5 steps to secure funding for ophthalmic product development

By Jeanne Hecht

We are 3 years out from the record-breaking pandemic peaks when biotech financing was the darling of most investments. Innovation is flourishing, interesting mergers and acquisitions (M&A) have created a lot of chatter (especially since the acquisition of Iveric Bio by Astellas in 2023), and ophthalmology remains a top 10 therapeutic area for private capital.¹

However, it is not easy, and raising capital is not for the faint of heart. It starts and ends with good science and a management team that can execute a robust and investable business plan. Many conversations are held about how to best attract the eyes of angel investors, venture capitalists, and large pharmaceutical investment funds. There are as many approaches as there are companies seeking funds, and the path requires persistence and a stiff spine.

Since 2006, the field of ophthalmology has been dominated by the growth of anti-VEGF biologics by strategics (Regeneron and Roche, Bayer, and Novartis). Glaucoma franchises peaked. The field had generated only 3 “major” products between 2006 and 2016 (Tepezza®, Oxervate®, and Xiidra®).² Those times have changed. With the success of new products for geographic atrophy (Apellis) and M&A activity among the likes of Alcon, Merch, and Viatris, near-term focus in the field will remain on research and development across several key subspecialties while the industry also tackles upcoming regulatory and clinical tipping points across the retina and anterior segment that are expected to fuel further investment and strategic activity.

What does the recent clinical trial data show? In 2023, we saw clinical trial initiation beginning to dip—a clear sign that the biotech market was in for a rocky ride. According to GlobalData, 2023 saw the initiation of 47 phase 1, 142 phase 2, 90 phase 3, and 54 phase 4 clinical trials for ophthalmic products.³ Top indications remain dry eye disease, diabetic macular edema, and wet/dry age-related macular degeneration. With a race to be the first to market and/or unseat an incumbent, the need for a well-articulated plan could not be more imperative.

The question is how? How can one differentiate oneself in a market that is currently highly competitive? After numerous conversations over the past 4 years, I have developed a perspective with these 5 recommendations.

1. Make Sure Your Pitch Stands Out

Investors receive thousands of decks each year, so ensuring that the pitch deck is tailored to the recipient is paramount.

• Do the investors you are attempting to court know the field?
• Does the information shared paint the art of the possible and the problem that will be solved?
• What about the future product earning potential?
• What is the exit strategy (full commercialization or exit at end of phase 2)?
• Did you rely too heavily on technical jargon or delve deeply into the science, even though the initial review might be done by an analyst who isn’t a scientist?

I cannot overstate the importance that the investment thesis is well articulated. Specifically, when the investor reads your deck, they must understand how you plan to utilize the capital and how your asset will generate future earnings in the market. A well-written and strategic pitch is the foundation for successful funding.

2. Maximize Warm Intros

Warm introductions are always easier than cold outreach. If you are taking advantage of a warm intro, then consider these questions.

• Who can support you in brokering a meeting or even a priority review of your deck compared to the others piling up?
• Have you leveraged your scientific advisors, CRO partner, and/or board members to broker this introduction versus a cold outreach?

In the field of ophthalmology, there are many ways to get introduced, and defining the right stakeholder mapping and path to advance your deck to the top of the review pile requires effort and foresight. Do not hesitate to leverage your network.

3. Practice, Practice, Practice

I once heard an investor say, “Science is table stakes; management is what we buy.” Confidence in the business comes from confidence in the management team. Practice the pitch, including responses to possible questions, who should be the presenter for which section, and what your strategy is to advance to the next discussion. Be sure to have an ask and state it clearly at the start and end of your deck.

Further, practicing with a safe audience and capturing questions that are raised throughout the process to continue to iterate on your pitch will ensure receptivity. This may be the difference between having a term sheet in hand or a polite “no thanks.”

4. Understand The Landscape

It’s important to know and understand your numbers. Ophthalmic investors buy the science and invest in the future earning potential of your product.

Do you understand the pain points, total cost of care, and avenue to which you can usurp an incumbent standard of care or take market share? All of these are critical data points that are required for a successful pitch to fund an ophthalmic product.

5. Keep Your Data Fresh

Last, but definitely not least, it’s important to remember that data gets stale. Be sure to keep current data flowing. This encompasses market, product, pricing, payer, and patient data. Use this data plan to define your pathway to advance your funding plan.

As you continue to engage possible investors, share new publications, posters, and relevant data and insights on the market.

• Has the regulatory environment shifted?
• Has new data arisen that supports the thesis that your product solves an unmet medical need?

Do not assume that investors are connected to the ins and outs of what is ongoing in the space. Use information to continue to educate them and advance your position.

Conclusion

In the hundreds of company investor decks I have reviewed, it should come as no surprise that I have found the chances of success increase with repetition and that strength lies in numbers. CRO partners have access to market data and insights as well as knowledge on where interest in innovation resides in the clinical marketplace.

Leverage your CRO partner as a first pass and safe place to pitch your initial deck. Solicit their insights into areas where your deck may not answer critical questions, and harness their experts as a sounding board. Raising capital is a full-combat sport and having the right players on the field will increase your chance of winning.

Jeanne Taylor Hecht is Lexitas’ Chief Executive Officer and Chairwoman of the Board of Directors. Her industry career spanned over 25 years as board member and Chief Executive Officer of multiple companies, including CEO at Ora and senior executive at companies such as Median Technologies, IQVIA, Decision Biomarkers, and the UNC Oncology Protocol Office. Jeanne also launched and expanded a life sciences consulting practice that supported companies with sales, marketing, and market growth strategies as well as advisory and board work. She is primarily motivated by helping to bring relief to patients. Jeanne is an active Advisory Board Member for the University of North Carolina Chapel Hill Kenan-Flagler’s Business School and a lecturer at the business school. She contributed to the creation of Wake Forest University’s master’s in clinical research program and remains an active industry advisor to the school. She holds a Bachelor of Science from the University of Michigan and a Master of Business Administration from that university’s Ross School of Business.

References

1. Senior M. Biotech financing: darkest before the dawn. Nat Biotechnol. 2024. doi:10.1038/s41587-024-02357-2
2. Bank of America Life Sciences – Rx Ophthalmology Market Review February 2024. Data on File.
3. (Q4, 2023). Data on File.