Q3 2022 Sight Sciences Inc Earnings Call

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The conference will begin shortly.

Raise your hand during Q&A, you can dial star one one.

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Good day and thank you for standing by welcome to the <unk> Sciences third quarter 2022 earnings results Conference call. At this time, all participants are in a listen only mode.

The speaker's presentation there'll be a question and answer session to ask a question during that session you will need to press star one one on your phone please.

Please be advised that today's conference is being recorded.

I would now like to hand, the conference over to your Speaker today, Mr trip Taylor Sir Please go ahead.

Thank you for participating in today's call presenting today are clients, whose cofounder and Chief Executive Officer, Paul <unk>, and Chief Financial Officer, Jackie Celnik earlier today <unk> Sciences released financial results for the three months ended September 32022, a.

A copy of the press release is available on the company's web site at investors <unk> Sciences Dot com.

To remind everyone that comments made by management today and answers to questions will include forward looking statements within the meaning of the federal Securities laws.

Statements related to <unk> Sciences anticipated financial performance and operating results market opportunity the future impact of COVID-19 on operation business strategy and plans for developing and marketing new products forward looking.

Statements are based on estimates and assumptions as of today and are neither promises nor guarantees and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied by these statements.

A description of some of the risks and uncertainties that could cause actual results to differ materially from those indicated by the forward looking statements on this call can be found in the risk factors section of the annual report on Form 10-K filed March 24, 2022, and other filings with the Securities and Exchange Commission.

The company undertakes no obligation to publicly update or revise any forward looking statements, except as required by law for more information. Please refer to the forward looking statements notices and risk factors in the recent SEC filings.

I will now turn the call over to Paul.

Thanks, Tripp and thank you all for joining us.

Our third quarter results reflect continued strength and execution across our entire business.

We are pleased with the progress we are making penetrating and expanding both the mix and dry eye treatment markets.

Taking the necessary steps to position the business to reach positive free cash flow in 2025.

In the period, we achieved total revenue of $18 7 million, representing 43% growth year over year and 8% growth sequentially.

Surgical glaucoma revenue grew 37% year over year, and 7% sequentially to $17 1 million in the third quarter and dry eye revenue grew 145% year over year and 21% sequentially.

We ended the quarter with just under $200 million of cash, which we currently expect will be more than enough to support our growth plan until we reach cash flow breakeven.

At Jesse will elaborate on in his remarks, we plan to achieve our intermediate growth targets with more moderate head count growth and significant reductions in non labor operating expenses.

We expect to significantly reduce cash burn in 2023 and going forward, while driving continued robust top line growth.

We achieved several milestones in the third quarter, including one the successful introduction of scion, our innovative blade less goniotomy device.

<unk>.

The complete enrollment of Sahara, our transformative dry eye RCT for the tier care system.

And three the publication of multiple peer reviewed articles featuring compelling clinical data that demonstrates expansive market opportunities for both omni anti air care.

Each of these commercially minded achievements strengthens our foundation for long term market leadership and charged greenfield path to growth in both glaucoma and dry eye.

Now I would like to discuss the highly productive third quarter in detail for both of our business units starting with surgical glaucoma.

Our core mission and surgical glaucoma until quip surgeons with the best possible solutions for their primary open angle glaucoma or.

Patient, regardless of severity of disease or cataract lens status.

The bulk of today's penetrated Migs market consists of procedures performed in conjunction with cataract surgery due to the narrower indications for use of legacy implants.

This has resulted in an artificial bifurcation of the mixed market into combination cataract, a $1 billion opportunity and stand alone of $5 billion opportunity.

We further segment the market based on severity of disease with mild and moderate patients each accounting for approximately 40% of the patient population and advanced patients representing the remaining 20% of the patient population for both the combination cataract and Standalone segments.

Mild and early moderate combination cataract patients comprise the most of the well established segment of the Migs market today and surgeons have the broadest array of surgical device options to treat these patients.

And rough numbers. This represents approximately a $400 million opportunity for patients with mild <unk>.

And a $200 million opportunity for patients with early moderate.

<unk>.

The $600 million segment, representing just 10% of the overall mix opportunity.

Has attracted the most commercial interest thus far due to the narrower indications for use of first mover products, coupled with the lower expectations for disease impact and changes in patient site.

We believe the remaining 90% of the market on nearly $5 $5 billion opportunity requires a greater level of efficacy and consistency to satisfy the needs of these surgeons and patients.

Stated another way, we believe the vast majority of Migs market growth over the next decade will be driven by devices that offer increased and reliable efficacy within the rapidly expanding moderate to advanced combination cataract segment and the entirety of the growing Standalone segment.

This is where we excel.

Today, we offer two best in class solution that are rapidly gain market acceptance, our flagship omni surgical system and our newly introduced ion surgical instruments.

I on the world's first Bladeless Goniotomy device has been extremely well received by our surgeon customers and we expect it to thrive in the established penetrated and more competitive mile to early moderate comp.

Combo cataract segment, especially in cases, where consideration such as efficiency and ease of use may take priority.

We anticipate that use of omni we will continue to expand the combination cataract and Standalone segment due to its proven efficacy superior design and intuitive use it remains our flagship <unk> product.

We believe use of omni has extended makes interventions to combo cataract patients beyond mild in well into moderate and even advanced disease. When doctors need a strong result, we believe using omni is the most effective and trusted solution due to its comprehensive mechanisms of action that can treat the entire 360 degrees of disease conventional outflow.

Pathway and address all sources of outflow resistance.

We are confident that omni possesses the requisite clinical functionality and clinical results to compel long term market expansion and penetration of the remaining 5 billion plus migs market opportunity.

Our surgical commercial goals are one continue expanding the large and growing moderate to advanced disease combination cataract and standalone mixed segments based on omnis differentiated efficacy profile.

To drive adoption and utilization of scion among specific subsets of surgeons, who may prioritize faster simpler procedures and.

And three increase our total share of Migs with omni and scion, while also growing the overall migs market.

Omnis adoption and utilization continues to grow among existing make surgeons, we believe that our efforts to support this adoption and growth have not only resulted in continued.

But <unk> also expanded the combination cataract segment to include a broader spectrum of Poa G patients due to omni superior and consistent efficacy.

We continue training, new surgeons with our technology, while increasing omni utilization in existing accounts.

Because of omnis differentiated efficacy position, we continue to enjoy outstanding surgical glaucoma account retention, especially in the market expansion segments, where efficacy really drives decision making.

Our brand and identity as the market expanding efficacy leader in Migs continues to grow as the surgical community medical societies, and payers better understand the efficacy and consistency of omni as demonstrated in real world results and clinical trials.

The support from both new and existing surgeons reaffirms our confidence that the use of omni will continue to grow that migs market and serve as the foundation all Migs procedure.

He is currently the only device with an FDA cleared indication for AB internal use to lower IOP in post cataract adults with <unk>.

Based on its differentiated usability and clinically demonstrated efficacy. We believe omni has demonstrated optimal product market fit for a continued mixed market expansion and we strongly believe in its ability to remain on top of the efficacy driven migs market expansion categories.

Based on our analysis of third party projected claims data and our observations in the field.

Lead us to believe that omni continues to expand the migs market. Our claims analysis indicates that growth in U S. Omni shipments outpaced the total makes utilization growth rate by over 40% for the LTM period, ending in the third quarter of 2022.

We are working to accelerate the adoption of omni is the leading stand alone makes intervention and we continue to focus our efforts on demonstrating the safety and efficacy of omni in all use cases through peer reviewed publications market education and commercial execution.

Over 1 million eyes have received trabecular bypass stents, primarily in mild to moderate combination cataract cases as glaucoma is a progressive disease over time. These patients may require further intervention to lower their IOP.

In October International Ophthalmology published a peer reviewed article based on data from Trey Our multicenter IRB approved study designed to evaluate the effectiveness and safety of omni in Ais with uncontrolled IOP. Despite a history of trabecular micro bypass stent implantation in conjunction with cataract surgery.

And medication usage.

Were all the findings demonstrated significant benefits of Standalone omni interfaith intervention for patients with a history of foreseeing receiving combination cataract stent procedures.

This unique clinical data provides strong validation of omni has potential to provide benefits throughout the entire lifecycle of <unk>.

At the European Glaucoma Society Congress in Greece, Mig surgeon presented omni data, demonstrating durable safety and efficacy over three years.

<unk> standalone use of omni in patients with open angle glaucoma.

We expect to see further studies to corroborate these impressive long term results in the future.

We're also very excited about significant clinical research project involving comparative real world clinical data for the most common mixed procedures held within the Aaas IRS real world patient data registry that we believe will help stakeholders, including patients providers and payers better understand.

The performance of leading Migs devices in everyday clinical practice.

We look forward to sharing the results of this very informative comparative analysis of clinical evidence based on thousands of real world mix cases over the coming months.

Commercially our team of glaucoma clinical consultants continue driving standalone utilization of omni we have seen uplift in certain GCC markets and have identified the initiatives that deliver the greatest impact we have begun standardizing. These best practices throughout our GCC territories to help drive omni utilization with our within our growing.

Installed base, we're learning fast optimizing our market development and institutionalizing best practices every single day, driving scale and leverage for our commercial efforts that is showing up ultimately in our continued customer stickiness and strong top line performance.

The entire site Sciences product portfolio was featured in presentations by top Kols at the American Academy of Ophthalmology, and European Society of cataract and refractive surgeons meeting.

We hosted peer discussions between surgeons and provided demonstrations of our products.

Level of interest and engagement was very encouraging for both omni and Sai on the focus of our third and newest growth initiative for surgical glaucoma.

In mid August we launched <unk> with a group of select surgeons. The initial feedback was extremely positive and we are very pleased with the success of our broader commercial rollout in progress now.

Scion enables a complimentary revenue opportunity, while allowing us to expand our reach to serve specific subset of customers, who may prioritize a faster simpler procedure side.

<unk> is the world's only bladeless goniotomy device and represents our third consecutive best in category device satisfying.

