Mark S. Blumenkranz: A Series of Successes

By Jerry Helzner, Senior Contributing Editor | Retinal Physician, May 2011

Most ophthalmologist-inventors would be happy to be involved in just one major innovation that both advances patient care and enjoys commercial success. Mark S. Blumenkranz, MD, MMS, has already been a key player in the development of the Ozurdex implant, the Pascal photocoagulator and a widely used electrosurgical cutting device, the PEAK Plasma Blade. Now, he is looking forward to other significant successes in femto-phaco technology with OptiMedica, where he serves on the company’s board of directors.

Dr. Blumenkranz, a retina specialist and professor and chairman of the Department of Ophthalmology at Stanford University, can trace his interest in innovation back to his boyhood days, when he demonstrated a keen interest in problem-solving and always trying to find “the best way to do things.”

“I would daydream while practicing piano about ways to program the keyboard electronically (long before the invention of the MIDI format), or in cutting the grass, how to power the lawnmower with a water jet to kill two birds with one stone.”

EMERGENCE OF AN INNOVATOR

Accepted into a highly demanding, fast-track combined baccalaureate and medical program at Brown University, Dr. Blumenkranz focused on his studies and graduate work in the enzyme kinetics of calmodulin in the Department of Biochemical Pharmacology.

“My creative energies were channeled toward research and publishing in the emerging field of retinal pharmacology, including work on how to inhibit ocular scarring with fluoropyrimidines, steroids and heparin, as well as the use of the early purine analogues like acyclovir for the treatment of viral retinal infections. I only really began to act on innovations when I was in my 30s, when I realized that just obtaining grants and publishing my results in journals didn’t necessarily translate into those discoveries becoming available for the benefit of patients.”

It seemed to Dr. Blumenkranz that another step was necessary, the handoff and incubation of those discoveries or innovations by pharma and medtech companies that were highly experienced and focused on bringing them to market. He recognized that this was particularly important when the innovations involved a new chemical entity or device that required rigorous testing in clinical trials and regulatory approval.

“My interest then — and now — has always been development of products to fill unmet medical needs.”

Like almost all innovators, his early efforts were not crowned with success. In 1987, while at the Kresge Eye Institute at Wayne State University in Michigan, he founded an adaptive technology company, Transceptor Technologies, that develops a computerized device for low-vision patients based upon both speech and optical character recognition.

“We had financing, we appeared on national news shows, we won innovation awards, and we sold some of the devices,” Dr. Blumenkranz remembers, “but it was not a financial success because the device was expensive to build for us, and to purchase by patients.”

The company had planned that anticipated costs for the device would be covered by third-party payers, stemming from the impending passage of the Americans with Disabilities Act, but at the last moment the bill was modified to include durable goods but not sensory aids.

Dr. Blumenkranz came away from this experience with valuable lessons about third-party payment, market sizing, regulatory hurdles and the limits and costs of technology.

FIRST MAJOR SUCCESS

These lessons would serve Dr. Blumenkranz well when he moved from Michigan to the Department of Ophthalmology at Stanford—a move that accelerated his trajectory toward recognition as a top ophthalmic innovator.

“The move to the Silicon Valley area was a key step for me,” he says. “The environment for innovation and the network of seasoned professionals that I found were remarkable in the early ‘90s.”

Dr. Blumenkranz says he gained more valuable experience serving on the boards of directors of two smaller ophthalmic device companies—OIS, a company that manufactures digital imaging systems for the eye, and Midlabs, a manufacturer of vitrectomy systems. He also served as a key early advisor and founding member of the scientific advisory board (SAB) of Eyetech, which brought the first anti-VEGF agent, Macugen, to market and went public.

Figure 1.
Panretinal photocoagulation of proliferative diabetic retinopathy with Pascal using a 200-micron spot size.

But he says that “all the pieces really started to come together” when he was brought into Oculex Pharmaceuticals, as a member of the board of directors and chairman of the SAB to help refocus the company’s priorities. He successfully lobbied for a novel clinical trial design for a sustained-release steroid implant that had been originally designed to treat inflammation following cataract surgery.

“We soon refocused the company on the posterior segment, where both the unmet clinical need and also the market opportunity was greater,” says Dr. Blumenkranz. “The concept of a steroid implant for RVO had never been tested, and I had some concerns about the potential long term side-effects of the nonbioerodable implant that was being tested for uveitis and diabetic macular edema by a competitor. I advocated for a new type of clinical trial design that allowed us to test the implant with several disease categories to determine where the drug performed best. We also used OCT measurements as surrogate endpoints for the very first time.”

Allergan, which had been a passive investor in Oculex, was impressed with the positive phase 2 trial results and purchased Oculex for $245 million. The steroid implant, which was initially named Posurdex, was approved by the FDA as Ozurdex in 2009 and has since experienced wide adoption by retina specialists as a patient-friendly, easy-to-implant treatment for macular edema associated with RVO and CRVO and for noninfectious posterior uveitis.

