Q1 2024 Sight Sciences Inc Earnings Call

Okay.

Operator: Good day, and thank you for standing by. Welcome to the Sight Sciences First Quarter 2024 Earnings Results Conference Call. At this time, all participants are in a listen-only mode.

Good day, and thank you for standing by.

Speaker Change: Welcome to the site Sciences' first quarter 'twenty 'twenty four earning results conference call.

Speaker Change: At this time all participants are in a listen only mode.

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is ready.

After the speaker's presentation, there will be a question and answer session.

Operator: To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Trip Taylor, Investor Relations and Financial. Please go ahead.

Speaker Change: Ask a question during the session you will need to press star one one on your telephone.

Speaker Change: You will then hear automated message advisory your hand is race. So withdraw your question. Please press star one one again.

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

Speaker Change: I would now like to hand, the conference over to your first speaker today trip Taylor Investor Relations in five minutes.

Trip Taylor: Please go ahead.

Trip Taylor: Thank you for participating in today's call. Presenting today are Sight Sciences Co-Founder and Chief Executive Officer, Paul Badawi, and Chief Financial Officer, Allie Bauerlein. Also in attendance is Sight Sciences Chief Commercial Officer, Matt Link.

Trip Taylor: Thank you for participating in today's call presenting today are site Sciences, co founder and Chief Executive Officer, Paul Modality, and Chief Financial Officer Ali Bauerlein also in attendance. This eight sciences' Chief commercial officer, Matt Link earlier today <unk> Sciences released its financial results for the three months ended March <unk>.

Trip Taylor: 31, 2024, and reaffirmed revenue and adjusted operating expense guidance for full year 2020 for a copy of the press release is available on the company's website at investors <unk> Sciences Dot com.

Trip Taylor: Earlier today, Sight Sciences released its financial results for the three months ended March 31st, 2024 and reaffirmed revenue and adjusted operating expense guidance for full year 2024. A copy of the press release is available on the company's website at investors.sightsciences.com. I'd like 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 Law. These forward-looking statements include statements related to the company's anticipated financial performance, operating results, and liquidity position, current and long-term strategic objectives, market opportunity, business and commercial strategy, ongoing litigation, product reimbursement, coverage, and strategy, efficacy of our products, expectations regarding regaining commercial momentum, account utilization and engagement, and clinical trial strategy and results.

Trip Taylor: I'd like 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. These forward looking statements include statements related to the company's anticipated financial performance operating results and liquidity position current and long term strategic objectives.

Trip Taylor: Market opportunity business in commercial strategy ongoing litigation product reimbursement coverage and strategy efficacy of our products expectations regarding regaining commercial momentum account utilization and engagement and clinical trial strategy and results.

Trip Taylor: Forward-looking statements are based on estimates and assumptions as of today, 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 its public filings with the Securities and Exchange Commission, including in the risk factors section of the company's annual report on Form 10-K and quarterly reports on Form 10-Q.

Trip Taylor: Forward looking statements are based on estimates and assumptions as of today 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.

Trip Taylor: 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 its public filings with the Securities and Exchange Commission, including in the risk factors section of the company's annual report on Form 10-K, and quarterly reports on form 10.

Trip Taylor: Q.

Trip Taylor: The company undertakes no obligation to publicly update or revise any forward-looking statements except as required by law. On this call, management may refer to financial measures that were not prepared in accordance with generally accepted accounting principles in the United States, including adjusted operating expenses.

Trip Taylor: The company undertakes no obligation to publicly update or revise any forward looking statements, except as required by law.

Trip Taylor: The company believes these non-GAAP financial measures are important indicators of its operating performance because they exclude items that are unrelated to, and may not be indicative of, its core operating regime. See the company's earnings release for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, as well as additional information about the company's reliance on non-GAAP financial measures. I will now turn the call over to Paul. Thanks, Trip.

Trip Taylor: On this call management may refer to financial measures that were not prepared in accordance with generally accepted accounting principles in the United States, including adjusted operating expenses. The company believes these non-GAAP financial measures are important indicators of its operating performance because they exclude items that are unrelated to.

Trip Taylor: And may not be indicative of its core operating results.

Trip Taylor: The company's earnings release for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures as well as additional information about the company's reliance on non-GAAP financial measures.

Trip Taylor: I will now turn the call over to Paul.

Paul Badawi: Thanks Tripp.

Paul Badawi: We continue to advance our mission of developing transformative, interventional technologies that allow eye care providers to procedurally elevate the standards of care, empowering people to keep seeing. In the first quarter, we saw an increase in the utilization of our surgical glaucoma technologies as compared to the previous quarter and the first quarter of 2023, and we continue to demonstrate operational excellence with our strong growth margins and disciplined expense management. We are executing on our strategic initiatives to facilitate appropriate and equitable market access for our products and expand our clinical evidence portfolio in both segments.

Paul: We continue to advance our mission of developing transformative intervention technologies that allow eyecare providers to procedurally elevate the standards of care empowering people to keep CA.

Paul Badawi: In the first quarter, we saw an increase in the utilization of our surgical glaucoma technologies as compared to the previous quarter and the first quarter of 2023 and continue to demonstrate operational excellence with our strong gross margins and disciplined expense management.

Paul Badawi: We are executing on our strategic initiatives to facilitate appropriate and equitable market access and expand our clinical evidence portfolio in both segments.

Paul Badawi: Our first quarter performance only increases our excitement about 2024 and the long-term opportunities in front of us. We believe that our compelling commercial strategies into multi-billion dollar market opportunities, robust clinical efficacy supporting our differentiated interventional portfolio, and experienced management team have created a tremendous opportunity to drive durable and profitable growth over the coming years. We generated total revenue of $19.3 million in the first quarter, representing a record for a first quarter period.

Paul Badawi: Our first quarter performance only increases our excitement about 2024, and the long term opportunities in front of us.

