One on One with Dan Myers

Head of CIBA Vision Ophthalmics North America recounts the division’s first decade and describes the future: Zaditor for allergy, new-material phakic IOLs.

---Dan Myers,

President, CIBA Vision Ophthalmics Dan Myers wants it known that he considers himself one player on a series of management teams that in 10 years built CIBA Vision Ophthalmics from an idea into a working pharmaceutical business with over $100 million in annual sales. Granted. But it is also worth mentioning that on the Georgia Tech team Dan Myers played on during college, he was the quarterback.

In July 1999 Mr. Myers became president of CIBA Vision North American Ophthalmics. Think of him as a special teams captain. R&D, acquisitions, licensing — all have been used to advance CIBA Vision Ophthalmics toward its aggressive growth goals. The product line now includes pharmaceuticals, over-the-counter products, IOLs and even a computerized information management system.

The corporate hierarchy in which he works is a bit complicated. Parent company Novartis (formed from the April 1996 mega-merger of CIBA-Geigy and Sandoz) comprises three divisions: health care (60% of income), agribusiness (27%) and consumer health (13%). The health care division is subdivided into pharmaceuticals, generics and, as an independent unit, CIBA Vision Corporation. According to the 1998 annual report for Novartis, CIBA Vision as a whole had sales of over 1.5 billion Swiss francs — an impressive figure, but less than 5% of total Novartis sales. CIBA Vision Corporation itself is divided into optics (contact lenses and lens care products, the business upon which the unit was founded in 1980) and ophthalmics (pharmaceuticals and surgical products).

In our interview with him, Mr. Myers told Ocular Surgery News the story of how flagship product Voltaren became the most popular “cataract” drug prescribed following refractive surgery and how the company’s acquisition of the Mentor MemoryLens is actually another way into that lucrative marketplace. And he announces for the first time the brand name of the new ophthalmic allergy drug that CIBA Vision hopes to bring to market not too long after this article is scheduled to appear.

Ocular Surgery News: CIBA Vision is definitely one of the top-earning multinational firms in the ophthalmic industry, and it’s also the youngest company. Why don’t you take us back to the beginning and tell us the history?

Mr. Myers: Back to the beginning of CIBA Vision Ophthalmics or to my start in the business?

OSN: Back to your beginning.

Mr. Myers: I started in the industry in 1982 as an Allergan sales rep here in Atlanta. I worked my way up in the sales ranks and left the industry in the mid-1980s to work for a company then called American Hospital Supply. They were a tremendously large company, later bought by Baxter.

I had about 3 years outside of ophthalmology until a gentleman by the name of Terry Johnson, who was at Allergan at the time, called me. We formed the team that acquired Cooper Vision Pharmaceuticals for Iolab in 1986. We assimilated the drug business into the old Iolab, which at that time was the market leader in IOLs. That was really my first opportunity to participate in an acquisition that created a new company. I was there as vice president of sales until 1990. That’s when the fax came across my desk announcing that CIBA Vision, maker of contact lenses, decided to diversify into the ophthalmic pharmaceutical business.

There was only one company in my hometown — Atlanta — that could possibly have done that. So I picked up the phone and called Steve Martin, who would later be my boss, and I said, “I grew up in Atlanta, I went to college in Atlanta and my wife is dying to get back to Atlanta. I don’t know what you are doing there but I just thought I would call.” Steve’s response was that he needed someone that could head up sales or marketing. “Do you do either one of those?” he asked me. I said, “I think you just found your guy.” That was in October 1990, and in December 1990 Steve hired me to help build a sales force. We literally had no products, no sales people and no real preconceived notions of how we were going to do it.

Dr. Glen Bradley, who’s still CIBA Vision’s CEO, had commissioned Steve not to acquire, but to build our way into the pharmaceutical business. Which is, trust me, a totally different game plan.

There were about four of us initially. One of my favorite stories from those early days is the time I came home and my wife said, “I tried to call you today and I couldn’t get through.” I told her that Steve was on the phone. She said “No, I tried to call you.” I said “I know, he was on the phone.” We were so small — we were in a small rental space that I think the developer just gave us because CIBA Vision rented so much other space — that for the first week we literally had one phone.

So when we talk about the ophthalmic division of CIBA Vision today, you have to remember that we really did start with nothing.