The American Academy of Ophthalmology definition of Goniotomy and aligning with CPT code 65820, scion is designed to allow surgeons to smoothly and efficiently and reliably exercise and remove several clock hours of diseased trabecular meshwork tissue via an app and turn our approach.

Our target customers for scion includes three types of combination cataract surgeons that are distinct from target omni customers.

Number one high volume cataract surgeons only looking to perform that quickest makes procedures.

Number two surgeons, who are initially less experienced with migs, such as surgical fellows at academic institutions and.

And number three surgeons looking for the most cost effective makes procedures and facilities that may emphasize procedural profitability.

These surgeons are use cases have very little overlap with our flagship omni device.

We have seen evidence that some scion surgeons will also consider using omni as they grow familiar with the best in class technologies, we offer.

Because our target customers for scion fit within the existing call patterns for our surgical glaucoma sales team the fixed investment necessary for customer acquisition is substantially already in place.

Transitioning now to our dry eye business, where we are focused on establishing fair market access and reimbursement for dry eye treatment procedures.

While <unk> continues to expand the current cash pay market, we remain committed to generating strong clinical data that will help us achieve appropriate reimbursement, which if successful would hugely expand the evaporative dry eye market.

In August clinical ophthalmology published comparative symptoms clinical data on advanced dry eye patients from the Olympia RCT, which represents further progress establishing <unk> as a leading dry eye treatment.

The authors of this analysis concluded that the tier care procedure delivered superior symptoms improvement quality of vision and symptom frequency overlap of flow in patients suffering from advanced dry eye disease.

This data reinforces our confidence in the clinical and economic value that <unk> brings to patients providers and payers.

I am pleased to announce that we completed patient enrollment for our Sahara RCT ahead of schedule. This keeps us on track to provide our randomized safety and efficacy readout appear care versus the leading prescription eye drop medication restasis by the second half of 2023.

As a reminder, Sahara was designed with input from medical directors at payers to provide the clinical foundation of obtaining future reimbursement coverage if successful.

In parallel we are intentionally growing our installed base of tier care users in todays cash pay market and believe reimbursement, which stimulate immediate growth of tier care procedures.

In summary, we remain well.

Well positioned to continue distancing ourselves as the market leader in mix and dry eye and to increase the number of patients we serve.

Our commitment to growing physician adoption and utilization across our product portfolio can support strong growth over the coming years.

Leveraging our strong revenue growth trajectory and gross margins, we are committed to a disciplined and lean operating budget that will allow us to optimize our considerable resources with a clear path to profitability.

I will now turn the call over to Jesse <unk> our CFO .

Thanks, Paul.

We posted record third quarter revenue of $18 7 million, representing 43% growth year over year.

Eight 4% growth sequentially.

This is an extremely strong result in a weak seasonal quarter in our industry.

As a point of comparison in the third quarter of 2021, we grew only four 5% sequentially that we achieved 77% revenue growth for the year.

Both omni and tier care performed well in the quarter and we comfortably exceeded consensus revenue estimates, even without science small revenue contribution in the tail end of the quarter.

Overall, we are quite pleased with our progress as we strengthen our leading position through continued share growth and market expansion and our two more established products and <unk> fully launched into the market in the fourth quarter and into 2023.

Our surgical glaucoma revenues for the third quarter were $17 1 million up 37% from $12 4 million in the third quarter of 2021 and sequentially up seven 4%, which represents a nearly 400 basis point improvement over our comparable sequential growth in the third quarter of 2021.

We continue to show strong underlying growth fundamentals and retention in order and facilities, while utilization increased notably which is a critical measuring stick for our market expansion efforts behind on me.

913 facilities ordered army during the third quarter compared to 875 facilities in the second quarter.

Concerning the continued combination of strong new customer acquisition activity and our high retention rates.

Our developed customer retention rate, which is designed to measure the percentage of our embedded facility base from the previous quarter. The reorders in the most recent quarter was over 99% in Q3.

Surgical glaucoma customer acquisition funnel remains strong for both products, which creates great momentum for the rest of 2022 and then into 2023.

In the third quarter of 2022, we trained over 160, new omni surgeons in the U S, bringing us to a total of nearly 200 U S. Surgeons trained on army and also trained over 120 surgeons on Si.

Given the universe of U S. Migs trained surgeons is estimated to be approximately 5600.

Obviously have a substantial amount of remaining runway to continue to rollout both products to targeted surgery.

Our dry segment revenues for the third quarter were $1 6 million.

Up 145% from <unk> 7 million in the third quarter of 2021, and a sequential increase of 27% from the second quarter of 2022.

Grew our install base to 881 facilities at September 32022 from 762 as of June 32022, and 497 at the end of the third quarter of 2021.

We were at a super exciting time in our tier care commercial lifecycle as we've had great success. This year in growing our installed base and are now complementing that activity with efforts to drive utilization and consumption in our base and our base in anticipation of Sahara Readouts in mid 2023.

A potential reimbursement breakthroughs thereafter.

Our combined gross margin for the third quarter was 84% consistent with 84% for both the corresponding prior year period.

And the second quarter of 2022.

Gross margin in surgical glaucoma was 89% in the third quarter compared to 87% in the prior year period and 88% in the second quarter of 2022.

Gross margin in dry eye was 38% in the quarter versus 33% in the prior year period and 41% in the second quarter of 2022.

We remain very pleased with the performance of our operations group on both sides of the business in the face of global supply chain issues.

SG&A expenses for the quarter were $31 5 million, which was in line with our $31 4 million of SG&A in the second quarter and an increase of $28 million in the third quarter of 2021.

This quarter exhibited the early impact of our cost optimization initiatives and modest head count reduction we made in the third quarter. So those initiatives are still ongoing and will result in an additional non labor efficiencies in Q4 and into 2023.

Q3 reported SG&A includes several nonrecurring expense items related to our cost of ops optimization program, such as severance, which I will discuss in further detail shortly.

Approximately 50% of our year to date, SG&A expenses headcount related which gives us great flexibility to accelerate or decelerate a large portion of our non labor opex as needed to appropriately fuel our growth while managing liquidity.

That being said, our FTE FTE count will be a key driver of the FCA SG&A line item.

As of September 32022, we had 250 full time 253 full time employees versus 284 at June 32022, and 197 as of September 32021.

R&D expenses for the quarter were $6 1 million compared to $4 3 million in the third quarter of 2021, and $5 9 million in the second quarter of 2022.

In total operating expenses for the third quarter were $37 6 million, a 50% increase from $25 1 million in the third quarter of 2021, and essentially flat to the second quarter of 2022.

Included within the $37 6 million was $3 2 million of noncash stock compensation, and depreciation and amortization expense $1 7 million of severance of pre termination comp expense for positions eliminated during the quarter.

$1 million one of expense related to the termination of certain clinical programs, which we've discussed on our second quarter call and approximately $1 million of additional nonrecurring items.

Excluding these items our operating expenses in the quarter would have been approximately $30 5 million, which we believe is a fair representation of our current cost structure going forward.

Our leadership team is close to finalizing our operating budgets and investment envelope for 2023 with the twin pillars of cost discipline and smart investments in our future.

We believe we can meet all of our goals in 2023, while maintaining quarterly normalized recurring cash operating expenses near the $35 million level from the third quarter.

This investment in our business will support our near term growth requirements and fund a number of high value pipeline and market development activities to create long term value more.

More than 10% of our operating expense budget in 2023 will be earmarked for discretionary investment projects that can be flexed under canceled without any impact to our core operations.

Our loss from operations for the three months ended September 32022 was $21 8 million compared to a loss of $22 9 million in the second quarter of 2022 and $14 million for the third quarter of 2021, we.

We had a net loss of $22 $2 million 46 per share in the quarter based on a weighted average share count of 47 9 million shares compared to a net loss of $17 2 million or <unk> 43 per share for the third quarter of 2021 based on a weighted average share count of $39 8 million shares.

We ended the quarter with $199 8 million of cash and cash equivalents and $33 million of long term debt, including $2 million of debt discount.

One note on our debt facilities that we fully expect to meet the requirements necessary to extend our principal amortization to two.

December 2023 at which point, we have the ability to further extend the amortization another year subject to certain conditions.

As evidenced in our discussion of our operating expenses, we continue to proactively manage our liquidity and operating expenses to maintain our strong cash position.

We are confident that our strong balance sheet, leading gross margins and disciplined spend can support positive free cash flow in 2025, while maintaining substantial cash cushion in reserve.

Finally, turning to our outlook for 2022, we're tightening our full year revenue guidance range to $70 million to $72 million based on the strength of our performance in Q3 and confidence in our trajectory in Q4 that headed and heading into 2023.

For the year the range implies annual growth rates of approximately 43% to 47% over 2021.

In summary, we continue to make substantial progress revolutionizing the glaucoma dry markets, we remain committed to leveraging our technology to improve the lives of patients with dry eye disease and continuing to produce excellent financial results similar to those in Q3.

I'll now turn the call back over to Paul for some concluding comments before we open up the call for Q&A.

Thanks Jesse.

Before we head into Q&A. Some brief summary comments and why we are so enthusiastic on where our company is positioned today.

One we grew eight 4% sequentially in Q3, a much higher growth rate in third quarter of 2021 during a 77% revenue growth year.

Number two we've created an extremely robust growth funnel by training, new surgeons and winning new accounts at levels that we believe will support our near and medium term growth objectives.

Number three we are actively expanding the actionable addressable market with compelling real world clinical data and studies like Trey.

Number four we will remain disciplined on Opex and committed to our outstanding unit economics with another mid <unk> gross margin result for the quarter, which placed us in a confident liquidity position.

And lastly, we just want to thank all of our physician customers and patients for their trust in us and our employees for executing our vision with excellence.

This concludes our prepared remarks, operator, please open up the call for questions.

Thank you.

As a reminder to ask a question you will need to press star one one on your phone.

Please standby as we compile the Q&A roster.

Yes.

Yes.

One moment please file first question.

Our first question will come from Mike <unk> of William Blair. Your line is open.

Hi, guys. Thanks for taking the question and congrats on the quarter.

Wanted to ask Scott update some of the trial and we have seen so far throughout the year. So you guys had previously said you expect this to continue into the second half, but now that we're adding.

