Avedro’s Long Wait for FDA Approval is Over

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The FDA approved Avedro’s New Drug Application for its riboflavin ophthalmic solution/KXL System (corneal cross-linking for the treatment of keratoconus and corneal ectasia following refractive surgery). OIS Co-chair Gil Kliman, an investor in Avedro, lays out the company’s next plans.

10 Top Topics in this OIS Podcast:

1. Can you give us an update on the approval for cross-linking?
2. The approval was “complex” in many ways.
3. Kliman lauds the FDA.
4. What are the commercial plans?
5. Will we be hearing more at OIS?
6. Update on the search for a new CEO.
7. How big an opportunity is PIXL?
8. Does Avedro need more financing?
9. Is this another sign of strength for ophthalmology?
10. See you in New Orelans.

Podcast Guest

Podcast Transcript:

Tom Salemi: Gil Kliman, welcome to the Podcast.

Gill Kliman: Great to be here, Tom.

TS: It’s finally – we’ve been waiting a few OIS’s for this news. But Avedro received some good news from the FDA. And can you give us an update on the approval for cross-linking in the KXL system?

GK: Yeah. We’re really excited for obvious reasons. This has been long awaited, not so much by the company, but maybe by the entire ophthalmology community in the US. Corneal cross-linking has really been an unusual procedure and it’s been widely used outside the US, but not in the US due to the lag in FDA approvals. So it’s a very proven technique, standard of care in most countries, and now we’re finally going to have it available in the US.

TS: And can you just break down the approval for us? I mean this was an approval for the drugs used in the procedure, less the light system that’s part of the procedure?

GK: Well, it’s an approval for both, so it’s really enabling the procedure, of which it really is 2 parts, as you point out. It’s kind of a drug-device combination, so it requires a device to emit light and the riboflavin. And we see that evolving over time, where this started out as more of a home brewed, doctor sort of technology, with a very primitive UV light source and some home made vitamins. And what Avedro’s really doing is commercializing that, getting it officially labeled by the FDA so that it’s a really standard of care, safe and proven efficacious procedure for patients around the world.

TS: Great. And the approval is, I guess they say, expected, but as I suggested earlier, it was expected for a few times now. What was – what went your way this time? Was it just finally all the questions were answered and the FDA was satisfied?

GK: Well, I think this was a very complex approval in many ways. Probably biggest picture, it required multiple divisions of the FDA, it required involvement of 3 different divisions: drug division primarily, but also device and also combined products because of the unique aspect of, as we mentioned, combining the device and the drug. And it also was unusual in that the data collection, part of it had been done by a prior entity, which Avedro acquired several years ago. So I would laud the FDA for actually taking their time and carefully looking at the data and giving a thoughtful approval to it. We wish that it had come earlier, but we could understand because of some of the complexity this was a long approval. At Interwest, we’re very patient with the FDA. We’re used to this. We’ve been investors in Glaukos for many years, and went through a fairly lengthy approval process there that ultimately ended up being quite positive with a great result for the company, and a product that’s now being widely used around the world. So Avedro is following on that same pathway, and we’re very happy to see the final approval come. And we were thinking that it would come sometime in this timeframe, so I think perhaps others had unrealistically optimistic ideas of approval. So we were actually very happy with the timing and I think it’s all worked out well.

TS: That’s terrific. And I know Avedro’s been selling OUS, so you’ve got a commercial apparatus already ready to go. At least you’re familiar with the process of selling. What do you have in the US? Are you ready to hit the ground running now that you’ve got the green light?

GK: Well, we certainly had enough time to prepare. So I think the team is super excited to launch. But I would also say we’re going to do it in a thoughtful fashion. So we’ll make some announcement at the ASCRS meeting. But this will be launched through the summer and I think really the Academy of Ophthalmology is where you really – we’re really effectively going to be launching. We weren’t sure if we would get the approval before ASCRS, so this will be kind of a coming out party. But a real commercialization will probably happen towards the latter half of this year in the US.

TS: And I hope we’ll be hearing some of this story at the upcoming OIS.

GK: Absolutely. Well, this is obviously big news in many ways, so we’ll be breaking the news at OIS, I believe starting in the breakfast session in the morning on refractive technologies, where Raj Rajpal, the recently appointed Chief Medical Officer of Avedro will be speaking on behalf of the company.

