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CorneaGen acquires KeraLink’s US operations: An exclusive interview with Monty Montoya and Douglas Furlong
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CorneaGen and KeraLink today announced that CorneaGen will be acquiring all of KeraLink’s U.S. eye bank operations and related assets. According to a press release, on March 1, CorneaGen will absorb all of KeraLink’s operating locations and enter into affiliate agreements with KeraLink’s affiliates in New Mexico and San Antonio, and employ most, if not all, of KeraLink’s operations personnel at their current locations. KeraLink will continue as a nonprofit organization that is now focused exclusively on addressing the corneal blindness problem in the developing world. CorneaGen will support KeraLink’s efforts by providing access to tissue, facilities and personnel.
Healio.com/OSN was given an opportunity to discuss the acquisition and what it means to the eye banking community and corneal surgeons globally with CorneaGen’s CEO Monty Montoya and KeraLink’s CEO Douglas J. Furlong.
Healio: How did this acquisition come to be?
Douglas Furlong: This acquisition came about because of both organizations’ shared mission: to eliminate corneal blindness around the world. We believe that this transaction is going to accomplish two major things. The first is to be a means of helping to consolidate efforts here in the United States, for the benefit of patients and surgeons. We believe that consolidation in the eye banking industry is the future because it is going to result in a lot of needed efficiencies that are going to drive research and innovation into new and better ways to treat the corneally blind.
That leads me to the second part of it. My organization has determined that we will operate exclusively after this transaction on the international front to treat the more than 10 million corneally blind outside the United States who currently are not being treated. To do that is going to require good partners and innovation, and both of those things are coming out of this transaction with CorneaGen. We feel delighted at the opportunity to have a partner like CorneaGen to help us do it.
Monty Montoya: CorneaGen is a mission-driven company that is committed to transforming how corneal surgeons treat and care for the cornea. As we are working to innovate the next generation of cornea care, whether it is devices, biologics or other interventions, we have always been looking for like-minded partners to work with.
To me, the real genesis of this transaction is the shared mission of KeraLink and CorneaGen, which is to eliminate corneal blindness. It just makes us an ideal match.
For CorneaGen, we want surgeons to view this as another acceleration to accomplish our mission. Through this acquisition, CorneaGen is going to gain efficiencies of scale in reaching the U.S. market, including our ability to serve an additional 8% of the domestic corneal surgeons and give them access to an expanded offering of surgical products.
The acquisition also brings new partnerships with academia and industry that are going to increase CorneaGen’s access to important discoveries in the treatment and prevention of corneal disease, so that also helps accelerate our mission to eliminate corneal blindness overall.
At the endpoint of the transaction, CorneaGen will be in a place where we will be serving about 25% of the U.S. market.
Furlong: KeraLink has made a purposeful decision to work outside of the U.S. Up to now, we have been operating as a traditional U.S. network of eye banks, where 95% or more of our resources, time and efforts are spent on the domestic cornea business, and that is obviously important. However, we determined as an organization that if we are serious about being “all in” on trying to eliminate corneal blindness outside the United States, where the problem is mostly unaddressed, then we must be “all in” in terms of our attention and our resources. The way to do that was to find a partner like CorneaGen that would like to do the transaction that we are doing here, so that we can take the proceeds of that transaction, move forward and be well-financed to do what we want to do abroad.
Healio: Your 5-year plan is to restore sight to 50,000 people, so what are your plans to achieve that goal?
Furlong: Our immediate focus is to be smarter about how we go about doing what we already know how to do. As an example, we have an irradiated cornea product called VisionGraft that has been in the market now for about 10 years. In the United States, it is used almost exclusively for glaucoma patch grafts, which is an excellent use of the product. But what we want to investigate is whether we can use that same irradiated cornea for actual corneal transplants that treat the anterior of the cornea. When you go abroad, the front of the cornea is where most of the problems occur. It is different from the United States, where most of the needed procedures are dealing with the endothelial layer or back of the cornea, which is age-related. Abroad, it is more trauma-related, ulcers and things like that. We want to take corneas that are currently going in the discard bin because of low cell counts and make use of them for corneal transplants by irradiating them and providing them to surgeons for deep anterior lamellar keratoplasty. That is an example of what we can do in the short term, and we believe that there are literally tens of thousands of corneas that are currently being discarded that could be put to use under a program like that.
In the meantime, we want to focus on long-term innovation to tackle the problem of corneal blindness outside the United States, where there is not enough available tissue right now, not enough trained surgeons, and you must do it at a cost that people can afford.
So, while we are doing the short-term things that we know how to do now, and doing them smarter, we are also going to be also focused on innovations that we can bring to market so that people can get the help that they need and be able to pay for it.
Healio: Outside of the U.S., which is of more urgent need: having trained corneal surgeons or having enough corneal tissue for transplants?