I think towards the end of the year and nearing 2023, what are you guys seeing recently on the competitive Trialing cycle do you expect some of these headwinds to continue into next year at all.

Okay.

Yes, hi, I'll take that.

I think it's I think it's quieter.

The competition is out there and I will just say as it relates to competition.

Ive always found the best way to compete is to elevate your game to a level, where others can't keep up.

Yes, we should give our competition credit for their efforts this past year.

But the simple reality for US is we've continued to elevate ourselves and our continued growth.

Continued performance that speaks for itself.

And the momentum we are generating will carry us straight into 2023.

Site, where we elevate and outperform through product design excellence customer focus and we never lose sight of the fact that helping our eyecare professionals better treat their patients.

As our opportunity and our obligation to <unk>.

Today.

The two fastest growing segments in Migs, Goniotomy and can Alloplasty and we're fortunate we believe we have the.

To best in class products for those two fast growing segments, where omni omni in the <unk> segment, and Zion and the Goniotomy segment.

And through through our rapidly growing user base, we're hearing routinely.

That omni is being referred to as the most efficacious product and mix.

So why does why does that matter.

It matters, because preventing visual field loss progression with glaucoma requires efficacy.

Efficacy that omni has proven to deliver in multiple peer reviewed publications and through real world surge and outcomes.

So.

With scion, leading the way in Goniotomy with omni, leading the way and can alloplasty anatomy and expanding the market we feel very confident.

In our possession and again our performance in the third quarter speaks for itself. The momentum we have right now speaks for itself and I don't think we've ever been more bullish.

Heading into a new year than we are today.

Okay.

Got it and then maybe a quick one on the market development side of things. So you mentioned <unk>.

<unk> accounts some of them have seen higher growth in some of the non KCP accounts are you guys planning on expanding the team of Gcc's moving forward and are there any other market development efforts that you are working on a plan that we should be thinking about thanks for taking the question.

We're actually at this stage.

Where what we're doing is we were taking the best practices of where there's been tangible successes within the GCC team and we're rolling them out and we're integrating it across the organization. So.

There is.

We anticipate.

Continued contribution and contribution increase from that investment, but we're not we're not increasing our investment today, because we've got several quarters ago.

Good learnings about where their efforts have been successful.

And we will generate a nice return by just institutionalizing that across the organization.

I'd, just like to add to that on Standalone market development, because it's important it's really driven by two tactics, one identifying and educating.

Patient and primary care providers on omnis unique design.

It's got a design that allows doctors to address the entire disease to outflow pathway in all three sources of resistance in that pathway.

Those kinds of initiatives are scalable and the reach and impact via peer to peer tactics direct to patient education initiatives and there'll be executed by our entire team and highly competent external partners and the second tactic, helping our trained omni Surgeons' council and educate their patients on the value of the omni procedure and how it can help them better treat their glaucoma.

Yes.

Surgeon Education initiative as prescriptive in nature gives our surgeons a glaucoma treatment triage algorithm.

Helps them make a strong recommendation for when omni surgical intervention is right for the patient. So all in all when you combined patient education and identification initiatives with surgeon training and patient counseling initiatives.

And you couple that with a growing library of really compelling standalone clinical data like the trade data. We just discussed you end up with a really viable playbook that enables our eyecare professionals to better treat more patients with omni.

Whether that's at the time of cataract surgery or as a standalone procedure.

Great. Thanks, guys.

Thank you.

Thank you.

And one moment please for our next question.

Our next question will come from Cecilia furlong of Morgan Stanley . Your line is open.

Great. Good afternoon, thanks for taking the questions and congrats on the quarter.

I wanted to start just with the implied guidance if you could talk to.

Really what's underlying.

Surgical glaucoma Omnia Christmas tie on contribution starting to ramp and then as you think about 2002 I talked about previously kind of a.

30% or so outlets to take additional questions.

How are you thinking about that today, and then really just the contributions omni versus buy on as we think about 'twenty.

Yes, Hi, Cecilia Jesse I'll take the second part of that of that first.

It's really early in the launch.

Provide sort of much specific feedback like particularly in a forum like this like on.

<unk> contribution so we're being conservative about it.

And we indicate we trained over 120 surgeons on it just in the third quarter, which was really kind of like five weeks of a soft launch so.

That shows a very healthy amount of interest and we think that the physician feedback.

On the instrument is pretty tremendous.

So we are excited but we.

It's kind of a call it a new segment for us a bit and so we're just being sort of conservative in our perspectives and in providing.

Any real specifics on what the contribution of that might be.

Sure.

So.

The end of the day really whats embedded in the fourth quarter to be a little boring, but like is really the continuation of the trends that we see.

Dominated by omni in terms of new customer acquisition, there was nice utilization uplift.

In the third quarter and customer retention right.

No.

It was Q3 is a funky quarter right like you July at all and most of August are generally.

<unk> soft, but it's really just based on what we saw.

<unk> second half of the quarter and really throughout the whole quarter right and that continuing into.

Q4 and beyond.

And then on the 30% phacelia.

We're not providing guidance at this point, but that is a that is a number we remain very comfortable with that.

There is a number of growth drivers as we.

<unk> discussed.

Real momentum heading into next year.

<unk> included.

And we think sort of the core are leading indicators of growth in terms of train surgeons ordering facilities and retention stats were all quite positive in the third quarter.

And just to add to that hi, Cecilia.

The omni and Sai on question and just to be Crystal clear Omni remains our flagship makes device and I think that will always be the case, it's got a very very compelling efficacy profile.

And the reality is the vast majority of the Migs market and certainly all of the mixed expansion opportunities those are going to be efficacy driven that's where he's got a very tightened product market fit.

<unk> is very distinct it serves very.

Separate and distinct subsets of the market things parts of the market, where omni frankly doesn't have the best product market fit areas, where efficacy might not be the top priority in things like efficiency and ease and speed may take priority and there is three very distinct subs.

Again, theyre not they'd be subsets don't overlap with omni one is the high volume cataract surgeons at prioritizing speed of procedure and efficiency number two or.

Migs Fellows and trainings I think about academic institutions, where fellows are learning mix for the first time Goniotomy is kind of known as the training wheels of mix. So <unk> got a really nice offering for those folks who were in training and then the last subset is facility profitability right think about the private equity owned.

Type facilities, where.

Profitability is.

One of the main drivers Goniotomy as one of the more profitable procedure, so and those distinct subsets of the market.

<unk> doesn't have the strongest product market fit omni does have the strongest product market fit where.

Comprehensive procedures and differentiated efficacy are paramount.

We believe that.

Scion customers. They open up they opened the door for us to new surgeon customers and we have the opportunity then when we've got the scion relationship to then sell omni over time. So we think that actually scion can can expand our omni market by opening doors that today arent the easiest doors.

Okay.

Thank you and if I could follow up to I. Appreciate the commentary on Opex. Just curious if you could provide a bit more color in terms of R&D priorities on both near term and as far as over the intermediate term you talked about previously next gen. Some other pipeline products as well as clinical trials just.

As we're thinking about 'twenty two how we should be thinking about just the contributions from the R&D standpoint across Michigan.

Yes so.

Cecilia on on pipeline, where obviously, we love innovation at site I think I think we've proven that we're good at it and we're excited about next year, releasing nextgen omni in the first quarter.

Early early feedback from surgeons, who we've received feedback from there has been very positive we think thats going to be a very nice.

Welcome addition to the mixed market next year, we also have.

An exciting next generation of tier care tier care MGM.

We're excited to get out next year and then beyond that.

<unk>.

Migs and.

And Mgd procedures, we do as we've discussed in the past we are in deep R&D and <unk>.

Do intend to bring to market.

Broad pipeline.

Innovative products that hopefully one day will address every every step of the way for the patient journey and the eye care provider journey, taking care of these patients. These are chronic diseases lifelong diseases. They don't have a cure.

And we expect to innovate just like we've done with omni with tier here and now with scion, where I think.

Fortunately I think we're three for three here and we're looking forward to.

<unk> more about the stuff that we're working on next year.

And Cecilia.

Half of the R&D line item right that you see us.

For us it is clinical right. So.

Other major products projects that will be in our R&D investment envelope next year, our Sahara precision those trials right now, which are obviously very important to us.

Great. Thank you for taking the questions.

Thanks Cecilia.

Thank you.

One moment please for our next question.

And the next question will come from David Saxon of Needham and company. Your line is open.

Hi, good afternoon, Poland, Jesse Thanks for taking my questions.

Maybe one for Paul one for Jesse.

<unk>.

To fulfill your.

Question around Psi on a <unk>.

<unk> talked about the <unk> launch strategy three pronged just wondering if you could tell us which buckets youre seeing the most traction.

Launch to date.

And based off.

The script it sounds like some science users are being introduced to omni, which is great to hear especially so.

Early on are you seeing anything.

About the reverse where omni users are.

Starting to switch some of their volumes to cyan.

Yeah.

Hi, David Great question.

On on the first question around <unk>.

A reality, we're seeing adoption across all three of those subsets, we knew we knew before we.

Before we develop scion we knew these markets subsets existed we've got obviously, a significant and highly talented.

Marshall team sales and marketing team and the subset of the market were known to us.

These were not accounts that we could win.

Regardless of how how efficacious omni is.

They werent account that were available to us.

Today so.

The answer is all three of those subsets, we're having progress with psi onto the high volume cataract surgeon, we brought on a number of those I think within the first few weeks.

Of like some of the very highest volume cataract surgeons in the country.

I know I know, we have some of those who came on early the academic institution.

<unk> take time right to get products through the system, but we're having very healthy discussions there today and then lastly on the PEO and profitability oriented facilities were selling scion into those types of accounts today.

Your second question David.

Omni users.

I can take that.

We.

Utilization the omni utilization of a sign of the initial sign on orders looks very similar to the omni utilization overall, David if that makes sense right like meaning.

Theres not a.

No discernible difference that we can observe yet like in there.

And their utilization trends versus the non firearm.

But on the user base.

And we're really encouraged right it's been a very targeted initial rollout.

And we knew that the use case really.