But we built a sales plan and we started interviewing sales reps. Luckily I had been in the industry almost 10 years by then. A lot of the folks at Iolab that I had managed were eager to come and start this thing with us on a wing and a prayer and, quite frankly, a lot of CIBA-Geigy’s money. And we managed to find a way to lose $25 million in the first 3 years.

I think it speaks to the patience that we knew a company like CIBA-Geigy would have. You couldn’t have gotten away with doing what we did without having a company with the vision of CIBA-Geigy. I don’t remember ever having any pressure put on us to take shortcuts.

The first year we did $1.8 million in sales and had to go like crazy to do that. Of course we weren’t paying our own way, but that was the beauty of having the contact lens and the lens care businesses. I can remember many times telling Steve Schuster, the head of optics, “Hang in there. I know we’re costing you a lot of money but we will pay our way someday.”

We at least doubled sales annually for our first 5 years — of course, you can only do that for so many years until the numbers catch up to you — and became profitable in our fourth year. We have built the business up to over $100 million in annual sales. I’m happy to say that now we represent about 33% of the total CIBA Vision business. Our portfolio is really nicely divided now. We’re about one-third contact lenses, one-third solutions, and one-third ophthalmic pharmaceuticals.

We really did build that up just a little at a time with whatever products we could find. With the one exception of Voltaren. I don’t think we could ever have pulled this off without a cornerstone product like Voltaren. We knew it was the kind of blockbuster, innovative drug that you can launch a company around. It will always hold a special place for a lot of people in this building because it paid a lot of peoples’ mortgages and built a lot of careers. Having said that, you can appreciate the frustration and concern with the recent generic diclofenac complications and the confusion it has caused in the marketplace.

OSN: What was the launch of Voltaren like?

Mr. Myers: Early on, our sales force’s challenge was not only to talk about Voltaren but to spend a lot of time driving the whole market of nonsteroidals. Up until that point, most doctors just pounded with steroids at everything that looked red.

We spent a lot of time trying to explain first, who is CIBA Vision Ophthalmics? Maybe the surgeon had heard of CIBA Vision, but only from our contact lens business. We also had quite a task explaining why a nonsteroidal, and then why Voltaren? It was quite a challenge in those first few months, and I remember slugging it out very slowly. I was somewhat disappointed in the early months and thought, well, maybe we overestimated this thing. We have been trying to build the company around this, and now what are we going to tell everyone?

Around October 1991 or so I got a phone call. At the time, my secretary was a woman named Vin McCampbell, who is now in charge of all our North American conventions. She walked in my office and said, “There’s a doctor on the phone that wants to talk to you.” Well, back then very few doctors were calling us. Trust me, we were only doing $1 million in sales and if a doctor wanted to talk to me, I’d answer. She said, “It’s a Dr. Lanstrum or Lonstrum.” I said, “Is it Dr. Dick Lindstrom?” She said, “Yes, Dr. Lindstrom,” as if to say, would you have heard of him?

When I got on the phone Dick said, “I don’t know if you realize what you have with Voltaren.” What he meant was, had we looked at the analgesic effect after refractive surgery? Back then it wasn’t even approved for that use, of course. But I remembered that a couple of scientists here had talked off the cuff about how Voltaren acts kind of like an aspirin of the eye. We had kidded around saying, maybe one day we’ll have the aspirin of the eye here. But it was just a running gag. Now all of a sudden it looked like that actually might have fallen to us right from heaven.

I met with Dick and that was our lead toward positioning Voltaren for pain management in refractive surgery. Within the next few years we had more Voltaren being written for pain management as for anything else, and of course we went on to get the approved indication for that.

Before then we couldn’t get a lot of people interested in CIBA Vision. They’d say, “Yeah, you’ve got a new nonsteroidal for cataract surgery. That’s not the first time that’s ever happened.” But when it started being positioned within refractive surgery, we took the rocket ride along with the hottest thing going. As I look back, that was when we started saying that we were going to make it. Once we started getting sales, CIBA-Geigy came to us in 1994 and gave us over $300 million to buy the Iolab pharmaceutical business.

I don’t know why I’ve been so lucky, but 3 years after I left Los Angeles to come back to Atlanta, I got a chance to go back and be a part of buying the company that I had been a part of. That acquisition went beautifully. You always worry about the culture changing you versus making that culture adapt to yours. Well, this was a slam dunk. All these people that I shook hands with and sadly left all ended up back here. It was a great reunion.

