12.10.18

Ophthalmic Investment Funds Led by Retinal Gene Therapy Developers

Source: Market Scope

Ophthalmology remains one of the most active areas of medical technology investment, attracting monies from venture capitalists, public markets, large ophthalmic companies, and private equity.

Market Scope just published its 2017/2018 Ophthalmic Deals Book, analyzing recent ophthalmic funding and investments, including descriptions of the companies or ventures raising funds.

Ophthalmic fundraising covered a wide variety of drugs, biologics, devices, and lasers. However, new ventures pursuing gene therapy for retinal eye diseases captured the largest share of funds in 2017, and this is continuing into 2018. These very costly early stage programs offer promise for treatment of rare inherited and often blinding eye conditions and serve as proving grounds for technology that may ultimately treat more prevalent systemic conditions.

Market Scope has identified 68 funding/investment transactions totaling $3.6 billion in 2017 and $1.7 billion and 41 transactions in the first nine months of 2018. This compares with $7.6 billion and 59 transactions in 2016—an extraordinary year that included the $4.4 billion acquisition of Abbott Medical Optics by Johnson & Johnson. Funds raised included investments for the development of new products and technologies, commercialization of new products, or outright purchases of products or technologies. These transactions ranged from $1.2 million to $550 million.

Sales of businesses or product lines accounted for $1.2 billion and nine transactions in fundraising deals during 2017. Strategic investors’ appetite for ophthalmic products continued to be a major source of funds, providing $1.4 billion in 14 transactions during 2017. Ophthalmic companies increasingly look to smaller startup firms to develop new products in an effort to reduce early stage risks and fill out their product lines. Good examples include the Johnson & Johnson purchase of Tear Science, Beaver Visitec’s purchase of Malosa Medical, and Aier Group’s purchase of Clinica Baviera.

Looking forward to the balance of 2018 and 2019, the ophthalmic investment environment is fertile with a large stable of development-stage companies in need of additional investments and a favorable stock market and investment climate. Several transactions are underway that are expected to push the 2018 total investment to $2 billion or more, including a planned $70 million public offering by Clementia Pharmaceuticals to advance its dry eye candidate and a $75 million licensing arrangement between Ionis Pharmaceuticals and Roche to advance Ionis’ candidate for geographic atrophy.

Market Scope’s “2017/2018 Ophthalmic Deals Book” was published in December.

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