Might have some overlap, but honestly the reason that the users were using omni.

What was such that like.

<unk> mitigated the theoretical risk of sort of the utilization cannibalization alright, so we're quite encouraged.

With that comparison of utilization.

Another way to say, okay, David another way to think of that is.

Our omni customers, who are proficient with omni in there now.

The bar or the efficacy bar and expectation has been set.

They're not going to move off of that.

That's why they are using omni, whereas so so omni customers don't necessarily become scion customers. However.

The opposite scion customers, we do have the opportunity to introduce them to test the omni once once they are using scion. We've got that established regular sales rep to surge and relationship and they are in the or with the surgeons and then they're seeing patients that are a little more advance that's the ideal opportunity.

Now that were in there.

To sell them on omni so we don't see it the other way around omni very very happy omni users, who depend on the efficacy that omni deliver switching off of omni really to anything else.

Okay great.

Then just maybe just one on the cash burn it looks like it was around $21 million for the quarter.

61 year to date.

Should we think about the burn in the fourth quarter.

It sounds like that should improve in 'twenty three so.

Maybe just give us a framework with.

How to think about the magnitude of that improvement at three <unk>.

Progress to positive free cash flow in 'twenty five.

So much yes.

Sure.

I think we've given a lot of good piece parts to be able to give our view right.

We will.

We gave a directional.

And I'd say.

The true directional sort of view of what the operating expense envelope should look like next year.

No our perspective on.

On medium term revenue growth right and then.

We are seeing margins.

Gross margins right.

The three periods.

84% for all three periods right.

As I discussed in my prepared comments so.

You sort of factor all those three things and without sort of giving specific cash burn guidance, but you can get to like on our perspective is like on.

The burnt envelope will be like next year, right and what's important to like in his comments was.

We've made a lot of the investment we think to grow then that grow the business in the next $500 million in terms of infrastructure investments support investment.

And we think this opex envelope.

<unk>.

Scaled very nicely with.

Much less variable opex like.

For the next $500 million of growth than we have than we have experienced since we've invested heavily in the recent past.

So that's why we.

We continue to convey conviction about.

Our balance sheet and the ability to hit to hit our growth objectives.

Moving within that within that balance sheet.

Got it thanks, and congrats on the quarter. Thanks, Kim Thank you.

Thank you.

One moment please for our next question.

Our next question will come from Tom <unk> of Stifel. Your line is open.

Great Hey, guys. Thanks for the questions.

Maybe if I can start on reimbursement with the can alloplasty professional fee cut for.

For next year I believe recently finalized maybe if.

If you can provide just general thoughts or views around the volume impact in 2023 from <unk>.

These changes and then I guess on top of that.

What are your thoughts on pricing gross margins next year.

In that same context.

Yeah, Hey, Tom.

Happy to take take that one so.

<unk> six 674 as we've discussed in the past.

Two years ago, the rock RV you process.

Revalued <unk> six 674, as well as trabecular bypass stenting on the $6 174 pro fee side they proposed.

Two year reduction and the proceeds from that.

The historical rate of 900, plus two 7% <unk> this year down.

Down to about 600 next year starting on January one so while.

While this is never welcome for surgeons ophthalmologists <unk> been experiencing reimbursement cuts on things like cataract surgery for many many years now so it's certainly not good news in terms of our business and in terms of doctors' decisions to use.

We don't see an impact there and the reason why I say that.

Is.

The relative positioning of the Profi, so moving from $750 to 600 again, it's not it's not.

Welcome news, but it doesn't change.

The level of reimbursement relative to any competing procedures I think about.

Goniotomy Goniotomy had had the highest pro fee.

That's scion for example, and it's still well until that procedure is revalued in due course this Dan Scott Revalued. So.

<unk> six 670, <unk> isn't going to change the relative lead better profi compare to stenting cataract. So we think that the.

As you try to assess the impact of any of these changes on utilization. Obviously, you think about relative number one relativity and then number two in a vacuum.

Does it does the profile going forward sufficiently reimbursed a provider that they'll continue doing these procedures and we think that the answer is yes.

So doctors are used to using omni they rely on omni for its efficacy we have a very sticky business and we don't see a profile change from $7 50 to 600, taking us off course.

Yes on pricing and margin.

<unk>.

Pricing pricing is really driven by the facility fee, which for six 674 actually went up.

We're always cognizant of margin pressures I think.

Month, Siam becomes a more prominent contributor to our revenue mix.

That gets production scale right.

There might be a very modest amount of pressure on our overall surgical glaucoma margins right, but.

But ultimately.

We don't.

Feel like sort of.

There will be any cause and effect of price pressure just given how pricing is really set in the market based on professional fee.

Got it that's great color and then my follow up just on.

Tier care, Paul you talked about the Sahara readout I think by <unk> 23.

Maybe sort of at that time, let's say the superior superiority endpoint where to hit.

So what can we expect maybe over the next six to 12 months after that.

It'd be great. If you could just refresh us kind of on the longer term market access strategy.

Would be very helpful. Thanks, guys.

Yeah sure. Thanks, Tom.

Couple of considerations again, it completed enrollment.

August September timeframe, the REIT out.

The randomization tier care versus Restasis readout.

Primary endpoints that'll be late late Q2, so maybe summer summer 2023, we'll have the data analyzed and ready for that readout.

And then beyond that.

<unk> knock on wood assuming success.

We would began we want to publish the data we will try to publish certainly to the six month data.

And then we continue the study is not over at that point it will.

Continue for two years Theres another readout at two years, the two goals of the study just to remind everybody.

One we want to assess haltere care compares to Restasis at six months on signs and symptoms and then the second goal of this study is to show durability of treatment effect. That's why we're running a two year trial with the <unk>. That's an attorney in the world of dry eye clinical trials, but again. This study was in <unk>.

<unk> by payers themselves you spoke to a number of payer medical directors before.

Before we.

Designed and began executing this study and those were the two things they needed to see they need to see how does how does interventional procedure for mgd compared to costly daily.

Market, leading prescription Rx and number two how long just tier care last.

Is the durability of treatment effect, because payers are going to want to decide if we're covering this how many how many treatments per year. We are we paying for them based on the thousands and thousands of cases, we've done successfully commercially today and the cash pay.

World, We typically see one one to two treatments in the first year and then a single treatment.

For maintenance every year thereafter.

Tom That's a long answer those those are the goals of the study we would begin having.

Hopefully again, assuming success very healthy discussions with payers with that six month data, we're not going to wait for the two year endpoint in late 2024, we're going to go with that six month endpoint.

Talk to.

As many payers as we can and I think hopefully we'll be able to pull in some payer wins.

In advance of that two year 2024.

A final readout.

Perfect. Thanks, Paul.

Thanks.

Thank you.

And one moment please for our next question.

Our next question will come from Craig Bijou of Bank of America. Your line is open.

Good afternoon, guys. Thanks, Thanks for squeezing me in here just just one from me.

I believe you guys said that youre seeing uplift.

Standalone utilization in certain markets.

And maybe you you bring those best practices to into other markets.

Hoping you can expand a little bit again.

Maybe on the characteristics of that market is there anything thats common.

Scene.

<unk> Standalone is youre seeing a little bit more uptick and then maybe just a little bit more color on how you plan to kind of take those best practices and bring them to your other markets.

Yes.

Craig I'll talk about the.

The GCC as what we've seen we've seen the most successful gcc's historically the way we were organized prior prior to our re org.

The gcc's or more or less on an independent team with a mission to go and educate educate our omni surge and educate the referring provider community et cetera, but they are operating more independently. What we saw again, we're learning very quickly we're paying close attention to what's working and then we're trying to institutionalize those best practices.

As we're doing that I think very well right now we saw that the Gcc's, who are working most closely with <unk>.

The local surgical.

That they were able to effect faster better higher quality.

<unk> of the entire surgical ecosystem right at that surgical reps had already cultivated and with the GCC and the rep working closely together the GCC was better able to go and educate the important referring providers educate the.

The types of omni surgeons that were more likely to be ready to go sooner and so it's through that very tight collaboration between GCC and surgical sales rep.

More efficient higher yield better quality standalone market development, what's happening. So what we've done is we've taken that entire 20 member GCC team and recently integrated them entirely within the surgical sales infrastructure and we're super excited now to replicate what we saw with <unk>.

D happening in a handful of territories, where we were seeing better better productivity on a stand alone market development and better better uplift there and we think that we're institutionalizing at now with the GCC is under the.

Leadership of the regional directors on our sales force and.

We expect now there was other territories to follow suit.

Got it one follow up I mean, any timing or expected timing on how.

Quickly.

You can see some uptick in the other.

Other territories.

Yes go ahead, Paul I think we're I think we're seeing.

Standalone uptick now I mean, if you just.

Some some barometers its hard its hard to track with any accuracy again, it's it's omni right. It's the same device. We don't have a combo cataract device and a standalone device omni has a very broad indication for.

For combo, cataract, and Standalone and Eddie severity of disease. So it's tricky, it's tricky to track in that way.

Because it's the same device, but based on.

First of all our performance and our growth I think it gets all rolled up into that.

You can expect that to continue.

And then just the discussions we're having.

We have a large commercial infrastructure in the discussions we're having with our surgeon customers and the awareness of stand alone that we're driving.

And the feedback from our customers on Standalone in the way that we're training doctors today from the get go.

They do their first 10 cases, where institutionalizing some best practices, we'll do seven combo cataract cases, and three standalone cases, if possible.

Those are the kinds of things that are happening with increasing frequency, it's tangible to us the.

Chatter amongst the surgeon community around Standalone continues to grow and I think all of those things are very good barometers of Standalone market development Standalone progress.

In an area, that's otherwise tricky to to assess with any like right now any real accuracy again, because the product omni is the same successful product in combo cataract business Standalone.

Got it thanks for the color guys.

Sure.

Thank you.

And I see no further questions in the queue I would now like to turn the conference back to Paul.

But <unk> for closing remarks.

Well, thank you Chris and thank you. All appreciate everyone's continued interest in <unk> Sciences I. Appreciate your time hope everyone is well and have a great rest of your day.

Thank you.