It also was a big job because we acquired 60 or 70 sales reps. That was the big leap that gave us the critical mass. All of a sudden we were a real company. We went from roughly $30 million in sales in 1994 to almost $100 million in 1995.

The game changed for us in 1995 and 1996, and we had to become more of a real pharmaceutical company. We’ve had to change some of the “barbaric” ways we behaved in the early years. CIBA Vision was great in the early years about letting us be barbaric in order to get things done.

So that’s how we got here. I can look out the window to where I went to high school 10 miles away and where I live now a mile and a half away. Debbie and I will be married 25 years next month, and I don’t think too many guys get to marry their high school sweetheart, go to college in the city where they grew up, come back to their hometown to start a business in the specialty that they’d kind of been raised in, lose $30 million in 3 years and still be there. It’s mind-boggling.

OSN: Well, it’s interesting that in a lot of the literature CIBA Vision puts out, there’s a conspicuous amount of talk about how the company is a good place to work and this community is a good place to live. That’s certainly what I’m hearing from you.

Mr. Myers: Absolutely.

OSN: I hate to use the term nurturing, it sounds almost weak and unbusinesslike, but obviously that’s part of the corporate culture here.

Mr. Myers: Exactly. I mean, everyone in the sales and marketing world tends to be a little rebellious. If you would have told me right after I graduated from Georgia Tech that someday I would wear wingtips, a blue suit and a red tie, I would have said there’s not a chance.

But in the right culture, in the right corporation, people with talent can be as free as if they are running their own business. I am an absolute testimony to that. CIBA Vision has never constrained people who want to get things done and just go out and do it. Now, sometimes that creates a little bit of organized chaos. When people used to ask me how the business was going, I would say it’s a little bit like having your hair on fire. You run fast when your hair is on fire — you’re just not sure where to go.

We’re productive and in most ways efficient, but I think we probably favor letting people go and do whatever they can. It may feel a little chaotic. Sometimes we have trouble explaining the matrix system we use in our company, so relationships aren’t always as structured and clear as you might find in a beautifully diagrammed organizational chart. But a byproduct of that is people tend to have fun. And when you have fun, you work with much more passion.

That has to be within certain parameters, of course. Some of the Swiss culture has been a little more structured than perhaps the U.S. division of CIBA Vision, but I’ve even seen that changing. Dr. Vasella [president of Novartis] is very focused on getting it done, enjoying what you’re doing, not worrying so much about whether the right report has been filled out and so forth. I’ve seen that shift with the formation of Novartis.

You always worry when there’s a merger like that above you. I think if you talked to most CIBA Vision people they would say it was wonderful, because the Novartis culture more closely mimicked what we’ve always been. With CIBA-Geigy, we always felt like they looked at us as those crazy people over at CIBA Vision.

OSN: It’s interesting when you describe how CIBA Vision Ophthalmics stood off even from the optical division. I think a general businessperson would say, you’re in eyes with contact lenses, now you’re in eyes with drugs — it’s the same thing. But is there really much synergy there?

Mr. Myers: Well, a lot of people in this business talk about synergy and it sounds good to the stockholders. But synergies have to take place when both parties have enough to bring to the table. In the early years, we were so small and the contact lens group was doing such bigger numbers that we really couldn’t have an impact.

As we’ve gotten larger, we’ve begun to ask more and more where we might have grown and begun unknowingly to duplicate things. It became obvious that we had areas of support services where synergies and consolidation made sense. We spent the better part of 1998 bringing those groups together.

Now I think we are just now beginning to see the benefit of some of those internal synergies. But the limitation is then the reality of where the patient gets treated. We have an optic sales force that primarily calls on optometry. The ophthalmic sales force primarily calls on ophthalmologists. An- other one is coming in the surgical arena that’s going to call specifically on the ophthalmic surgeons.

We know that it’s a volatile, changing world out there in that regard and it’s highly controversial. CIBA Vision certainly has no interest in refereeing the debate as to who should be treating which patient for what specific disease. We’ll leave that for legislative bodies and medical groups. But you really have three very distinct treatment points, if you want to call it that, where you have to ask where those synergies lie. Where we find synergies is in the back-office stuff. That’s what we have really been successful doing.

I think the market is going to dictate how patients get treated in the future and how much real sales synergy exists. It’s an ever-changing horizon.

