Ophthalmology-focused startups had a record year for venture capital funding in 2021. Impressive Series A rounds and collaborations hint at a continuing upward trend for the field in 2022.
Biotech companies researching treatments for ophthalmological conditions experienced a splurge of venture capital (VC) funding in 2021, with the total more than trebling the haul from 2020. This trend is parallel to a funding surge that hit life sciences VC financing in 2021.
Two months into 2022, the cash influx into European ophthalmology biotechs has already overtaken that of 2020’s entire catch. The strong start to 2022 was driven by a pair of impressive Series A rounds: one €50M closing was announced by the Spanish gene therapy firm SpliceBio and another €58M round went to the UK startup EyeBio.
“The ophthalmology space is ripe for innovation with thousands of patients facing a lack of durable and effective treatments,” said Rafaèle Tordjman, founder and CEO of the French VC firm Jeito, which invested in EyeBio’s Series A round. “This has resulted in increased investor interest.”
According to Riad Sherif, CEO of the Swiss firm Oculis, investors are drawn to assets in promising markets, and ophthalmology is no exception. The size of the market for ophthalmology treatments is expected to leap from €20B ($22B) in 2020 to €29.4B ($32.6B) in 2025.
EyeBio, which was founded last year, caught the attention of Jeito and other major VC firms in its recent €58M Series A round. Little has been revealed about the company’s pipeline, but the company founders include industry veterans from ophthalmology specialists Eyetech Pharmaceuticals and Roche’s Genentech.
Most strikingly, EyeBio’s founders were instrumental in commercializing a drug treatment for age-related macular degeneration (AMD) in 2004 called pegaptanib. This was the first drug to block a protein linked to several common eye disorders called VEGF. Anti-VEGF drugs have changed the field of ophthalmology and have the potential to become a blockbuster class.
According to Tjordman, the anti-VEGF space is particularly exciting at the moment as the FDA recently approved a drug called faricumab (Vabysmo) for treating AMD and diabetic macular edema. Developed by Roche, Vabysmo is the first bispecific antibody drug of the anti-VEGF class and may have a longer-lasting effect than current treatments.
“EyeBio has the potential to disrupt [the anti-VEGF] space, where thousands of patients are facing a lack of durable and effective treatments,” added Tjordman.
VC funding rounds aren’t the only front in the expansion of Europe’s ophthalmology scene. This week, Oculis launched a major collaboration with the Barcelona-based firm Accure Therapeutics.
According to the deal’s terms, Accure is eligible for up to €900M in upfront and developmental milestone payments. In return, Oculis gains development rights to Accure’s small molecule candidate, which is designed to prevent chronic vision loss in conditions affecting the optic nerve. These conditions include acute optic neuritis and glaucoma, which is linked to abnormally high pressure in the eyeball.
“Glaucoma is a very frequent disease with more than 80 million patients in the world and it remains a leading global cause of irreversible blindness,” said Sherif. Despite the availability of treatments lowering pressure in the eye, “a significant proportion of patients, about 10%, still go blind or suffer from sight impairment, as current therapies do not address the underlying degeneration.”
Oculis closed a Series C round worth €47.4M in May 2021 to fund the development of treatments for retinal edema. By snapping up Accure’s candidate, Oculis aims to bring to market the first drug that can prevent damage to the optic nerve in glaucoma and other neurodegenerative retinal diseases.
One major factor linked to the increasing interest in ophthalmology is the continuing growth in funding for gene therapy. The eyeball is often seen as an easy location to inject gene therapies and has a low amount of immune cells present, which can attack viral vectors carrying the therapy.
Ophthalmological gene therapies have been the focus of numerous recent funding rounds, including small rounds closed by Amarna Therapeutics and Complement Therapeutics, as well as SpliceBio’s large Series A fundraising. The king attraction for investors in Europe was the gene therapy specialist Gyroscope Therapeutics, which was acquired by Novartis for up to €1.4B in December 2021.
Other clinical developments are drawing further attention to ophthalmology. One example is a microchip implant system developed by the French firm Pixium Vision, which caused excitement in January when it allowed legally blind patients to be able to read text. And one treatment to watch this year is a gene therapy for blindness developed by the French firm GenSight, which is being scrutinized in the EU and US for market approval.
However, it’s not smooth sailing for all players in ophthalmology. For example, the share price of the Dutch firm ProQR plummeted by 75% in February 2022 when its lead drug failed to treat a rare eye disease in a phase II/III trial. Additionally, public biotech companies across the board are experiencing tough market conditions, in part caused by continuing inflation fears.
According to Sherif, there will continue to be demand for treatments for eye conditions. In particular, Western populations are getting older and more prone to chronic conditions like type II diabetes, which can lead to diabetic macular edema. Investments will likely follow the demand.
“Some diseases are not adequately treated, where only symptoms are treated, while other diseases have good treatments available but they are too burdensome for patients,” said Sherif.
“I do not see this investment trend slowing down any time soon as there is still plenty of work to do for biotech companies like Oculis to innovate and ultimately improve eye care globally for patients.”
Cover image via Elena Resko