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Investor glee as LenSx agrees $744M buy-out

07 Jul 2010

Huge return for venture capitalists as acquisition by Alcon Laboratories shows value of femtosecond lasers for cataract surgery.

The acquisition of medical laser systems specialist LenSx Lasers by Swiss eye care giant Alcon Laboratories has generated a huge return for venture investors in the Californian company.

On July 6, LenSx and Alcon announced details of a deal worth at least $361.5 million in cash. That could rise more than two-fold to $744 million, provided sales of the laser system and fees relating to the innovative procedure reach certain targets.

The venture companies involved in LenSx included Versant Ventures, SV Life Sciences, InterWest Partners and Venture Investors.

Although femtosecond laser technology has become widely used in LASIK procedures for correcting near-sightedness in patients, cataract surgery represents a far larger market opportunity. According to Alcon, it is the most frequently performed ophthalmic procedure globally.

That goes some way to explaining the value of the acquisition. Incorporated in November 2006, LenSx raised $10.5 million in its “series A” round of equity financing as recently as April 2008. This was followed up with a $22.4 million round in March 2009. By then, the LenSx system had undergone initial clinical evaluation in Hungary.

As with LASIK, the use of a femtosecond laser source enables a surgeon to tailor each procedure for each individual’s unique anatomy.

Stephen Slade, who is the medical director at LenSx, said of the procedure: “With this laser we have seen more precise centring of the intraocular lens, giving us the potential to deliver improved post-surgical outcomes to patients.”

Slade adds that the femtosecond pulses allow a reduction in the total energy required in the surgery, which is said to provide the patients with a more accurate refractive outcome.

The benefits of ultrafast lasers, which create minimal heating effects because of the incredibly short timescale of each laser pulse, have long been known, and upwards of 2 million femtosecond LASIK procedures have been performed since 2001.

Although the benefits are equally applicable to industrial uses, the technology is only just becoming accepted in high-end materials processing applications.

Crucial to the magnitude of the LenSx exit deal was a succession of approvals from the US Food & Drug Administration (FDA) over recent months. In September 2009, the company received its first FDA clearance for the “anterior capsulotomy” stage of the cataract procedure.

In this stage, the laser is used to make a small round opening in the front of the capsule that contains the lens in which the cataract has formed, before it is removed and replaced with a plastic prescription lens.

Talking about the limitations of conventional cataract surgery, Slade commented: “The [conventional] procedure still relies on multiple manual steps. The femtosecond laser has been designed to advance the precision and reproducibility of key parts of the procedure – something we have seen lasers do repeatedly in other ophthalmic procedures.”

The initial regulatory approval was swiftly followed in December 2009 by the FDA’s clearance to make corneal incisions with the ultrafast laser. Then in April 2010, the FDA also approved the use the femtosecond laser in the “phacofragmentation” stage of the procedure, in which the damaged lens is broken up and removed.

By then, the LenSx laser had already been deployed in Houston, Texas, to perform the first laser cataract surgeries in the US, with Slade carrying out the procedures himself.

In Hungary, where the femtosecond system was initially trialled, more than 500 cataract procedures have now been performed, hinting at the potential of the approach amid the trend towards an ageing global population.

About the Author

Mike Hatcher is the Editor in Chief of optics.org

CHROMA TECHNOLOGY CORP.SPECTROGON ABLASEROPTIK GmbHIridian Spectral TechnologiesMad City Labs, Inc.Universe Kogaku America Inc.ABTech
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