Visual prosthetics company VisionCare Ophthalmic Technologies Inc. has raised an additional $4 million in its fifth financing round led by Danny Naveh's Agate Medical Investments LP, bringing the round to a total of $20 million. Current investors include Giza Venture Capital, Pitango Venture Capital, Onset Ventures, Three Arch Partners, Generali/BSI, and Saints Capital.
VisionCare has developed the Implantable Miniature Telescope for the treatment of end-stage age-related macular degeneration (AMD). The product was designed by Dr. Isaac Lipshitz. It obtained US Food and Drug Administration (FDA) approval for the device in 2010, and received an insurance indemnification code from Medicare a few months ago.
VisionCare CEO Allen Hill told "Globes", "The population suited for our treatment is almost entirely comprised of Medicare recipients, so the Medicare indemnification is the most important one for us."
Agate managing general partner Chanan Schneider said, "Agate led the financing round after VisionCare received the Medicare indemnification code needed to penetrate the market. We believe that the company's management, which has led it to date, will continue to lead it to commercial success."
VisionCare's implantable telescope is the smaller than a pea in size. The Medicare indemnification code covers the entire procedure from diagnosis, through surgery, and six meetings to test the patient's vision after the implant.
$500 million market
"The product has two types of lenses," says Hill. "A lens for near vision is implanted in one eye, and a lens for far vision and navigation is implanted in the other eye. The vision differs from regular vision, but it gives patients a quality of life at a new level. Some or our patients recognize faces and can read newspaper headlines. The degree of success varies from patient to patient, but the before treatment, the patients were nearly blind."
Hill says that VisionCare's entry into the US market is satisfactory, and that the company was also operating in Germany and the UK. Sources inform ''Globes'' that, since obtaining the Medicare indemnification code, the company has sold scores of its miniature telescopes for a few hundred thousand dollars altogether.
"Globes": What is the size of your target market?
Hill: "We're suitable for patients with severe MAD. There are 40,000 cases a year in the US, and a few more in Europe."
On the basis of pricing figures obtained by "Globes", the company's potential market in the US is $500 million. The European market size depends on indemnification there. Hill says that the current market is to selected hospitals.
VisionCare is headquartered in Saratoga, California, but 14 of its 27 employees are based at the company's development and production center in Israel. "We intend to increase our Israeli operations," said Hill.
VisionCare will use most of the proceeds for marketing and development and to expand use of the telescope for other diseases. "We're pleased by the amount raised, and we believe that it will help us reach positive cash flow," said Hill. "If we raise more capital, it will be for expansion."
What's your exit strategy?
"We intend to be acquired or hold an IPO, depending on developments in the capital market. We're waiting for the end of 2012 to see what the market climate will be, and we're optimistic."
Headquartered in Saratoga, California, the company's R&D center is in Israel.
Published by Globes [online], Israel business news - www.globes-online.com - on February 5, 2012
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