Paul Badawi: We believe that our compelling commercial strategies and two multibillion dollar market opportunities robust clinical efficacy supporting our differentiated interventional portfolio and experienced management team have created a tremendous opportunity to drive durable and profitable growth over the coming years.

Paul Badawi: We generated total revenue of $19 3 million in the first quarter, representing a record for a first quarter period.

Paul Badawi: Growth was 3% sequentially from the fourth quarter of 2023 and 2% compared to the first quarter of 2023. At the same time, we significantly decreased our cash usage to $10.8 million in the first quarter of 2024 compared to $17.7 million in the first quarter of 2023, while still investing in our commercial and R&D value drivers and after taking into account our debt restructuring payments and typical first-quarter bonus payments. I will now turn to a more detailed discussion of our business segments, starting with our surgical glaucoma segment.

Paul Badawi: Growth was 3% sequentially from the fourth quarter of 2023, and 2% compared to the first quarter of 2023 at.

Paul Badawi: At the same time, we significantly decreased our cash usage to $10 8 million in the first quarter of 2024 <unk>.

Paul Badawi: Compared to $17 7 million in the first quarter of 2023, while still investing in our commercial and R&D value drivers and after taking into account our debt restructuring payments and typical first quarter bonus payments.

Paul Badawi: I will now turn to a more detailed discussion of our business segments, starting with our surgical glaucoma segment.

Paul Badawi: We are pleased with our quarterly performance with surgical glaucoma revenue of $18.3 million, representing sequential growth of 6% compared to the fourth quarter of 2023 and growth of 5% compared to the same period in the prior year. Omni is positioned as an important mixed technology that surgeons rely on to treat their glaucoma patients, and our recovery trajectory is meeting our expectations.

Paul Badawi: We are pleased with our quarterly performance with surgical glaucoma revenue of $18 3 million.

Paul Badawi: Representing sequential growth of 6% compared to the fourth quarter of 2023 and growth of 5% compared to the same period in the prior year.

Trip Taylor: Omni is positioned as an important makes technology that surgeons rely on to treat their glaucoma patients and our recovery trajectory is tracking to our expectations.

Paul Badawi: We remain confident in our ability to continue expanding our position in the surgical glaucoma market for both combination cataract uses and standalone uses. We have strategically focused on a few critical drivers to build long-term success within our surgical glaucoma sector. Our main priorities are to increase surgeon utilization across all accounts and reengage accounts who ceased or decreased their orders during the LCD uncertainty period. We also continue to focus our efforts on increasing the pipeline of new surgeons to be trained on Omni and Scion.

Trip Taylor: We remain confident in our ability to continue expanding our position in the surgical glaucoma market for both combination cataract uses and Standalone UCITS.

Trip Taylor: We are strategically focused on a few critical drivers to build long term success within our surgical glaucoma segment.

Trip Taylor: Our main priorities are to increase surgeon utilization across all accounts.

Trip Taylor: And Reengage accounts, who ceased or decrease their orders during the LCD uncertainty period.

Trip Taylor: We also continue to focus our efforts on increasing the pipeline of new surgeons can be trained on omni and scion.

Paul Badawi: Growth in the first quarter of 2024 was driven primarily by increased utilization from existing accounts of Omni and Scion, which showed both sequential growth and growth when compared to the same period in the prior year. This is a testament, in large part, to the leading clinical profile of OMNI, which demonstrates the efficacy of OMNI at lowering both IOP and IOP-reducing medications for a broad set of primary open-angle glaucom In parallel, we are actively reengaging with accounts that have ceased or decreased their orders during the LCD uncertainty period during the second half of 2023 before the LCDs were withdrawn in late December 2023. As a reminder, we experienced net account attrition of approximately 6% during that period, which we believe was primarily due to the uncertainty caused by the LCDs during the same period.

Trip Taylor: Growth in the first quarter of 2024 was driven primarily by increased utilization from existing accounts of omni and SIOP.

Trip Taylor: Which had both sequential growth and growth when compared to the same period in the prior year.

Trip Taylor: This is a testament in large part to the leading clinical profile of omni, which demonstrates the efficacy of omni at lowering both IOP and IOP, reducing medications for a broad set of primary open angle glaucoma patients.

Trip Taylor: In parallel we are actively re engaging with accounts that have ceased or decrease their orders during the LCD uncertainty period. During the second half of 2023 before the LCD were withdrawn in late December 2023.

Trip Taylor: As a reminder, we experienced net account attrition of approximately 6% during that period, which we believe was primarily due to the uncertainty caused by the LCD is in the same period.

Paul Badawi: We expect returning accounts to contribute toward further regaining momentum in the second quarter to help drive low double-digit sequential growth from the first quarter of 2024 and toward double-digit growth in the second half of the year versus the comparable period in the prior year. Another core aspect of our strategy is building our pipeline of surgeons to be trained on procedures enabled by our Omni technology. We are pleased to see that our pipeline has increased over the past few months, and we expect this pipeline to continue to strengthen throughout the remainder of 2024.

Trip Taylor: We expect returning accounts to contribute toward further regaining momentum in the second quarter to help drive low double digit sequential growth from the first quarter of 2024 and toward double digit growth in the second half of the year versus the comparable period in the prior year.

Trip Taylor: Another core aspect of our strategy of building our funnel of surgeons to be trained on procedures enabled by our omni technology. We are pleased to see that our funnel has increased over the past few months and we expect this funnel to continue to strengthen throughout the remainder of 2024.

Paul Badawi: Producing robust clinical data also remains a critical piece of our strategy to drive increased adoption and utilization of OMNI. The compelling results from the prospective multi-center Gemini 2 study demonstrated sustained and clinically significant IOP reduction of 29% at three years and clinically significant reduction of IOP-lowering medication use, as 74% of study patients were medication-free at three years. Most recently, we announced the publication of a large-scale, real-world clinical outcome study of patients treated by the three most common mixed technologies in AJO International.

