Specialty device companies fill niches in ophthalmology

Small device companies assume risks that bigger companies avoid to bring innovation to ophthalmogy, one analyst said. Part 2 of a two-part series on small companies in ophthalmology.

Part 1: “Small companies taking big financial risks,” September 15 issue, page 1.

Specialty device companies play an important role in ophthalmology: They originate and develop innovative ideas that may be too risky for larger companies to pursue. Sometimes these ideas fail and disappear, but sometimes they go on to shape the profession and industry of ophthalmology.

Consider the excimer laser, for instance, and its role in ophthalmology in the 21st century. Where would refractive surgery practice be today if the small startup companies Summit, Visx and Taunton had not begun investigating the effects of the excimer laser on corneal tissue in the 1980s? Visx has gone on to capture the majority of the U.S. market share in excimer refractive surgery – now a multimillion-dollar market. The merged Summit and Taunton were subsequently bought by Alcon, which is now another major player in the field.

Similarly, all of ophthalmology owes a debt to the small company Cavitron, which in the 1960s had the vision to help the late Charles D. Kelman, MD, develop his concept of ultrasound cataract removal. Little needs to be said about the success of that venture.

Decades later, a new crop of small companies hopes to become the next Visx, the next Cavitron, the next company to hit upon an idea that will revolutionize the field of ophthalmology. Like their counterparts in the ophthalmic pharmaceutical industry, many small firms will take the risks and fail, but a few will go on to success.

(For more on small ophthalmic pharmaceutical companies, see “Small companies taking big financial risks,” September 15 issue, page 1.)

“Smaller companies serve the purpose of developing innovative products that the larger companies are not willing to undertake,” industry analyst David R. Harmon, of Market Scope, said.

“Although the players and the products and trends change over time, small companies are essential for the growth of ophthalmology. There will always be small companies in ophthalmology because they play an important role in the industry,” Mr. Harmon said.

Small companies often do the development legwork and then either sell their successful product to a larger company or are bought outright, Mr. Harmon said. Occasionally a small company bucks the odds and grows larger on its own.

“Visx is an example of a one-product company that developed that one product and matured into a larger company,” Mr. Harmon said. “IntraLase is another example of a small company going public and making the transition into a larger company.”

The challenges to small device companies are many, but they are less demanding than those faced by small pharmaceutical companies, Mr. Harmon suggested.

“These pharma companies, like Ista and Inspire, typically have to raise a lot of money and have a relatively large organization just to get their products through the regulatory process. With an IOL or other device, the financial burden is about one-fifth of what it is for a drug company. You are able to have much smaller companies bringing more products to market than you are apt to see on the pharma side,” he said.

The current generation of small device companies in ophthalmology focuses on a range of products, including intraocular inserts, implants and IOLs for refractive and cataract surgery, as well as computer software.

For this article, Ocular Surgery News spoke to representatives of a number of small specialty device companies in ophthalmology regarding their current products and their plans for the future. This article is not meant to be an exhaustive list of small device companies in ophthalmology, but rather a sampling of the field.

Addition Technology

Addition Technology’s signature product is the Intacs prescription corneal insert, which was developed in the 1980s and ’90s by the now-defunct KeraVision. Intacs is currently the only device of its kind approved by the Food and Drug Administration. The device is approved for correction of myopia of up to 3 D, and it can also be used under a humanitarian device exemption for treatment of keratoconus.

The company is investigating the feasibility of using the insert for other conditions, explained William Flynn, chief executive officer of Addition Technology. Research is ongoing in formal clinical evaluations in the United States and internationally, he said.

Addition, which is not publicly traded, intends to remain a niche therapeutic company within eye care, Mr. Flynn said. The company has no licensing agreements with other companies and no plans to enter into any, he said.

“We are going to try to stay with similar products in the future, although we have nothing in our pipeline currently,” Mr. Flynn said. “We have had discussions with various companies regarding expansion, but nothing that has come to fruition. We are focused on ophthalmology because that is where our comfort zone lies, and the majority of the company has a strong background in it.”

EyeKon Medical

EyeKon Medical was created in 2003 with the purchase of the IOL companies Medical Developmental Research, Suncoast Medical and TGR, some of which had been in business since the 1980s.

The small IOL company fills a number of interesting niches with its products. The company has a line of one-piece and three-piece PMMA IOLs that are available in the United States, as well as hydrophobic and hydrophilic acrylic lenses that are sold internationally. It also has lines of viscoelastics and of surgical instruments.

“We have the CE Mark for all our products, so we sell throughout Europe and other countries,” said Mark Robinson, president of EyeKon. “In the United States we are doing the phase 1 clinical trials for the hydrophilic acrylic IOL. We also hope to have other products go through U.S. clinical trials.”

