In a warehouse in Sylmar, a team of 85 scientists, engineers and technicians are helping the blind see. Second Sight Medical Products Inc. made headlines around the world this year when it announced approval from the Food and Drug Administration for its Argus II Retinal Prosthesis System. The device, implanted behind the eye and then connected to an external, glasses-mounted camera, restores very limited sight to patients suffering from retinitis pigmentosa, a degenerative disease that causes blindness. But now comes the hard part: getting the device to those who can benefit from it. “For any medical device company at this stage, it’s really about overcoming the barriers to entry to the market,” said Dan Mendelson, chief executive of Washington D.C.-based insurance and reimbursement consulting firm Avalere Health LLC. “And with the limited-scale testing common in medical device companies, it can take a number of years before private insurers see the value proposition of it.” The high cost associated with the bionic eye makes that value especially difficult to prove. Currently, the cost in Europe is estimated at around $96,000, but it can be much more once surgery, maintenance and follow-up are factored in. And costs will be higher in the United States, though the company does not yet know how much given the FDA may require small technical changes for the implants. It has been estimated at $150,000, plus the cost of surgery, which can be tens of thousands of dollars. Second Sight has applied to Medicare for approval for reimbursement, as most patients who qualify for the device are also Medicare eligible because of their disability. But even if the government were to approve the procedure, it wouldn’t necessarily lead to private insurers covering the procedure right away. Additionally, the company must train doctors, an expensive proposition, and is ensuring one trained surgeon is on hand for all first-time doctors. All those costs are for a single eye. Currently, the device can only be implanted in one eye for technical reasons, and the costs are expected to be much higher when the capability to add a second eye is achieved. The device works like this: a small implant, about the size of a large marble, is secured behind a patient’s eye. Inside are 64 tiny receptors, which gather light and spatial information in black and white, sent to them from a camera mounted atop a pair of specially designed sunglasses made by Oakley Inc. in Foothill Ranch. The device then transmits the information to the optic nerve, which in turn allows the patient to “see” shapes. For now, patients must wear the glasses and carry around a processor roughly the size and appearance of an old Walkman. But this is just the second iteration of the device, which has been some 20 years in the making. Chief Executive Robert Greenberg said the first non-trial U.S. patients will get the device this year and that the company is already working on improvements. “We’re going to be getting this device to patients in the U.S. this year, absolutely,” he said. “And we’ve already applied to make upgrades to the approved device.” Passion project Alfred Mann, the Los Angeles billionaire who made his money in aerospace and medical devices, co-founded Second Sight based on research at University of Southern California. Mann remains Second Sight’s largest investor, followed by the Williams family, whose Williams International Inc. in Commerce Township, Mich., made a fortune manufacturing small jet engines. Silicon Valley firm Versant Ventures is the only venture capital partner. To date, the firm has raised $130 million: $100 million from private investors and $30 million in grants from the National Institute of Health and other agencies. “I think a lot of people have really wanted us to succeed in this,” Greenberg said. The first version of the Argus, which was tested in humans just four years ago, was nearly twice the size of the current device, and had just eight receptors compared to the 64 now in use. This means the vision has gone from mere shades of grey to enough refinement that patients can actually read large letters. “The brain fills in a lot of the information if they scan for information, but it’s by no means crisp,” said Greenberg. In the works is software that could process vision, now varying-grayscale shades, in color. Eventually, the goal is for the device to be smaller, implantable in both eyes, and perhaps more stylish. The device is also limited in patient reach. Its FDA approval allows patients suffering from retinitis pigmentosa, a degenerative disease, to get the implant. But Greenberg said he expects the firm to apply for expanded use in the near future. In fact, the company has already made some changes. Since it submitted for FDA approval two years ago, technical advances in manufacturing mean the implant today is slightly different than the one that was approved. “A few months ago, we filed those changes with them, so we’re hoping it will be a quick process to get that approval,” he said. Until then, the company is using the lag time to build infrastructure for commercialization in the U.S. Until now, the only patients who have the device were those that participated in trials – 30 people in total. That means the only doctors or clinics who can implant the device are ones that participated in those trials as well, six clinics in total. “We’re looking at additional clinics who want to be part of what we’re doing,” said Brian Mech, business development director for Second Sight. “We want to have a dozen by the time we launch later this year.” Clearing hurdles This year, the company expects revenue of just over $5 million, primarily from its European operations. It will begin marketing in the U.S. later this year. But it will be some years before the firm is profitable. “We really kept to ourselves for a lot of years,” Greenberg said. “We didn’t have to really go out on tour to raise funds, so we were able to focus on the product. But yeah, now that we’ve announced the approval, we’re getting all sorts of offers.” Those offers range from strategic partnerships with larger firms to private investors, though Greenberg declined to go into detail. He said the company hadn’t ruled out going public if it needs to raise funds. To get an idea of the future of Second Sight, take a look at what was once its sister company, Advanced Bionics AG, which is now a subsidiary of a Swiss firm. Another Mann-backed project, the firm secured approval for an early version of its primary product, a cochlear implant that restores hearing to deaf patients, in 1993. But high costs and debate over the benefits mean that despite success, the implant is far from a common procedure. Even today, as costs have declined and competitors have taken up some of the market share, the cost of a cochlear implant can run upward of $100,000, depending on where or who does the surgery. But it has gained in popularity in the deaf community, and more than 100,000 people worldwide now have an implant.