Trip Taylor: Producing robust clinical data also remains a critical piece of our strategy to drive increased adoption and utilization of omni the compelling results from the prospective multicenter Gemini two study demonstrated sustained and clinically significant IOP reduction of 29% at three years and clinically significant re.

Trip Taylor: <unk> of IOP lowering medication use at 74% of study patients were medication free at three years.

Trip Taylor: Most recently, we announced the publication of a large scale real world clinical outcome study of patients treated by the three most common mixed technologies and <unk> International the results further demonstrated omni strong efficacy profile.

Paul Badawi: The results further demonstrated Omni's strong efficacy profile. Using the American Academy of Ophthalmology's IRIS registry, the largest specialty society clinical data registry in all of medicine and the first comprehensive eye disease clinical registry in the United States, this large-scale MIGS study evaluated long-term, two-year, post-surgical outcomes among patients with primary open-angle glaucoma treated with the three most commonly used FDA-approved or cleared ab interno MIGS devices in the U.S., Omni, I The results from this study reported that the comprehensive outflow procedure performed with the OmniSurgical System technology was effective at lowering both IOP and IOP-reducing medication use at two years.

Trip Taylor: Using the American Academy of Ophthalmology is Iris registry, the largest specialty society clinical data registry in all of medicine, and the first comprehensive eye disease clinical registry in the United States. This large scale make study evaluated long term two year post surgical outcomes among patients with primary open angle glaucoma.

Trip Taylor: With the three most commonly used FDA approved or cleared AB internal migs devices in the U S. Omni hydrous, microstat and Istent inject combined with cataract surgery as well as for cataract surgery alone.

Trip Taylor: The results from this study reported that the comprehensive outflow procedure performed with the omni surgical system technology was effective at lowering both IOP in IOP, reducing medication use at two years. The results were further evidence of the omni procedure durable efficacy at two years and were consistent with our many prior pub.

Paul Badawi: The results were further evidence of the OMNI procedure's durable efficacy at two years and were consistent with our many prior published studies. We are excited to see that large-scale, real-world studies of mixed standards of care provide further evidence of the robust IOP reduction and medication reduction associated with the comprehensive outflow procedure enabled by IOP. The body of evidence supporting Omni's clinical efficacy continues to expand, continuing to strengthen our belief that the comprehensive outflow procedure enabled by Omni is a critical procedure in the field of glaucoma that is elevating the standard of care. We will continue prioritizing the production of powerful long-term clinical data, and we anticipate delivering additional compelling results in the future. We are very proud of our published, high-quality, long-term data, including the GEMII-2 and IRIS studies.

Paul Badawi: Studies.

Trip Taylor: We're excited to see that large scale real world studies of make standards of care provide further evidence of the robust IOP reduction in medication reduction associated with the comprehensive outflow procedure enabled by omni.

Trip Taylor: The body of evidence supporting omni as clinical efficacy continues to expand continuing to strengthen our belief that the comprehensive outflow procedure enabled by omni is a critical procedure in the field of glaucoma that is elevating the standard of care.

Trip Taylor: We will continue prioritizing the production of powerful long term clinical data and we anticipate delivering additional compelling results in the future.

Paul Badawi: We are very proud of our published high quality long term data, including the Gemini two into IRA studies.

Paul Badawi: Should new proposed LCDs emerge, we believe these data, along with our existing body of clinical evidence, will continue to support coverage of the procedure enabled by OMNI for the appropriate patient population. I want to emphasize our belief that the reimbursement profile for Omni today is sufficient to drive high growth. At the same time, when we look at the clinical profile of the procedure enabled by our technology, we believe there are opportunities to better align Omni's coding, coverage, and payment profiles with the clinical value Omni actually delivers.

Trip Taylor: New proposed Lcd's emerge we believe these data along with our existing body of clinical evidence. We will continue to support coverage of the procedure enabled by omni for the appropriate patient population.

Trip Taylor: I want to emphasize our belief that the reimbursement profile for omni today is sufficient to drive high growth.

Trip Taylor: At the same time, when we look at the clinical profile of the procedure enabled by our technology. We believe there are opportunities to better align omnis coding coverage and payment profiles with the clinical value omni actually delivers we look forward to continued engagement with the Max CMS commercial payers and other stakeholders.

Paul Badawi: We look forward to continued engagement with the MACS, CMS, commercial payers, and other stakeholders as part of our ongoing efforts to maintain and improve appropriate and equitable market access for glaucoma patients and their surgeons to the procedures enabled by our Omni technology. To close our surgical glaucoma discussion, I want to comment on the recent results from the patent trial that concluded last week in Delaware. As we noted in our press release earlier this week, the jury found that Sight Sciences' three asserted patents were willfully infringed and awarded monetary damages for past infringement.

Trip Taylor: As part of our ongoing efforts to maintain and improve appropriate and equitable market access for glaucoma patients in their surgeons to the procedures enabled by our omni technology.

Paul Badawi: The monetary damages included $5.5 million in lost profits and $28.5 million in royalty damages for sales of the Hydrus Microstent from its commercial launch through trial. As far as next steps, the District Court will entertain post-trial briefings by both parties, including with respect to potential enhancements to the damages and other remedies, and the court's final judgment will be subject to appeal.

Trip Taylor: To close our surgical glaucoma discussion I want to comment on the recent results from the patent trial that concluded last week in Delaware.

Trip Taylor: As we noted in our press release earlier. This week the jury found that site scientists three asserted patents were willfully infringed and awarded monetary damages for past infringement.

Trip Taylor: The monetary damages included $5 5 million in lost profits and $28 5 million in royalty damages for sales of the hydrus microstat from its commercial launch through trial.

Trip Taylor: As far as next steps the district Court, we will entertain post trial briefings by both parties, including with respect to potential enhancements to the damages and other remedies.

Trip Taylor: And the court's final judgment will be subject to appeal.

