Oculex Pharmaceuticals Inc. is seeing the light now. Persues-Soros Bio Pharmaceutical Fund along with Bay City Capital led a $50 million Series B deal for the Sunnyvale, Calif.,-based company that aims to wipe out eye troubles.
“We are working on a system to get drugs delivered to the eye. The eye is difficult to treat with drugs because it is designed to keep stuff out. It is also difficult to get through the blood-eye barrier,” says David Weber, executive vice president at Oculex. “We’ve been able to formulate a drug delivery system that gets there.”
Other investors in the deal include Granite Global Ventures, Venture TDF and BioAsia Investments. Credit Suisse First Boston acted as the placement agent for this transaction. Steve Elms, a managing director at Perseus-Soros, Carl Goldfischer, a managing director at Bay City Capital, and Song Tjoa, an executive director at Greatland Co. all joined the company’s board as a result of the round.
“We looked at various eye investments, for us this was finally the right opportunity. They have a great management team and product,” says Elm, whose company put $15 million into the deal.
While Oculex raised a significant round, it isn’t the only eye company that can bring in the big bucks. EyeTech Pharmaceuticals brought in $54 million during the third quarter, making it the fifth largest deal of the period.
The proceeds from Oculex’s round will be used to get the company through clinical trials. Right now Oculex’s first product Posurdex is in Phase II clinical trials. Posurdex is based on the company’s proprietary biodegradable intraocular drug delivery technology. Weber claims it’s the only biodegradable intraocular product designed to provide drug therapy for an extended period of time. The micro-sized product is inserted directly inside the eye by a physician to ensure that therapeutic levels of medication are delivered to the targeted site over a predetermined amount of time.
“Our main competition are controlled systems, Bausch & Lomb has a product but it is not biodegradable so the medication has to be put in and removed. We do it through a needle and it biodegrades away so you don’t have to remove it,” says Weber.
Since Posurdex is only in Phase II clinical trials and still has to go through Phase III, Oculex doesn’t expect to gain regulatory approval of Posurdex until 2006, leaving the thought of revenue and profits a long way off. However in May 2001, Oculex did form an agreement with Allergan, a health-care company, which might provide revenue sooner. “They have use of our technology and their products are still in development,” says Weber.
While all the details have not been worked out, Posurdex will be sold to ophthalmologists. It has not been determined whether Oculex will sell its own products or work with an outside sales company.
Elm doesn’t expect Oculex to need more funding until after it finishes Phase III clinical trials, which will be in about three years from now. At that point, it will either go for another round of private financing or head to the public market.
Contact Danielle Fugazy