Ocularis Pharma, LLC. The Next Wave in Ophthalmic Drugs: Managing the Pupil to Improve Night Vision Performance Ocularis Pharma, LLC November, 2013
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1 Ocularis Pharma, LLC The Next Wave in Ophthalmic Drugs: Managing the Pupil to Improve Night Vision Performance Ocularis Pharma, LLC November, 2013
2 Ocularis Pharma, LLC Page 2 The Next Wave in Ophthalmic Drugs: Managing the Pupil to Improve Night Vision Performance Ocularis Pharma, LLC November, 2013 Table of Contents 2 I. Summary Conclusions 3 II. Cause and Treatment of Night Vision Complaints 3 Introduction to Night Vision Complaints and Ocularis Approach to Treatment 3 Night Myopia 4 Cataracts 6 Post-IOL Surgery 7 Post-Refractive Surgery 7 III. U.S. Market Potential for Treatment of Night Vision Complaints by Segment 8 Methodology 8 Market Potential Summary 8 IV. New Business Opportunity for Optometrists 9 V. References 10
3 Ocularis Pharma, LLC Page 3 I. Summary Conclusions Ocularis Pharma, LLC ( Ocularis ) estimates that the market to treat moderate to severe night vision complaints with Nyxol Eye Drops exceeds $1.6 billion in the United States, and is comprised of the following segments: Night Myopia Cataract (equatorial cortical) Post-IOL Surgery Post-Refractive Surgery $786 million $581 million $140 million $146 million Ocularis forecasts Nyxol sales in the United States to begin at $82 million in year of product launch and rise to $710 million five years later. Ocularis has not analyzed non-u.s. markets for Nyxol Eye Drops, but believes that there are substantial additional revenue opportunities for the drug in the rest of the world. Ocularis has conducted market research whose results indicate that optometrists, rather than ophthalmologists, will be the primary prescribers of Nyxol Eye Drops, and that the treatment of night vision complaints will provide significant potential for optometry practice growth. II. Cause and Treatment of Night Vision Complaints Introduction to Night Vision Complaints and Ocularis Approach to Treatment Night vision complaints (NVCs) are very common in individuals with otherwise normal vision and healthy eyes. This condition is most obviously recognized in night driving. More than one-third (36%) of drivers aged 18 to 49, and 22% of drivers aged 50 and older, report having difficulty driving in the dark most or all of the time 1. Ocularis research indicates that 6.3% of the normal U.S. population experiences moderate to severe night vision problems. This condition is sometimes referred to as night myopia, although it actually encompasses more than a form of myopia. There is presently no drug indicated to treat NVCs; the problem is sometimes addressed with a second eyeglass prescription or occasionally off-label use of Alphagan P, a glaucoma medication with pupil reduction side effect. Almost all night vision complaints arise from light scattering and aberrations that occur in the optical system of the eye. (Night Blindness, a retinal disorder, is a rare, unrelated condition). This scattering and aberration of light entering the eye manifests as one or more phenomena such as glare, halos, starbursts, poor contrast sensitivity and poor depth perception. Imperfections in the cornea and the lens of the eye, whether natural or surgery-related, are the major contributors to light scattering and aberrations. These imperfections tend to exist more towards the periphery of the cornea and, sometimes, the lens, rather than the center of the optical system. As pupils dilate in dim light, more and more of these peripheral imperfections come into play, scattering light and causing NVCs. If one can control pupil size in dim light, by inhibiting pupil dilation, the iris of the eye can effectively block light scattered and aberrated by these peripheral imperfections in the optical system, and thereby reduce NVCs and improve night vision.
