Irvine’s IntraLase Seeks to Displace Metal Blades in Vision-Correction Surgeries
IntraLase graphic: Company’s laser is used to create a dissection plane on the cornea.
By VITA REED
Laser eye surgery’s bubbling hype appears to have waned, but some medical device makers still see opportunity in the market.
Count Irvine’s IntraLase Corp. among them.
IntraLase, a five-year-old, venture-backed company, sells products for eye surgeons. IntraLase’s offerings include IntraLase FS, a pulse laser for creating a flap on a patient’s cornea,the first step in laser vision correction surgery.
The company also provides IntraLASIK, software that helps surgeons create precise measurements for making corneal flaps.
IntraLase officials say their laser device is a safer way of doing eye surgery than using a microkeratome, a device that holds a metal razor blade to create a corneal flap.
“We’ve done now about 8,000 procedures in the U.S. in the first five months of the year,” said Randy Alexander, IntraLase’s chief executive. “We’ve not seen any of the complications that are associated with the blade. Our goal is to make it safer and hopefully to reinvigorate, if you will, the LASIK market.”
About 3 million laser-eye surgeries are performed each year in the U.S., according to Alexander.
“We want to be there for every procedure done in the next three or four years,” he said.
The company received regulatory clearance for laser flap creation some 18 months ago and started shipping its first products late last year. IntraLase is on pace to have around $20 million in revenue and 45 lasers in use by year’s end, Alexander said.
IntraLase has received much of its funding via venture capital, raising about $70 million to date, according to Alexander. IntraLase investors include Domain Associates, which has offices in Laguna Niguel and Princeton, N.J., and Versant Ventures, with offices in Newport Beach and Menlo Park.
“We are strong supporters,” said William Link, a Versant managing director who is a member of IntraLase’s board.
Versant and Brentwood Venture Capital, where Link is a general partner, have invested some $18 million in IntraLase.
“IntraLase (has) some of the most interesting new technology we’ve seen in several years,” Link said.
Domain became an IntraLase investor thanks to personal ties. Alexander had worked with Brian Dovey, a Domain general partner, before the venture firm invested in IntraLase. Dovey, in turn, referred Alexander to Robert More, another Domain general partner.
More doesn’t have a seat on IntraLase’s board but has what Alexander called “board observation rights. He attends meetings, but he’s not a board member,” he said.
An IntraLase initial public offering could be on the table some time in 2003, according to Alexander.
“We have a chance to be a successful public company,” he said. “We’re continuing to build our infrastructure.”
IntraLase is looking to generate repeat sales as it gets more lasers into eye surgeons’ offices, which rent the company’s products. Expansion into Europe and Japan is due next year, Alexander said.
In terms of price, Alexander said OC focus-group results showed that some patients would be willing to pay $300 and $500 more for surgery where a corneal flap is created with an IntraLase machine, rather than a razor.
Rivals include Israel’s Lumenis Ltd. and Mountain View-based Iridex Corp., which are more entrenched in the laser surgery market. IntraLase has 85 patents covering all aspects of its technology, Alexander said, putting it in a “blocking position.”
Since its late 1997 founding, IntraLase has grown from six employees to 220 today. About 100 of them work out of its 41,000-square-foot facility on Morgan Street in Irvine, including production, support staff and sales and marketing professionals, Alexander said.
IntraLase grew out of technology developed by Tibor Juhasz and Dr. Ron Kurtz, two University of Michigan professors. Today, Juhasz is IntraLase’s vice president of research and development, while Kurtz is the company’s medical director.
IntraLase always been based in OC, though.
“We have better access to technology resources, personnel who are expert in the field, so we just found better resources to build a business here,” Alexander said.
Alexander’s had an extensive ophthalmic industry background. Before coming to IntraLase, he was president of refractive surgery for Chiron Vision, now part of Bausch & Lomb Inc. Chiron Vision was founded by Versant’s Link and was sold to Bausch & Lomb in 1997 for $310 million.
While at Chiron, Alexander was responsible for developing a refractive product line. His background also includes being chief executive and president of Pharmacia Intermedics, which made surgical vision correction devices.
