Morrisville medical device company TearScience will announce this morning that it has raised $44.5 million in venture capital - the most by any Triangle company so far this year - to commercialize devices for diagnosing and treating dry eye disease.
"We're going to build a great company," said co-founder and CEO Tim Willis.
The 5-year-old company has about 20 employees today and expects to expand to 30 to 35 by the end of this year. Its ranks should swell to 60 by the end of 2011, said Nicole Wicker, chief financial officer.
TearScience has intentionally kept a low profile - it doesn't even have a Web site - while it focused on developing its devices. The company has applied for more than 40 patents to date.
"It was best to stay under the radar until we had all our patents filed," said Brian Regan, vice president of marketing and market development.
TearScience raised $17.1 million in venture capital in two earlier rounds of fundraising. The latest round of funding is the most among medical device companies in the Southeast this year, and is especially impressive given the difficult funding environment, said Cindy Clark, president of ibility, previously known as the Center of Innovation for Advanced Medical Technologies.
"But companies that have great technology and excellent management and are telling a good story can still get funded in this environment," Clark said.
TearScience is an attractive investment because it has innovative technology that offers patients an attractive solution to their ailment, and it addresses an under-served market, said Immanuel Thangaraj, managing director of Essex Woodlands Health Ventures, which led TearScience's latest funding. "I would have loved to invest more," he said.
The company hasn't set pricing for its devices but expects to sell them as a package for $50,000 to $80,000.
Thangaraj said that's a common price point for devices purchased by eye doctors. Still, he said, the price tag is "one of the unknowns" associated with his firm's investment.
Sales of dry eye treatments exceed $2 billion a year, according to TearScience. Patients say it feels as if their eyelids are made of sandpaper.
The leading medication is Restasis, a drug produced by Allergan that is expected to generate sales of $580 million to $600 million this year.
TearScience's technology is a "a game changer," said Dr. Alan N. Carlson, professor of ophthalmology and chief of the corneal and refractory surgery service at Duke Eye Center.
"In terms of safety, efficacy, long-term result, patient acceptance, I don't think there is anything out there that compares with what TearScience has to offer," said Carlson, who is not affiliated with the company.
Next on TearScience's agenda is marketing of its devices, which have been approved by regulators in Europe. The FDA has approved the diagnostic device, theLipiView Interferometer, while an application for the treatment device, the LipiFlow Thermal Pulsation System, is pending.
Willis said the company will have a slow introduction of the devices in Europe over the next several months, an approach that will enable the company to do any necessary fine-tuning.
The LipiView device takes optical measurements of the eye to diagnose whether they have evaporative dry eye, the most common type of chronic dry eye disease.
TearScience's LipiFlow device is designed to treat the condition, which stems from a deficiency of the oily lipid layer that prevents tears from evaporating.
The company's tests have shown that a single 12-minute session will help most patients from nine to 15 months before they need another treatment.
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