VCs Team Up To Help Form New Med Device Incubator, ForSight Labs

VCs Team Up To Help Form New Med Device Incubator, ForSight Labs

Jan 6, 2006 – Morgenthaler Ventures, Split Rock Partners and Versant Ventures have teamed up to form a new medical-device incubator that will launch start-ups focused on vision disorders.

The incubator, ForSight Labs, is modeled after The Foundry – the device incubator backed by Morgenthaler and Split Rock – and operates out of The Foundry’s Menlo Park offices. The firms, which invested a total of $2.4 million to launch the incubator in October, plan to use ForSight to start an average of one new company per year.

ForSight’s first company will evaluate four potential vision-disorder markets before settling on one to pursue. As with companies created at The Foundry, the firms expect that the start-ups emerging from ForSight will go on to raise backing from outside investors. The Foundry, formed in 1998, has created nine companies, including Ardian, a heart-failure device maker that raised a $6.8 million second round led by Advanced Technology Ventures last January.

Morgenthaler and Split Rock originally considered starting vision-disorder companies at The Foundry, which traditionally has focused mostly on cardiovascular conditions, but decided that the market was different enough from the cardiovascular field to warrant a separate incubator, said Morgenthaler General Partner Robert C. Bellas Jr.

ForSight’s backers have recruited a well-known surgeon and entrepreneur, Eugene de Juan Jr., to serve as the incubator’s CEO. De Juan, a professor of ophthalmology at the University of California at San Francisco’s School of Medicine, has co-founded five ophthalmic-device companies and holds more than 40 drug and device patents. One of the companies he founded, drug-delivery company InnoRx Inc., was acquired by publicly held SurModics Inc. last January.

Morgenthaler and Split Rock about two years ago had considered creating a vision-disorder company at The Foundry that would use a semiconductor technology, licensed from the U.S. Naval Research Lab, that de Juan had helped develop. The company would have developed an implantable device to treat diseases affecting the back of the eye.

Though they decided not to launch the company because of concerns about the technology, they were impressed by de Juan and asked him to help them form the new incubator after hearing late last year that he had been recruited to join UCSF from the University of Southern California. UCSF permits and encourages his work outside the university, de Juan said.

While ForSight represents the first foray into vision disorders for Morgenthaler and Split Rock, it is not new to Versant Managing Director William J. Link, who has joined the ForSight board along with Bellas and Split Rock Managing Director David Stassen. Link, who previously was the founder of Chiron Vision, a Chiron subsidiary that was acquired by Bausch & Lomb in 1997, has backed several vision-oriented device companies, including Glaukos Corp., a Laguna Hills, Calif., developer of an implantable device treatment for glaucoma.

The ForSight investors say they see opportunity to develop better treatments for conditions such as the wet form of age-related macular degeneration, which affects 1.5 million Americans and is the leading cause of blindness in people over age 50.

Existing drugs, such as Macugen, sold by Pfizer Inc. and OSI Pharmaceuticals, require frequent injections into the eye. A more patient-friendly therapy potentially could expand the market even further, de Juan suggested. Some of the companies ForSight creates may develop products that combine drugs and devices, de Juan said.

http://www.the-foundry.com