Backing Vision Tech Startup Avedro, VCs Take Long View on Eye Surgery Market
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extremely gradual and unnoticeable to patients. The company also expects a big selling point to be that the procedure, unlike Lasik, doesn’t require any sort of surgical cutting. The firm plans to initially market the procedure to people who are mildly nearsighted and typically opt to correct their vision with glasses or contact lenses.
By comparison, Lasik (short for laser-assisted in situ keratomileusis) is a permanent procedure. It involves cutting open a thin flap of corneal tissue on the font of the eye and then using a laser to remove tissue from the layer of the cornea underneath the flap. In most cases, the surgeries are successful, but a small minority of patients end up seeing double or have lines in their field of vision, among other side effects.
Muller was reluctant to provide many details on Avedro’s clinical trial, which began in March, and he declined to say how much Avedro’s procedure would cost. He did tell me that the firm would need to show data on fewer than 100 patients to gain European approval, and that approval—which he expects to gain in 2010—would also be sufficient to market the firm’s technology in most Asian markets. The firm will later seek FDA approval, which will require much larger clinical trial involving 300 people or more, he said. Thus, Avedro doesn’t expect to launch in the U.S. market until sometime in 2012. The company also does not expect insurers to cover the costs of its procedure, so patients would have to pay for it themselves.
Avedro has advanced the engineering of its device quite quickly since early last year, when the firm closed an $8 million first-round financing led by Prism VentureWorks in Needham, MA, Muller says. The original technology that the device is based on was developed in the lab of engineering professor B. Stuart Trembly at Dartmouth College. Hanover, NH-based Borealis Ventures provided the seed investment in 2003 to license Trembly’s vision-correction technology from Dartmouth and form the startup, which was originally named Thermal Vision, Borealis managing director Phil Ferneau told me. Muller took the reins at Avedro in 2007.
Doug Cole, a venture capitalist who led Flagship’s recent investment in Avedro, says that Muller’s success at Summit and knowledge of the refractive surgery market factored into Flagship’s decision to lead the company’s second round of venture financing.
“Avedro’s senior management team pioneered the creation of the multibillion dollar laser surgery market in the 90s, so they understand the space as well as anyone,” Cole, a director of Avedro, wrote in an e-mail last week. “Avedro’s revolutionary approach avoids incision entirely and offers the first major alternative to conventional procedures. Market interest in this kind of alternative is intense.”
Indeed, annual revenue for manufacturers of vision-correction surgery technology is expected to grow from $307 million in 2008 to $1.5 billion by 2013, driven mainly by technological advances and increased demand for vision-correction alternatives, according to industry analysis firm Market Scope. The St. Louis-based firm also predicted that the consumer side of the refractive surgery market, which includes Lasik procedures, would begin to recover next year.