Paul Badawi: We have invested considerable capital and research and development to create new and innovative technologies, striving to pioneer novel treatments for chronic eye disease. Our commitment to these investments underscores our mission to expand patient access to transformative and interventional technologies that enhance patient outcomes. Given the substantial investments we have made in our surgical innovations on behalf of our surgeons, customers, and glaucoma patients, we have a duty to our stakeholders to safeguard our intellectual property portfolio, and we are pleased with the jury's verdict. Our attention remains steadfast on equipping eye care providers with efficacious technologies and executing on our long-term growth strategy in surgical glaucoma and dry eye disease. Now I will turn to our dry eye bit.

Paul Badawi: We have invested considerable capital in research and development to create new and innovative technologies striving to pioneer novel treatments for chronic eye disease.

Trip Taylor: Our commitment to these investments underscores our mission to expand patient access to transformative and intervention technologies that enhance patient outcomes.

Trip Taylor: Given the substantial investments we have made in our surgical innovations on behalf of our surgeon customers in glaucoma patients.

Trip Taylor: We have a duty to our stakeholders to safeguard our intellectual property portfolio and we are pleased with the jury's verdict.

Trip Taylor: Our attention remains steadfast on equipping eyecare providers with efficacious technologies and executing on our long term growth strategy and surgical glaucoma and dry eye disease.

Speaker Change: Now I will turn to our dry eye business.

Paul Badawi: We believe the TearCare system represents a transformative technology that will elevate the standard of care for evaporative dry eye disease treatment. Our long-term strategy has been to pioneer the field of interventional dry eye. The interventional dry eye procedure performed with tear care is designed to address the root cause of evaporative dry eye disease, and the growing body of tear care clinical results strongly support our belief in its safety and efficacy.

Speaker Change: We believe the tiered care system represents a transformative technology that will elevate the standard of care for evaporative dry eye disease treatment.

Trip Taylor: Our long term strategy has been to pioneer the field of intervention will dry eye. The interventional dry eye procedure performed with tier care is designed to address the root cause of the evaporative dry eye disease, and the growing body of tier care clinical results strongly support our belief and its safety and efficacy.

Paul Badawi: Clinical trial data has demonstrated that tier care provided patients with a comprehensive, consistent, fast-acting, and durable treatment, and the Sahara RCT showed superiority on our primary objective endpoint, tier breakup time, versus the market-leading prescription eyedropper, staples. There are over 11 million diagnosed patients who we think could benefit from the procedure, which we believe creates an approximate 2.5 billion core addressable U.S. market opportunities. Over the last five years, we have sold over 55,000 TearCare smart lids, developed meaningful relationships with important dry eye key opinion leaders, and achieved the successful 6- and 12-month results of our landmark study, the HERA-RC. These developments were critical to build a foundation prior to seeking equitable market action.

Trip Taylor: Clinical trial data has evidenced that tier care provided patient with a comprehensive consistent fast acting and durable treatment and the Sahara RCT showed superiority on our primary objective endpoint tier breakup time versus the market, leading prescription eyedropper stasis.

Trip Taylor: There are over 11 million diagnosed patients, who we think could benefit from the procedure, which we believe creates an approximate $2 5 billion core addressable U S market opportunity.

Paul Badawi: Over the last five years, we have sold over 55000 tier care smart lids develop meaningful relationships with important dry eye key opinion leaders.

Trip Taylor: And achieved the successful six and 12 month results of our landmark Sahara RCT.

Paul Badawi: These developments were critical to build a foundation prior to seeking equitable market access.

Paul Badawi: As part of our original long-term strategy, we are now focused on driving equitable market access for patients that can benefit from the procedures enabled by the Tier Care technology. We have shifted our resources away from cash-pay commercialization efforts toward market access, while reducing our overall commercial spend and infrastructure in the dry ice segment until we have some coverage. This year, we have begun discussions with payers with the goal of receiving coverage decisions starting in 2025. Our strategy for these payer discussions is based on articulating the value of peer care from both clinical and health economic perspectives.

Trip Taylor: As part of our original long term strategy. We are now focused on driving equitable market access for patients that can benefit from the procedures enabled by the tier care technology.

Trip Taylor: We shifted our resources away from cash pay commercialization efforts toward market access, while reducing our overall commercial spend in infrastructure and the dry ice segment until we have some coverage wins.

Paul Badawi: This year, we have begun discussions with payers with the goal of receiving coverage decision starting in 2025 our.

Trip Taylor: Our strategy for these payer discussions is based on articulating the value of peer care from both clinical and health economic perspectives.

Paul Badawi: We believe the combination of the strong clinical data from our Sahara RCT and the findings of our budget impact analysis, to be discussed in more detail shortly, create a compelling case for payers to cover treatments performed with care at an appropriate reimbursement level. We recently presented at the Asterisk Conference in April the 12-month results of the Sahara RCT, demonstrating improved signs and symptoms of dry eye disease for tear care patients who crossed over from Mercedes.

Paul Badawi: We believe the combination of the strong clinical data from our Sahara RCT and the findings of our budget impact analysis to be discussed in more detail shortly create a compelling case for payers to cover treatments performed with tier care at an appropriate reimbursement level.

Paul Badawi: We recently presented at the Astro Conference in April the 12 month results of the Sahara RCT, demonstrating improved signs and symptoms of dry eye disease for tier care patient crossover from our status.

Paul Badawi: The Phase 2 crossover of the Sahara RCT showed subjects who were previously treated with Restasis for six months and then subsequently taken off of Restasis and received a single tear care treatment experienced further statistically significant improvements in the signs and symptoms of dry eye disease.

Trip Taylor: The phase II crossover of the Sahara Sahara RCT showed subjects, who were previously treated with Restasis for six months and then subsequently taken off of Restasis and received a single tier care treatment.

Paul Badawi: Experienced further statistically significant improvements in the signs and symptoms of dry eye disease.

