Iontophoretic devices

A massive potential market base exists for the laser refractive surgery industry. It is estimated

that approximately 54% of the U.S. population (~162 million) has refractive errors,

approximately 90% of which are eligible for correction using current techniques or those on the

near horizon (Federal Air Surgeon’s Medical Bulletin). In contrast, only 900,000 Americans have

had LASIK (the most popular laser correction technique) as of two years ago. This represents

only 0.6% of the total current market, leaving the other 99.4% untapped. (“Bye-Bye Glasses,”

EyeCare Business Online). Furthermore, the demand for laser refractive surgery is

approximately doubling annually (“Bye-Bye Glasses,” EyeCare Business Online,).

The company has contacted nine of the leading ophthalmological medical institutions in the U.S.

Seven of the nine have expressed interest in participating in collaborative research and, given

encouraging research results, performing NICS commercially once it is available. Institutions

expressing interest include: John Hopkins, Harvard, Stanford, Oregon Health Sciences, Duke

University, and the University of California at San Francisco.

NovOculi’s principals have also conducted a preliminary market survey at a local grocery market

in the Durham, NC area. Fifty consumers with refractive errors were randomly selected outside

of a local grocery market and asked the questions in the survey. A copy of the survey and a

summary of its findings may be found in the Market Survey topic.

Technology The principals have developed and patented a revolutionary technique, NICS, and two novel

devices which are used to accomplish incisionless refractive correction. The patented technique

involves driving an ionic dye from its patented polymeric vehicle into the cornea of the patient

using the patented iontophoretic device (a device that creates a charge which then repels or

attracts other charges). Once the ionic dye has been effectively driven into the cornea and away

from sensitive structures, a laser tuned to the wavelength of the dye is then used to target the

dyed cornea and alter its shape, much as is done with current laser refraction protocols. After the

procedure is completed, the iontophoretic device is reapplied, this time with opposite polarity,

and the dye is drawn from the cornea due to the attraction of opposite charges. Through the use

of the patented device and technique, the ophthalmologist performing the procedure will be able

to avoid the most troublesome and complication-ridden aspect of current laser refraction surgery:

the corneal incision. Over 90% of all complications of current laser refraction surgery are related

to difficulties associated with the incision and the subsequent healing process, virtually all of

which could be avoided with NovOculi’s technology.

Strategy The key element in NovOculi’s strategy is to market its technology to both those performing the

procedure as well as to those on which the procedure will be performed. Once research data and

publicity have been generated, the sales force will step in to encourage the initial investment in

the laser and equipment required for the procedure, creating a “demand push.” After this

investment has been made, a “demand pull” will be generated for the components required for

institutions to perform the procedure through marketing directly to patients.

The sales team will begin with six seasoned sales personnel and swell to forty-four members by

Year 5. The sales team will work closely with laser manufacturers in order to promote the

technology to patients and surgeons.

Ophthalmologist training for the NICS procedure will be available at six sites throughout the

U.S.: San Francisco, Boston, Atlanta, Philadelphia, Kansas City, and Durham, NC. Each site will

have in-depth training sessions led by a prominent ophthalmic surgeon.

Those performing the procedure will be able to charge a premium for providing patients with

access to this superior technology. NovOculi will extract approximately half of the nearly $1,000

premium through licensing fees associated with its patented procedure and sales of the individual

components.

Regulatory Issues

As with its predecessor, LASIK, the company’s product will not need to wait for FDA approval

prior to widespread use. LASIK had been performed on almost 900,000 patients without

approval by the FDA as of two years ago (Current Trends in Refractive Eye Surgery, 128th

Annual Meeting of APHA).

This was made possible due to the fact that the “FDA does not approve procedures, only the

equipment used in them” (“Eye centers set their sights on LASIK surgery growth,” Houston

Business Journal, July 16) and the components of the procedure have already been approved by

the FDA for medical use. NovOculi will not need to obtain approval to market their

patented technique and devices due to the fact that the FDA has approved similar devices for

medical use in the following arenas: 1) The 440 nm laser has been approved for dermatologic

uses. 2) Iontophoretic devices has been approved for drug delivery on the epidermis. 3)

Polymeric contact lenses have been approved and are commonly used as an external aid for

refractive correction, and 4) The targeting dye, tartrazine, is the most ubiquitous food coloring

additive on the market to date.

Major Milestones The following are key milestones for the startup period:

 Completion of strategic business plan nine months before starting date.

 Research grants applied for by seven months before starting date.

 All patents, domestic and foreign, applied for by six months before starting date.

 Start-up capital raised by starting date.

 All other first-year milestones are currently on schedule in accordance to the business

plan.

Competitive Advantage

NovOculi is uniquely positioned to take advantage of this market opportunity due to its

protected, proprietary positions. Three patents have been filed in the U.S.: one for protecting the

reversible iontophoretic device, the second protecting the technique involved in NICS, and the

third protecting the unique vehicle for the ionic dye.

The principals, to date, have spent ample time on development and research of the current

products which will satisfy the market demand for a safer, less complicated laser refraction

correction technique.

Financial Summary Based on detailed financial projections, if the company receives its funding, it will operate

profitably by Year 4 with a hefty net profit. The following chart summarizes the projected

financial information.

Strawberries

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