TS: Great. And you mentioned the executive team of Avedro. Obviously you’ve had some change there recently. We talked to David Muller a few months ago. Can you give us any update on your search for a CEO?

GK: Yeah. It’s really an exciting opportunity to be able to bring in new leadership, particularly at this point of the company, now we have the FDA approval. David Muller did a terrific job of pioneering this technology and really building the market as a single company out there, to raise awareness and prove that this really was a good, viable commercial procedure, good for patients and good for business. But we’re now getting into a big commercial phase where it probably would be a good time to make a transition. So we’re very happy how the transition worked out with David. He did a tremendous job and we thank him for all his accomplishments with the company. We now have the luxury of looking at a real plethora of very experienced executives coming out of ophthalmology who would be interested in joining the company. Brian Roberts has been doing an excellent job of leading the company in this interim period, but I think we’ll in the next few months be adding someone who has deep ophthalmology relationship coming out of ophthalmology and a lot of marketing and sales experience for the big commercialization job that’s coming up.

TS: Great. And at previous OIS’s, most recently, David has sort of been moving the presentation ball forward, looking at PiXL, your big opportunity there. What’s next for PiXL? Can you describe it for a second? And does this news sort of free up resources to really give that a stronger push?

GK: Absolutely. So at Interwest, our investment focuses always on real breakthrough products that are first of a kind, creating new categories, and that’s what got us excited about Avedro. And we’re of course delighted to have the FDA approval for keratoconus, but for us the real big, bright, shiny object out there is the potential for this to be a refractive procedure through the so-called PiXL procedure as made by the company. And this really takes it to a new level, in that now the potential to treat millions of patients with refractive error, and it’s a much more elegant approach in that rather that diffusely shining UV light, we’re going to have the ability to give very focused and discrete exposures to allow differential changes in the curvature of the cornea. We’re in early clinical trials. We’ve gotten some very exciting data out of Germany. That is another thing that will be happening in the second half of this year is to advance both the light delivery and the riboflavin parts of the procedure to give a very precise, safe, noninvasive treatment for low refractory error to treat millions of patients around the world.

TS: Terrific. And finally, regarding financing, I know you and OrbiMed joined as investors last year. Where is the company for financing? Do you anticipate having to raise a follow up round to sort of take advantage of this good news and of the advances in PiXL?

GK: The company is extremely well financed, Tom, and that’s one of the things we really like about the positioning now. We were very, very flattered to get OrbiMed as a partner here. We’ve been co-investors with them at Glaukos for many years. Jonathan Silverstein and I have been on the board there for a while working together. And so now we have two deep-pocketed investors, being slightly immodest, who are fairly experienced in ophthalmology. So we’re extremely well financed now. We always look at financings for the future because all private companies, generally, are undercapitalized relative to large companies. But for the time being, we’re in an excellent positioning having done a very large round in anticipation of this approval. So we see ourselves well- positioned for the near future in terms of financing.

TS: That’s great. We have seen a string of real positive developments in ophthalmology, I guess maybe starting with the Glaukos approval a few years ago. Do you see this trend continuing? Is it just sort of the culmination of a lot of exciting research in this area?

GK: well, there’s a lot of positive forces at work, but this is really a nice part in the cycle. We often have a cycle of things going up and down in ophthalmology. Sometimes they are a little bit of lags in the innovation. Sometimes the FDA is moving slower rather than faster. And it seems like we’re really in a golden age right now, where innovation is at one of its peaks. We’ve got a lot of new technologies coming into the field. The FDA has really done a terrific job of organizing and streamlining the approval process on both the drug and the device sides. I think they’re moving through much faster. And we’ve got some very obviously positive dynamics in the marketplace with aging of the Baby Boomers, etc. And it’s a great time for small companies now because we have the opportunity both of private financings as well as public offerings, which is what Glaukos went through. And that will be our hope longer term for Avedro is it could follow on the pathway of Glaukos and do a robust commercialization, and then have access to public markets. To I’ve been investing something like 20 years in ophthalmology now. I think this is the best I’ve ever seen, and maybe it’s going to get even better.

TS: I certainly hope so. Well, thanks for taking a few minutes, Gill. Look forward to seeing you in New Orleans at OIS, in the crowd and on the stage.

GK: Likewise. See you soon in the Big Easy.

TS: Take care.

GK: Take care.