The company is preparing to submit an investigational device exemption application for its sodium hyaluronate viscoelastic, EyeCoat SH, and another for a capsular tension ring, Mr. Robinson said.

“We used to manufacture IOLs in the past for Pfizer,” Mr. Robinson said. “We manufacture PMMA IOLs for Advanced Medical Optics in Japan.” Pfizer sold its IOL line to AMO earlier this year.

The company also manufactures the bull’s-eye multifocal IOL design originally developed by IOLab, Mr. Robinson said.

“We do sell that in the international market with a lot of interest and reorders,” he said. “IOLab was in clinical trials with it, then they sold it to Chiron, then it fell off the market.”

The company is currently working on developing accommodative and phakic IOL models, he said.

Mr. Robinson said he sees one possible future for the company as a lens manufacturer for other IOL companies.

“I don’t think we will ever be an AMO or a Pfizer because we are not a public company, but we would definitely like to be working with other companies in manufacturing,” Mr. Robinson said. “It would be more cost effective for us to be a manufacturer for a larger company than trying to be a bigger company ourselves.”

eyeonics

Eyeonics is the brainchild of J. Stuart Cumming, MD, FACS, FRCOphth, who 15 years ago set about the task of designing an IOL that would restore accommodation after cataract surgery.

Dr. Cumming developed the Crystalens accommodative IOL through several design iterations with the aim of helping patients with presbyopia to regain reading vision without the use of glasses.

Since the FDA approval of the Crystalens last year, eyeonics has experienced tremendous growth, said Mike Judy, vice president of marketing for the company. Eyeonics currently has the only accommodative lens on the market in the United States.

“Our role in the marketplace is to help those early cataract patients, and those with presbyopia, and try to deliver a product that meets the needs of the baby boomer market,” Mr. Judy said.

Currently, eyeonics has no plans to expand its product line, Mr. Judy said. Rather, the company is focused on optimizing its existing product, with plans to distribute the lens through its sales force, he said.

As for the future of eyeonics, “We will definitely stay a specialty device company,” he said.

GMP Cos.

GMP Cos. is a intellectual property development company with products in many areas of medicine and a small footprint in ophthalmology to date. GMP is developing the Eyepass Glaucoma Implant along with two Atlanta ophthalmologists, Reay Brown, MD, and Mary Lynch, MD, of Emory University.

The Eyepass device is in phase 3 trials in the United States, said Michael Salem, MD, executive vice president of research and development for GMP.

The company has also licensed a concept for uveoscleral surgery for glaucoma from Yale University and Bruce Shields, MD. According to GMP’s Web site, the company hopes the two approaches to glaucoma will prove to be complementary.

GMP is not just in ophthalmology, Dr. Salem said, “We are more of a broad-based biotech, medical technology company. “We focus mainly on technologies from universities and individual inventors, and then we commercialize them.”

In addition to the glaucoma products, GMP has a rich line of products and concepts in development outside of ophthalmology that includes surgical instruments for several specialties, stents and other cardiac care devices, several biotech drugs and other products.

For marketing and commercializing the Eyepass, GMP is open to several options, Dr. Salem said. GMP’s business model includes not only marketing products itself, but also partnering or sublicensing sales and marketing to other companies.

“We are in discussions with various partners as the Eyepass relates to markets outside of the U.S. and how we market and sell it both internationally and domestically,” Dr. Salem said.

Norwood Abbey

Norwood Abbey is another intellectual property development company with a new foothold in ophthalmology. The company, which has drug delivery and immunology products, is the parent company to Norwood EyeCare, which recently purchased the Centurion SES Epikeratome for epi-LASIK from CIBA Vision.

Current efforts are focused on developing that product’s stance in the market, said Lamar Chandler, Norwood’s vice president of marketing for the United States and Europe.

“Right now, we are getting the Epikeratome back on its feet after CIBA shut the operation down last year. We had to go back and resurrect that product,” Mr. Chandler explained. He said he was “one of the people that came [to Norwood] with the acquisition” of the product.

The company, based in Australia, is looking to expand, Mr. Chandler said. The company is open to in-house development as well as acquisitions, he said. The company is now focusing strongly on the ophthalmic market, Mr. Chandler said.

Norwood is not currently publicly traded, but it is filing for a listing on the Nasdaq exchange later this year, he said.

“We are looking at all possibilities, alliances, acquisitions. We don’t want to stay small with one or two products. How we get to the size of a Bausch & Lomb will be dictated by the market and what products are available. We are looking to work our way up as high as we can go,” he said.

