Nine years ago, Emmett T. Cunningham Jr., MD, PhD, MPH, and like-minded individuals created the Ophthalmic Innovation Summit, a place where those in the “innovation cycle” could learn what others in the cycle — venture capitalists, innovators, pharma, device manufacturers — were doing. It’s become the place to be before a major ophthalmic conference.
Ophthalmology Management: how did you get interested in the venture capital side of the business? What was the attraction for you?
Emmett T. Cunningham, Jr., MD., PhD, MPH: All of ophthalmology, even academic ophthalmology, has a business component, right? People who run their own private practice obviously are running a business. Same for an academic department. So, business is part of ophthalmology in all of its incarnations. But I moved more to the finance, or the investment side, as a series of steps. I went from academics to Pfizer initially, and from Pfizer to a small, private start-up called Eyetech and while at Eyetech, I interacted with the venture capital investors who were on the board. I got to know them, became interested in venture capital, and then when Eyeteeth was acquired, I approached one of the venture investors about joining their firm. This firm was, and is, Clarus.
OM: When did the idea for OIS originate?
EC: I had been going to some investment meetings run by Craig Simak (CEO, Healthegy). He and his mother built this meeting that I enjoyed, and I always thought a version of what he was doing, but a little different, would be good for ophthalmology. And what he did mostly was bring investors together, and I just thought it would be much better to bring investors together with large pharma executives, small pharma executives, and thought leaders — so that everybody involved in the innovation cycle would all come together. And it turns out that bringing all those people together has created a great chemistry because you have the innovators, the people who use the products, and the people who are responsible for funding and doing development.
OM: What year are we in now for OIS?
EC: I think it’s the ninth year.
OM: Did you ever think it would get this large?
EC: At the very beginning I don’t know that I thought about growth or ultimate size. But I always felt that it would serve an unmet need and provide value. Nothing like it was out there.
The first meeting we had about 450 people and I knew then that it would catch on. I could see it getting to 2,000 people a year over time.
OM: How many marriages, if you will, have you conducted between venture capitalists and start-ups?
EC: It’s really hard to quantify the impact in that sense since we don’t track the network meetings or even know who meets.
OM: Okay. Not even a really educated guess?
EC: No. But it’s clear that it has become the go-to meeting for people who are either looking for financing or want to promulgate some new data in ophthalmology. So, it’s an important meeting, but I don’t know that I can quantitate the dollars, or number of companies, as a result of people attending OIS.
OM: With the FDA’s head of devices (Malvina Eydelman, MD) on your advisory board, what does that bring to the table for you?
|Index Performance (% Change)||1 month||3 months||1 year|
|OIS Index (OIS)||-2.50%||-0.30%||0.30%|
|NASDAQ Biotechnology Index (NBI)||-5.80%||-1.50%||22.60%|
|US Medical Device Index (IHI)||3.30%||4.90%||27.90%|
|US Market: Russell 3000 Index (R3000)||2.10%||4.40%||21.60%|
|The OIS Index was introduced in October 2016, as a composite of ophthalmic growth stocks; OIS uses it to track the performance of its economic sector. More information is available at https://ois.net/ois-index/ .
COURTESY OIS INDEX/OIS.NET
EC: [While] the advisers help us with topics that we might address in the meeting, the most important thing is that the FDA actively participates in virtually all our meetings.… [their] opinions are so valued and sometimes hard to access openly. And so, we provide an open forum.
OM: Why are ophthalmologists so drawn to business? It’s above and beyond in this specialty, isn’t it?
EC: Well, let me focus you here. I’m not sure that I know why ophthalmology is a particularly innovative, or entrepreneurial discipline. But it is clear that lots of things have been innovated in ophthalmology. Perhaps a different type of person goes into a procedural discipline. It’s more so than pediatricians, internists or psychiatrists for sure.
OM: When you’re at the summit listening to a presentation, how can you tell if an idea will germinate?
EC: Not sure that I can base an informed opinion on one, eight-minute talk. I only have my own impression, and it’s based on many factors, most important of which is probably how well the person presents the story and business plan. But it has to do with the strength of the science that supports the hypothesis and, related to that, the data that emerge from the clinical studies.