OSN: There have been some other potential synergies in CIBA Vision’s history. In 1994 not only did you acquire Iolab, but CIBA-Geigy formed a partnership with Chiron.

Mr. Myers: Right.

OSN: Was there ever any interaction between the eye care businesses?

Mr. Myers: That’s an interesting one. It was a 49.9% purchase by giant company CIBA-Geigy of giant company Chiron and I personally believe that the vision care aspect had virtually nothing to do with it. We just happened to have vision care and they happened to have vision care. We really got more of a directive that the parents have married, so you children learn to get along. Andy Corley, who was at that time in charge of Chiron Vision’s refractive surgery business, is an old friend of mine. We were actually sales reps together in Atlanta in 1982.

We found ourselves sitting across a table with him running a piece of Chiron Vision and me running the CIBA Vision sales and marketing. We looked across that table and said, “How did we ever get here?” But even where you had the two of us who got along well and wanted to find a way, we never really could find a lot of synergies between CIBA Vision and Chiron Vision. We struggled with it until Bausch & Lomb made their purchase and ended all that.

There again is a classic example that the patient leads you to where you need to be. They were a surgical-driven company. We were a pharmaceutical-driven company. We were trying to synergize in places where the call points were different.

OSN: Also in 1994, CIBA Vision formed a strategic marketing alliance with Autonomous Technologies Corp. [ATC]. Is that still in effect?

Mr. Myers: That was another interesting offshoot of our history. We got into refractive surgery through Voltaren, as I described earlier. I was a refractive surgery believer from way back. In 1994 we weren’t really sure exactly how it was going to go, but we looked at ATC’s technology. The scanning and tracking LadarVision was pretty interesting. Dr. Marguerite McDonald was medical director there and had done some consulting work with us. It was through a lot of input from her that we determined to go forth.

So we bought a 30% share in Autonomous. Back then, quite frankly, we still positioned it kind of as a hedge, as an insurance policy. I don’t think we had a strategic vision that we wanted to be a laser company. We are a materials company. We are a liquids company. That’s what we know how to do. We never could quite figure how to make money-making lasers. We’d leave that for someone else to this day.

Now the other piece is, we thought there also would be some real synergies. While we may not make the laser, maybe we help Autonomous market it. We could build ancillary products around it, that is, pharmaceutical pain management, other drugs that might be used. We were in bandage contact lenses. Now remember, this is early, pre-laser in situ keratomileusis (LASIK). The photorefractive keratectomy procedure was terribly painful. The strategy in 1995 was what I called the remora fish approach. I didn’t want to be the big fish. I just wanted to get all the crumbs that were falling around the lasers.

Well, that looked good at that time, but of course in comes LASIK and basically eliminates the pain management aspect. Our interest in Autonomous began to wane somewhat, and I think they then saw they needed someone like Summit because Summit knew how to build the lasers. It became a nice little marriage for them. Today we hold a 3% share of Summit Technology by virtue of our Autonomous stock being purchased through that acquisition. We also have a seat on Summit’s board as a byproduct of that purchase.

We like where we are now. You need to keep looking for new opportunities, but you have to be careful that you don’t try to become something you’re not. We think we know the ophthalmic customer really well. We think we know materials really well. We have some manufacturing expertise that keeps our costs in line with where the contact lens market is going. But I think we remain pretty much averse to equipment businesses. Even in the Mentor purchase, we did not buy the equipment. We have entered into that purchase, quite frankly, because of our interest in refractive surgery as it relates to phakic IOLs. That’s really what drove the Mentor acquisition.

OSN: That’s surprising.

Mr. Myers: Well, we’re still consistent to our strategy of doing what we do best. Now you need to know some history to fully appreciate this Mentor acquisition. During the Iolab acquisition, I was one of the guys who said — and some people may think this is dumb — offer more money not to take the IOL business. I was willing to pay more to stay out of the IOL business and not have what we thought were declining margins and a lot of manufacturing headaches. I had been inside Iolab and I was seeing that declining market. Not to disparage their product line, but we just didn’t see innovative products.

I’ve talked about fun in this corporate culture and the little bit of chaos that makes things fun, but the other key word would be innovation. Dr. Vasella will come here and visit and he will talk innovation, innovation, innovation. Then Glen Bradley [president and CEO of CIBA Vision Corp.] will tell you to get out of the box, get out of the box, get out of the box.