Paul Badawi: The first two phases of the Sahara RCT, month 6 and month 12, endpoints, suggest that the effectiveness of tear care appeared to be the same whether or not a study patient had prior treatment with Restasys and that similar results could be expected when tear care is used as a primary or secondary treatment for dry eye disease. We are extremely pleased that phase two of the RCT again demonstrates the strong clinical efficacy of the tiered care procedure.

Trip Taylor: The first two phases of the Sahara RCT month, six and month 12 endpoints suggest that the effectiveness of tier care appeared to be the same whether or not a study patients had prior treatment with restasis and at similar results could be expected one tier carriers use as a primary or secondary.

Paul Badawi: Treatment for dry eye disease.

Trip Taylor: We are extremely pleased that phase two of the RCT again demonstrates the strong clinical efficacy of the tier care procedure in the final phase of the Sahara RCT patient from the tier care cohort will be followed for a total period of 24 months from baseline with repeat care care treatments as needed. According.

Paul Badawi: In the final phase of the Sahara RCT, patients from the tier care cohort will be followed for a total period of 24 months from baseline with repeat tier care treatments as needed according to protocol-specified treatment, with the goal of understanding treatment frequency. We expect results from this final phase of the Sahara RCT to be published in 2025. In addition, we believe there are benefits associated with a dry eye treatment technology like TearCare that is not reliant on patient adherence. The ability to avoid the risk of patient noncompliance with a drop regimen further supports the case for prioritizing an interventional in-office treatment over a prescription-based approach.

To protocol specified treatment with the goal of understanding treatment frequency.

Paul Badawi: We expect results from this final phase of the Sahara RCT to be published in 2025.

Paul Badawi: In addition, we believe there are benefits associated with a dry eye treatment technology like tier care that is not reliant on patient adherence the.

Trip Taylor: The ability to avoid the risk of patient noncompliance with a drop regimen. Further supports the case for prioritizing and intervention will in office treatment over a prescription based approach.

Paul Badawi: Okay.

Paul Badawi: In addition to clinical data, our conversations with payers include our budget impact analysis, which will be presented this month at ISPOR, the International Society for Pharmacoeconomics and Outcomes Research, a leading health economics conference. We anticipate that the compelling model showcasing the health economic impact and savings for tear care versus prescription drops will be a powerful tool as we work to establish broad coverage for tear care. Another part of our strategy to achieve positive coverage decisions is for our customers to properly submit claims for tier care treatments to payers in a manner that appropriately reflects the value of the procedure.

Paul Badawi: In addition to clinical data our conversations with payers include our budget impact analysis, which will be presented this month at <unk>. The International Society for Pharmacopeia Economics, and outcomes research, a leading health Economics conference.

Trip Taylor: We anticipate that the compelling model showcasing the health economic impact and savings for tier care versus prescription drops will be a powerful tool as we work to establish broad coverage for tier care.

Paul Badawi: Another part of our strategy to achieve positive coverage decision is for our customers to properly submit claims for care care treatments to payers in a manner that appropriately reflects the value of the procedure. We are happy to report that we are seeing early positive traction with our customers efforts and we expect this momentum to continue.

Paul Badawi: We are happy to report that we are seeing early positive traction with our customers' efforts, and we expect this momentum to continue. Again, our goal is to begin receiving positive coverage decisions from payers starting in 2025, and until then, we will continue working diligently to articulate the clinical and economic benefits of Tiered Care Technology. Looking ahead to the rest of 2024, we believe we are in a position to continue to execute on our strategic priorities and capitalize on our upcoming catalysts as we scale our business with the intent to return to double-digit growth in the second half of 2024 and into 2025. In our surgical glaucoma segment, we expect Omni to capture market share in combo cataract procedures and lead the development of the standalone mixed market. We also remain committed to producing long-term clinical evidence for omics.

Trip Taylor: Again, our bullet to begin receiving positive coverage decisions from payers starting in 2025 and until then we will continue working diligently to articulate the clinical and economic benefits of <unk> technology.

Paul Badawi: Looking ahead to the rest of 2024, we believe we are in a position to continue to execute on our strategic priorities and capitalize on our upcoming catalysts as we scale our business with the intent to return to double digit growth in the second half of 2024 and into 2025 and.

Paul Badawi: In our surgical glaucoma segment, we expect omni to capture market share and combo cataract procedures and lead the development of the Standalone Migs market.

Paul Badawi: We also remain committed to producing long term clinical evidence for Ami.

Paul Badawi: In our dry eye segment, we will continue to lay the foundation for market access to interventional eyelid procedures with tear care. We believe we have an incredible opportunity ahead of us, along with the right strategy and the right team to execute and deliver value for our patients and stakeholders. I will now turn the call over to Ali to discuss our financials. Thanks, Paul.

Trip Taylor: And our dry ice segment, we will continue to lay the foundation for market access to intervention of island procedures with tier care.

Paul Badawi: We believe we have an incredible opportunity ahead of us along with the right strategy and the right team to execute and deliver value for our patients and stakeholders.

Paul Badawi: I will now turn the call over to Ali to discuss our financials.

Alison Perry Bauerlein: Before I turn to the first quarter financial results, I want to reiterate that we feel we are well positioned to support our financial and strategic goals for the future and are pleased with both our commercial and operational execution throughout the quarter. We plan on achieving cash flow break-even without the need to raise additional equity capital and are excited about our long-term growth opportunities. Moving back to the first quarter, total revenue for the first quarter was $19.3 million.

Ali: Thanks, Paul before I turn to the first quarter financial results I want to reiterate that we feel we are well positioned to support our financial and strategic goals for the future and are pleased with both our commercial and operational execution throughout the quarter we.

Alison Perry Bauerlein: We plan on achieving cash flow breakeven without the need to raise additional equity capital and are excited about our long term growth opportunity.