OM: When you first started out, did you see more device people? Did you see more pharma people? Were they smaller companies? Are they now larger?
EC: We do track the composition of the audience at a very high level, and while the absolute numbers have increased, the proportions are more or less the same. So, it has always been mostly companies, private and public ones, the big ones you’d recognize in ophthalmology, followed by key opinion leaders, investors and service providers, and so on.
OM: What is the investment environment like in ophthalmology?
EC: Investments in ophthalmology remain pretty strong. We’ve even seen the emergence of some smaller boutique investment houses that focus specifically on ophthalmic products. There is the Flying L-Ventures with Bill Link, (PhD, cochair, OIS) Andy Corley and Dick Lindstrom, MD, and then there’s Lagunita BioSciences with Mark Blumenkranz, MD as just two examples.
OM: What attracts venture capitalists, and what turns them off?
EC: Well, at the end of the day, venture capitalists need to generate returns for their investors. So, job one is to identify good investments with high returns. But like everybody, we like to do well by doing good and so if we can invest in things that address large unmet needs that’s the ultimate win-win.
When we’re listening to companies present it comes back to the strength of the science, both the preclinical and clinical science. It’s triangulated against how big is the unmet need, how big would the impact be if it works, and how much risk and money it takes to get there.
OM: What trends do you see in devices, trends in pharma?
EC: There are trends that go into how much money or interest is being paid towards devices versus pharma. And devices, not just in ophthalmology, but across venture capital, are relatively out of favor now. And they’re relatively out of favor because they’re not very profitable.
You have to spend a lot of money to get them approved and market them and they tend to address markets that are a fraction of a pharmaceutical market as far as revenues are concerned. That just makes them less profitable and so they’re less attractive. That’s been going on now for several years. It’s harder to raise money to fund a device than it is a drug.
OM: What are your aspirations for OIS?
EC: I think our aspiration isn’t much beyond what we are currently doing. I guess my aspiration would be that it continues to serve, to provide or address the need that it has for the last nine years, which is to bring together all the constituents in the innovation cycle, give them a platform to interact, and to sort of germinate, to use your word, the interest and enthusiasm for innovation and entrepreneurship.
If it gets bigger, fine. It doesn’t need to get bigger. If it goes international, fine. It doesn’t need to go international. All that is to be determined.
But, if it were exactly what it is now and stayed that way for 10 more years, I’d be delighted with that. (The latest summit before 2017 AAO in New Orleans drew 1,000 people, according to the OIS website.)
OM: So, international might be in the future? Are you thinking about that?
EC: We’ve thought about it off and on. It’s a bandwidth issue, we only have so much, and each meeting takes a lot of effort. OM
OIS success stories
At the 2015 OIS conference held before ASCRS, in San Diego, more than 25 presenters spent just a few minutes explaining to audience members what their products were designed to do; where they were in the approval process; and mentioned their financial interests and/or merger and acquisition availability.
Of those companies, several have received FDA approval for their products, been acquired by larger companies, or both. They include:
- Mynosys: its Zepto microcapsulotomy device cleared the FDA this June.
- InnFocus: acquired by Santen in July 2016, is seeking FDA approval for its MicroShunt.
- Avedro: received FDA approval for its corneal crosslinking system in April 2016.
- AqueSys: received FDA approval for the XEN gel stent in November 2016; it was acquired by Allergan in September 2015.
- AcuFocus: received approval for its Kamra inlay in April 2015.
- RVO ReVision Optics: received approval for its Raindrop near vision inlay in 2016.
The following year, at least 16 companies addressed more than 500 people at the OIS@ ASCRS, held in New Orleans.
Among those that reached similar satisfactory endings:
- Shire: received approval for Xiidra in 2016.
- Aerie: an FDA advisory committee recommended approval for its Rhopressa glaucoma treatment in October 2017.
- Transcend Medical: bought by Alcon in February 2016, saw its CyPass micro-stent receive FDA approval in August 2016.