4 Ocularis Pharma, LLC Page 4 Ocularis demonstrated the benefit of this pupil modulation approach in its NOVA (Night Optics and Vision Assessment) study 2. In this non-drug study of 100 subjects, five patient types with NVCs were tested to see if making their pupils smaller in dim light, using contralateral illumination response (shining a light in one eye, causing consensual pupil reduction and testing the other eye, the flashlight test ), would result in improved dim light vision. Four of the groups night myopia, high myopia, contact lens and post-lasik - had significant improvement in dim light vision in substantial numbers of patients. The fifth group, cataract patients, had a smaller number of patients with substantial improvement, about 25%, which is attributable to the variation in type and location of the cataract in each lens. Ocularis is developing Nyxol Eye Drops (phentolamine mesylate ophthalmic solution) to inhibit pupil dilation to reduce light scatter and aberrations, and resultant NVCs, and consequently improve night vision. Ocularis has analyzed the market potential for Nyxol Eye Drops to treat NVCs attributable to night myopia, cortical cataract, post-iol surgery and post-refractive surgery. Following a review of the cause and treatment of NVCs in each of these four market segments, a summary estimate of the market potential for treating NVCs with Nyxol is presented. Then, treatment of NVCs as a new business opportunity for optometrists is discussed. Night Myopia Over the last 20 years, the development of technology to measure imperfections in the optical system of the human eye has been dramatic. In particular, corneal topography and wavefront aberrometry have been able to exquisitely measure imperfections in the optical system. These technologies have been largely trained on understanding imperfections associated with diseases of the eye, such as keratoconus, or enhancing surgical approaches to improve vision, such as LASIK. What has not been appreciated to date is the relationship between natural imperfections in the optical system of normal eyes and pupil size under various lighting conditions. Our pioneering work over the last 10 years has shown that reducing pupil size in patients with night vision complaints can significantly improve night vision in these patients. Natural imperfections or aberrations in the surface of the cornea distort light, as do imperfections in the curvature of the cornea. Both surface and curvature imperfections are normal and are commonly found in the general population. The visual condition caused by the combination of natural corneal imperfections and excess pupil dilation in dim light is often called night myopia, though this condition encompasses more than just myopia. Night myopia is the largest segment of the population that can be helped by Nyxol Eye Drops to improve night vision. A large study showing the relationship between optical imperfections and pupil size in normal subjects was published in 2003 by Vinciguerra, et. al., Statistical Analysis of Physiological Aberrations of the Cornea 3. In this study, 4,340 subjects who had undergone corneal topography were retrospectively evaluated. Subjects were excluded if they: had visual acuity less than 20/20, had previous ocular surgery, wore contact lenses over the previous month, had corneal astigmatism greater than 2.5 diopters (D), had spherical equivalent refraction beyond and D, had any type of corneal disease or had abnormal tear film break-up time. With these exclusion criteria, 500 subjects (1,000 eyes) were deemed suitable (or normal ) for analysis. There were 277 females and 223 males ranging in age from 14 to 80 years old (mean / yrs). Corneal data (wavefront aberration RMS) were analyzed for pupil diameters of 3, 5 and 7mm. The results of this analysis are graphed below for spherical, coma, higher order and astigmatism aberrations:
5 Ocularis Pharma, LLC Page 5 Average Aberration RMS (microns) Values at 3, 5 and 7 mm Pupils 3 The results of this analysis are tabulated below for total, spherical, coma, higher order and astigmatism aberrations. Also, data from our study, OP-NYX-SNV, are included: Average Aberration RMS (microns) at Various Pupil Diameters Statistical Analysis of Physiological Aberrations 3 OP-SNV Pupil Diameter (PD) PD Delta Results 4 PD Delta Aberration Type 3 mm 5 mm 7 mm 3-5 mm 5-7 mm 1.3 mm Total Spherical NA Coma NA Higher Order Astigmatism NA Our first observation of these results is that the change in average aberration scores from 7 mm to 5 mm is large and clinically meaningful, ranging from 0.19 microns for Higher Order up to 0.73 for Total Aberrations. The change in average aberration scores from 5 mm to 3 mm is smaller, though the change for Total and Astigmatism Aberrations is still clinically meaningful, 0.34 and 0.29 microns, respectively. Note that these data are all for normal eyes, proving that reducing pupil size in dim light will improve dim light vision, even in normal eyes. In our OP-NYX-SNV study 4, a 1.3 mm average reduction in pupil size using Nyxol Eye Drops in subjects with moderate to severe NVCs resulted in clinically meaningful changes in Total and