Now here we are 5 years later. We’re buying an IOL line and I was one of the first ones to vote for it. The reason is that the more we have looked at refractive, the more we’ve been drawn to the phakic lens concept.

It took 10 or 15 years to get doctors to the paradigm of doing a surgical procedure on a healthy cornea. Once we got past that, the arena of thought just seemed to go wide open. All of a sudden it seemed okay to talk about how to correct vision surgically. People can begin thinking of things that you just would never even consider before. The KeraVision intrastromal corneal rings, the STAAR Surgical ICL. In the mid 1990s we were chasing refractive surgery, but at the 1998 American Academy of Ophthalmology meeting it really began to dawn on us that refractive surgery is coming to us. Now it’s becoming a materials issue in the research of biocompatibility. We think we know that kind of stuff real well.

A lot of the polymer research work we’ve done in contact lenses carries over. We’ve invested in a company called ThinOptics, which can make IOL materials that are extremely thin that we think has a future for phakic lenses. We also are doing work on artificial cornea and accommodating IOLs.

Will there ever be a day where these kinds of things will happen? Nobody really is sure where it is all going. But the point is that all of a sudden it felt like refractive surgery fits again for us strategically.

We then began to ask, if any of these things we are working on actually hits the market, how would we reach the customer? We don’t really have a structure in place because our pharmaceutical reps call on the doctor primarily in the office. Our contact lens reps are primarily calling on optometrists in the office. Refractive is a surgical sale. So it was with that mission in mind that the opportunity with Mentor was explored. Luckily, a deal was struck such that they thought they got enough value for just the IOLs.

So there I sat in a meeting and my thumb was up for IOLs because all of a sudden I saw that key word. The MemoryLens clearly is an innovative product.

When you talk about acrylic, it’s the material that we know surgeons are saying they want. We are just on the front end of the discussion of biocompatibility, just at the start of this debate as to what are going to be the right materials. We like that debate at CIBA Vision. That’s a debate we are happy to have. We think the MemoryLens is certainly a product that is going to fit the needs of the surgeon for product performance, size of incision and material characteristics.

It is really interesting how in 5 years you can face virtually the same decisions and be facing 180° based on how the market moves or how your situation changes. I would never have dreamed back then that I’d be in the IOL business in 1999, I can tell you that.

It’s really easy and it’s always the right thing for one of the leaders to stand up at a company meeting and say, “I can’t ever remember a more exciting time to be here.” Having said that, I still have to add that I can’t remember a better time to be at CIBA Vision Ophthalmics than right now.

Most of our growth in the past came through acquisition or just adding one more product than we had before. We were proud of it then, but doubling sales from $2 million to $4 million is not something you really need to put on your resume as a great crowning achievement. While you feel good about going from $20 million to $70 million by acquiring a business, and I think we did those acquisitions extremely well, that really is no cause for tremendous celebration either.

For the past 2 years, CIBA Vision Ophthalmics has shown growth, but it has slowed to single digits. That’s just simply not acceptable around here, I can assure you. I’m not happy with it, nor do I think our management team is happy with it.

We are about to embark in the next 24 months on a period where the new-product pipeline has to take over. You can only acquire your way so far, then you have to really start paying off on some of the R&D money you’ve been investing. We’ve been investing anywhere from 15% to 20% of income in R&D routinely, year after year, no matter how painful it was to the bottom line. In the pharmaceutical business, you just have to have the faith it’s going to pay off. If you give up on that, you might as well plan to become a generic company because one day that is what you will be.

This fall we will launch the first drug that we have taken from start to finish. Voltaren we kind of got from CIBA-Geigy, our parent. Zaditor will be the first drug that we have launched at CIBA Vision for which we have done the full development work, the full regulatory filing and the launch. It is an allergy medication that will have a very exciting position in the marketplace. We think it will really start to give us some growth. Our reps have been pounding away in doctors’ offices for years and they deserve a new product.

OSN: I saw that the FDA granted a priority review for the product. What’s the story there?

Mr. Myers: We were excited about that. I’d like to add that we were somewhat surprised, as well. With Visudyne [verteporfin for photodynamic therapy of age-related macular degeneration] we thought we would get priority review because of the nature of that disease and what we thought that would do for patients. We were happy to receive the priority review from FDA on ketotifen. We originally thought this would be a first-quarter 2000 launch, getting ready for the spring allergy season, but now with a little bit of good luck we’ll be able to move the product launch up to the fall allergy season.

