Australian and Israeli-based biotech startup Azura Ophthalmics has raised $US16 million ($20 million) to fund treatments for a disease many in the startup world may not be aware of, but which affects 300 million people worldwide: meibomian gland dysfunction, a leading cause of dry eye disease.
Meibomian gland dysfunction (MGD) is responsible for at least 70 percent of dry eye cases, according to Azura Opthalmics chief executive Marc Gleeson, who says there are currently no pharmaceutical treatments available for this uncomfortable condition.
The meibomian gland produces a lipid that protects the eyeball with a thin film, and plays an integral role in vision quality, according to Gleeson. In post-menopausal women and people with autoimmune deficiency, however, the eye’s surface can often deteriorate as individuals age, causing discomfort and damage to the eye.
“We believe we are the only company developing a pharmacological agent to treat this,” Gleeson tells StartupSmart.
“A lot of research to date has been associated with the inflammation associated with the end stage [of MGD], but we are targeting the upstream so we can prevent the downstream effects,” he explains.
The startup will use the $20 million raised to conduct clinical trials in Australia for a pharmacological product that will treat MGD by repairing dysfunctional meibomian glands. The trial will be conducted with 120 MGD patients in collaboration with the University of New South Wales and the University of Melbourne, as Azura looks to get the product approved by the US Food and Drug Administration (FDA).
The startup raised the funding from Brandon Capital’s Medical Research Commercialisation Fund (MRCF), TPG Biotech, OrbiMed and US family fund Ganot Capital, after previously raising $US1.2 million in a Series A round in 2014 from Ganot Capital and Israel’s Elron Industries, Gleeson says.
Investors keen to cash in on medtech
Gleeson says in Australia there is definitely “a lot more willingness to invest in biotech and medtech” with interest in the space from both the government and private sectors.
“There’s definitely willingness at a policy level as well as at a VC level to invest, and it’s an attractive environment,” he says.
“There’s been successes for investors [through exists] that continues to breed and energise the sector.”
As one of the largest capital raises for a biotech startup this year, Gleeson admits this deal didn’t happen overnight, but rather required patience in seeking out the right investors that fit well with the company’s future ambitions.
For startups similarly operating in the biotech or medtech sphere, where the problem you’re solving can’t be as easily described as ‘the Uber for’ something, Gleeson advises being clear and concise when pitching to investors.
“Make sure that the fundamental basis of the tech is clear, and try and limit the ambiguity around what you’re trying to do so everyone has a clear understanding of the steps to success and the incremental milestones along the way,” he says.
Laying out detailed, achieveable milestones is crucial to communicating your startup’s vision for the future, Gleeson says, adding that the process of innovation “only happens in incremental steps”
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Australia’s attractive regulatory environment
While Azura was founded and headquarted in Israel, Gleeson, who is Sydney-based, says the startup decided to incorporate in Australia because it could leverage research incentives to support its clinical trials.
Gleeson says the company’s founder, Yair Alster, decided to conduct trials and develop the treatment in Australia because of its “attractive regulatory environment for early-stage clinical trials”.
Alster had previously undertaken clinical work in Australia for his previous startup, Forsight Vision5, and the experience opened his eyes to Australia’s “favourable regulatory environment”, Gleeson says.
Gleeson also points to the government’s R&D Tax Incentive, which sees eligible companies undertaking research and development in Australia receiving a refundable tax offset, as offering an attractive way for Azura to “preserve valuable capital”.
When paired with internationally-recognised universities, clinicians and research facilities, he says Australia was an attractive market for the startup to lay down roots.
“There are world-leading clinicians in this area, and when you couple that with the attractive regulatory environment, we can do it [develop our product] in a capital and time efficient manner in Australia,” Gleeson says.