Furlong: It is a combination of both things, and depending on where you are outside the U.S., maybe one thing is a little more predominant than the other. But virtually everywhere outside the United States, you start to run into both issues. Our task at KeraLink moving forward will be to wrestle with both of those issues and, through innovation, come up with sensible workarounds.
Montoya: I absolutely agree with Doug. You need to be working on both ends of that problem to produce meaningful change, so both of those things need to be addressed in tandem.
Healio: Can you can outline the ways that you will work together going forward, or will you be moving forward independently?
Furlong: We will be set up to move forward independently, but our agreement has a collaboration built in. KeraLink will continue to have access to tissue for any type of research or training that we want to do abroad. We will continue to have access to CorneaGen’s facilities, including all of the facilities that are being transferred to CorneaGen as part of this transaction, as well as their other facilities. Also, just as importantly, we are going to have access to personnel, so that if KeraLink wants to borrow some CorneaGen experts to help us with a particular program, CorneaGen has already committed to make their people available to KeraLink on an as-needed basis.
This is a collaboration. It starts at the closing table of this deal, but it will go forward for many, many years after that.
Montoya: CorneaGen, being a mission-driven organization, is committed to advancing access to corneal care in the U.S. and across the globe. So, it absolutely fits in our charter to be working hand in glove with KeraLink in those places where we can have an impact. For us, the efficiencies gained through the larger organization are also expected to free up resources to help enhance our ability to pursue research and innovation.
We are looking toward a future for prevention and treatment of corneal blindness that eliminates the need for transplants going forward. If we can make that a reality here in the U.S., we then want to translate that globally, and having a partner like KeraLink that can take the baton and make sure that those advances are delivered to the far corners of the planet will be absolutely critical.
Healio: What would you want cornea surgeons to know about this acquisition?
Montoya: I think one of the things that is going to be important for cornea surgeons is to appreciate that CorneaGen will have an even larger pool of quality tissue to serve them and their patients, and along with that enhanced skills and experience needed to prepare the tissue for ideal surgical outcomes. This consolidation of eye bank operations will grow the pools of tissue and talent, improving access for surgeons and patients across the U.S. To that end, we see this as being something exciting for the surgical community.
Furlong: In order to treat an additional 50,000 people with corneal blindness, we are going to have to put clinical innovations in play on the ground that, by definition, put us well on the way to treating many, many more than that. Fifty thousand is a starting goal, not an end goal.
The other thing I would like to do is to give you my view of what is going on at CorneaGen, only because it has been in the news quite a bit in the last couple of years since it formed, originally as SightLife Surgical, and the whole issue of having a for-profit company in this space.
I see it as an absolute imperative that we disrupt the status quo. The normal way of doing things has gotten us to the point in the United States where we have eliminated wait lists. That happened in the mid-1990s. Since then, the status quo has not delivered appreciable relief to the 10-plus million people outside the U.S. who are waiting for that relief. So, my view is that this is not only a good thing and an inevitable thing to have this type of consolidation happen and to have a company like CorneaGen formed and thriving, I think it is a moral imperative that we shake up the status quo because, with all due respect, the status quo has not helped the people outside the United States nearly enough.
Some people have said, “Wow, this is disruptive,” and I agree. It is intended to be disruptive, and hopefully, that disruption is going to help a lot more people see.
Montoya: I think this highlights why KeraLink, and CorneaGen are so well-suited to partner together in this way. Having a partner like Doug, who gets that this is about the mission, and not about self-preservation of his organization or his territory, and is willing to do something disruptive and innovative to move the ball forward on behalf of the cornea blind of the world — those are the kind of partners that CorneaGen is looking for, and we are excited to initiate this process.
Furlong: To follow up on that, our efforts at KeraLink will include leveraging strategic partnerships to bring innovative products, procedures and therapies to market, and we believe this is going to result in functional sight restoration for so many who never would have been helped but for those efforts.
Healio: Can you give any logistical details about how the transition will take place?
Montoya: The transaction becomes effective March 1, and CorneaGen will absorb all of KeraLink’s operating locations. We will also enter into agreements with KeraLink’s affiliates in New Mexico and San Antonio. Then, our intention will be to employ most of KeraLink’s operational personnel at their current locations.
Furlong: When the switch gets flipped on March 1, it should be seamless for our surgeons who we work with and have worked with for years at KeraLink. They are going to be able to order tissue just as they always have. After March 1, that tissue will be coming from CorneaGen instead of KeraLink, but with many of the same people providing those services. The only real difference for the surgeons is that they are now going to have the benefit of having access to everything that KeraLink had and everything that CorneaGen has as a combined array of products and services.
Montoya: On a scale of transactions, this is by far the largest combination of eye banking operations in the history of the U.S., so it is a big deal.
Furlong: It is a big deal. It is intentionally disruptive for, I believe, all the right reasons, and that is to make many, many people see who otherwise never would have been helped.
Disclosures: Furlong reports he is CEO of KeraLink. Montoya reports he is CEO of CorneaGen.