IPO Report: Presbia PLC (LENS)

Francis Gaskins |

Presbia.jpgPresbia PLC (LENS) is an ophthalmic device company that has developed and is currently marketing a proprietary optical lens implant for treating presbyopia, the age-related loss of the ability to focus on near objects. It is based in Irvine, CA.

11 other companies are scheduled for the week of Jan. 26, 2015. The full IPO calendar is available at IPOpremium.

Manager, Joint-managers: Jefferies
Co-managers: None

LENS scheduled a $50 million IPO with a market capitalization of $160 million at a price range midpoint of $12 for Thursday, Jan. 29, 2015 on Nasdaq. SEC Documents

Presbia PLC Overview

LENS is an ophthalmic device company which has developed and is currently marketing a proprietary optical lens implant for treating presbyopia, the age-related loss of the ability to focus on near objects.

LENS’ lens, which it refers to as its microlens, is a miniature lens designed to be surgically implanted in a patient’s eye to improve that patient’s ability to see objects at close distances.

Presbia PLC Valuation 

Glossary

Accumulated deficit (mm)

.

.

-$34

     

Per share dilution

.

.

-$8.71

     

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Valuation Ratios

Mrkt Cap (mm)

Price /Sls

Price /Erngs

Price /BkVlue

Price /TanBV

% offered in IPO

annualizing Sept 9 mos

         

Presbia PLC (LENS)

$160

957.6

-9.4

3.6

3.6

31%

             

Presbia PLC Conclusion

Neutral

Implanted over 600 of microlenses outside of the United States.

Need to see more implants

Currently authorized to sell throughout the European Economic Area

Seeking FDA marketing approval, could take over 21/1 years

Moderate cash burn rate:  P/E -9.4

Price-to-book 3.6

Insider may purchase $5mm, 10%

Presbia PLC Business

LENS is an ophthalmic device company which has developed and is currently marketing a proprietary optical lens implant for treating presbyopia, the age-related loss of the ability to focus on near objects.

LENS’ lens, which it refers to as its microlens, is a miniature lens designed to be surgically implanted in a patient’s eye to improve that patient’s ability to see objects at close distances.

LENS’ current strategy is to continue to commercialize its microlens in certain strategic countries where LENS currently has marketing approval and to continue to seek to obtain marketing approval in other key markets, including the United States.

Through the SEC filing date ophthalmic surgeons have implanted over 600 of microlenses outside of the United States.

Presbia PLC Market

According to Market Scope’s 2013 Comprehensive Report on The Global Presbyopia Surgery Market, or the Market Scope Report, presbyopia is a common vision disorder that affects approximately 1.8 billion people worldwide.

Presbyopia is associated with the inability of the eye’s natural lens to change shape, or accommodate, in order to see clearly objects in the near and middle distance ranges.

According to the Market Scope Report, the worldwide presbyopic population is expected to grow to approximately 2.0 billion by 2018 and 2.1 billion by 2020.

According to the Market Scope Report, spending on devices, equipment and procedure fees for presbyopia-correcting surgery is expected to increase from approximately $448 million in 2012 to approximately $1.2 billion in 2018 at the manufacturer level.

LENS does not currently have marketing approval in many jurisdictions included in the foregoing global data, which jurisdictions collectively represent a majority of the worldwide presbyopic population.

Presbia PLC Marketing

LENS has marketing approval in a number of strategic countries that LENS is targeting for commercialization and LENS is actively seeking marketing approval in certain other strategic countries that LENS are targeting for commercialization, including the United States.

Through its European Union CE Mark, LENS is generally authorized to market its microlens throughout the European Economic Area (27 of the 28 European Union member states plus Iceland, Liechtenstein and Norway), or EEA, and Switzerland.

LENS currently markets its microlens in certain strategic EEA countries as well as certain strategic countries outside of the EEA in which it possesses marketing approval.

Presbia PLC Seeking Marketing Approval

LENS is presently seeking marketing approval in other strategic countries, including the United States.

In December 2013, LENS received approval to commence a staged pivotal clinical trial as part of the U.S. Food and Drug Administration, or FDA, approval process.

Beginning in May 2014, LENS enrolled a total of 75 subjects at six investigational sites in the United States and each subject underwent insertion of the microlens in the non-dominant eye.

Based on six-month data on 52 subjects, on January 8, 2015, LENS submitted an interim safety report as a supplement to the investigational device exemption, or IDE, to the FDA.

If the FDA finds no safety concerns in the interim safety report, LENS anticipates the FDA will permit it to continue enrollment and to increase the study population size and the number of investigational sites conducting our clinical trials.

LENS is targeting enrollment of an additional 337 subjects, for a total of 412 subjects, at up to a planned 10 investigational sites in the United States.

This study is necessary in order to obtain clinical data to provide the primary support for a safety and effectiveness evaluation to support a pre-market approval, or PMA, for marketing clearance in the United States.

Data on a minimum of 300 subjects with 24-month data will be submitted as part of the PMA, and all subjects will be followed for three years following implantation.

Assuming that the FDA finds no safety concerns in the interim safety report, LENS is targeting approval from the FDA to continue enrollment in the  study in the first or second quarter of 2015.

