Eyeing Ophthalmic Opportunities

Versant Ventures’ William Link knows eyeball tech and has been one of the few venture capitalists to aggressively invest in the space over the past decade. I caught up with Link to learn a little bit about what he’s working on.

Q: Versant Ventures has been heavily involved in eye-related businesses, even though few venture firms had actively pursued that as an opportunity. Why?

A: Prior to founding Versant, I’d been in the ophthalmologic field for 20 years. I came into health care venture capital with a pretty strong emersion in the ophthalmologic field. It’s probably not surprising that I was able to find some interesting opportunities that other venture capitalists weren’t seeing.

When I got into venture, there had been one or so ophthalmic startups. There have now been 47 venture-backed ophthalmic companies in the last decade. I played a bit of a role in that by playing a bit of a role in the ophthalmic space. We have invested in 15 ophthalmic companies in the sector and as the momentum builds, we’re in a pretty good position to find projects of merit and help them grow.

Q: What’s the opportunity look like?

A: Eye disease increases with age and we have this wave of an aging population and I’m in that group and that puts demands on the industry.

Since the mid-2000s on we have been able to see a few nice exits. When we have positive exits where the returns are solid, that attracts even more interest into the space. The exits are much like other healthcare sectors it’s primarily M&A. The active acquirers are strong leading companies. Abbot Labs bought Advanced Medical Optics at the end of 2008. AMO in turn, was probably the second largest ophthalmic space. In the venture field, we do outsourced R&D, projects that have merit that the large acquirers will take notice. Novartis has just made a very large commitment to the ophthalmology space by acquiring the leader in the field. That’s to me a reinforcement of the interest in the field. We love it. We’re basically trying to feed those leading companies with important innovation and companies of merit.

Q: So what have you been investing in?

A: Since I’m a medical device guy, the early investments we did were mostly focused on the front of the eye to improve vision. IntraLase, for example. We brought a beautiful new technology to improve Lasik and make it safer and better. The company went public in 2005 and we sold it to AMO in 2007 that was a beautiful contribution: a nice return for investors and a lot of patients benefiting.

I got so interested in the early 2000s in the tough retinal areas that in 2003, Versant invested in Second Sight, the retinal prosthesis. We’ve had breakthrough progress in the last two years there. With good support from the capital providers and the team, we’ve made nice headway.

Q: What are you looking at next in this field?

A: Enhanced drug delivery for eye diseases. The eye is a sealed chamber by design. It’s not easy to get drugs inside the eye. A number of companies have been working on intriguing technology to get drugs to the eye. One of my most exciting projects is Neurotech, it’s based in Rhode Island close to Brown University. It’s a tiny tube that can be implanted in the back of the eye through a tiny incision and inside it are human cells that are genetically engineered to deliver a specific protein that can deliver a medicine and be productive for years. The first product will slow retinal degeneration in certain cases.

Q: What do you see as the future of this industry?

A: We’re just going to be able to continue to improve the technology of drug delivery to intervene in ophthalmic diseases early and earlier so it’s not a sentence of going blind. The overall environment in bringing resources to treating eye disease has never been better. We have the strongest leaders in the ophthalmic industry since I’ve been involved in 40 years and we have this aging population. It’s a sector that’s going to continue to attract innovation and reward it.

Alexander Haislip is a Sr. Writer for Thomson Reuters’ Venture Capital Journal and the author of “Essentials of Venture Capital,” out this November from John Wiley & Sons.