SAN FRANCISCO – At the Glaucoma 360 New Horizons Forum here, Emmett Cunningham, Jr., MD, PhD, moderating a panel on financing for emerging glaucoma device companies, described the “early Death Valley” that panel participants know all too well. To get beyond Death Valley, medical device companies have to think creatively. Here’s how some of those companies made that journey.
First, Some Context
Death Valley refers to the period when a start-up accrues mounting costs and draws down capital with no revenue coming in. It’s also a phase in which venture capital firms can be hesitant to invest, especially in high-risk, high-cost medical device companies.
Life sciences companies had faced challenges raising funds in recent years as VC investment in the sector plunged from $15 billion in 2015 to $12.6 billion in 2016, according to the National Venture Capital Association. That’s been on the rebound for the past few years, rising to $16.6 billion in 2017 and $23.3 billion last year. But life sciences deals are also getting larger, with 61.4% of them valued at $50 million or more in 2018, with smaller deals on the decline since 2016.
Funding the ‘Death Valley’ Journey
John Freshley, president and CEO of ONL Therapeutics, told the Glaucoma 360 crowd that his company is currently seeking about $40 million in both partnering and venture financing to fund both its retinal disease and acute angle-closure glaucoma (AACG) programs. The company is developing ONL1204, a novel, first-in-class small-molecule Fas inhibitor for the treatment of retinal detachment, glaucoma, age-related macular degeneration, and non-infectious uveitis, among other diseases. ONL Therapeutics has raised about $11 million to date, including a $1 million grant from the National Eye Institute and a $4.25 million round of Series A fundraising.
Vivid Vision is developing a virtual reality platform to treat amblyopia and strabismus. The company was founded by CEO James Blaha, a computer programmer who grew up with the vision problems. Blaha said the company has raised a little over $4 million over the past five years, with Uncork Capital as its largest investor. SOSVentures and its LEAP Axlr8r program have also provided support.
Belkin Laser Ltd., an Israel-based clinical-stage medical device company, is developing a one-second laser therapy for glaucoma. Belkin Laser has received $6.6 million in funding since its 2013 inception. That includes a $5.3 million round of financing comprising $2.5 million from Zico Holdings and Rimonci Capital and $2.8 million in a European Union grant as part of the GLAUrious Program, which Belkin Laser and four collaborative European partners initiated. Like Vivid Vision, Belkin Laser received early support from an accelerator program. It’s currently in the process of securing Series B financing with a goal to raise $8 million.
Implandata Ophthalmic Products GmbH recently completed a Series C round that it describes as a “mid-single-digit million Euro” amount from institutional and private investors, according to a press release. Those investors include Occident Group AG and bank subsidiary Kapitalbeteiligungsgesellschaft Niedersachsen. The Hannover, Germany-based company’s EYEMATE eye pressure management system comprises an implantable microsensor paired with an external handheld device that, together, allow patients to measure intraocular pressure on a regular basis and share this information with doctors.
Ivantis Inc., with headquarters in El Segundo, CA, and Toronto, closed a $25 million Series C round in January 2017. New investors RA Capital Management and Mérieux Développement led the round. The funding helped Ivantis complete the pivotal trial and other efforts that led to Food and Drug Administration approval in August 2018 of its Hydrus Microstent.
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