6 Ocularis Pharma, LLC Page 6 Higher Order Aberrations of 0.47 and 0.14 microns, respectively. These changes after Nyxol administration are comparable to the changes noted above for 2 mm pupil reductions in normal eyes. In most of the night lighting conditions encountered today, humans have pupils that are larger than needed to see clearly (an artifact of millions of years of human evolution in very dark night environments, while the electric light bulb was only invented a little over 100 years ago!). For example, a typical daylight pupil of 1 to 2 mm in diameter can dilate to 5 mm or larger in dim light. A dim light pupil of 4 to 5 mm is perfectly adequate for most modern nighttime applications. However, pupils in dim light vary from 4 to 9 mm in the population, with the average dim light pupil size at 6 mm. Combining unnecessarily large pupils in dim light with peripheral corneal imperfections leads to aberrated light and night myopia. Therefore Nyxol Eye Drops, which can inhibit dilation of the pupil in dim light by 1 mm or more, cause the iris to block light aberrated by these peripheral corneal imperfections. The result is much improved night vision. Cataracts Cataracts are imperfections in the lens of the eye that cause light scatter and NVCs. Cataracts are the result of tiny opaque clumping bodies that form in the otherwise clear lens. When these clumping bodies grow large enough to cause light to scatter, NVCs will result. Cataracts tend to progress over time to the point where daytime vision is compromised also. Then, the natural cataractous lens is removed and an IOL is implanted in its place, restoring vision. Prior to lens replacement, however, Nyxol Eye Drops can improve NVCs in some cataract patients. Cataracts can be characterized by the concentration of clumping bodies in various locations in the lens. There are three main cataract types cortical, nuclear and posterior subcapsular (PSC). Cortical and nuclear cataracts are the most common, each occurring in about 40% to 45% of the population, while PSC cataracts occur in about 10% of patients 5,6. Cortical cataracts start in the periphery or cortex of the lens and progress towards the center. Nuclear cataracts are in the center or nucleus of the lens. PSC cataracts form at the back of the lens. See the following 7 :
7 Ocularis Pharma, LLC Page 7 Cortical cataracts (a and b) tend to start in younger age groups, 45 years on up, and progress towards the center of the lens over time. Nuclear cataracts (c) tend to start later in life, 60 years on up, and slowly become more dense in the center of the lens. PSC cataracts (d) form in the back of the lens, in the direct line of sight in the optical system. Onset of PSC cataracts causes definite visual function loss and usually results in removal of the lens and replacement with an IOL. Cortical cataracts will cause vision loss once they progress to the center of the lens. Nuclear cataracts will cause vision loss as they eventually become denser. Cortical and nuclear cataracts can eventually lead to lens removal and replacement. Nyxol Eye Drops will not help patients with cataracts in the center of the lens, including some cortical (b), and most nuclear (c) and PSC (d). Inhibiting pupil dilation in dim light will only allow light to move through the center of the lens, where the cataract resides in these types. In fact, dim light vision is likely to be diminished with Nyxol Eye Drops in these cataract patients. However, patients with equatorial cortical cataracts (a), particularly in the early stage of development, may very well benefit from Nyxol Eye Drops in dim light. The equatorial cortical cataract at this stage will not have an effect on daytime vision (with a small pupil guiding light through the center of the lens) and likely will not qualify for removal and replacement with an IOL. In dim light, however, when the pupil dilates and light strikes the cortical cataract on the periphery, light scatter will occur and cause NVCs. Thus, patients with equatorial cortical cataracts can improve their night vision by inhibiting pupil dilation with Nyxol Eye Drops. Post-IOL Surgery Removing natural cataractous lenses and implanting intraocular lenses (IOLs) is the single most common surgery done in older Americans today, with over two million procedures annually. It is a highly effective treatment and restores sight to millions. However, in 5% of patients who receive monofocal IOLs 8 and up to 25% of patients who receive multifocal IOLs 8, NVCs arise. In the case of monofocal IOLs, which typically are limited to 6 mm in diameter, the problem is in the design of the IOL s edge, which is intended to prevent infiltration of cells behind the IOL in the lens capsule. If a patient s pupil size is large enough in dim light (about 6 mm or larger), light will scatter off this edge and cause NVCs. In the case of multifocal IOLs, patients who tend to have larger pupils in dim light will have light scattering off the boundaries of the various optical zones of the multifocal IOL causing NVCs. Both of these conditions can be improved with Nyxol Eye Drops by inhibiting pupil dilation, thereby reducing light scatter from monofocal IOL edges and reducing the halo associated with multifocal IOL optical zones. Post-Refractive Surgery Certain surgeries on the cornea, such as LASIK (and earlier refractive surgeries such as RK and PRK), can create imperfections in the cornea which will aberrate light. While these corneal surgeries, particularly LASIK, have improved much over the years, many individuals who had RK, PRK and the earlier versions of LASIK, have chronic NVCs to this day. Even some patients who have the most up to date custom LASIK still can have chronic NVCs post-surgery. Also, more than 30% of post-lasik patients have NVCs immediately following surgery that resolve over several months 9. Many of the imperfections resulting from these surgeries are in the periphery of the cornea. By inhibiting pupil dilation in dim light with Nyxol Eye Drops, many patients with chronic or acute post-lasik NVCs can experience improved night vision.