Alison Perry Bauerlein: This reflects an increase of 2% compared to the first quarter of 2023, primarily driven by increased utilization of Omni and Scion and partially offset by the expected decline in dry ivory. Surgical glaucoma revenue for the first quarter was $18.3 million, up 5% versus the comparable period in the prior year and 6% compared to the fourth quarter of 2023. 1073 customers ordered surgical glaucoma products in the first quarter, up 1% from the fourth quarter of 2023 and up 5% from the first quarter of 2023.

Alison Perry Bauerlein: Moving back to the first quarter total revenue for the first quarter was $19 3 million. This reflects an increase of 2% compared to the first quarter of 2023, primarily driven by increased utilization of omni in fire and partially offset by the expected decline in dry eye revenue.

Alison Perry Bauerlein: Surgical glaucoma revenue for the first quarter with $18 3 million up 5% versus the comparable period in the prior year and 6% compared to the fourth quarter of 2023.

Alison Perry Bauerlein: 1073 customers ordered surgical glaucoma products in the first quarter up 1% from the fourth quarter of 2023 and up 5% from the first quarter of 2023 utilization.

Alison Perry Bauerlein: Utilization of ordering accounts was up about 10% from the fourth quarter of 2023 and up about 5% from the first quarter of 2020. We believe this improved utilization is a testament to the unique benefits of Omni and Scion and their importance to surgeons and patients. Our dry eye revenue for the first quarter was $1 million, down 32% compared to the first quarter of 2023.

Alison Perry Bauerlein: Utilization of ordering accounts was up about 10% from the fourth quarter of 2023 and up about 5% from the first quarter of 2023.

Alison Perry Bauerlein: We believe this improved utilization is a testament to the unique benefits of omni and sign on and are important to surgeons and patients.

Alison Perry Bauerlein: Our dry eye revenue for the first quarter was $1 million down 32% compared to the first quarter of 2023.

Alison Perry Bauerlein: This expected decline was primarily due to fewer new accounts and related smart hub sales as a result of the reduced sales infrastructure after our restructuring in October of 2023 and the focus on the next phase of our commercial strategy for our dry eye segment towards achieving market access. For the first quarter of 2024, we had 288 active dry eye customers, a 9% increase versus the first quarter of 2023. We also sold about 4,000 dry eye treatment lids in the first quarter, a 7% decrease versus the comparable period in the prior year.

Alison Perry Bauerlein: This expected decline was primarily due to fewer new accounts and related smart home sales as a result of the reduced sales infrastructure. After our restructuring in October of 2023, and the focus on the next phase of our commercial strategy for our dry eye segments towards achieving market access.

Alison Perry Bauerlein: For the first quarter of 2024, we had 288 active dry eye customers, a 9% increase versus the first quarter of 2023.

Alison Perry Bauerlein: Also sold about 4000 dry eye treatment list in the first quarter, a 7% decrease versus the comparable period in the prior year.

Alison Perry Bauerlein: Gross margin for the first quarter was 86% compared to 84% in the same period of the prior year. The increase in gross margin was primarily driven by higher surgical glaucoma gross margin, which was partially offset by lower dry eye gross margin. Surgical glaucoma growth margin in the first quarter of 2024 increased to 88%, compared to 86% in the same period of the prior year, primarily driven by a one-time prior year inventory scrap.

Alison Perry Bauerlein: Gross margin for the first quarter was 86% compared to eight 4% from the same period in the prior year. The increase in gross margin was primarily driven by higher surgical glaucoma gross margin, which was partially offset by lower dry high gross margin.

Alison Perry Bauerlein: I'll come on gross margin in the first quarter of 2024 increased to 88% compared to 86% in the same period in the prior year, primarily driven by a one time prior year inventory scrap expense.

Alison Perry Bauerlein: Dry eye gross margin in the first quarter of 2024 declined to 42% compared to 54% in the same period of the prior year, primarily due to higher overhead costs per unit in the current period, primarily due to lower production volume. Total operating expenses for the first quarter were $31.2 million, a decrease of 7%, compared to $33.3 million in the first quarter of 2023, which reflects reduced selling, general, and administrative operating expenses and improved operating expense leverage in the first quarter of 2024, as compared to the same period in the prior year. The decrease was primarily due to lower personnel-related expenses, partially offset by the expected increased legal expenses and stock-based compensation.

Alison Perry Bauerlein: Dry eye gross margin in the first quarter of 2024 declined to 42% compared to 54% in the same period in the prior year, primarily due to higher overhead cost per unit in the current period, primarily due to lower production volumes.

Alison Perry Bauerlein: Total operating expenses for the first quarter were $31 2 million, a decrease of 7% compared to $33 3 million in the first quarter of 2023, which reflects reduced selling general and administrative operating expenses and improved operating expense leverage in the first quarter of 2020.

Alison Perry Bauerlein: Four as compared to the same period in the prior year.

Alison Perry Bauerlein: The decrease was primarily due to lower personnel related expenses, partially offset by the expected increased legal expenses and stock based compensation expenses.

Alison Perry Bauerlein: Adjusted operating expenses were $26.6 million for the first quarter, a decrease of 11 percent compared to $29.7 million for the same period in the prior year. Our loss from operations for the first quarter was $14.7 million, compared to a loss of $17.6 million in the first quarter of 2023. Our net loss was $16.2 million, or $0.33 per share, in the first quarter. We ended the quarter with $127.3 million of cash and cash equivalents and $35 million of debt, excluding debt discounts and amortized debt issuance costs.

Alison Perry Bauerlein: Adjusted operating expenses were $26 6 million for the first quarter, a decrease of 11% compared to $29 7 million in the same period in the prior year.

Alison Perry Bauerlein: Our loss from operations for the first quarter with $14 7 million compared to a loss of $17 6 million in the first quarter of 2023.

Alison Perry Bauerlein: Our net loss was $16 2 million or <unk> 33 per share in the first quarter compared to a net loss of $17 1 million or <unk> 35 per share for the first quarter of 2023.

Alison Perry Bauerlein: We ended the quarter with $127 3 million of cash and cash equivalent and $35 million of debt, excluding debt discounts and amortized debt issuance costs.

