Ophthalmic Optical Coherence Tomography Market: Past, Present, & Future
In 1992 the first commercial optical coherence tomography (OCT) company was started. It was called Advanced Ophthalmic Devices (AOD) and as the name implies was focused on the ophthalmology market. AOD grew out of research at the Massachusetts Institute of Technology, Massachusetts Eye and Ear Infirmary, and Tufts University New England Eye Center (NEEC) and was founded by James Fujimoto, Carmen Puliafito, and Eric Swanson. On August 27, 1993 Humphrey Instruments, which is now owned by Carl Zeiss Meditec, acquired AOD. As part of the acquisition, market data, technology, patents, and several ophthalmic prototypes systems were delivered to Zeiss and also to the NEEC and elsewhere for field testing. Zeiss, through a combination of market foresight, good engineering, marketing, distribution, and a strong patent position got a head start and enjoyed a virtual monopoly on the market for a decade. In 1996 Zeiss delivered the first commercial units for sale. It took some time for the market to evolve and the technology to mature. As with any new medical technology, it takes a long time to get market acceptance. OCT was no different. Zeiss went through several technology iterations of time-domain systems (and management debates) but stuck with OCT. By 2008 Zeiss announced they had delivered over 10,000 units to the market (reference). Assuming roughly $70k/unit, this translates to $0.7B. An impressive reward from a first mover advantage.
Slide 2 shows a plot of the ophthalmic OCT market size based on the above rough estimate. Today there are eight ophthalmic OCT companies eager to capture and own a share of this market - Bioptigen, Heidelberg Engineering, Optopol Technology, Optovue, Ophthalmic Technologies Incorporated/OPKO, Topcon, Tomey, and Zeiss - and more contemplating entering it (see slides 3-10). Most of these companies banked on fast development of Fourier domain detection (FD-OCT) systems as a way to get a technology lead over time-domain and thereby capture some market share. At the 2006 Annual Meeting of the American Academy of Ophthalmology Optovue announced the first FDA cleared FD-OCT (reference). The financial investments and technological innovations have resulted in truly impressive systems and today the clinical impact of OCT is outstanding. OCT has become an indispensable diagnostic instrument in the treatment of retinal diseases and has made substantial inroads into glaucoma management and anterior segment imaging. Millions of tests have been performed benefiting patients around the world. In contrast to the relatively slow market start back in 1993 for Zeiss in which they had to create the OCT market, Fourier Domain systems have moved relatively fast. On July 17th, 2008 Zeiss announced they had shipped 1,000 Cirrus systems (reference) and on November 13th, 2008 Optovue also announced they has shipped 1,000 RTVue systems (reference).
The surge in competition in FD-OCT had led to a spate of commercial innovations. Ultrahigh-resolution OCT, only recently an exclusive domain of research laboratories, is now commercially available from Bioptigen (Slide 11) and Optopol (Slide 12). Eye tracking has been introduced to register OCT sections to scanning laser ophthalmoscope fundus images, and improve OCT image quality by averaging frames (Slide 13). Disease-specific software are now available to help diagnose and track glaucoma using the macular ganglion cell complex map (Slide 14) and detect keratoconus using the corneal thickness map (Slide 15). Swept-source OCT was introduced by Tomey for anterior segment imaging. OCT has long promised the concept of an in situ "Optical Biopsy" – and with today’s resolution and segmentation algorithms it is coming to fruition. Unlike conventional excisional biopsy, OCT can provide cross sectional images of tissue at near histological resolution without the need for excision and processing of a biopsy specimen (Slides 16-18).
The future is hard to predict but some general conclusions can be drawn. The first is that with the depressed worldwide economy, sales are going to be slower and engineering development dollars are going to be harder to find and justify to investors and managers. Second, not many markets divide nicely for nine companies. Typically the first three to five companies own the vast majority of any given market. Third, lots of competitors in a given field usually spell reductions in profit margins. These and other factors may slow the rate of innovation or lead to consolidation. There remain some big traditional ophthalmic instrumentation companies without an OCT product and they may look to acquire smaller companies. Others have established partnerships and there is a strong possibility that non-traditional ophthalmic instrumentation companies may enter this space by acquiring technology.
There are, however, lots of bright spots and opportunities. Slide 19 shows a plot of the number of OCT papers, for all subjects and for ophthalmology, published in refereed journals (and some conferences) from 1991 (Huang OCT Science paper) to 2008. While it is difficult to determine what is an "OCT" journal article, these simple bounds were determined by articles that mention OCT in the title and abstract. Slide 20 shows the cumulative issued U.S. patents that mention OCT in the specification, claims, and title & abstract. It is clear that ophthalmology dominates the publications and that there is still tremendous effort and innovation at research universities around the world that will lead to incremental improvements that can be capitalized on by ophthalmic OCT companies, perhaps through partnerships and licensing. Companies will seek differentiation with higher speed, larger scan volumes, higher resolution, and improved software algorithms (segmentation, rendering, and disease-specific diagnostic aids) and better user interface and data management features. There are also new ophthalmic markets to tap into. For example, sales into the corneal, anterior chamber, refractive and cataract markets are still a small fraction of what may be possible. There are exciting publications in these areas (e.g. enter "anterior chamber" in search box). Doppler OCT is being introduced for retinal blood flow measurement, and polarization-sensing OCT may introduce novel contrast for retinal imaging and retinal nerve fiber layer measurements. Other researchers have looked to multi-modality imaging - integrating OCT with other modalities such as Raman, Fluorescence, and ultrasound (e.g. search Raman, fluorescence, or ultrasound) - and show promising results. And finally, several innovative companies and researchers are looking at hand-held devices (e.g. search "hand-held"). In the future an OCT battery powered device with a micro-display, compact micro-optical technology, a few custom ASICS and other electronics, and wireless high speed interface may power a hand-held device as light and flexible as today’s ophthalmoscopes.
David Huang, MD, PhD
Assoc. Prof. of Ophthalmology & Biomedical Engineering
University of Southern California