8 Ocularis Pharma, LLC Page 8 III. U.S. Market Potential for Treatment of Night Vision Complaints by Segment Methodology In its Market Assessment for Nyxol Eye Drops, November , Ocularis has developed proprietary, detailed market estimates for Nyxol Eye Drops for each of the market segments discussed above. To derive these estimates, Ocularis has used a variety of sources to define as specifically as possible the total population having the condition, and then that subset that experiences moderate to severe night vision problems. Of the population of moderate to severe patients, Ocularis calculated the fraction treatable with Nyxol. This is done by employing the contralateral illumination response or flashlight test to induce pupil reduction and then measure the patient s improved night vision. Using the flashlight test, Ocularis NOVA Study produced response rates (fraction treatable) for each of several subgroups. Ocularis then estimated the subset of the fraction treatable that would be seeking treatment in order to define the market potential for each segment, and applied rising penetration rates to calculate forecast sales. Ocularis estimates that at time of product launch, the market to treat moderate to severe NVCs with Nyxol Eye Drops exceeds $1.6 billion in the United States, and is comprised of the following segments: Night Myopia $786 million Cataract (equatorial cortical) $581 million Post-IOL Surgery $140 million Post-Refractive Surgery $146 million Total Annual US Market Potential $1,653 million Ocularis forecasts Nyxol sales in the United States to begin at $82 million in launch year and rise to $710 million by year five. Ocularis has not analyzed non-u.s. markets for Nyxol Eye Drops, but believes that there are substantial additional revenue opportunities for the drug in the rest of the world.
9 Ocularis Pharma, LLC Page 9 IV. New Business Opportunity for Optometrists Our discussions with the FDA have made it clear that Nyxol Eye Drops will be considered a prescription drug. While ophthalmologists and optometrists in all fifty states will be able to prescribe Nyxol for the treatment of NVCs, our belief, based upon extensive discussions with and surveys of eyecare practitioners, is that optometrists will likely embrace this opportunity more vigorously than ophthalmologists. Our surveys of optometrists show that they are highly attuned to the night vision complaints of their existing patients. Optometrists report that, on average, 14% of their patients complain about their night vision unprompted, and if prompted, that the percentage would double to 28% 11. In contrast, our extensive discussions with ophthalmologists suggest that, on average, ophthalmologists only infrequently hear complaints about night vision. This difference between optometrists and ophthalmologists is not surprising. Ophthalmologists today are focused on treating serious eye diseases and disorders, such as macular degeneration, glaucoma, cataracts, diabetic retinopathy and others that, if untreated, can lead to blindness. While eye drop therapy is important for the treatment of some of these diseases, more invasive procedures such as injections into the eye or eye surgery are often required. In contrast, optometrists are largely focused on the vision performance of non-diseased eyes, with non-invasive treatments such as eyeglasses, contact lenses, and dry eye drops (Rx and OTC) the primary treatment options. Because of this focus on vision performance, optometrists are attuned to the night vision complaints of their patients and amenable to prescribing a patient-administered treatment like Nyxol Eye Drops. Ophthalmologists do encounter night vision complaints post-lasik and post-iol surgeries, so Nyxol Eye Drops will provide a treatment option for these ophthalmology patients, but the much broader market segments of night myopia and cortical cataract patients will more likely be addressed by the optometrist. Today, most of the corrective measures of vision performance by the optometrist are tuned for photopic (daytime) performance. Diagnosis and treatment of night vision complaints, therefore, represent an entirely new practice expansion for the optometrist. Unlike periodic treatment with eyeglasses and contact lenses, with patient visits every year or even longer intervals, the treatment of night vision complaints with chronic prescription eye drop therapy will result in more frequent visits by the NVC patient to the optometrist to monitor his/her chronic therapy and renew drug prescriptions. In addition, in many states, optometrists can dispense eye drop medication to their patients, providing yet another potential revenue stream for the optometrist. Treatment of NVCs is all new, incremental business for the optometrist, and it is significant. There are approximately 35,000 optometrists practicing in the United States today. On average, they have about 250 patient visits per month 12, or about 3,000 per year. Our 2015 estimate of night myopia patients seeking NVC treatment is 1,966,000 and of cortical cataract patients seeking NVC treatment is 1,453,000, for a total of 3,419,000 patients in the United States that would potentially seek out optometrists to treat their NVCs. (We believe that post-iol and post-lasik NVC sufferers will more likely be treated, at least initially, by their ophthalmic surgeons.) If we assume the chronic management of these night myopia and cortical cataract NVC patients requires an average of four visits per year, the result would be 13,676,000 new patient visits per year, or about 390 incremental patient visits per year per optometrist, a 13% increase from their current patient load. This is a considerable increase to the practice potential of optometrists.