Alison Perry Bauerlein: We had $10.8 million of cash used in the first quarter, reflecting continued operating discipline, which included a payment of $3.2 million associated with our debt refinancing, annual bonus payments, and higher legal expenses. This was a substantial improvement from 17.7 million cash used in the first quarter of 2023. Moving to our outlook for the full year 2024, we are reiterating our revenue guidance of $81 to $85 million, representing growth of approximately 0 to 5% compared to 2023. We expect second quarter 2024 revenue to be lower than the comparable period in the prior year, following the impact of the LCDs in the second half of 2023.

Alison Perry Bauerlein: We had $10 8 million of cash used in the first quarter, reflecting continued operating discipline, which included a payment of $3 2 million associated with our debt refinancing annual bonus payments and higher legal expenses.

Alison Perry Bauerlein: This was a substantial improvement from $17 7 million cash used in the first quarter of 2023.

Alison Perry Bauerlein: Moving to our outlook for the full year 2024, we are reiterating our revenue guidance of 81% to $85 million representing growth of approximately zero to 5% compared to 2023.

Alison Perry Bauerlein: We expect second quarter 2020 for revenues to be lower than the comparable period in the prior year. Following the impact of the LCD in the second half of 2023.

Alison Perry Bauerlein: However, we do expect low double-digit sequential revenue growth in the second quarter of 2024 versus the first quarter of 2024, primarily driven by increased omni-utilization. We expect this will be followed by double-digit growth in the second half of the year versus the comparative period in the prior year, as we regain commercial momentum and expand utilization and our customer base. We expect typical seasonality in 2024, where the second and fourth quarters tend to have higher utilization than the first and third quarters. However, we still expect dry eye revenue to decline significantly in full year 2024 compared to full year 2023 due to the evolution of our commercial strategy towards market access activities and the restructuring of our dry eye business.

Alison Perry Bauerlein: However, we do expect low double digit sequential revenue growth in the second quarter of 2024 versus the first quarter of 2024, primarily driven by increased omni utilization.

Alison Perry Bauerlein: We expect this will be followed by double digit growth in the second half of the year versus the comparative period in the prior year as we regain commercial momentum and expand utilization at our customer base.

Alison Perry Bauerlein: We expect typical seasonality in 2024 for the second and fourth quarters tend to have stronger utilization in the first and third quarters.

Alison Perry Bauerlein: Still expect <unk> revenue to decline significantly in full year 2024, compared to full year 2023, due to the evolution of our commercial strategy towards market access activities and the restructuring of our driver IC.

Alison Perry Bauerlein: We expect <unk> revenue to have accelerated growth in 2025 with reimbursement coverage and an expanded commercial presence.

Operator: We expect dry eye revenue to have accelerated growth in 2025 with reimbursement coverage and an expanded commercial presence. In terms of gross margin, we continue to expect overall gross margin to be in the mid 80s. However, we anticipate incurring increased overhead costs per unit due to lower production bills planned in 2024 for both segments, with a larger impact in dry ice. We are reiterating our full year 2024 adjusted operating expense guidance of $107 to $110 million, representing a decrease of approximately 0 to 3% compared to 2020.

Alison Perry Bauerlein: In terms of gross margin, we continue to expect overall gross margin to be in the mid eighties. However, we anticipate incurring increased overhead cost per unit due to lower production belt planned in 2020 for both segments, but the larger impact in the dry ice segment.

Operator: We are reiterating our full year 2024, adjusted operating expense guidance of $107 million to $110 million, representing a decrease of approximately zero to 3% compared to 2023.

Operator: We believe we will return to double digit revenue growth in the second half of 2024 and into 2025.

Operator: We remained focused on further penetrating and expanding the surgical glaucoma and dry eye market as we execute and deliver on our long term goals and build for our future.

Operator: We believe we will return to double-digit revenue growth in the second half of 2024 and into 2025. We remain focused on further penetrating and expanding the surgical glaucoma and dry eye markets as we execute and deliver on our long-term goals and build for our future. Operator, please open the line for questions. Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.

Speaker Change: Operator, please open the line for questions.

Speaker Change: Thank you.

Speaker Change: At this time, we will conduct a question and answer session.

Operator: As a reminder to ask a question you will need to press star one one on your telephone and wait for your name to be announced.

Operator: Draw. Your question. Please press star one again.

Operator: Please stand by while we compile the Q&A roster. Our first question comes from the line of David Saxon with Needham and Company. Your line is now open.

Speaker Change: Please standby, while we compile the Q&A roster.

Operator: Our first question comes from the line of David Saxon with Needham <unk> Company. Your line is now open.

David Joshua Saxon: Oh, great. Thanks for taking my questions and good afternoon, Paul and Ali. So I just want to start on guidance. I get all the comments, you know, sequential double-digit growth in the second quarter and double-digit year-on-year growth in the second half. I mean, pretty easily bumping up against the top end of the guidance.

David Joshua Saxon: Oh, great. Thanks for taking my questions and good afternoon, Paul and Ali.

David Joshua Saxon: So I just wanted to start on guidance I get all the comments.

Operator: Sequential.

David Joshua Saxon: Couple of digit growth in the second quarter and then the second half should see double digit year on year growth.

Alison Perry Bauerlein: So my question is just, you know, given what you're seeing year to date, why not raise the guide? Is there anything you're seeing that you view as a material risk to the guidance? Yeah, I'm happy to take that question. And our general approach to guidance is to make sure that we set achievable targets based on what we're seeing in the business. We're only one quarter into 2024, and while we've seen great success through this point, we want to see consistent traction with that regaining momentum, seeing utilization continuing to improve, as well as new accounts.

David Joshua Saxon: I mean pretty easily bumping up against the top end of the guidance. So my question is just.

David Joshua Saxon: Given what you're seeing year to date.

David Joshua Saxon: Do not raise the guide is there anything youre seeing that you view asset.

