Marketing and Sales

Marketing and Sales

United States

     Our U.S. marketing roll-out objective is to gain acceptance of Intacs by both ophthalmic
surgeons and consumers. We have established two distribution channels to begin the initial
marketing efforts to the estimated 8,000 ophthalmic surgeons, of which an estimated 2,000 are
currently performing refractive surgery. The first channel is our direct sales force. We have
added refractive surgery business specialists and manufacturers' representatives to market
directly to ophthalmic surgeons. The second channel involves our accessing the use of refractive
surgery provider groups. These groups have emerged primarily to market laser- based refractive
surgery procedures. We have signed purchasing or distribution agreements with Laser Vision
Centers, Inc., NovaMed Eyecare, Inc., ARIS Vision and Vision America giving us access to
approximately 600 ophthalmic surgeons affiliated with these groups.

     Surgeon Acceptance. Our marketing program for ophthalmic surgeons involves several key
elements, including a skills transfer program and a practice integration program. We believe our
success depends on well- trained surgeons to ensure successful outcomes from their first
patients onward. High levels of patient satisfaction will develop the critical mass of patients
required to start and sustain the word-of-mouth process, an established driver of refractive
procedure volume growth. Prior to performing the Intacs corneal ring segment placement
procedure, ophthalmologists are required to go through KeraVision surgeon training. Our training
program is guided by six leading ophthalmologists who are part of the KeraVision's senior
training faculty and are highly experienced with the Intacs technology. The classes include a
comprehensive lecture and a surgical wet lab that can accommodate up to 20 ophthalmologists. A
detailed training manual is provided to each of the program attendees. Following the initial
training, we provide experienced personnel to provide on-site guidance for the ophthalmologists
through their first series of procedures. Through December 31, 1999, we have trained over 600
surgeons, including both primary doctors and their associates.

     KeraVision's marketing program includes significant post-training efforts to ensure rapid
integration of Intacs into each surgeon's practice. Our integration process includes education
of the office staff, development of patient education materials, including brochures and videos
and seminars with optometrists in the region.

     Prior to attending the training sessions, doctors are required to purchase an initial kit
consisting of two instrument sets, a vacuum system and 18 Intacs for a total price of
$45,000. If desired, the instrumentation may be leased. We have derived our initial revenues
from kit sales while we are working to build underlying procedure volumes to maintain and grow
future revenues.

     Consumer Acceptance. In addition to personal referrals, we intend to increase awareness of
Intacs through several other approaches. First, we have engaged in a public relations strategy
that has resulted in coverage on over 400 TV news programs and 3,300 print articles since
January 1999. Second, many ophthalmic practices currently use extensive marketing efforts to
market laser procedures. We believe that practices which integrate Intacs will use their own
resources to advertise and perform other activities to build procedure volume. Third, we may
elect to conduct co-operative advertising in conjunction with these practices. Fourth, once
there is a sufficient number of doctors trained and an adequate level of interest in Intacs
established within a region, we believe that a regional consumer marketing campaign may be used
to increase further market acceptance. Part of our strategy is to create the Intacs brand, which
is the first branded product within the refractive surgery market. The development of a brand
identity can facilitate consumer adoption by allowing consumers to ask for the product by name,
enabling focused advertising and fostering general awareness.

     Our initial marketing effort will focus on the estimated 20 million Americans who are
within the treatment range of our first product. Our efforts have focused on enhancing consumer
awareness, with a goal of increasing the volume of Intacs placement procedures to drive sales of
Intacs. We are also seeking to expand the market for refractive surgery to reach those consumers
who have an interest in refractive surgery but are concerned with other vision correction
surgical procedures that do not allow for the option of removal and placement.