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Venture capitalists look for market, path to reimbursement
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SAN FRANCISCO — Clear identification of a market and a path for reimbursement are two necessary ingredients for venture capitalists in the ophthalmic space to consider before making a funding decision. But the funding is out there.
“My impression is, since 2008, things have come back. There’s more money moving into the space, and it’s a relatively good time. People are chasing good science to address large unmet needs,” Emmett T. Cunningham Jr., MD, PhD, MPH, who co-moderated a panel of venture capitalists at the Glaucoma 360 New Horizons Forum, said here. “So if you have a great idea, you can [typically] find the money.”
Before committing that money, however, fellow moderator William J. Link, PhD, said he needs to know a couple of things: “Is this something that is transformative compared with [what else] is on the market today?” And, who is going to buy it and will it be reimbursed?
“Unless we can envision who wants to buy it, then it’s really hard for us to make the investments, whether it’s [on the] device or on the biotech pharma side,” Link said.
It is necessary to marry the unmet need with the path to reimbursement, according to Mark S. Blumenkranz, MD, MMS. Before considering a new investment, Blumenkranz said he looks for “bulletproof science,” capital efficiency and careful attention to whether the product can be commercialized.
For diagnostics and devices, panelist Firas M. Rahhal, MD, said his group tends to invest early, but clinical data are needed first “[to] have a strong suggestion that patient outcomes will be improved or the practice of ophthalmology will be improved or be rendered more efficient.”
Panelist Jeffry Weinhuff agreed that there has to be a demand for the product.
“Some people get real excited about the science and the possibility,” he said, but then forget about the lengthy due diligence checklist that investors need to complete before committing. – by Patricia Nale, ELS
Reference:
Funding innovation: Venture capital panel discussion. Presented at: Glaucoma 360 New Horizons Forum; Feb. 3, 2017; San Francisco.
Disclosures: Blumenkranz is chairman and founding director of Lagunita Biosciences. Cunningham is managing partner of Clarus Ventures. Link is co-founder and managing director of Versant Ventures. Rahhal is a partner in ExSight Capital Management. Weinhuff is managing partner for Visionary Ventures.