Medical Device Daily Contributing Writer

SAN FRANCISCO – It is beginning to sound like a broken record, but the same theme that has become so well appreciated in the ophthalmic surgery world in the past two years has clearly been evident during the annual symposium of the American Society of Cataract and Refractive Surgery 's (ASCRS; Reston, Virginia), which started last Friday and runs through tomorrow at the Moscone Center.

A confluence of favorable events, the “perfect storm“ in the words of refractive surgery industry consultant Shareef Mahdavi, president of SM2 Consulting (Pleasanton, California), has created a tidal wave of interest in refractive surgery that has never been seen in the ophthalmic surgery industry.

Speaking at a meeting for investment analysts sponsored by one of the industry's leaders, Advanced Medical Optics (AMO; Santa Ana, California), Mahdavi cited several favorable factors that are driving this market. These include improved technology, a favorable reimbursement environment, and an affluent and aging population that is demanding quality vision care.

Mahdavi, who has spent over a decade in the refractive surgery field, noted that five new intraocular lenses (IOLs) have been approved by the FDA in the past three years, setting the stage for strong industry marketing and more consumer choice. These lenses include ReSTOR from Alcon (Fort Worth, Texas), ReZoom from AMO and the Crystalens from Eyeonics (Aliso Viejo, California). The latter is privately owned and venture capital-backed while the other two are large, well-capitalized and prominent public companies.

These three products all are aimed at providing near, intermediate and far vision. Their market potential is considered to be very large.

In addition, AMO and Staar Surgical (Monrovia, California) both now market phakic IOLs aimed primarily at treating high myopia, which is generally defined at 8 diopters and above. While the first three IOLs previously mentioned have a very large market potential, phakic IOLs are generally considered to be niche products, with modest sales potential.

The reimbursement climate changed dramatically in May 2005, when the Centers for Medicare & Medicaid Services (CMS) began allowing patients to opt for higher technology, more costly lenses and could do so by paying the difference over a standard IOL.

The impact of this ruling was dramatic. In only seven months, Alcon, the industry's dominant ophthalmic surgery player, racked up $35 million in domestic ReSTOR revenues, with an additional $19 million generated outside the U.S. – by any measure an impressive performance for a new product.

In a Feb. 9 report, medical technology analyst Joanne Wuensch of the investment banking firm Harris Nesbitt (New York) has forecasted that global ReSTOR revenue would reach $178 million, more than tripling the total of 2005. She also has forecasted very robust growth for AMO's ReZoom, with U.S. sales in 2006 predicted to be $35 million to $40 million, up dramatically from only $5 million in 2005.

According to Mahdavi, today's affluent consumer, between the ages of 40 and 64 years, has the financial resources to spend for the highest quality vision care that they can find.

“This group does not want to admit they are getting older,“ he said, and “therefore they will not readily accept reading glasses. They are seeking a refractive product that will enable them to get the best solution for their needs.“

Mahdavi predicted that in just five years, 20% of the IOL industry would be premium-priced, providing patients with superior quality vision.

It is important to note that the premium-priced sector also is a financial boon to both manufacturers and physicians. The former, which have been selling IOLs for the Medicare population at about $100 per lens, now are reaping a veritable windfall, with average lens prices in the $850 range. With average manufacturing costs per lens at no more than $50, this represents pharmaceutical-like gross profit margins.

Similarly, physicians are prospering tremendously as their per-procedure IOL fee from CMS has soared from between $600 and $700 to $3,000 or more under this new, private pay scheme.

One of AMO's most promising products is the Tecnis aspheric multi-focal lens, the subject of several positive papers here during ASCRS. Aspheric IOLs have become very popular recently, as their design appears to provide superior vision relative to conventional IOLs.

In late-January, AMO reported that the Tecnis lens had been designated as a New Technology Intraocular Lens (NTIOL) by CMS. The designation follows labeling claims approved by the FDA in April 2004 that the lens reduced postoperative spherical aberrations compared to lenses with spherical optics and improved night driving simulator performance.

A NTIOL is defined as an IOL that CMS determines has been approved by the FDA for use in labeling and advertising the IOL's claims of specific clinical advantages and superiority over existing IOLs. The Tecnis IOL is the only lens approved for NTIOL reimbursement status, which provides for additional Medicare reimbursement of $50 per lens for ambulatory surgical centers, where more than half of all cataract surgeries in the U.S. are performed.

During this meeting, Mark Packer, MD, of the well-regarded ophthalmic surgery practice Fine, Hoffman and Packer (Eugene, Oregon), told analysts that “aspheric IOLs clearly outperform spherical lenses“ and that as a clinical investigator of the Tecnis lens, he clearly feels it is the best available aspheric IOL.

“I believe that spheric lenses will eventually go by the wayside,“ he said.

AMO is now marketing the Tecnis multi-focal lens outside the U.S. and hopes to gain FDA approval in late 2007.

Russ Trenary, chief marketing officer for AMO, trumpeted AMO as a company that can provide a “soup to nuts“ solution for the ophthalmologist. “Our goal is to surround the ophthamologist with a variety of refractive technologies and provide a complete solution,“ he told the analysts.

A newcomer to the domestic refractive surgical scene is Lenstec (St. Petersburg, Florida). Its Tetraflex IOL has had CE mark approval since 2003 as a solution to patients seeking accommodation for their presbyopia, but the company has been relatively unknown within the U.S.

Its Tetraflex IOL, designed by Robert Kellan, MD, director of the Kellan Eye Center (Boston), is a foldable lens made of a hydrophilic acrylic whose design appears to offer some advantages over existing technology.

The lens is based on an entirely different concept from other accommodative lenses. It is not designed on a hinge principle like the Crystalens, but rather on a configuration that allows the lens to move along with the entire capsular bag. Its optic is designed to act as a “sail,“ catching the wave of vitreous to provide maximum forward movement for near vision and return to the intended plane in the “flat“ position for clear intermediate and distance vision.

Lenstec is quickly generating positive notice in the U.S., as its clinical trial is gaining significant momentum. Based upon strong European safety data, the company received FDA approval to begin a 300-patient pivotal trial last September and, according to a company spokesman, some 60 lenses have been implanted to date. Although it is too early to evaluate the U.S. data, it looks promising.

According to David Brown, MD, of the Eye Center of Florida (Fort Myers, Florida), the Tetraflex lens has been a “consistent performer so far,“ with his patients achieving both excellent near and far uncorrected visual acuity. Brown has been the most prolific surgeon among the seven approved sites, with about half of the total patients implanted thus far occurring at his center.

The company said it hopes to finish enrollment of the trial within the next few months and could become the fourth company to attain FDA approval for an accommodating IOL.

Deepak Chitkara, MD, of the Viewpoint Centre (Manchester, UK), reported solid clinical results and said that Tetraflex provides “true accommodation.“ Chitkara is a highly regarded and very busy British ophthalmic surgeon who has had the longest history with the Tetraflex and has implanted a large series of lenses.

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