This concludes today's conference call. Thank you all for participating you may now disconnect and have a pleasant day.

The conference will begin shortly to raise your hand during Q&A you can dial one one.

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Good day and thank you for standing by welcome to the <unk> Sciences third quarter 2022 earnings results Conference call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session.

Ask a question during that session you will need to press star one one on your phone.

Please be advised that today's conference is being recorded.

I would now like to hand, the conference over to your Speaker today, Mr trip Taylor Sir Please go ahead.

Thank you for participating in today's call presenting today are clients, whose cofounder and chief Executive Officer, Paul The Dally and Chief Financial Officer, Jesse Celnik earlier today <unk> Sciences released financial results for the three months ended September 32022, a.

A copy of the press release is available on the company's website at investors <unk> Sciences Dot com.

To remind everyone that comments made by management today and answers to questions will include forward looking statements within the meaning of the federal Securities laws. Those include statements related to the <unk> Sciences anticipated financial performance and operating results market opportunity the future impact of COVID-19 on operations business strategy.

And plans for developing and marketing new products forward looking.

Statements are based on estimates and assumptions as of today and are neither promises nor guarantees and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied by these statements a description of some of the risks and uncertainties that could cause actual results to differ materially from those indicated.

The forward looking statements on this call can be found in the risk factors section of the annual report on Form 10-K filed March 24, 2022, and other filings with the Securities and Exchange Commission.

The company undertakes no obligation to publicly update or revise any forward looking statements, except as required by law for more information. Please refer to the forward looking statements notices and risk factors in the recent SEC filings.

I will now turn the call over to Paul.

Thanks, Tripp and thank you all for joining us.

Our third quarter results reflect continued strength and execution across our entire business.

We are pleased with the progress we are making penetrating and expanding both the migs and dry eye treatment markets, while taking the necessary steps to position the business to reach positive free cash flow in 2025.

In the period, we achieved total revenue of $18 7 million, representing 43% growth year over year and 8% growth sequentially.

Surgical glaucoma revenue grew 37% year over year, and 7% sequentially to $17 1 million in the third quarter and dry eye revenue grew 145% year over year and 21% sequentially.

We ended the quarter with just under $200 million of cash, which we currently expect will be more than enough to support our growth plans until we reach cash flow breakeven.

Jesse will elaborate on in his remarks, we plan to achieve our intermediate growth targets with more moderate head count growth and significant reductions in non labor operating expenses.

We expect to significantly reduce cash burn in 2023 and going forward, while driving continued robust top line growth.

Okay.

We achieved several milestones in the third quarter, including one the successful introduction of scion, our innovative blade less goniotomy device.

To the.

The complete enrollment of Sahara, our transformative dry eye RCT for the tier care system.

And three the publication of multiple peer reviewed articles featuring compelling clinical data that demonstrates expansive market opportunities for both omni anti air care.

Each of these commercially minded achievements strengthens our foundation for long term market leadership and charged greenfield path to growth in both glaucoma and dry eye.

Now I would like to discuss the highly productive third quarter in detail for both of our business units starting with surgical glaucoma.

Our core mission and surgical glaucoma and steel quipped surgeons with the best possible solutions for their primary open angle glaucoma patient.

Patient, regardless of severity of disease or cataract lens status.

The bulk of today's penetrated Migs market consists of procedures performed in conjunction with cataract surgery due to the narrow our indications for use of legacy implants.

This has resulted in an artificial bifurcation of the migs market into combination cataract, a $1 billion opportunity and stand alone of $5 billion opportunity.

We further segment the market based on severity of disease with mild and moderate patients each accounting for approximately 40% of the patient population and advanced patients representing the remaining 20% of the patient population for both the combination cataract and Standalone segments.

Mild and early moderate combination cataract patients comprise the most well established segment of the Migs market today and surgeons have the broadest array of surgical device options to treat these patients.

In rough numbers. This represents approximately a $400 million opportunity for patients with mild <unk>.

And a $200 million opportunity for patients with early moderate.

The $600 million segment, representing just 10% of the overall mix opportunity has attracted the most commercial interest thus far due to the narrower indications for use of first mover products, coupled with the lower expectations for disease impact and changes in patient site.

We believe the remaining 90% of the market on nearly $5 $5 billion opportunity requires a greater level of efficacy and consistency to satisfy the needs of these surgeons and patients.

Stated another way, we believe the vast majority of Migs market growth over the next decade.

Will be driven by devices that offer increased and reliable efficacy within the rapidly expanding moderate to advanced combination cataract segment and the entirety of the growing Standalone segment.

This is where we excel.

Today, we offer two best in class Meg solution that are rapidly gain market acceptance, our flagship omni surgical system and our newly introduced ion surgical instrument side.

<unk> the world's first Bladeless goniotomy device.

<unk> been extremely well received by our surgeon customers and we expect it to thrive in the established penetrated and more competitive mile to early moderate.

Combo cataract segment, especially in cases, where consideration such as efficiency and ease of use may take priority.

We anticipate that use of omni we will continue to expand the combination cataract and Standalone segment due to its proven efficacy superior design and intuitive views. It remains our flagship <unk> product.

We believe use of omni has extended makes interventions to combo cataract patients beyond mild in well into moderate and even advanced disease. When doctors need a strong result, we believe using omni is the most effective and trusted solution due to its comprehensive mechanisms of action that can treat the entire 360 degrees of disease conventional outflow.

Pathway and address all sources of outflow resistance.

We are confident that omni possesses the requisite clinical functionality and clinical results the compelling long term market expansion and penetration of the remaining $5 billion plus <unk> market opportunity.

Our surgical commercial goals are one continue expanding the large and growing moderate to advanced disease combination cataract and standalone mixed segments based on omnis differentiated efficacy profile.

To drive adoption and utilization of scion among specific subsets of surgeons, who may prioritize faster simpler procedures and.

And three increase our total share of Migs with omni and scion, while also growing the overall migs market.

Omnis adoption and utilization continues to grow among existing make surgeons, we believe that our efforts to support this adoption and growth have not only resulted in continued.

But <unk> also expanded the combination cataract segment to include a broader spectrum of Poa G patients due to omni superior and consistent efficacy.

We continue training, new surgeons with our technology, while increasing omni utilization in existing accounts.

Because of omnis differentiated efficacy position, we continue to enjoy outstanding surgical glaucoma account retention, especially in the market expansion segments, where efficacy really drive decision making.

Our brand and identity as the market expanding efficacy leader and makes continues to grow as the surgical community medical societies, and payers better understand the efficacy and consistency of omni as demonstrated in real world results and clinical trials.

The support from both new and existing surgeons reaffirms our confidence that the use of omni will continue to grow that migs market and serve as the foundation all Migs procedure.

He is currently the only device with an FDA cleared indication for AB internal use to lower IOP in post cataract adult with Jean.

Based on its differentiated usability and clinically demonstrated efficacy. We believe omni has demonstrated optimal product market fit for a continued mixed market expansion and we strongly believe in its ability to remain on top of the efficacy driven migs market expansion categories.

Based on our analysis of third party projected claims data and our observations in the field.

Lead us to believe that omni continues to expand the migs market. Our claims analysis indicates that growth in U S. Omni shipments outpaced the total makes utilization growth rate by over 40% for the LTM period, ending in the third quarter of 2022.

We are working to accelerate the adoption of omni is the leading stand alone makes intervention and we continue to focus our efforts on demonstrating the safety and efficacy of omni in all use cases through peer reviewed publications market education and commercial execution.

Over 1 million eyes have received trabecular bypass stents, primarily in mild to moderate combination cataract cases as glaucoma is a progressive disease over time. These patients may require further intervention to lower their IOP.

In October International Ophthalmology published a peer reviewed article based on data from Trey Our multicenter IRB approved study designed to evaluate the effectiveness and safety of omni in Ais with uncontrolled IOP. Despite a history of trabecular micro bypass stent implantation in conjunction with cataract surgery.

<unk> and medication usage.

Overall, the findings demonstrated significant benefits of Standalone omni interfered intervention for patients with a history of if we're seeing receiving combination cataract procedures. This.

<unk> unique clinical data provides strong validation of omni has potential to provide benefits throughout the entire lifecycle of <unk>.

At the European Glaucoma Society Congress in Greece, mixed urgent presented omni data, demonstrating durable safety and efficacy over three years.

With Standalone use of omni in patients with open angle glaucoma.

We expect to see further studies to corroborate these impressive long term results in the future.

We're also very excited about significant clinical research project involving comparative real world clinical data for the most common mixed procedures held within the AOS IRS real world patient data registry that we believe will help stakeholders, including patients providers and payers better understand.

The performance of leading MX devices in everyday clinical practice.

We look forward to sharing the results of this very informative comparative analysis of clinical evidence based on thousands of real world mix cases over the coming months.

Commercially our team of glaucoma clinical consultants continue driving standalone utilization of omni we have seen uplift in certain GCC markets and have identified the initiatives that deliver the greatest impact we have begun standardizing. These best practices throughout our GCC territories to help drive omni utilization with our within our growing.

Installed base, we're learning fast optimizing our market development and institutionalizing best practices every single day, driving scale and leverage for our commercial efforts that are showing up ultimately in our continued customer stickiness and strong top line performance.

The entire site Sciences product portfolio was featured in presentations by top Kols at the American Academy of Ophthalmology, and European Society of cataract and refractive surgeons meeting.

We hosted peer discussions between surgeons and provided demonstrations of our products.

The level of interest and engagement was very encouraging for both omni inside the.

The focus of our third and newest growth initiative for surgical glaucoma.

In mid August we launched <unk> with a group of select surgeons. The initial feedback was extremely positive and we are very pleased with the success of our broader commercial rollout in progress now.

Scion enables a complimentary revenue opportunity, while allowing us to expand our reach to serve specific subset of customers, who may prioritize a faster simpler procedure.

<unk> is the world's only bladeless goniotomy device and represents our third consecutive best in category device satisfying.

The American Academy of Ophthalmology definition of Goniotomy and aligning with CPT code 65820, scion is designed to allow surgeons to smoothly and efficiently and reliably ex size and remove several block hours of diseased trabecular meshwork tissue via an app and turn our approach.