Frankly, this is something that kind of sneaked up on us. Here we were talking about entry to the surgical market and what we are going to do in refractive, and along comes this little ketotifen product through the merger of CIBA and Sandoz. This was a Sandoz compound and, of course, they didn’t have an eye care division.

When we looked at some of the data and what labeling we thought we could obtain from the FDA, we got really excited about this drug. Usually, as you go through a drug development program, the more you know about the drug, typically the more you have to manage expectations downward. Whether it’s the side-effect profile, a toxicity issue, a dosing issue, there’s usually some kind of a labeling restriction. I don’t think I’ve ever seen a product come through the development process and actually start looking better than when it first started in the pipeline. I think Zaditor is going to be a product we’ll remember as fondly as Voltaren.

OSN: You mentioned Visudyne, and that’s the pipeline drug that is very high-profile. Certainly the company that is developing the drug with CIBA —

Mr. Myers: QLT.

OSN: Right. I always start to call it PDT.

Mr. Myers: Well, trust me, you’re not the only one. We’re doing a lot of education on QLT versus PDT.

OSN: They’ve certainly become high-profile in financial circles, and certainly ophthalmologists are following the development of PDT because of the nature of AMD. What’s the future look like?

Mr. Myers: Visudyne has been really exciting now for the past 2 or 3 years, so I think everyone has been watching this. I think it should be noted that QLT is an excellent company. When you go into an alliance on something this big with so much at stake, you are really worried about learning to live together. I can tell you we have been favorably impressed with QLT. It’s well deserved that they get the kind of accolades they have.

I’d also like to think that we’re bringing a lot to the partnership and we’ve learned this market very well. You have to remember that this was part of our diversified strategy. Sure, you want an allergy drug and you want to be in glaucoma. But we are never going to meet our goal and our commitment to Novartis to be number one or two in this industry by just chasing the big markets and the big companies. What an entry into retina does is change the game completely because then you’re playing in a field where very few people are. Other people will have to follow us.

We’ve watched the medical industry working its way toward the back of the eye. I’m extremely proud that we are going to be the first company to get there. We think we will have a fairly comfortable period of time to get into the marketplace, introduce our product, and establish relationships with vitreoretinal specialists. This is an exciting area with tremendous opportunity.

And I think our employees have really gotten a sense that this is one of those rare times that you can talk about being a part of a company that has found a way to stop the progression of a blinding disease. As Visudyne kept coming along and we kept getting better information, we started realizing how much it could help people with AMD. I hear employees talking all the time about how exciting it is to be bringing to market something that really makes a difference.

I think right now the biggest hurdle for us is trying to find out what is the real number of treatable patients out there. There are not a lot of good models. Very little is known about how many of those patients are out there and how this treatment will play out once the vitreoretinal specialist begins to use the product. That will be what we spend the last half of this year doing as we prepare for the launch.

OSN: I saw some press releases about regulatory filings being expected in 1999 in Europe as well as North America. Is this something that you’ve been developing simultaneously for both markets?

Mr. Myers: That’s another key piece of the Visudyne development. Visudyne will be one of the first product launches that we really can call global. Under the Novartis culture, there is a lot more emphasis put on global activities. I mean, everyone likes to talk about being global, kind of like synergy. It sounds good, shareholders feel good about it, but the truth is that it’s a tremendously, tremendously difficult thing to achieve. You’re trying to cross so many cultures, so many ways of doing business. People process information differently based on their upbringing, their cultural experiences, and then you’re trying to get them all to talk a single language across the world. It is really quite a challenge.

I think we’ve done as well as anyone else. I certainly don’t think we’ve mastered it, but I think we’re really committed to it. Zaditor and Visudyne will be the first two global products that we’ll launch. We won’t launch them simultaneously in each market because of the regulatory authorities, but during the entire development process, we’ve had people in Switzerland on teleconferences with people in the United States, with people from Argentina and so on. We want to make sure that when customers go to different meetings — the planet is getting smaller — they see a product worldwide. Up until now we’ve just had each country fighting their own little wars. Just as I’ve told you the little CIBA Vision Ophthalmics U.S. story, there is an equivalent story for the United Kingdom, Spain, Argentina, Brazil, etc.

