04 Mar Eye Surgery Equipment Maker Business Plan
This business plan is designed to present NovOculi, Inc., to potential investors, and to raise equity capital necessary to start production and continue research and developing its patented products.
The Company
NovOculi, Inc., an innovative start-up, plans to develop and sell ophthalmological surgical tools. NovOculi's principals have extensive experience in refractive correction techniques, both laser-based and non-laser-based. On the basis of this experience, NovOculi's principals have created and begun testing a unique method for incisionless refractive adjustment called NICS.
The current refractive methods, such as LASIK or PRK, require at least a small amount of the protective epithelial coating overlying the cornea. These procedures can also cause complications. The principals have developed a method involving iontophoresis, an ionic dye and a wavelength-specific laser to accomplish effective refraction without the troublesome destruction of epithelium.
NovOculi intends to use NICS to exploit the market potential and penetration in the laser refraction field, in which the demand is almost doubled every year.
Based on detailed financial projections made by the company's management, it is estimated that equity investments are required to launch the company's operations. Funds will be used for NICS production, testing, and marketing, as well providing initial working capital during the first two year.
Market Potential
The laser refractive industry has a huge market potential. 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). Only 900,000. Americans have had LASIK since 2002. This market represents 0.6% of total available market. 99.4% remains untapped. (#8220'ByeBye Glasses; EyCare Business Online). Furthermore, the demand for laser refractive surgery is approximately doubling annually (“Bye-Bye Glasses,” EyeCare Business Online,).
The company has reached out to nine top American ophthalmological and medical institutions. Seven of the nine have expressed interest in participating in collaborative research and, given encouraging research results, performing NICS commercially once it is available. John Hopkins University (Harvard), Stanford University (Oregon Health Sciences), Duke University (Duke University) and University of California at San Francisco (UCSF) are just a few of the institutions who have expressed an interest.
NovOculi's principals also conducted a preliminary survey of the Durham, NC grocery store. 50 consumers with refractive problems were randomly selected and asked questions during the survey. The Market Survey topic contains a copy of the survey as well as a summary of its findings.
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 the polymeric vehicle into patient's cornea using the patented, iontophoretic devices (a device that generates a charge that then repels/attracts other charges). Once the ionic color has been driven into the cornea away from sensitive areas, a laser tuned for the wavelength of the dye can then be used to target and alter the cornea. This works in the same way as current laser refraction procedures. After the procedure has been completed, the iontophoretic devices is reapplied. This time the dye is applied with oppositepolarity. The patented method and device allows the surgeon to avoid the most difficult and complicated aspect of current laser 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 the research data and publicity are generated, the sales team will encourage the initial investment into the laser and other equipment needed for the procedure. This will create a “demand pull” for the necessary components for institutions to market the procedure directly to patients.
The sales team will start with six sales people and grow to forty four members by Year 5. Laser manufacturers will collaborate closely with the sales team to help promote the technology to patients.
Six U.S. sites will provide training opportunities for ophthalmologists in the NICS procedure: San Francisco and Boston, Atlanta, Philadelphia; Kansas City, Philadelphia, Kansas City, Durham, NC. Each site will be able to offer training sessions in depth led by a prominent surgeon in ophthalmology.
Patients will have the option to pay a premium if they are able to access this high-tech technology. NovOculi will take approximately half the almost $1,000 premium via licensing fees and sales of individual components.
Regulative Issues
Like its predecessor, LASIK, the FDA will not approve the company's product before widespread usage. As of 2 years ago, LASIK had already been performed on nearly 900,000. Patients were not required to wait for FDA approval (Current Trends In Refractive Eye Surgery, 128th Anniversary Meeting of APHA).
This was possible due the FDA not approving procedures but only the equipment. (Eye centers are focusing on LASIK growth. Houston Business Journal). Additionally, the FDA has approved components of this procedure for medical usage. NovOculi won't need approval to market its patented technology and devices. The FDA has already approved similar devices in the following areas: 1) The FDA approved the 440 nm laser for dermatologic purposes. 2) Iontophoretic devices are approved for drug delivery on skin. 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.
Milestones
The following are key milestones for the startup period:
- Nine months prior to the start date, completion of the strategic business plan.
- Requests for grants of research must be made at least seven weeks before the starting date.
- All foreign and domestic patents must be applied for within six months of the date of issue.
- Starting date: Start-up capital raised
- All other first-year milestones are currently on schedule in accordance to the business plan.
Competitive Advantage
NovOculi, with its exclusive patent positions, is uniquely positioned for this market opportunity. The U.S. has granted three patents to NovOculi: the first protecting the reversible instrument for iontophoretics, the second protecting NICS techniques, and the last protecting the unique vehicle used for the ionic color.
To date, the principals spent much time researching and developing current products that meet the market demand.
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. Below is a summary of the projected financial information.
1.1 Mission
To provide the field of ophthalmology with innovative designs which will facilitate the treatment of ophthalmologic diseases and conditions.
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