Our target customers for scion include three types of combination cataract surgeons that are distinct from target omni customers.

Number one high volume cataract surgeons only looking to perform the quickest makes procedures.

Number two surgeons, who are initially less experienced with migs, such as surgical fellows at academic institutions and.

And number three surgeons looking for the most cost effective makes procedures and facilities that may emphasize procedural profitability.

These surgeons are use cases have very little overlap with our flagship omni device.

We have seen evidence that some science surgeons will also consider using omni as they grow familiar with the best in class technologies, we offer.

Because our target customers for scion fit within the existing call patterns for our surgical glaucoma sales team the fixed investment necessary for customer acquisition is substantially already in place.

Transitioning now to our dry eye business, where we are focused on establishing fair market access and reimbursement for dry eye treatment procedures.

While <unk> continues to expand the current cash pay market, we remain committed to generating strong clinical data that will help us achieve appropriate reimbursement, which if successful would hugely expand the evaporative dry eye market.

In August clinical ophthalmology published comparative symptoms clinical data on advanced dry eye patients from the Olympia RCT, which represents further progress establishing <unk> as a leading dry eye treatment.

The authors of this analysis concluded that the tier care procedure delivered superior symptoms improvement quality of vision and symptom frequency overlap of flow in patients suffering from advanced dry eye disease is.

This data reinforces our confidence in the clinical and economic value that <unk> brings to patients providers and payers.

I am pleased to announce that we completed patient enrollment for our Sahara RCT ahead of schedule. This keeps us on track to provide our randomized safety and efficacy readout appear care versus the leading prescription eye drop medication restasis by the second half of 2023.

As a reminder to Harel was designed with input from medical directors of payers to provide the clinical foundation of obtaining future reimbursement coverage if successful.

In parallel we are intentionally growing our installed base of tier care users in todays cash pay market and believe reimbursement would stimulate immediate growth of tier care procedures.

In summary, we remain well.

Well positioned to continue distancing ourselves as the market leader in mix and dry eye and to increase the number of patients we serve.

Our commitment to growing physician adoption and utilization across our product portfolio can support strong growth over the coming years.

Leveraging our strong revenue growth trajectory and gross margins, we are committed to a disciplined and lean operating budget that will allow us to optimize our considerable resources with a clear path to profitability.

I will now turn the call over to Jesse <unk> our CFO .

Thanks, Paul.

Posted record third quarter revenue of $18 7 million, representing 43% growth year over year at 88, 4% growth sequentially.

This is an extremely strong result in a weak seasonal quarter in our industry.

As a point of comparison in the third quarter of 2021, we grew only four 5% sequentially that we achieved 77% revenue growth for the year.

Both omni and tier care performed well in the quarter and we comfortably exceeded consensus revenue estimates.

Even without science small revenue contribution in the tail end of the quarter.

Overall, we are quite pleased with our progress as we strengthen our leading position through continued share growth and market expansion and our two more established products and <unk> fully launched into the market in the fourth quarter and into 2023.

Our surgical glaucoma revenues for the third quarter were $17 1 million up 37% from $12 4 million in the third quarter of 2021 and sequentially up seven 4%, which represents a nearly 400 basis point improvement over our comparable sequential growth in the third quarter of 2021.

We continue to show strong underlying growth fundamentals and retention in order and facilities, while utilization increased notably which is a critical measuring stick for our market expansion efforts behind on me.

913 facilities ordered army during the third quarter compared to 875 facilities in the second quarter.

Concerning the continued combination of strong new customer acquisition activity and our high retention rates are.

Our developed customer retention rate, which is designed to measure the percentage of our embedded facility base from the previous quarter. The reorders in the most recent quarter was over 99% in Q3.

Surgical glaucoma customer acquisition funnel remains strong for both products, which creates great momentum for the rest of 2022 and then into 2023.

In the third quarter of 2022, we trained over 160, new omni surgeons in the U S, bringing us to a total of nearly 2200 U S. Surgeons trained on army and also trained over 120 surgeons on Si.

Given the universe of U S. Migs trained surgeons is estimated to be approximately 5600 <unk>.

Obviously have a substantial amount of remaining runway they continue to rollout both products to targeted surgeons.

Our drive segment revenues for the third quarter were $1 6 million up 145% from <unk> 7 million in the third quarter of 2021, and a sequential increase of 27% from the second quarter of 2022.

We grew our installed base to 881 facilities at September 32022 from 762 as of June 32022, and 497 at the end of the third quarter of 2021.

We are in a super exciting time in our tier care commercial lifecycle as we've had great success. This year in growing our installed base and are now complementing that activity with efforts to drive utilization and consumption in our base and our base in anticipation of Sahara Readouts in mid 2023.

Potential reimbursement breakthroughs thereafter.

Our combined gross margin for the third quarter was 84% consistent with 84% for both the corresponding prior year period.

And the second quarter of 2022.

Gross margin in surgical glaucoma was 89% in the third quarter compared to 87% in the prior year period and 88% in the second quarter of 2022.

Gross margin in dry eye was 38% in the quarter versus 33% in the prior year period and 41% in the second quarter of 2022.

We remain very pleased with the performance of our operations group on both sides of the business in the face of global supply chain issues.

SG&A expenses for the quarter were $31 5 million, which was in line with our $31 4 million of SG&A in the second quarter and an increase of $28 million in the third quarter of 2021.

This quarter exhibited the early impact of our cost optimization initiatives and modest head count reduction we made in the third quarter. Those initiatives are still ongoing and will result in an additional non labor efficiencies in Q4 and into 2023.

Q3 reported SG&A included several nonrecurring expense items related to our cost of ops optimization program, such as severance, which I will discuss in further detail shortly.

Approximately 50% of our year to date SG&A expenses are head count related which gives us great flexibility to accelerate or decelerate a large portion of our non labor opex as needed to appropriately fuel our growth while managing liquidity.

That being said, our FTE FTE count will be a key driver of the FCA like SG&A line item.

As of September 32022, we had 250 full time 253 full time employees versus 284 at June 32022, and 197 as of September 32021.

R&D expenses for the quarter were $6 1 million compared to $4 3 million in the third quarter of 2021, and $5 9 million in the second quarter of 2022.

In total operating expenses for the third quarter were $37 6 million, a 50% increase from $25 1 million in the third quarter of 2021, and essentially flat to the second quarter of 2022.

Included within the $37 6 million was $3 2 million of noncash stock compensation, and depreciation and amortization expense $1 7 million of severance of pre termination comp expense for positions eliminated during the quarter.

$1 million one of expense related to the termination of certain clinical programs, which we've discussed on our second quarter call and approximately $1 million of additional nonrecurring items.

Excluding these items our operating expenses in the quarter would have been approximately $35 million, which we believe is a fair representation of our current cost structure going forward.

Our leadership team is close to finalizing our operating budgets and investment envelope for 2023 with the twin pillars of cost discipline and smart investments in our future.

We believe we can meet all of our goals in 2023, while maintaining quarterly normalized recurring cash operating expenses near the $35 million level from the third quarter.

This investment in our business will support our near term growth requirements and fund a number of high value pipeline and market development activities to create long term value more.

More than 10% of our operating expense budget in 2023 will be earmarked for discretionary investment projects that can be flex and our canceled without any impact to our core operations.

Our loss from operations for the three months ended September 32022 was 21 8 million compared to a loss of $22 9 million in the second quarter of 2022 and $14 million for the third quarter of 2021.

We had a net loss of $22 $2 million 46 per share in the quarter based on a weighted average share count of $47 9 million shares compared to a net loss of $17 2 million or <unk> 43 per share for the third quarter of 2021 based on a weighted average share count of $39 8 million shares.

Ended the quarter with $199 $8 million of cash and cash equivalents and $33 million of long term debt, including $2 million of debt discount one note on our debt facilities that we fully expect to meet the requirements necessary to extend our principal amortization to two through December 2023 at which point, we have the ability to further extend.

The amortization another year subject to certain conditions.

As evidenced in our discussion of our operating expenses, we continue to proactively manage our liquidity and operating expenses to maintain our strong cash position.

We are confident that our strong balance sheet, leading gross margins and disciplined spend can support positive free cash flow in 2025, while maintaining substantial cash cushion in reserve.

Finally, turning to our outlook for 2022, we're tightening our full year revenue guidance range to $70 million to $72 million based on the strength of our performance in Q3 and confidence in our trajectory in Q4 and headed in heading into 2023.

For the year the range implies annual growth rates of approximately 43% to 47% over 2021.

In summary, we continue to make substantial progress revolutionizing the glaucoma dry markets, we remain committed to leveraging our technology to improve the lives of patients with dry eye disease and continuing to produce excellent financial results similar to those in Q3.

I'll now turn the call back over to Paul for some concluding comments before we open up the call for Q&A.

Thanks Jesse.

Before we head into Q&A. Some brief summary comments and why we are so enthusiastic on where our company is positioned today.

Number one we grew eight 4% sequentially in Q3, a much higher growth rate in third quarter of 2021 during a 77% revenue growth year.

Number two we've created an extremely robust growth funnel by training, new surgeons and winning new accounts at levels that we believe will support our near and medium term growth objectives.

Number three we are actively expanding the actionable addressable market with compelling real world clinical data and studies like Trey.

Number four we will remain disciplined on Opex and committed to our outstanding unit economics with another mid <unk> gross margin result for the quarter, which placed us in a confident liquidity position.

And lastly, we just want to thank all of our physician customers and patients for their trust in us and our employees for executing our vision with excellence.

This concludes our prepared remarks, operator, please open up the call for questions.

Thank you.

As a reminder to ask a question you will need to press star one on your phone.

Please standby as we compile the Q&A roster.

Sure.

Yes.

One moment. Please first question.

Our first question will come from Mike <unk> of William Blair. Your line is open.

Hi, guys. Thanks for taking the question and congrats on the quarter.

Wanted to ask Scott update some of the trial and we have seen so far throughout the year. So you guys had previously said you expect this to continue into the second half, but now that we're adding.