I think the global approach is beginning to pay off. It’s paying off on our R&D side of things. We’re not duplicating a lot of efforts. We think we are seeing efficiencies there. If it’s not a global product, we probably won’t do it. That used to not be the case. It used to be if you could find a way to make money in your little local country, go do it. Luzi von Bidder, president of the worldwide ophthalmics business unit, used to call it street fighting.

OSN: A couple of other acquisitions or licensing deals include Rescula, licensed from Ueno, and Ocupress, which CIBA distributes for Otsuka. They’re both Japanese companies. Is there a pattern here?

Mr. Myers: That’s an interesting observation. First of all, you can’t have a strategic plan or even say you’re in the ophthalmic pharmaceutical business if you’re not going to play in glaucoma. When you look at the size of the market and what it has contributed to a couple of other companies recently, the numbers are very, very large.

Right now our current line of glaucoma products is acceptable. We have a beta blocker, and Betimol has done quite well for us. But if we were going to go further in that market, we needed to find the next glaucoma drug.

Ocupress was one of those situations where we already had distributorships with Otsuka in many countries in Europe and South America. They wanted to market here in the United States, so it was a natural fit. We felt there was a nice positioning with the beta blocker Ocupress and the beta blocker Betimol.

Ueno is the Japanese company that has licensed unoprostone, called Rescula in a lot of markets, but we are not sure yet if we’re going to be given that trade name. Unoprostone was much more strategic in nature. We were able to pick up the licensing rights worldwide, less Japan. Ueno kept Japan for themselves. But it has basically been a global development project that has launched already in certain countries. We hope to file the NDA at the end of this year. That would probably put us into late 2000 or early 2001 with the U.S. market entry.

OSN: Did Ueno ever show any interest in marketing it themselves beyond Japan?

Mr. Myers: Yes, they did. I actually got to know Dr. Ueno and entertained him in the United States. An outstanding man. I think he understands what a lot of Japanese drug companies have discovered about coming into the United States. They found that you’re really going to have to invest heavily and stick it out for the long term. You can make a decision to do that, but because there are so many players who can be a marketing partner for you, is it really worth it in the end?

Conversely, we still are struggling somewhat to find the winning strategy for ourselves in Japan. Maybe at the end of the day, Japanese and American companies must have global and worldwide distribution systems that can share what each knows best.

OSN: I guess the other big new product is CareLinc, the practice and information management system, which came along at a propitious time. It was announced that the Ivy system was going to be maintained but no longer actively marketed, and CareLinc was launched around the same time.

Mr. Myers: It has been about a year.

OSN: What’s been the experience with that product?

Mr. Myers: CareLinc has been a really interesting journey for me personally and for our company. We went into this with a lot of optimism. I am actually more positive about the product now than I was then, but I greatly underestimated the development time. If I could go back and do one thing better, I would have gotten more education on what the development cycle would be. We probably tried to get this product to market a little faster than we really should have. Now we believe we are ready.

Dr. Bob Osher and the doctors at the Cincinnati Eye Institute have spent a year just agonizing over every little detail. As a result, we’ll be showing an excellent product at the Academy meeting.

We would have launched CareLinc whether the Ivy system had continued to be on the market or not because they really are not analogous products. We used to refer to it as a system for electronic medical records. But the more I see what CareLinc can do for doctors, the more I think we need to call it automated clinical practice. I don’t think that many ophthalmologists yet understand how differently they are going to treat and interact with patients in the next decade. We’re just on the tip of that

OSN: You mentioned two products briefly. The artificial cornea and the accommodating IOL. Where did these products come from, and where are they in the pipeline?

Mr. Myers: I think we’ve had a good history of telling people not to get hung up in bureaucracy but to just go off by themselves and make it happen. That’s how we built the ophthalmic division. We’ve done something similar in the R&D area. Dr. Bradley formed a group called Biocure to start looking for more value in the materials knowledge that we were gaining from our contact lens business. Not just in ophthalmology, by the way, but in other markets too.

Out of that came the artificial cornea project, which is showing a lot of promise. It’s obviously several years away, but they are starting to show that you can inlay materials in the front of the eye and hence, the name artificial cornea.

We also have done work on injectable materials that could be somehow cured in the capsular bag. We are not the only people trying to figure out accommodating IOLs, but we like the fact that it’s still materials research work. We feel like we’ve got a fair shot at it.

