Eye Surgery Device Maker Raises $15M
By VITA REED
Refractec Inc., an Irvine-based maker of medical devices to correct vision problems, has completed a $15 million fourth round of funding.
The company plans to use the money to market its ViewpoinT CK system, a device that uses radio waves to correct farsightedness. The Food and Drug Administration approved ViewpoinT in April.
“We’re ahead of our plan as far as the launch goes,” Chief Executive Mitchell Campbell said.
ViewpoinT is used in a procedure called conductive keratoplasty. It works like this: A hair-thin probe is inserted into the cornea and heated by the release of radio-frequency energy. Depending on how severe the patient’s farsightedness is, the insertion is repeated from eight to 32 times around the cornea.
The heating shrinks the collagen around the edge of the cornea, causing the center to rise.
“There are no complications,it does not cut or remove tissue,” Campbell said.
Market research showed that patients in Refractec’s target market,baby boomers at an average age of 55,found the cutting aspect of traditional laser surgery unappealing, Campbell said.
Refractec is marketing ViewpoinT, which is about the size of a videocassette recorder and costs $48,500, to refractive surgeons, Campbell said. He describes the procedure as “complementary” to conventional laser eye surgery, which usually is for correcting nearsightedness.
The aging population stands to expand Refractec’s market, Campbell said. Many older people suffer from presbyopia, he said, a condition that causes the eyes to lose elasticity, requiring the use of reading glasses.
“The market is extremely large, bigger than it is for myopia,” Campbell said. “We’re in a market where everybody is affected by vision problems at one point in their lives.”
Refractec’s potential market is estimated at more than 100 million people, he said.
The company is looking at an initial public offering either in the second half of 2003 or early 2004, Campbell said.
Refractec was founded in 1993. The company has 45 employees and plans to expand its workforce to 55 or more by the end of the year.
Campbell said he wasn’t aware of any company doing exactly what Refractec is trying to do, calling reading glasses the company’s main competition.
At one time, Sunrise Technologies International Inc., a Fremont-based device maker, was planning to roll out a system using a high-temperature laser, called laser thermal keratoplasty.
But Sunrise has fallen upon hard times. Earlier this year, it laid off nearly all its employees and was delisted by Nasdaq for failing to comply with requirements.
Thomas H. Lee Partners and Putnam Investment Management LLC, both of Boston, and R.B. Webber Investments LLC of Mountain View led Refractec’s latest funding round.
Refractec’s newest funding follows earlier investments led by two Menlo Park-based companies, Brentwood Venture Capital and Delphi Ventures. Refractec’s raised $25 million to date, Campbell said.