10 Ocularis Pharma, LLC Page 10 NVC s can be initially diagnosed using low contrast visual acuity (LCVA) charts the optometrist likely already has in his visual acuity slide deck, in mesopic or dim light condition. For more precise measurements of night vision performance, contrast sensitivity can be measured using devices like the Holladay Automated Contrast Sensitivity System (HACSS by M&S Technologies) or wavefront aberrations can be measured using devices like the OPD Scan 3 (Nidek/Marco). The efficacy of treatment with Nyxol Eye Drops can be predicted by using the flashlight test for improvement in mesopic LCVA, contrast sensitivity or wavefront aberrations. Also, using the flashlight test will screen out those patients who would not benefit from reduced pupils in dim light, as would likely be the case for nuclear cataract patients, as an example. Hence, optometrists can diagnose and treat NVC patients with measurement devices they already likely own or can readily acquire. The combination of significant additional patient visits and limited capital investment to diagnose and treat these patients should be a very attractive business proposition for optometrists. Our estimates of the night myopia and cortical cataract markets assume that this incremental patient visit potential would be from existing patients who receive refractive correction with eyeglasses or contact lenses. However, more than one half of the U.S. population does not have refractive correction for daytime vision and does not see the optometrist today. A significant fraction of this population is likely to have NVCs, and would constitute an important source of new optometry patients that we have not estimated here and are above and beyond those estimates. To summarize, the treatment of night myopia and cortical cataract patients for NVCs with Nyxol Eye Drops represents a significant new increment to the practice of optometrists in the United States, a valuable new way to help their patients see better at night, and a very attractive business opportunity. V. References 1 Shedding Light on Driving in the Dark, Conducted by Kelton Research on behalf of Road and Travel Magazine and ACUVUE Brand Contact Lenses Night Optics and Vision Assessment (NOVA) Study Report, Ocularis Statistical Analysis of Physiological Aberrations of the Cornea, Vinciguerra, Camesasca, and Calossi, Journal of Refractive Surgery, Volume 19, March/April (Suppl) OP-NYX-SNV Single Dose Study of Nyxol Eye Drops in Patients with Severe Night Vision Problems, Clinical Study Report, Ocularis Pharma, Inc., February 7, Blue Mountains Eye Study, Comparison of Age-Specific Cataract Prevalence in Two Population-Based Surveys 6 Years Apart, Tan, Wang Rochtchina and Mitchell, BMC Ophthalmology 2006, 6:17. 6 Beaver Dam Eye Study, Incidence of Age-Related Cataract over a 10-Year Interval: the Beaver Dam Eye Study, Klein, Klein, and Lee, Ophthalmology, Volume 109, Issue 11, , November 2002.
11 Ocularis Pharma, LLC Page 11 7 The Human Eye, Structure and Function, Clyde W. Oyster, Multiple publications and PMAs for IOLs. Representative example noted here is the Summary of Safety and Effectiveness Data for the PreMarket Approval of the Tecnis Multifocal Intraocular Lens, PMA Number P080010, January, Abstracted from Physician s Handbook for LASIK Devices, VanDevanter, Market Assessment for Nyxol Eye Drops, Ocularis, November, Night Vision Optometrist Survey, Ocularis, State of the Profession: 2006, Edlow and Markus, American Optometric Association, 2006.
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