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Venture Eyes Ophthalmology--And Likes What It Sees

 
• By Ellen Licking

Ophthalmology has long been a bright spot for venture investors given the potential market size, health care burden, and high unmet medical need associated with many eye diseases. Based on a recent analysis by Start-Up magazine, there is no sign that trend is diminishing. Using Elsevier's Strategic Transactions database, Start-Up found that private backers have poured nearly $1.8 billion into 58 ophthalmology start-ups since 1999, with the money split nearly 50/50 in terms of device and drug investments. This trend is likely to accelerate as a number of new acquirers emerge to play in what was once a niche area.

On October 1, Sanofi and the ophthalmology start-up Fovea Pharmaceuticals SA announced a $538 million marriage that unequivocally demonstrates the French pharmaceutical company's interest in developing treatments for eye diseases. [See Deal] Fovea, which has a mid-stage clinical program for allergic conjunctivitis and earlier ones for macular edema, will become Sanofi's eyes in ophthalmology, operating as an independent business unit to build the drug maker's pipeline via a combination of in-licensing and in-house development.

Sanofi is by no means the only large health care company to awaken to the potential of ophthalmology. Lured by the promise of large markets and high unmet medical need, both pharmaceutical and med-tech giants are increasingly interested in developing capabilities in this therapeutic area. Novartis AG has bet heavily on the sector, shelling out billions to purchase a 25% stake in Nestle SA's Alcon Inc. via a transaction that also allows Nestle to put additional Alcon shares to the Swiss pharma for billions more. [See Deal] Meantime, Bausch & Lomb Inc

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