I think towards the end of the year and nearing 2023, what have you guys seen recently on the competitive Trialing standpoint, do you expect some of these headwinds to continue into next year at all.

Yes, hi, I'll take that.

I think it's I think it's quieter.

The competition is out there and I'll, just say as it relates to competition.

Ive always found the best way to compete.

Is to elevate your game to a level, where others can't keep up.

Yes, we should give our competition credit for their efforts this past year.

But the simple reality for US is we've continued to elevate ourselves and our continued growth.

Continued performance that speaks for itself.

And the momentum we are generating will carry a straight into 2023.

Site, where we elevate and outperform through product design excellence customer focus and we never lose sight of the fact that helping our eyecare professionals better treat their patients.

It's our opportunity and our obligation.

Today.

The two fastest growing segments in Migs, Goniotomy and can Alloplasty and were fortunate we believe we have the two.

To best in class products for those two fast growing segments, where omni omni in the <unk> segment.

Zion into Goniotomy segment.

Through through our rapidly growing user base, we're hearing routinely.

That omni is being referred to as the most efficacious product and mix.

What is why does that matter.

It matters, because preventing visual field loss progression with glaucoma requires efficacy.

Efficacy that omni has proven to deliver in multiple peer reviewed publications and through real world surge and outcomes.

So.

With scion, leading the way in Goniotomy with omni, leading the way and can alloplasty anatomy and expanding the market we feel very confident.

And our position again, our performance in the third quarter speaks for itself. The momentum we have right now speaks for itself and I don't think we've ever been more bullish.

Heading into a new year than we are today.

Okay.

Got it and then maybe a quick one on the market development side of things. So you mentioned the <unk>.

<unk> accounts some of them have seen higher growth in some of the non KCP accounts are you guys planning on expanding the team of GCC is moving forward and are there any other market development efforts that you are working on our plan that we should be thinking about thanks for taking the question right.

We're actually at this stage.

Where what we're doing is we were taking the best practices of where theres been tangible successes within the GCC team.

And we're rolling them out and we're integrating it across the organization so.

There is.

We anticipate.

<unk> contribution and contribution increase from that investment, but we're not we're not increasing our investment today, because we've got several quarters ago.

Good learnings about where their efforts have been successful.

And we will generate a nice return by just institutionalizing that across the organization.

Now I'd, just like to add to that on Standalone market development, because it's important it's really driven by two tactics, one identifying and educating patients and primary care providers on omnis unique design.

It's got a design that allows doctors to address the entire disease to outflow pathway in all three sources of resistance in that pathway.

So it's kind of initiatives are scalable and their reach and impact via peer to peer tactics direct to patient education initiatives and there'll be executed by our entire team and highly competent external partners and the second tactic, helping our trained omni Surgeons' council and educate their patients on the value of the omni procedure and how it can help them better treat their glaucoma.

Yes. This this surgeon education initiative as prescriptive in nature gives our surgeons a glaucoma treatment triage algorithm.

All of them make a strong recommendation for when omni surgical intervention is right for the patient. So all in all when you combined patient education and identification initiatives with surgeon training and patient counseling initiatives.

And you couple that with a growing library of really compelling standalone clinical data like the trade data. We just discussed you end up with a really viable playbook that enables our eyecare professionals to better treat more patients with omni.

That's at the time of cataract surgery or as a standalone procedure.

Great. Thanks, guys.

Thanks, Thank you.

<unk>.

And one moment please for our next.

Question.

Our next question will come from Cecilia furlong of Morgan Stanley . Your line is open.

Good afternoon, Thanks for taking my question and congrats on the quarter.

I wanted to start just with the implied <unk> guidance, if you could talk to really what's underlying surgical.

Surgical glaucoma omni versus Zion contribution starting to ramp and then as you think about 2002, you talked about previously kind of a 30% or so outlets to the business and the question.

Are you thinking about that today, and then really just the contributions on the versus buy on as we think about 'twenty.

Yes, hi.

I'd say, it's Jesse.

I'll take the second part of that of that first.

It's really early in the launch.

Provide sort of much specific feedback like particularly in a forum like this like on.

<unk> contribution so we're being conservative about it.

And we indicate we trained over 120 surgeons on it just in the third quarter, which was really kind of like five weeks of a soft launch so.

That shows a very healthy amount of interest and we think thats a physician feedback.

On the instrument is pretty tremendous.

So we are excited but we.

It's kind of a call it a new segment for us a bit and so we're just being sort of conservative in our perspectives and then providing.

Any real specifics on what the contribution of that might be.

<unk>.

So at the end of the day really whats embedded in the fourth quarter to be a little boring, but like is really the continuation of the trends that we see.

Dominated by omni in terms of new customer acquisition, there was nice utilization uplift.

In the third quarter and customer retention right.

No.

It was Q3 is a funky quarter right like you July at all and most of August are generally.

<unk> soft, but it's really just based on what we saw.

<unk> second half of the quarter and really throughout the whole quarter right and that continuing into.

Q4 and beyond.

And then on the 30% phacelia.

We're not providing guidance at this point, but that is a that is a number we remain very comfortable with that.

There's a number of growth drivers as we.

<unk> discussed with real momentum heading into next year.

<unk> included.

And we think sort of the core are leading indicators of growth in terms of train surgeons ordering facilities and retention stats were all quite positive in the third quarter.

And just to add to that hi, Cecilia on the omni and Sai on question and just to be Crystal clear Omni remains our flagship makes device and I think that will always be the case, it's got a very very compelling efficacy profile.

And the reality is the vast majority of the Migs market and certainly all of the mix expansion opportunities those are going to be efficacy driven that's where omni has got a very tightening product market fit.

So <unk> is very distinct it serves very.

Separate and distinct subsets of the market things parts of the market, where omni frankly doesn't have the best product market fit areas, where efficacy might not be the top priority in things like efficiency and ease and speed.

They take priority and there is three very distinct subset again, theyre not they'd be subsets don't overlap with omni one is the high volume cataract surgeons at prioritizing speed of procedure and efficiency number two or.

Migs Fellows and trainings I think about academic institutions, where fellows are learning mix for the first time Goniotomy is kind of known as the training wheels or mix.

So <unk> got a really nice offering for those folks who are in training and then the last subset is facility profitability right think about the private equity owned type type facilities, where.

Profitability is.

One of the main drivers Goniotomy as one of the more profitable procedure, so and those distinct subsets of the market.

Omni doesn't have the strongest product market fit omni does have the strongest product market fit where comprehensive procedures and differentiated efficacy are paramount.

We believe that.

Scion customers. They open up they opened the door for us to new surgeon customers.

We have the opportunity then when we've got the scion relationship to then sell omni over time. So we think that actually scion can can expand our omni market by opening doors that today arent the easiest doors to open.

Thank you and if I could follow up to I. Appreciate the commentary on Opex I'm. Just curious if you could provide a bit more color in terms of R&D priorities, both near term and as far as everyday.

Mediate term you talked about previously Nextgen omni some other pipeline products as well as clinical trials just as.

As we're thinking about 'twenty two how we should be thinking about just the contributions from an R&D standpoint across Michigan, yes. So.

Cecilia on pipeline, where obviously, we love innovation at site I think I think we've proven that we're good at it.

We're excited about next year, releasing nextgen omni in the first quarter.

Early early feedback from surgeons, who we've received feedback from there has been very positive we think that's going to be a very nice.

A welcome addition to the mixed market next year, we also have an.

An exciting next generation of tier care care care MGM that.

We're excited to get out next year and then beyond that.

<unk>.

Migs and <unk> and.

And Mgd procedures, we do as we've discussed in the past we are in deep R&D and <unk>.

Do intend to bring to market.

Broad pipeline.

Innovative products that hopefully one day will address every every step of the way for the patient journey and the eye care provider journey, taking care of these patients. These are chronic diseases lifelong diseases. They don't have a cure.

And we expect to innovate just like we've done with omni with tier here and now with scion, where I think.

Fortunately I think we're three for three here and we're looking forward to.

Sharing more about the stuff that we're working on next year.

And Cecilia.

Half of the R&D line item right that you see us.

For us it is clinical right. So.

Other major products projects that will be in our R&D investment envelope next year, our Sahara precision those trials right now, which are obviously very important to us.

Great. Thank you for taking the questions.

Thanks Cecilia.

Thank you.

One moment please for our next question.

And the next question will come from David Saxon of Needham and company. Your line is open.

Hi, Good afternoon, Paul and Jesse Thanks for taking my questions.

Maybe one for Paul on for Jesse.

<unk>.

To fulfill your.

Question around Psi on a <unk>.

Talked about the <unk> launch strategy three pronged just wondering if you could tell us which buckets youre seeing the most traction.

Launch to date.

And based off.

The script it sounds like some cyan user users are being introduced to omni, which is great to hear especially so.

Early on are you seeing anything.

About the reverse where omni users are.

Starting to switch some of their volumes to <unk>.

Yeah.

Hi, David Great question.

On on the first question around scion.

A reality, we're seeing adoption across all three of those subs that we knew we knew before we.

Before we developed <unk> on we knew these market subsets existed we've got obviously significant and highly talented commercial team sales and marketing team and the subset of the market or known to us.

We're not accounts that we could win.

Regardless of how how efficacious omni is.

They werent account that were available to us they are today so.

The answer is all three of those subsets, we're having progress with XI onto the high volume cataract surgeon, we brought on a number of those I think within the first few weeks I mean think of like some of the very highest volume cataract surgeons in the country.

I know I know, we have some of those who came on early.

The academic institutions those institutions take time right to get products through the system, but we're having very healthy discussions there today and then lastly on the PEO and profitability oriented facilities were selling scion into those types of accounts today.

Your second question, David Omni users.

I can take that.

We.

Utilization the omni utilization of some of the initial sign on orders.

Looks very similar to the omni utilization overall, David if that makes sense right like meaning.

There's not a discernible difference that we can observe yet like in there.

Utilization trends versus the non sign on.

But on the user base.

And we're really encouraged right it's been a very targeted initial rollout.

And we knew that the use case really.

Might have some overlap, but honestly the reason that the users were using omni.