A SECOND BREAKTHROUGH

Dr. Blumenkranz earned a second major success through his founding of OptiMedica and the development of the Pascal photocoagulator, a more advanced and precise photocoagulator that has been adopted worldwide since its introduction to the market in 2005. He says the company was founded on the premise that marrying scanning technology and a new generation of enhanced graphical user interfaces (commonly used for many non-medical products) to lasers had the potential to revolutionize the treatment of patients.

“We had seen a glimpse of that in the area of refractive surgery,” says Dr. Blumenkranz, “but surprisingly in my mind, not in the subspecialties of retina, glaucoma or cataract surgery to a significant degree. We actually built the Pascal from scratch, with much of the development of the device originally done at Stanford. At the same time, we built a top-secret skunkworks at OptiMedica and were writing IP and developing prototypes of scanning femtosecond lasers to perform capsulotomy and lens softening and segmentation as early as the first quarter of 2005.”

In an interesting and potentially high-stakes corporate move, OptiMedica recently sold the Pascal retinal and glaucoma franchise to Topcon, to focus on the emerging area of femto-phaco technology.

A self-described “serial innovator,” Dr. Blumenkranz also founded Peak Surgical, which produces electrosurgical devices for precision cutting. The devices are primarily used in general and plastic surgery, orthopedic surgery and in ENT, with increasingly rapid and broad acceptance.

BASIC ADVICE TO INNOVATORS

When asked what advice he could give to retina specialists who aspire to be innovators, Dr. Blumenkranz says they should always start with a focus on development for unmet medical needs.

“Once you have done that, and not before, then look at the potential size of the market, which involves both the number of affected individuals and reimbursement picture. Finally, look at the risk profile. Take into account the technological challenges of the project: has it ever been done before?”

Dr. Blumenkranz advises that the intellectual property landscape is typically very important to the innovator and to potential investors.

“Do you have freedom to operate? Do you have the ability to keep others from economically capitalizing on your ideas without your benefiting as well, either through your own product development or theirs, in the form of an enforceable license? Be realistic about the things you are good at and those things you will need to identify others to do, such as general management and finance. Great ideas are necessary but not sufficient criteria for success. Much more often than not, a great management team with an average-to-good idea that gets started later, is a better bet than an average or below average management team with a great idea that gets started earlier.”

Dr. Blumenkranz says that one of the key decisions an innovator will have to make, once it is decided to go forward with an idea, is whether what you have is a product that should be protected, incubated and then likely sold as a license, or whether you have the basis or in fact need for the creation of a company. That decision is typically based upon market size, as well as the technical complexity and capital needs of the project, and it is going to largely govern how you proceed with the innovation.

Dr. Blumenkranz says aspiring innovators should also seek out a mentor. “It’s important to have someone with you who’s done it before and knows where the potholes and minefields are,” he says. “The help could come from a serial entrepreneur, an established company, a business incubator, or from a so-called ‘angel fund’ that has been successful with previous projects as well as traditional venture capital.”

Innovator-physicians in solo private practice will typically have more freedom to innovate, although not necessarily the ancillary resources, notes Dr. Blumenkranz. Those in group practice will require approval from their partners if the innovation is going to consume a significant amount of your time or make use of practice resources.

“Innovation is in some ways easier but also more complicated in academia,” advises Dr. Blumenkranz. “Academic physicians are exposed to very interesting ideas on a weekly basis in modern research universities and are used to some degree of project management training if they spend time in the laboratory or in administrative positions.”

However there are a number of limiting considerations that must be taken into account, including time spent away from primary responsibilities. This is typically permitted but proscribed in scope by employment agreements with the university.

“Similarly, the type of role you may be permitted to play in an outside company is typically advisory but not managerial; there is a requirement for full disclosure of your outside business activities to all relevant university officials as well as during oral presentations and publications. There are significant challenges in the licensing of intellectual property from the university.”

Dr. Blumenkranz cautions that the university may choose to license a concept to an entity other than the original developer, depending on how the university technology transfer office views the likelihood of the work being ethically and commercially successful in the hands of one party versus another. He says this is in keeping with the intent and terms of the Bayh-Dole Act, which Congress enacted to foster innovation and technology transfer stemming from government research grants for the benefit of the public and which has been enormously successful in that regard.

Figure 2.
Pascal treatment of clustered peripheral tears using hemi arc patterns.

“The innovator may have a role in future development—or may not,” he notes. “It’s a risk to be appropriately borne, stemming from an arms-length process the university uses to identify the best potential licensee.”

INNOVATE WITH HUMILITY

Dr. Blumenkranz cautions innovators that they should not fall in love with their own ideas, or “drink the Kool-Aid.”

“Be data-driven and ready to make multiple mid-course adjustments, depending on that data,” he advises. “Being flexible and opportunistic (in the positive sense of the word) is a hallmark of the best small companies and most successful serial entrepreneurs. Finally, for any innovator to achieve success, you need to be working with the best people; professionals who have both integrity and proven competence. These are the people who can vet your ideas and provide sound advice.”

Dr. Blumenkranz notes that the biotech and medtech space in ophthalmology is a relatively small universe with a long memory. “Doing what you say you’ll do builds trust with your team, and a reputation for not only innovation but integrity comes in handy when you are looking around for the people and resources that will enable you to tackle the next great unmet need,” he concludes. ■