Companies Developing Systems to Help the Blind See Again

From the Wall Street Journal

By Jonathan Matsey

While the phrase bionic retinas may conjure images of Steve Austin in “The Six Million Dollar Man” or Geordi La Forge in “Star Trek: The Next Generation,” technology to create vision where none, or very little, exists, is not a television fantasy. Companies concentrating on damaged retinas look poised for success as the technology inches toward measurable achievement.

“We will be approved on the market in Europe this year,” said Bill Link, managing director at Versant Ventures, an investor in Second Sight Medical Products Inc.

Second Sight, based in Sylmar, Calif., is also looking at a U.S. Food and Drug Administration submission at the end of 2011, according to Link. The company has raised $16 million in venture capital.

Second Sight’s system uses a pair of glasses to send images to a receiver implanted on the retina. From there, the image is transmitted to the brain through the optic nerve. The device is targeted to patients who have lost most of their vision as a result of retinal degeneration and whose nerve connections are still intact.

A similar approach is being developed by Nano Retina Inc. of Herzliya Pituach, Israel, though Nano Retina aims for much greater visual clarity than Second Sight, it says. “We have a much higher resolution – about 1,000 pixels,” said Ra’anan Gefen, managing director of the company. “Second Sight is the most advanced (clinically) but on the other hand, it is really a limited device.”

According to Link, Second Sight’s first-generation device offers 16 pixels while a second-generation system will have 60. “They can read letters on a computer screen, they can tell light from dark, they can see a line on the ground,” said Link of people using Second Sight’s system.

Gefen, on the other hand, is more ambitious. “We will give them back vision so that they can see almost normally,” he said.

Gefen’s company was founded as a joint venture with nanotech company Zyvex Labs LLC of Richardson, Texas, and is backed by several million dollars from Rainbow Medical, an Israeli business accelerator, according to Rainbow Founding Partner Yossi Gross. Nano Retina is still a couple of years away from clinical studies, Gross said.

Costs for the two systems appear to be about the same. Link estimates Second Sight’s device will sell for $50,000 to $100,000 per system; Gefen says Nano Retina’s will cost around $60,000. Both companies said they expect much of that cost to be picked up by insurance companies. Link said his portfolio company is currently in discussion with potential payers.

Waiting in the wings is a third player – Optobionics Corp. – which had raised around $50 million from investors including Advanced Medical Optics Inc., Advanced Technology Ventures, Arch Venture Partners, Medtronic Inc. and Polaris Venture Partners and had taken its device through Phase II trials before hitting a snag in fund-raising for Phase III trials.

“There was no appetite to put in another $100 million,” said Alan Chow, chief executive of Optobionics. As a result, his company entered bankruptcy in 2007, recently relaunching after Chow bought the technology.

Unlike the other two companies, Optobionics is pursuing a trickier and more costly approach: restoring function to the damaged retina by using the device to stimulate the rods and cones, rather than using the system as an adjunct to the retina.

Chow said he is looking into ways to continue financing the Phase III development although he said it might not be through venture financing.

Despite the lengthy development times and funding challenges, those involved with the companies say they are motivated by the importance of their work. “Everybody says that this is a very ambitious project, but everybody admits that there is a real need here,” said Gross.