What was such that.

Mitigated the theoretical risk of sort of the utilization cannibalization alright.

We are quite encouraged.

With that comparison of utilization.

Another way to say, okay, David another way to think of that is.

Our omni customers, who are who are proficient with omni in there now.

The bar or the efficacy bar and expectation has been set.

That they're not going to move off of that.

That's why they are using omni, whereas so so omni customers don't necessarily become scion customers. However, the opposite Psi on customers, we do have the opportunity to introduce them to test the omni once once they are using scion we've got that.

Stablish regular sales rep to surge and relationship and they are in the or with the surgeons and then they're seeing patients that are a little more advance that's the ideal opportunity now that we're in there.

To sell them on omni so we don't see it the other way around omni very very happy omni users, who depend on the efficacy that omni delivers switching off of omni really to anything else.

Okay great.

Then just maybe just one on the cash burn it looks like it was around $21 million for the quarter.

61 year to date.

Should we think about the burn in the fourth quarter.

It sounds like that should improve in 'twenty three so.

Maybe just give us a framework with.

How to think about the magnitude of that improvement as we.

Progress to positive free cash flow in 'twenty five.

So much yes.

Sure.

I think we've given a lot of good piece parts to be able to kind of give our view right.

We will.

We gave a directional.

And I'd say.

The true directional sort of view of what the operating expense envelope should look like next year.

No our perspective on.

On medium term revenue growth right and then.

We are seeing margins.

Gross margins right.

I think the three periods.

It was 84% for all three periods right.

And I discussed in my prepared comments so.

You sort of factor all those three things and without sort of giving specific cash burn guidance, but you can get to like when our perspective is like on.

But the burn envelope will be like next year, right and what's important to like in his comments was.

We've made a lot of the investment we think to grow then that grow the business in the next $500 million in terms of infrastructure investments support investment.

And we think this opex envelope.

<unk> scaled very nicely with.

Much less variable opex like.

For the next $500 million of growth than we have than we have experienced as we've invested heavily in the recent past.

And so that's why we.

We continue to convey conviction about.

Our balance sheet and the ability to hit to hit our growth objectives.

Within that within that balance sheet.

Got it thanks, and congrats on the quarter. Thanks, Kim Thank you.

Thank you.

One moment please for our next question.

Our next question will come from Tom <unk> of Stifel. Your line is open.

Great Hey, guys. Thanks for the questions maybe.

And maybe if I can start on reimbursement with the can alloplasty professional fee cut.

For next year I believe recently finalized maybe if.

If you can provide just general thoughts or views around the volume impact in 2023 from <unk>.

These changes and then I guess on top of that.

What are your thoughts on pricing gross margins next year.

In that same context.

Yeah, Hey, Tom.

Happy to take take that one so.

<unk> six 674 as we've discussed in the past.

Two years ago, the rock RV you process.

Revalued <unk> six 674, as well as trabecular bypass stenting on the six 674 pro fee side they proposed.

Two year reduction in the proceed from there.

A historical rate of <unk>.

900, plus two 750 <unk> this year.

Down to about 600 next year starting on January one so while.

While this is never welcome for surgeons ophthalmologists, they've been experiencing reimbursement cuts on things like cataract surgery for many many years now so it's certainly not good news in terms of our business and in terms of doctors' decisions to use.

We don't see an impact there and the reason why I say that is.

<unk>.

The relative positioning of the pro fee so moving from $750 to 600 again, it's not it's not.

Welcome news, but it doesn't change.

The level of reimbursement relative to any competing procedures to think about.

Goniotomy Goniotomy had had the highest pro fee.

Scion for example, and it is still well until that procedure is revalued in due course.

Scott Revalued so.

Reduced six 674 fee isn't going to change the relative lead better profi compared to stenting cataract. So we think that the.

As you try to assess the impact of any of these changes on utilization. Obviously, you think about relative number one relativity and then number two in a vacuum.

Does the does the profile going forward.

Sufficiently reimbursed provider that they will continue doing these procedures and we think that the answer is yes.

So doctors are used to using omni they rely on omni for its efficacy we have a very sticky business and we don't see a profile change from $750 to 600, taking us off course.

Yes on pricing and margin.

Pricing pricing is really driven by the facility fee, which for 66174 actually went up.

We're always cognizant of margin pressures I think.

Once I am becomes a more prominent contributor to our revenue mix as that gets production scale right.

There might be a very modest amount of pressure on our overall surgical glaucoma margins right, but.

But ultimately.

We don't.

Feel like sort of.

There will be any cause and effect of price pressure just given how pricing is really set in the market based on professional fee.

Got it that's great color and then my follow up just on.

Tier care, Paul you talked about the Sahara readout I think by <unk> 23.

Maybe sort of at that time, let's say the superior superiority endpoint where to hit.

But what can we expect maybe over the next six to 12 months after that.

It would be great. If you could just refresh us kind of on the longer term market access strategy.

Would be very helpful. Thanks, guys.

Yes sure. Thanks, Tom.

A couple of considerations again, it completed enrollment.

In August September timeframe the readout.

The randomization tier care versus Restasis readout.

Primary endpoints that will be late late Q2, So maybe summer summer of 2023, we'll have the data analyzed and ready for that readout.

And then beyond that assuming knock on wood assuming success.

We would begin we want to publish the data we'll try to publish certainly the six month data.

And then we continue the study is not over at that point it will.

Continue for two years Theres another readout at two years, the two goals of the study just to remind everybody.

One we want to assess how tier care compares to restasis at six months on signs and symptoms.

And then the second goal of this study is to show durability of treatment effect. That's why we're running a two year trial with the <unk>. That's an eternity in the world of dry eye clinical trials, but again. This study was informed by payers themselves you spoke to a number of payer medical directors before.

Before we.

Designed and began executing this study and those were the two things they needed to see they need to see how does how does the interventional procedure for mgd compared to costly daily.

Market, leading prescription Rx and number two how long just tier care last.

What is the durability of treatment effect, because payers are going to want to decide if we're covering this how many how many treatments per year. We are we paying for it based on the thousands and thousands of cases, we've done successfully commercially today and the cash pay.

World, We typically see one to two treatments in the first year and then a single treatment.

For maintenance every year thereafter, so we would Thomas long answer those those are the goals of the study we would begin having.

Hopefully again, assuming success very healthy discussions with payers with that six month data, we're not going to wait for the two year endpoint in late 2024, we're going to go with that six month endpoint.

And talk to us.

As many payers as we can and I think hopefully we'll be able to pull in some payer wins.

In advance of that two year 2024.

Final readout.

Perfect. Thanks, Paul.

Thanks.

Thank you.

And one moment please for our next question.

Our next question will come from Craig Bijou of Bank of America. Your line is open.

Good afternoon, guys. Thanks, Thanks for squeezing me in here just just one from me.

I believe you guys said that youre seeing uplift.

Standalone utilization in certain markets.

And maybe you bring those best practices to other markets.

Hoping you can expand a little bit again.

Maybe on the characteristics of that market is there anything thats common.

Seeing.

<unk> Standalone as you have seen a little bit more uptick.

And then maybe just a little bit more color on how you plan to kind of take those best practices and bring them to your other markets.

Yes.

Craig I'll talk about the.

The GCC as what we've seen we've seen the most successful gcc's historically the way we were organized prior prior to our re org.

The gcc's or more or less on an independent team with a mission to go and educate educate our omni surge and educate the referring provider community et cetera, but they are operating more independently. What we saw again, we're learning very quickly we're paying close attention to what's working and then we're trying to institutionalize those best practices.

As we're doing that I think very well right now we saw that the Gcc's, who are working most closely with <unk>.

Local surgical.

That they were able to effect faster better higher quality.

Education of the entire surgical ecosystem right.

Surgical reps had already cultivated and with the GCC and the Rep working closely together the GCC was better able to go and educate the important referring providers educate the.

The types of omni surgeons that were more likely to be ready to go sooner and so it's through that very tight collaboration between GCC and surgical sales rep.

More efficient higher yield better quality standalone market development, what's happening. So what we've done is we've taken that entire 20 member GCC team and recently integrated them entirely within the surgical sales infrastructure and we're super excited now to replicate what we saw with <unk>.

Already happening in a handful of territories, where we were seeing better and better productivity on a stand alone market development and better better uplift there and we think that we're institutionalizing at now with the GCC is under the.

Our leadership.

Regional directors on our sales force.

And we expect now there was other territories to follow suit.

Got it one follow up I mean, any timing or expected timing on how.

Quickly you think.

You can see some uptick in the other.

Other territories.

Yes go ahead, Paul I think we're I think we're seeing.

Standalone uptick now I mean, if you just.

Some some barometers its hard its hard to track with any accuracy again, it's it's omni right. It's the same device. We don't have a combo cataract device and a standalone device omni has a very broad indication for.

For a combo cataract and Standalone and Eddie severity of disease. So it's tricky, it's tricky to track in that way.

Because it's the same device, but based on.

First of all our performance and our growth I think it gets all rolled up into that.

We can expect that to continue.

And then just the discussions we're having.

We have a large commercial infrastructure in the discussions we're having with our surgeon customers and the awareness of Standalone that we're driving.

And the feedback from our customers on Standalone in the way that we're training doctors today from the get go.

They do their first 10 cases, where institutionalizing some best practices, we'll do seven combo cataract cases, and three standalone cases, if possible.

Those are the kinds of things that are happening with increasing frequency, it's tangible to us the.

The chatter amongst the surgeon community around Standalone continues to grow and I think all of those things are very good barometers of Standalone market development Standalone progress.

In an area, that's otherwise tricky to to assess with any like right now any real accuracy again, because the product omni is the same successful product in combo cataract business Standalone.

Got it thanks for the color guys.

Sure.

Thank you.

And I see no further questions in the queue I would now like to turn the conference back to Paul.

But <unk> for closing remarks.

Well, thank you Chris and thank you. All appreciate everyone's continued interest in <unk> Sciences I. Appreciate your time hope everyone is well and have a great rest of your day.

Thank you.

This concludes today's conference call. Thank you all for participating you may now disconnect and have a pleasant day.