LENS is targeting submission of the final PMA to the FDA with 24-month data on 300 subjects in the second quarter of 2017.

LENS is pursuing a modular PMA submission strategy whereby LENS intends to submit to the FDA or the first quarter of 2016, prior to the submission of the final PMA.

LENS is targeting PMA (Pre-market) approval of its microlens in the fourth quarter of 2017.

LENS is also targeting submission to the FDA of a final report with 36-month data on these 300 subjects in the second quarter of 2018.

Presbia PLC Benefits

LENS believes that its solution offers each of the following benefits:

Its solution is effective as a standalone solution for plano presbyopes, or those individuals who suffer from presbyopia but do not have any other visual disorder, and may also be used in conjunction with laser procedures or lens replacement procedures for those individuals who in addition to being presbyopic suffer from other visual disorders.

Its solution is minimally invasive; LENS’ microlens can be implanted and removed in simple, surgical procedures.

LENS believes that its solution offers significant near vision improvement with little or no loss of binocular distance visual acuity (the ability to see distant objects with both eyes without prescription enhancement) and minimal risk of adverse side effects.

LENS’ solution offers a wide range of corrective power, from +1.5 diopters to +3.5 diopters, in 0.25 diopter increments (a diopter is a unit of measurement of the optical power of a lens).

Once implanted, LENS’ microlens is invisible to the naked eye.

Presbia PLC Intellectual Property

LENS currently owns two U.S. patents and seven pending U.S. patent applications that LENS considers material to its business.

One of LENS’ existing patents relates to LENS’ microlens inserter; that patent expires in September 2030. The other patent relates to the method and apparatus to package LENS’ microlens; that patent expires in February 2030.

LENS’ pending patent applications relate to the method and apparatus to inject its microlens, the method for laser cutting a corneal pocket to insert its microlens, the apparatus and method to use a preloaded inserter to insert its microlens, and LENS’ proprietary data collection software.

LENS has one issued patent in Japan, which is the counterpart to LENS’ U.S. patent covering its microlens inserter. Also, LENS has filed foreign patent applications in Australia, Canada, China, Europe, Israel, Japan and Korea for LENS’ microlens inserter and its microlens holding apparatus invention.

Presbia PLC Competition

The medical device industry in general, and the ophthalmic medical device market in particular, are highly competitive, subject to rapid technological change and significantly affected by new product introductions and market activities of other participants. LENS’ currently marketed products are, and any future products LENS commercializes will be, subject to intense competition.

LENS expects to compete against companies that are developing corneal inlay surgical solutions for presbyopia, including AcuFocus, Inc., ReVision Optics, Inc., Neoptics AG and LensGen, Inc. AcuFocus, Inc.’s corneal inlay approach attempts to use small aperture optics to reduce distortion by eliminating peripheral light rays and limiting the width of diverging light rays.

ReVision Optics, Inc.’s corneal inlay approach attempts to produce a smooth variation in focal power across the pupil by microscopically altering the surface shape of the cornea.

Neoptics AG’s corneal inlay approach consists of a bifocal lens with a peripheral zone designed to improve near vision and a central zone for distance vision.

LensGen, Inc. is a newer company with little publicly available information regarding its intraocular lens which is being designed to harness fluidics and displacement to manipulate curvature to better capture light.

Both AcuFocus, Inc. and ReVision Optics, Inc. have been conducting clinical trials in the United States for years and have more experience than Presbia in conducting such trials.

AcuFocus, Inc. has completed a pivotal clinical trial in the United States and is thus further along in the FDA approval process than Presbia.

Also, both AcuFocus, Inc. and ReVision Optics, Inc., like Presbia, have marketing approval in certain jurisdictions outside the United States, including the EEA, and can be expected to compete with Presbia in such jurisdictions.

LENS believes that AcuFocus, Inc. may have more commercial activities to date than Presbia in certain jurisdictions, including Japan.

LENS does not believe that Neoptics AG has approval in the U.S. to conduct clinical trials or marketing approval in any jurisdiction.

In addition to being an effective treatment option for presbyopia, LENS believes that its microlens is less invasive than ReVision’s Optics, Inc.’s corneal inlay, offers a range of optical power corrections not offered by ReVision’s Optics, Inc.’s corneal inlay or AcuFocus, Inc.’s corneal inlay, is less conspicuous than AcuFocus, Inc.’s corneal inlay and is more easily removable than ReVision Optics, Inc.’s corneal inlay.

Presbia PLC 5% shareholders pre-IPO

Richard Ressler             100%   

Presbia PLC Dividends

No dividends are planned.

Presbia PLC Use of Proceeds

LENS expects to receive $45 million from its IPO and use it for the following:

$17.0 million to cover the total anticipated remaining costs to advance LENS’ microlens and its microlens inserter through LENS’ U.S. staged pivotal clinical trial;

$15.0 million to $17.0 million to fund LENS’ efforts to expand the number of high-volume refractive laser centers with which LENS does business;

$4.0 million to $4.5 million to fund research and development;

$1.0 million to $1.5 million to pursue regulatory approvals that LENS requires in the United States and internationally; and

any remaining proceeds for working capital and for general corporate purposes.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
LENS Presbia PLC 4.25 0.09 2.16 1,981

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