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Investors and key therapeutic areas are determining the state of the ophthalmic market

Alex Delaney-Gesing

This is editorially independent content
7 min read

During Octane OC’s 2024 annual Ophthalmology Technology Forum (OTF) last month, attendees were given a look at current and future investment trends and growth opportunities in the eyecare industry—with a particular focus on target therapeutic areas for product innovations.

This rundown was delivered by Sergio Rossi, managing director and partner at Boston Consulting Group in Boston, Massachusetts.

Let’s start with the basics of this presentation.

During the State of the Ophthalmic Industry Report, Rossi focused on three key areas of the eyecare marketplace:

  • Ophthalmology market
  • Innovation themes
  • Market trends

Break these down.

Per Rossi, the ophthalmology market is currently just over $88 billion, with expectations for it to reach $110 billion by 2028. It’s divided into three categories of products:

Moving on to themes …

From the broader perspective, Rossi noted the following general macro trends leading to a rising global prevalence and inability to meet patient demands effectively:

  • Rising prevalence:
    • Aging population
    • Cardiometabolic disease epidemic
    • Increasing screen usage
    • Compounding impact of the myopia epidemic
  • Inability to meet patient demands:
    • High budget impact of innovative treatments
    • Physician shortage and barriers to scope expansion
    • Lack of infrastructure and physical barriers to access
    • Disparities in pricing, access, and reimbursement

Note: Both categories are also impacted by an increase in consolidation of eye care practitioners (ECPs) largely driven by private equity (PE) representatives.

Cumulatively: These issues are leading to a rise in pressure and urgency to address eye care challenges—a call to action to push these boundaries and remove these barriers to serve patients in need, Rossi noted.

Go on …

Rossi also noted that significant opportunities exist for addressing global unmet needs in two specific areas of degenerative blinding diseases:

“Every company can decide what their sweet spot is, and where to invest, and where they can grab this potential market opportunity,” Rossi said.

  • Case in point: Growth is expected in the retinal disorders segment, due in part to recent advancements and a shift to Rx products
    • Conversely: In dry eye, OTC products are being propelled by a shift from Rx to OTC —plus an increase in nutraceutical availability

What therapeutic areas are investors focusing on?

Per Rossi, a growing number of manufacturers and investors are directing their pipeline focus toward established treatments as well as emerging areas of high research & development (R&D) with no current or severely limited current products.

Their focus:

  • New mechanism of action (MOA) drug class
    • Dry eye; glaucoma; dry/wet AMD; presbyopia; diabetic macular edema (DME)
      • Technologies: non-steroidal immunomodulators; tear production; neuro-protection; miotic agents; tri-specific antibodies
  • New modalities
  • Novel formulations
    • Presbyopia; dry eye
      • Technologies: cholinergic agonist; liquid contact lens (hyaluronic acid [HA])
  • Device/drug-device combinations
    • Glaucoma; wet AMD; diabetic retinopathy
      • Technologies: encapsulated cell technologies; hydrogel-based intravitreal implants; wearable devices (ie: goggles)

With these unmet needs in mind, where are investors headed?

Investors are continuing to increasingly target post-phase 3 clinical trial products (over 60%, according to Rossi), focusing on devices and treatments with a “de-risked opportunity” and higher likelihood of being commercialized.

Plus: Comparing front-of-the-eye (ie: cornea) to back-of-the-eye (ie: retina) products, companies are largely looking to invest in back-of-the-eye treatments.

Any other technological advancements pushing growth?

Oh yes … to name a few:

Talk about the US ECP market trends.

Three segments are important for manufacturers to keep in mind when developing a commercial and medical strategy, Rossi noted.

  • Opticians and optometrists (estimated 50k)
  • Ophthalmologists
    • Comprehensive (estimated 20k)
    • Specialized (estimated 5k)
      • Retina specialists (estimated 2k)

However: With over 80,000 active ECPs across the United States, the ECP market faces the increasing cost of pressure and growth demands due to PE-driven consolidations.

So what priorities should manufacturers keep in mind for therapeutic development?

Two areas of EPC needs—each with subcategories of their own, according to Rossi.

  • Healthcare delivery (clinical priorities)
    • Durable treatments for chronic diseases
    • Customization and precision in cataract surgery
    • Affordability of care
  • Business management (economic factors)
    • Optimizing optometrist relationships
    • High return-on-investment (ROI) marketing efforts
    • Higher revenue and margin opportunities

Rossi added: To improve services, manufacturers have begun to adapt to changing consumer and provider needs by offering more online and remote access, as well as streamlined digital platforms for products and financial assistance.

Lastly: the take home.

The ophthalmology market is a sizable market that will grow more profitable in the future, Rossi concluded.

With a number of unmet needs, investors and companies must identify a way to focus on what is within their wheelhouse to ensure their investment and innovations are productive..

Further: External product innovation has largely fueled the healthcare space as of late, so focusing on funding smaller biotechs and startups—with the eventual plan to merge or exit them with bigger pharma players in order to bring a product to market—will continuously need to be adjusted based on consumer needs.

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