip and Baerveldt and Ahmed shunts.

Many Settings for Fostering Innovation

Ophthalmic innovation is now occurring in a variety of settings and formats. These settings encompass individual ophthalmologist-inventors working alone to improve on a handheld instrument such as a cannula or forceps, or innovation “incubators” where new ideas are evaluated and selected by experienced venture capitalists who lend their expertise to move projects forward, or in academia where multi-disciplinary teams can be formed under the sponsorship of a prestigious academic institution.

Many of these early stage efforts are now evolving into start-up or fledgling companies that have obtained financing and are moving ahead with real opportunities to develop a successful commercial product.

This article will attempt to convey the depth and breadth of the current interest and excitement in ophthalmic innovation. Clearly, the aging of the baby boomer generation and its increasing demands for eye care has driven much of the investment now going into the development of new devices and therapies. A medical specialty that was once considered a backwater for commercial investment has now taken center stage as drugs to treat retinal disease such as Lucentis (ranibizumab, Roche/Genentech) and Eylea (aflibercept, Regeneron Pharmaceuticals) are now recording annual sales in the billions, and femtosecond lasers costing approximately $500,000 are being seen as “must have” equipment in cataract surgery practices.

COURTESY: OPHTHALMOLOGY INNOVATION SUMMIT

A company presentation being given at the Ophthalmology Innovation Summit in Chicago in November.

No Lack Of New Ideas

Talk to the leading ophthalmic instrument companies and they will tell you they are constantly flooded with ideas from ophthalmologists seeking to find a backer to develop a product idea. The ideas can range from something simple, such as adding another lens to a phoropter, to a completely new device that would require a multimillion dollar investment to develop.

Even bigger ideas for drugs and devices are regularly presented to established venture capital firms, such as InterWest Partners, Clarus and Versant Ventures, that specialize in what has become over the last decade the “hot” ophthalmic arena. These transformative ideas can pay off in a big way for venture capital investors. Witness the hundreds of millions Alcon spent to acquire the LenSx femto-phaco platform from its initial investors and a somewhat lesser sum Allergan paid to acquire the Ozurdex implant for retinal disease.

COURTESY: OPHTHALMOLOGY INNOVATION SUMMIT.

The Ophthalmology Innovation Summit

If you have any doubts at all about the nature of the quest for ophthalmic innovation, all you have to do is attend the annual Ophthalmology Innovation Summit (OIS), held in conjunction with the annual meeting of the American Academy of Ophthalmology. The OIS was started in 2010 by ophthalmic entrepreneur Emmett T. Cunningham, MD, PhD, with an assist from ophthalmic venture capital notables William Link, PhD, of Versant Ventures, and Gilbert H. Kliman, MD, of InterWest Partners. It has quickly grown to attract dozens of fledgling companies that make presentations before a large gathering that includes inventors, potential investors and ophthalmologists eager to learn of what advances the future might have in store for them.

The Basics of Innovation

Though venture capitalists are looking to put their millions behind “big idea” concepts that can potentially generate huge returns, many practicing ophthalmologists have ideas for instruments or devices that can produce incremental improvements in existing procedures such as cataract or glaucoma surgery.

How would they know if their idea has the “right stuff ” to find a backer? Over the past year, Ophthalmology Management put that question to a number of prominent ophthalmic inventors, investors and company executives. We then distilled their responses into a list of five basic requirements any successful ophthalmic innovation should meet:

► Will the innovation have a market? In other words, will it do something faster, better or cheaper than currently available alternatives?

► Does the innovation solve a problem? The product concept might be clever, but if it doesn’t generate real-world benefits it will not find a niche in the marketplace.

► Can the potential investor look at a prototype? Investors want to have a good idea of where their money is going. If the inventor can actually demonstrate the benefits of the product, it has a better chance of gaining financing.

► Can the concept be patented? Having well-protected intellectual property and strong patents behind the concept can ensure potential investors that a rival won’t steal or duplicate the idea.

► Is it profitable? Investors won’t touch an idea unless they see a path to profitability. They want to have a sense of how much time and money it will take to make the product a commercial success.

The Inventor’s Mindset

For the individual ophthalmologist-inventor, the obstacles to successful innovation may be daunting, but successful innovators are unanimous in advising those with ideas to believe in themselves and pursue their dreams.

On a practical level, a good first step is to conduct a patent search to make sure your idea is a new one, Dr. Kliman of InterWest Partners says. He also advises serious ophthalmologist-inventors to meet with a business adviser who has experience in moving new products through the development process. An adviser or entity that has a track record of success and good contacts in the ophthalmic industry would be a plus.

COURTESY: FORSIGHT LABS

The ForSight VISION4 Inc. Port Delivery System. It is being developed to deliver therapeutic molecules to the vitreous cavity.

You must be able to show potential investors that your product will work the way you claim it will. To do this, you need to show the best possible proof, either in the form of a prototype or a model, that adequately demonstrates the capabilities of the product or device.

One caveat: If you are ready to show or demonstrate a prototype, make sure any of your potential investors have no conflicts of interest that could result in them becoming competitors.

COURTESY: TRANSCEND MEDICAL

Transcend Medical’s CyPass Micro-Stent is being developed at ForSight Labs. Shown here is a high magnification of the glaucoma implant loaded on the delivery device.

Golden Age For Innovation

The good news is that, primarily due to the increasing eyecare needs of the baby boomer generation, companies and venture capitalists are more open to promising ophthalmic concepts than they have ever been.

