Building a successful biotech or biopharma company typically turns on a sentinel event — the pivot, as William J. Link, PhD, Managing Director of Versant Ventures calls it. That can involve a complete shift in a company’s focus. Link hosted a panel at the Ophthalmology Innovation Summit in Chicago, where CEOs and founders explained how they pulled that off.
“The path to value creation is not a straight line. It never, ever is a straight line,” Link said. “There are ups and downs along the path that creates value. We have to ask questions: Do we stay the course? Do we give up? Some of us don’t give up very easily, and look back later and say we should’ve given up sooner.”
Mark Forchette, President and CEO of Delphinus Medical Technologies Inc., is the former CEO of OptiMedica Corp., developer of the Catalys femtosecond laser platform for cataract surgery. Abbott Laboratories Inc. completed its acquisition of OptiMedica in 2013 in a $400 million deal, but, as Forchette explains, OptiMedica had to pull off “what I describe as a pretty remarkable pivot” to become a cataract laser company. By 2009 OptiMedica’s first product was the PASCAL pattern scanning laser for retinal photocoagulation, with the femtosecond laser “in the background,” as Forchette explained it.
“That was a complicated picture because of the demanding day-to-day requirements of supporting the retina and glaucoma segment, on top of the intense focus on developing our cataract technology,” he recalled. “We were simultaneously raising $35 million, and that was a challenging time to raise money. We made a fairly audacious pivot to transact the retina and glaucoma segment of the business — the revenue-generating segment of our business at the time — so that we could focus strictly on the cataract segment,” Forchette said. “We went back to being a nonrevenue startup after having built all that infrastructure.”
Ophthalmologist Ron Kurtz, MD, co-founder of both IntraLase Corp. and LenSx Lasers Inc., explained that IntraLase got its start in the 1990s when LASIK was becoming the refractive procedure of choice. “IntraLase introduced femtosecond technology into the corneal space, and initially we thought it could be a replacement or next step for refractive surgery,” Dr. Kurtz explained. However, the team at IntraLase realized the femtosecond platform actually solved a problem that had confounded refractive and cataract surgeons for some time: the ability to create consistent, reproducible corneal incisions and flaps.
“The question that we had internally was that, while these stand-alone refractive procedures were possible and worthwhile, as a startup, did it make sense to go against the tide or follow in the wake of LASIK?” said Dr. Kurtz. “It made more sense to us to join and make LASIK better, providing safe, uniform thin flaps that were reproducible in high volumes. We made that pivot pretty quickly, and then it was a longer effort to convince the community there was value in a significantly more expensive laser microkeratome.”
Vicente Anido Jr., PhD is now CEO and Chairman of Aerie Pharmaceuticals Inc., the company developing Rho kinase (ROCK) inhibitor drugs for treatment of glaucoma, but his story of changing a company’s direction came from his days as CEO of Ista Pharmaceuticals Inc. “Within the first month or so of joining the company, I actually had to go out to Wall Street and tell them the one and only drug of the company didn’t work,” he said. “I had to re-pivot the entire company from a biomed play in the back of the eye into a specialty pharmaceutical company with a focus on ophthalmology.”
That lesson prepared him well when he joined Aerie Pharmaceuticals in 2013. “We found ourselves in a situation where we thought we had a very, very active molecule for the treatment of glaucoma that was a highly specific product, and it worked great — for a short period of time,” he said of his first days at Aerie. “What we found was that we had developed a second molecule, which was not as highly specific but a very general Rho kinase inhibitor, and which in addition had other mechanisms of action, including norepinephrine transporter (NET) inhibition,” Dr. Anido continued. “We very quickly pivoted the entire company from the drug that we thought would make it, to the one we currently have going into Phase III trials.”
Ora Inc. started out 30 years ago providing support services to large pharmaceutical companies, according to President and CEO Stuart Abelson. “Over time, we found we really needed to broaden our service offerings; the client base changed. These newer clients, mostly smaller and VC-backed, did not have the full range of internal services that most large pharma companies have, and they were asking us for more.”
So Ora developed a strategy to broaden its therapeutic focus to all regions of the eye, as well as its services capabilities and geographic reach. “Most importantly, this new group of clients came to us and were interested in having us invest along with them,” said Abelson. Hence Ora Investment Group was born, which redeploys capital into early stage companies. “Most recently, we have made the decision to move forward with initiating a $100 million ophthalmology dedicated fund, that will include outside investors, to further serve this segment of the market — effectively entering our third act,” he said.
When he joined WaveTec Vision as president and CEO four years ago, Thomas Frinzi found an organization that, as he described it, “had stalled commercially.” WaveTec, which developed the ORA System, the first commercialized intraoperative guidance system for cataract surgery, was acquired by Alcon in August 2014. “I can’t emphasize enough the need when you come into a turnaround situation like WaveTec for a process that’s really going to help you gain alignment and drive efficiency,” he said.
“We chose the high performance management system, a proven approach within ophthalmology. It became clear it wasn’t just a commercially stalled organization; technologically we needed to improve the overall performances of the device.” In Frinzi’s first 15 months at WaveTec, the team “rallied around” and re-engineered the ORA device, changed the business model, and rebranded the business. “We hired a new commercial organization and reintroduced ourselves to the market.”