LENSX LASERS: DON’T SHED A TEAR FOR EYE INVESTORS
PEHUB.com
Venture capitalists have put a lot of money over the past couple of years into companies developing treatments for eye disease. Now they’re seeing some ROI.
This week, venture backers in LensX Lasers got what looks on paper to be a very nice exit that could turn into a much better one, when Alcon announced that it has entered into a definitive agreement to acquire the company. Alcon will pay US $361.5 million in cash for LenSX, a developer of a laser used in cataract treatment, plus maximum contingent payments of US $382.5 million if it hits agreed-upon milestones.
Four-year-old LenSx, which developed what Alcon says developed is first femtosecond laser to receive U.S. Food and Drug Administration clearance for use as a part of cataract surgery, previously raised $32 million in venture funding. The Aliso Viejo, Calif.-based company’s investors include InterWest Partners, SV Life Sciences Advisers, Venture Investors and Versant Ventures.
It’s the second eye-related acquisition in as many months. In June, Bausch & Lomb bought the assets and U.S. rights for Zirgan, a drug approved by the U.S. Food and Drug Administration last year as a topical anti-viral for the treatment of corneal ulcers, from Sirion Therapeutics, a venture-backed developer of ophthalmic products. Terms of the transaction were not disclosed. Sirion has raised $71 million since 2005 from backers including Advent International, Aisling Capital, Atlas Venture and Avalon Ventures.
The other big M&A deal in the eye space this past year came from Abbot. In September, Abbott bought Irvine, Calif.-based Visiogen for $400 million. The company develops technologies for treatment of age-related vision loss, specifically cataracts and presbyopia. Visiogen previously raised $77 million between 2001 and 2009 from venture investors including Prospect Venture Partners, Sprout Group, Technology Partners, Three Arch Partners new Leaf Venture Partners and Foundation Medical Partners.
In the past year, VCs have backed some sizeable new rounds for companies in the ophthalmic space as well. Tear Science, which develops therapeutics for dry eye disease, raised $44.5 million Series C round in May with backing from new investors Essex Woodland Health Ventures, Investor Growth Capital and General Catalyst. Lux Biosciences, which develops medications for ophthalmic diseases, raised a $50 million round in October with backing from HBM Bioventures, Novo A/S, Prospect Venture Partners and SV Life Sciences. And Oraya Therapeutics, which develops a robotically controlled “IRay” system to treat inflammatory diseases of the eye, raised $42 million in a round that closed last July.
A quick database search for pharma and med-tech companies with the word “eye” in their business description revealed that VCs have funded at least 18 companies that meet that criteria in the past year, investing about $260 million.