Dr. Link, a founder and managing director of Versant Ventures, is recognized as one of the pioneers in helping to finance ophthalmic innovation. Versant has invested in such successful new ideas as the Crystalens accommodating IOL, the IntraLase and LenSx femtosecond lasers, WaveTec’s ORange intraoperative aberrometer, the Glaukos iStent for glaucoma surgery and many other companies still progressing through their development stage.

We are now in the midst of “the best environment we’ve ever experienced for ophthalmic innovation,” Dr. Link says. Venture capital has funded about 50 ophthalmic startups since 1999, he says. “There were maybe two or three in the whole prior decade,” he notes.

Aging and the ocular diseases that accompany it — cataract, glaucoma and macular degeneration — are no small factors in driving ophthalmic innovation, Dr. Link notes. “The lack of innovation prior to this decade created many unmet needs in eye care,” he says. “Plus, retinal diseases especially are difficult diseases. It has taken a while to figure out solutions. We have only recently gotten to the point where we can provide capital to companies whose therapies have a real chance of succeeding commercially.”

COURTESY: CALHOUN VISION

The Calhoun Light-Adjustable Lens (LAL) is unique in that it can be adjusted by near-ultraviolet light after it is placed in the eye.

An Innovator’s Innovator

Eugene de Juan Jr., MD, MA, is probably the most complete example of an ophthalmic innovator, having played a key role in the development of more than 100 new concepts. They range from handheld surgical instruments to biochemical therapeutics to miniature microcircuitry designed to restore a level of sight to people afflicted with blinding retinal diseases such as retinitis pigmentosa.

Dr. de Juan initially got interested in innovation when his father, an ophthalmologist, showed him the various surgical instruments he used. “It fascinated me that almost every instrument was named after the surgeon who had developed it,” he recalls. “I thought it would be cool to have an instrument with my name on it that surgeons all over the world would be using. Even at that young age, I was interested in leaving a legacy of making surgery better.”

Today, Dr. de Juan has put the concept of personal glory far behind him and has dedicated himself to helping other innovators through the establishment of ForSight Labs, a Bay Area incubator for the development of ophthalmic medical devices. All aspects of ForSight Labs aim at encouraging intense and highly focused ophthalmic innovation. Ideas can come from within the ForSight team, their colleagues or independent inventors. The ForSight team evaluates potential projects. The ideas they select are developed with a goal of successful commercialization. Among the devices being developed at ForSight Labs are the ForSight Vision4 drug-delivery system and Transcend Medical’s CyPass Micro-Stent glaucoma implant.

The Innovation Environment

By creating an ophthalmic incubator with real structure and a team of proven experts to assist in the development of new and promising concepts, Dr. de Juan has provided an environment that meets one of his primary requirements for successful innovation.

“Working with the right people is 99% of achieving success,” he says. “It really matters who you work with.”

Qualities Dr. de Juan looks for in the right people include their experience, commitment, values, judgment, intellect and creativity. And he much prefers working with team players who can collaborate well with their colleagues rather than so-called geniuses who isolate themselves from the team. Every project experiences some disappointments along the way, he says. Not having the right people on board can disrupt or even spell the end of a worthwhile concept.

Innovating in Academia

In terms of working with the right people, Daniel M. Schwartz, MD, of the University of California, San Francisco, (UCSF) has been a highly successful ophthalmic innovator in an academic environment, having forged an alliance between UCSF and California Institute of Technology (Caltech) that draws on experts from a number of disciplines to collaborate on developing new concepts.

While some skeptics might believe innovating in an academic setting would involve such major obstacles as bureaucracy, extensive oversight, complicated licensing agreements and research budget constraints, Dr. Schwartz says that he found no such roadblocks. When asked to list the advantages and disadvantages of innovating in academia, Dr. Schwartz is quick to say, “I have found no disadvantages.”

In terms of advantages that foster innovation in academia, he cites the ability to tap into renowned experts in numerous disciplines embodied by the faculties of UCSF and Caltech. An example of this world-class talent pool is the team that developed the Calhoun lens, an IOL whose power can be fine-tuned after it has been implanted in the eye. For the advanced knowledge of chemistry, chemical engineering and polymer materials necessary to make the Calhoun concept a reality, Dr. Schwartz enlisted Robert Grubbs, PhD, a Nobel laureate in chemistry at Caltech, and Julia Kornfield, PhD, a professor of chemical engineering. also on the faculty at Caltech.

Clinicians who discern an unmet medical need and have some fundamental ideas on how to meet that need drive the most successful ophthalmic innovation, Dr. Schwartz says. “What we are doing here is translational research,” he says. “We first identify an idea with potential and then draw upon the two university faculties to create a team of scientists who can contribute to the development of a successful device or therapy.”

Put Your Ideas to the Test

Dr. de Juan encourages ophthalmologists with new and interesting ideas to come forward, although the road to success is not an easy one, as many long-time innovators will attest. He advises innovators to first protect and then promote what they have to offer. Once the idea is patent-protected, the inventor should discuss it with trusted friends and colleagues.

“If other people are also enthusiastic, you probably have a good idea,” he says. “Then get more feedback from business friends and people in a position to evaluate your idea, while continuing to test and improve your concept.”

An innovator without a track record will not get a great financial deal on the first project. But once an innovator establishes a reputation for generating successful ideas, securing funding becomes much easier.

Obtaining a lucrative financial deal should not be the primary goal of a fledgling innovator, Dr. de Juan says. “Remember, the reason you are doing this is to make people better,” he says. OM