BY ALAN M. WOLF – Staff Writer

A small medical-device company in Morrisville has won regulatory approval for its system to diagnose and treat a common form of dry-eye disease.

TearScience will announce today that it received clearance from the Food and Drug Administration for its LipiFlow system. Company officials hail it as a big breakthrough for millions of patients who suffer from the ailment and rely mostly on eye drops for relief.

It’s also a major milestone for the company, which plans to hire up to a dozen more people to handle sales and customer service. While the Triangle is home to many small companies developing experimental drugs or devices, there are few that have received FDA approval to start selling their products.

The process took more than three years, about twice as long as initially expected, said TearScience co-founder and CEO Tim Willis.

“It was very exhaustive,” he said. “The positive thing is that we know without a shadow of a doubt that our product works, that it’s safe.”

Now the real work begins. TearScience needs to shift from a development stage company to making its LipiFlow system and marketing it to eye doctors across the country.

“Companies that don’t do it right, they can have major hiccups,” said Willis, 56, aserial entrepreneur who has helped start six medical-device businesses during his career.

The company hasn’t determined LipiFlow’s final price, which will be based partly on each eye clinic’s volume. But the system is likely to cost $100,000 or more. It has four or more components, including a handheld scanner and a device resembling a desktop computer with connections that attach to patients’ eyes.

For patients, the treatment isn’t yet covered by insurance, which is another potential obstacle, said Alan Carlson, professor of ophthalmology and chief of the corneal and refractory surgery service at Duke Eye Center in Durham.

Regardless, he hails TearScience’s device as a huge improvement over eye drops and other existing therapies that are often ineffective or cumbersome for patients.

“This is a procedure that improves the function of the eye and restores the ocular surface to a much healthier state,” he said. “We see patients on a daily basis who will benefit from this.”

Carlson is a scientific advisor for TearScience but said he has put stock options he received from the private company into a charitable trust to avoid any conflict of interest.

Another challenge is that TearScience now needs to make more of its system. It’s on back order for customers in Canada, where it is already approved by regulators. A large eye clinic in Toronto began using the system this month.

It’s likely to be six months before the company and its contract manufacturers have more ready for clinics in this country. That means it could be next year before local patients will see them.

“You can’t just turn the switch and have product pop out the next day,” Willis said. “The good news is we have a lot of work to do.”

The company already employs 32 people and recently moved into larger offices in anticipation of expanding its marketing efforts.

65 million affected

The company’s device is designed to treat so-called evaporative dry eye by warming oil glands in the eyelids to clear any obstructions.

If the glands don’t produce enough oil, it can lead to symptoms such as itching and burning eyes.

TearScience estimates that the disease effects 65 million people worldwide. Carlson said an aging population that spends too much time staring at computer screens will increase the number of patients who need treatment for dry eye.

The company expects to convince ophthalmologists that its technology is better than what’s already on the market.

“They’re not happy with the treatment options for patients,” said Jeff O’Hara, TearScience’s vice president of sales for North America. “But it does take an education process because we are truly changing the mindset of doctors.”

On the business side, Willis declined to comment on when TearScience might break even or start making money.

The private company has raised $70 million in venture-capital financing since it started in 2005.

At this point, TearScience doesn’t need more money, Willis said.

That’s not to say he would refuse additional financing at the right price.

“I’m a country boy and I never turn down cash,” he added.