ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, October 3, 1996 TAG: 9610030029
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
Innotech Inc., a Roanoke optical products developer, has targeted as its next business opportunity a lens implant that could help restore the sight of patients with central vision loss.
Innotech said Wednesday that it has agreed to acquire Prism Ophthalmics LLC, a U.S. partnership that owns a patent for a prismatic lens implant
Specifically, Innotech said it has agreed in principle to buy an option ultimately to purchase Prism for $5 million.
Under the terms of the agreement, Innotech will buy a warrant giving it the right to acquire 15 percent of Prism should it not buy the whole company.
Innotech will pay $400,000 for the purchase option and another $1.2 million for the warrant.
The Prism deal has the potential not only to benefit Innotech's shareholders but also to "do something for mankind" by restoring functional sight and improving the quality of life for a significant number of people throughout the world, said Ronald Blum, Innotech's chairman and chief executive officer.
Prism's patented prismatic lens is designed to be surgically placed in the eye to help partially restore the loss of central vision caused by diseases such as macular degeneration and macular hole. Central vision loss is a top cause of blindness - particularly among older people - in developed countries such as the United States, Blum said. Central vision loss is the cause of blindness in more than 2 million people in the United States.
Central vision loss is characterized by a dark spot that occurs at the center of sight and gradually enlarges until a person becomes legally blind. The disease typically occurs in both eyes, and the main treatment is aimed at slowing the disease rather than restoring sight.
The implant is designed to work by redirecting an image from a diseased to a healthy area of the macula, which is an area of especially sharp vision on the eye's retina.
In patients who receive the implant, the disease-caused dark spot in the center would be moved to one side of the field of vision, explained Amitava Gupta, Innotech's vice president for engineering research and development.
Vision with the implant will not be perfect because the vision is redirected to an area of the macula where the vision is less sharp, Gupta said. The implant's purpose, he said, is to provide functional vision so a person with the disease can have an independent life.
Innotech said the $1.6 million it will pay for the option and warrant will be used by Prism for further development of the prismatic implant, clinical trials and commercial development of the product.
Gupta will serve as Prism's chief operating officer during the implant's development and early commercialization. The company will begin operating in November with its headquarters at Northpark, an office building on Peters Creek Road.
Gupta said it could take four years to get Food and Drug Administration approval for commercial use of the implant.
The implant could be sold sooner to major developed countries such as Great Britain and Germany, Gupta said. Blum added that the company hoped to start seeing revenue from overseas sales of the implant by the second half of 1998.
Prism has sought the advice of leading ophthalmologists and scientists in performing clinical evaluations of the implant, Gupta said.
Richard Mackool, an attending surgeon at the New York Eye and Ear Infirmary and a leading cataract and cornea specialist, who is among Prism's advisers, said the incidences of central vision loss should increase as the population ages.
"A treatment that can enable patients to function much more normally, even though it does not cure the disease itself, will be increasingly needed and highly beneficial," Mackool said.
The Prism deal is Innotech's first venture into lens implants. Until now, the company's business has involved the development, manufacture, and marketing of its Excalibur desktop fabricating system for plastic eyeglass lenses and of the supplies that are used by that system.
Innotech was founded in 1990 by Blum, a former partner in a Roanoke-based eyeglass retailer. It became a public company with its initial stock offering in March.
The Sept.30 issue of Fortune magazine labeled Innotech as a company to watch. Wall Street analysts are advising investors to buy the company stock, Fortune said.
Today's revenues of $10 million could reach $65 million by 1998 and its stock could climb to $15 a share within a year, one analyst said. The company's stock, trading on the Nasdaq stock market, closed Wednesday at $9.62 1/2 a share.
LENGTH: Medium: 86 linesby CNB