That ties in with the strategy of the Mentor acquisition. That will support a sales force that begins to know the surgeon better, begins to learn the surgical marketplace and will be there with the relationships when we start delivering some of these products.

CIBA VISION HISTORY HIGHLIGHTS

1980 ......... CIBA Vision created within CIBA-Geigy 1984 ......... Softcolors tinted contact lens launch 1985 ......... American Optical Co. lens and lens care products acquired 1989 ......... NewVues disposable contact lens introduced (later renamed Focus) 1990 ......... CIBA Vision Ophthalmics created to develop ophthalmic pharmaceuticals 1991 ......... Voltaren launched for post-cataract surgery inflammation 1994 ......... Johnson & Johnson’s Iolab pharmaceutical products acquired 1995 ......... Development deal with QLT Phototherapeutics signed 1996 ......... CIBA-Geigy and Sandoz merge, form Novartis 1997 ......... Voltaren approved for post-refractive surgery pain and photophobia 1998 ......... Mentor intraocular lenses acquired

OSN: How do you see things balancing over the next 5 years as far as products you are developing in-house with your R&D as opposed the licensing, comarketing and alliance income streams?

Mr. Myers: I think there’s always going to be this symbiotic relationship to that. You can’t live just off R&D pipeline delivery. It takes too long, it’s too much of a risky proposition. You have a couple of failures and the drought is just way too long.

It’s a little passé to say that the rich get richer and the big get bigger, but in some ways that’s the way it is. As your R&D pipeline begins to pay off and you begin to launch some of these big innovative drugs, your critical mass gets larger and you can build your worldwide network and become truly a global player. That in and of itself begins to attract other players who are looking for partners.

It’s no coincidence that we get more phone calls today asking about partnerships, alliances and product ideas than we got in 1991. People who have a great idea or product but can’t afford the development and marketing costs are going to turn to the companies who represent the same kind of culture and image that they want to have in the marketplace. That’s a big part of it. How you deliver your products is sometimes as important as what you deliver to the marketplace.

You also can’t have these big blockbuster drugs all the time. There are a lot of niche markets and a lot of patient needs that you can meet that don’t necessarily mean huge sales.

A great example for us is Vitravene [fomivirsen intravitreal injection for CMV retinitis]. We launched it last year. Not many people know about it — you haven’t even asked about it — and we won’t do a lot of sales in it, but it is for a marketplace that is in desperate need for drugs. CMV retinitis in the AIDS population is a horrible disease. We felt that launching Vitravene did two things. One is that it helps the patient. There are not a lot of those patients anymore — that’s why the sales are low — but it is a product that put us where there are needs. Second, it does get us a relationship with vitreoretinal specialists prior to the launch of Visudyne, which again is a product that will have tremendous application.

So you don’t always make a decision based on the total sales revenue from the one product. From the classic accountant’s profit and loss model, Vitravene probably wasn’t a great deal. Was it something we should have done? I would argue yes.

CIBA Vision’s organizational structure
CIBA Vision Corp. — Global
Glen Bradley	president and CEO
Timothy Barabe	CFO
Stuart Heap	president, worldwide lens business unit
Luzi von Bidder	president, worldwide ophtha business unit
Robin Terrell	president, worldwide lens care business unit
Adrian Hunter	head, biomaterials business unit
Mike Grayson	head, manufacturing
CIBA Vision North American Ophthalmics Business Unit
Dan Myers	president, ophthalmics
Mark Testerman	vice president, sales
Dave Holland	vice president, marketing
John Snisarenko	vice president, Canadian sales/marketing
Steve Lang	executive director, retina
Tom Rowe	executive director, QA/QC and technical affairs
Larry Mandt	director, regulatory/medical affairs
Tom Elder	vice president, NA logistics

OSN: Do you see CIBA Vision doing direct-to-consumer marketing for some product or another in the next 5 years?

Mr. Myers: If you can figure that one out, you need to be sitting here and I’ll be asking the questions. I think that is one of the real wildcards that a lot of companies are going to try to play. It’s a fine balancing act. I personally think some companies outside of ophthalmology have raced too far, too quickly in that area. It is an extremely costly way to reach the real marketplace of doctors. Whether the payback will merit what you have to put in is a difficult prediction.

In ophthalmics, direct-to-consumer marketing really only applies to allergy. I think if we move that way, we’ll be in a good position because of our contact lens division. That’s a core competency that we will be able to leverage.