Optical Diagnostics

Optical Diagnostics is a small company in the Netherlands with a focus on software programs for ophthalmology. The company provides ophthalmologists with clinical and technical consultation software in Windows format.

The Aniseikonia Inspector software program is the most well known of Optical Diagnostics’ products, according to company founder and president Dr. Gerard de Wit. The Windows software program assists the physician in managing aniseikonia. The patient looks through red and green lenses at a computer screen and adjusts target images until they appear to be the same size.

Other products available from Optical Diagnostics include the Color Vision Recorder, which determines the amount of color deficiency a patient may have, and the MD Simulator, which shows the visual implications of age-related macular degeneration, he said.

All of Optical Diagnostics’ products are available in the United States, and the majority of the company’s sales occur through its Web site, Dr. de Wit said.

Refocus Group

The Refocus Group is currently developing the PresView scleral spacing procedure, with plans to relaunch the procedure in Europe this year. The PresView procedure was initially designed to treat presbyopia surgically, but it is now thought to be applicable to glaucoma as well, said Terry Walts, chief executive officer and president of the company.

The PresView procedure was marketed in some countries between 1998 and 2000 by the Refocus Group’s predecessor, Presby Corp. In 2000 the company voluntarily withdrew the product from the market in order to redesign the procedure from a manual one to a more automated technique.

Since that time, the company has been investigating the new technique in clinical trials in several countries, including the United States. In December of last year the company received permission from the FDA to begin phase 2 clinical trials for the treatment of presbyopia.

“PresView is the only product and procedure that we are actively developing at this time,” Mr. Walts said. “When we launch PresView later this year in Europe, it will be for both presbyopia and glaucoma, however the doctor chooses to use the product.”

In the next 2 to 3 years, Refocus will concentrate on the relaunch of the PresView, first in Europe and then in the United States, he said.

“Instead of focusing on expanding our product line we intend on focusing on the PresView system exclusively,” Mr. Walts said. “We continue to entertain the idea of strategic alliances, but we have not formed any relationships as of yet. We do, however, intend on using local and regional distributors both abroad and here, but nothing has been finalized as of yet.”

Currently, the company has no revenue, he said, but it hopes soon to have modest revenues associated with the commercialization of PresView in Europe and other markets outside of the United States.

A note from the editors:

OSN Staff Writer Jeanne Michelle Gonzalez and Copy Chief Tim Donald, ELS, contributed to this article.

For Your Information:

• David R. Harmon can be reached at the Market Scope Newsletter, 13610 Barrett Office Drive, Suite 211, Manchester, MO 63021; 314-835-0600; fax: 314-835-0606.
• Lamar Chandler is vice president of marketing for the U.S. and Europe for Norwood EyeCare. He can be reached at Norwood EyeCare, 6455 East John Crossing, Suite 425, Duluth, GA 30097; 404-936-0346; fax: 800-506-1519; e-mail: epi-lasik@norwoodeyecare.com.
• Dr. Gerard de Wit is president of Optical Diagnostics. He can be reached at Optical Diagnostics, Eikvaren 19, 4102 XE Culemberg, Netherlands; 31-345-518116; fax: 31-345-518116; e-mail: info@opticaldiagnostics.com; Web site: opticaldiagnostics.com.
• William Flynn is chief executive officer of Addition Technology. He can be reached at Addition Technology, 950 Lee St., Des Plaines, IL 60016; 847-297-8419; fax 847-297-8678; Web site: www.getintacs.com.
• Mike Judy is vice president of marketing for eyeonics Inc. He can be reached at eyeonics Inc., 6 Journey, Suite 125, Aliso Viejo, CA 92656; 949-916-9352; fax: 949-916-9359; Web site: www.eyeonics.com.
• Mark Robinson is president of EyeKon Medical. He can be reached at EyeKon Medical, 2451 Enterprise Road, Clearwater, FL 33763; 727-793-0170; fax: 727-799-2212; Web site: www.eyekonmedical.com.
• Michael Salem, MD, is executive vice president of research and development for GMP Cos. He can be reached at GMP Cos., 1 East Broward Blvd., Suite 1701, Fort Lauderdale, FL 33301; 888-723-3310; fax: 954-745-3571; Web site: www.gmpcompanies.com.
• Terry Walts is president and chief executive officer of Refocus Group. He can be reached at Refocus Group, 10300 N. Central Expressway, Suite 104, Dallas, TX 75231; 214-368-0200; fax: 214-368-0332; Web site: www.refocus-group.com.

• OSN Staff Writer Kim Norton writes on cataract and refractive topics.
• OSN Staff Writer Jeanne Michelle Gonzalez specializes in practice management, regulatory and legislative topics, in addition to cataract and refractive surgery.