Calhoun Vision Inc.’s future just got a whole lot brighter.
The Pasadena maker of adjustable, surgically implantable lenses to treat cataracts got $69 million in financing to support its run for U.S. Food and Drug Administration approval.
“This is a major inflection point for the company,” said Chief Executive Rick Heinick, who joined the firm in March. “The $69 million infusion will help take this company to its leadership position in the cataract space.”
Led by Menlo Park’s Longitude Capital, the round marks the first institutional funding for Calhoun, which was founded in 2000.
The firm raised upwards of $20 million in the past from angels in multiple rounds but never nailed down institutional dollars, Heinick said.
“I can’t speak for previous management teams, but they absolutely tried,” he said. “We have a brand-new management team with some very well-known people in the ophthalmology space. … We had the confidence of some very well-known VCs that could see where we were heading strategically and how we’re going to go after this very large market.”
During cataract surgery, doctors remove a patient’s cloudy lens and replace it with an artificial one. Because it is hard to estimate the exact strength of an implantable lens necessary to fix vision and because vision can change as the eye heals from the procedure, postoperative patients often end up needing glasses.
Calhoun’s lenses, using technology developed at Caltech, can be adjusted noninvasively in an ophthalmologist’s office after the eye has healed, Heinick explained. In other words, no glasses required.
The company’s lenses are already approved in Europe and Mexico, but the U.S. market is the big prize. The Review of Ophthalmology estimated 3.6 million cataract procedures will be done in the country this year and an additional 20 million worldwide.
In January, the firm brought in Andy Corley, who sold his Aliso Viejo firm Eyeonics Inc. to industry giant Bausch & Lomb, to serve as chairman. Heinick had also been at Bausch & Lomb as chief human resources and transformation officer before its $8.7 billion sale to Montreal’s Valeant Pharmaceuticals International Inc. Calhoun last week hired Dr. Ron Kurtz as chief operations officer and Eric Weinberg as chief commercial officer.
The company has just finished a two-year process of enrolling 600 U.S. patients for its phase-three trial.
“That’s an important milestone for us,” Heinick said. “Now we have a chance to follow these patients over a one-year period and then continue with the FDA submission process.”
Though the chief executive didn’t want to speculate on a time line for regulatory approval, if all goes well, it could take about two years, he said.
Biotech Bubble?
While many have wondered whether biotech’s sky-high valuations and stock prices mean the sector is in a bubble bound to pop, a more likely scenario might be a leaky balloon.
“We’ve had this incredible run in biotech over the last three years where the biotech industry overall has way outperformed the broader stock market,” said Glen Giovannetti, a Boston-based global life sciences leader for consulting firm Ernst & Young. “I get asked a lot, ‘All these companies have appreciated so much, are they overinflated? Is the bubble going to pop?’”
To that end, EY’s annual biotech industry report singled out Puma Biotechnology Inc.’s $5.7 billion valuation in December as one of highest among a group of 26 precommercial firms valued at more than $1 billion.
But the Westwood breast cancer drug developer’s market cap has recently sunk to about $4 billion. Some might point to that movement as possible evidence of a popping bubble.
Not necessarily, Giovannetti said.
“Very big companies like Amgen, Gilead, Biogen and Celgene, even though they’ve appreciated a huge amount the last few years, they don’t look overly expensive compared to other big companies,” Giovannetti said. “It’s harder to measure prerevenue companies.”
But compared to the 2000 biotech bubble, which he said was rooted in unfounded optimism around therapies tied to genomic sequencing, a lot of the market excitement today is being generated by drugs backed by more solid data and science.
Even so, some of these precommercial companies will stumble, he said. Trial results might not pan out or safety concerns could crop up, among other challenges. It’s the nature of the business. In fact, Puma shares have recently seen a sell-off tied to some nuanced revelations about its clinical results.
Giovannetti said valuations might have risen to lofty heights as generalist institutional investors and mutual funds sought to get into hot biotech stocks. But such shareholders might also get spooked by less than stellar clinical results or find another booming market to chase.
“Some air comes out of the balloon but it doesn’t pop,” Giovannetti explained.
Checkups
Downtown L.A. nutritional supplement company Herbalife Ltd. has expanded its corporate affairs team, adding Ric Hobby as senior vice president for global government relations, Megan Jordan as senior vice president for global corporate communications and Randall Popelka as vice president of government and industry affairs. … Keck Medicine of USC has recruited neurologist Dr. Daniel Pelletier from Yale University to serve as chief of the division of neuroimmunology and multiple sclerosis, and vice chair of research for the department of neurology. … Doheny Eye Institute has named Dr. Srinivas Sadda president and chief scientific officer.
Staff reporter Marni Usheroff can be reached at [email protected] or (323) 549-5225, ext. 229.