Speaker Change: Material risk to the guidance.

Speaker Change: Yes, I'm happy to take that question and our general approach to guidance is to make sure that we set achievable target based on what we're seeing in the business. We're only one quarter into 2024, and while we've seen great success.

Speaker Change: We wanted to see consistent traction with that regaining momentum seeing utilization continuing to improve as well as new accounts, but at this point in time, we are very happy with what <unk> seen particularly in our surgical glaucoma segment.

Alison Perry Bauerlein: But at this point in time, we are very happy with what we've seen, particularly in our surgical glaucoma segment. So as we get farther into the year, we'll obviously continue to look at what appropriate guidance is, but we are very pleased with the results we saw in Q1 and that we've seen starting into Q2, and we think it's important to put out achievable guidance. Okay, that makes sense. Maybe for my second question, I'll switch gears to dry eyes.

Speaker Change: So as we get farther into the year, we'll obviously continue to look at what appropriate guidance is but we are very pleased with the results. We saw in Q1 that we've seen starting into Q2.

Alison Perry Bauerlein: And.

Alison Perry Bauerlein: We think it's important to point out achievable guidance.

Alison Perry Bauerlein: Okay.

Speaker Change: That makes sense, maybe for my second question I'll switch gears to dry eye. So I'd love to hear what Youre seeing in terms of care care claims so.

David Joshua Saxon: So, I'd love to hear what you're seeing in terms of tear care claims. So far, you know, is the level of reimbursement in line with expectations? And at a level that you think could get doctors excited about the procedure?

Alison Perry Bauerlein: So far the level of reimbursement in line with.

Alison Perry Bauerlein: Expectations.

Alison Perry Bauerlein: And at a level you think could get doctors excited about the procedure and then kind of secondarily to that I mean, we all know the dry eye drop market is very promotional.

David Joshua Saxon: And then kind of secondarily to that, I mean, we all know the dry eye drop market is very promotional and requires a lot of marketing. You know, the kind of dry eye device, I guess, would have reimbursement to help the doctor's economics. But to build patient awareness, do you think you need to, you know, spend heavily on marketing and promotional activities like we see in the dry eye drop category? Thanks so much. Hi, this is Matt.

David Joshua Saxon: And requires a lot of marketing.

Matt: You are.

David Joshua Saxon: The triad device.

Matt: Would have reimbursement to help the doctors economics, but to build patient awareness do you do you think you need to spend heavily on marketing and promotional activities like we see in the dry eye drop.

Matt: Category. Thanks, so much.

Matt Link: I'll take that one in two parts. First on the claims, you know, obviously, we're very excited about the data from Sahara, and as Paul referenced in his comments, you know, we were preparing for the publication of our economic impact model, but still very, very early days as it relates to claims. It would be premature to really say anything at this time. What we can say is based on the economic impact model we have, there's reasons to be optimistic around the level of reimbursement, and we believe that level of reimbursement to be both, you know, favorable from a provider's perspective and making the economics work within their practice, and also favorable from a payer perspective relative to the current standard of care, which we compared the tiered care, So, again, early in this conversation, early in the claims process, but certainly encouraged by what we're seeing and hearing at this stage, and we'll look forward to provide more feedback on that at a later date.

David Joshua Saxon: Hi, This is Matt I'll take that one two parts first on the claims.

Matt: We're very excited about the data from Sahara and as Paul referenced in his comments.

Matt Link: We're preparing for the publication of our <unk>.

Matt Link: Economic impact model, but still very very early days as it relates to claims would be premature to really say anything at this time, but we can say is based on the economic impact model. We have there is reasons to be optimistic around the level of reimbursement and we believe that level of reimbursement.

Matt Link: Both.

Matt Link: Favorable from from a Provider's perspective, and making the economics work within their practice and also favorable from a payer perspective relative to the current standard of care, which we compared the tier care.

Matt Link: A seizure too so again early in the conversations early in the claims process.

Matt Link: But certainly encouraged by what we're seeing and hearing at this stage and we'll look forward to provide.

Matt Link: More feedback on that at a later date.

Matt Link: As it relates to marketing, we fully understand and appreciate that we're in a market-creating opportunity here. This is a pharmaceutical medication space as it relates to the treatment of dry eye. That is a generic disease state that isn't highly differentiated.

Matt Link: As it relates to the marketing.

Matt Link: We fully understand and appreciate that we're in a market creating opportunity here. This is a pharmaceutical medication.

Matt Link: Space as it relates to the treatment of dry eye that is a generic disease state that it is highly differentiated I believe a lot of the promotional activity is.

Matt Link: I believe a lot of the promotional activity is to differentiate from other drops that are available on the market. We've got this very unique opportunity to create an entire new category for procedural intervention in ocular surface disease, specifically due to meibomian gland disease. And so we absolutely know that there is a marketing opportunity. But I think equally, if not more important, there is an education and outreach opportunity for providers. These patients are being seen in clinics across the United States. However, we know that they are underdiagnosed and undertreated.

Matt Link: It is a differentiate from other drops that are available on the market and we've got this very unique opportunity to create an entire new category for procedural intervention in ocular surface disease, specifically due to <unk> gland disease, and so we absolutely know that there is a marketing opportunity I think <unk>.

Matt Link: If not more important there is an education and outreach opportunity to providers. These patients are being seen in clinics across the United States. We know that they are underdiagnosed and undertreated and so certainly at the very beginning of this we believe there is an opportunity for outreach and education to providers.

Matt Link: And so certainly, at the very beginning of this, we believe there's an opportunity for outreach and education to providers to identify the patients that are already in their clinics when supported with reimbursement. We think that'll be a very favorable opportunity for them and for us. And then moving forward, we'll continue to evaluate what the broader promotional opportunities are to expand that patient population in conjunction with market access and sustainable reimbursement. Thanks so much, guys.

Matt Link: We identify the patients that are already in their clinic when supported with reimbursement, we think that'll be a very favorable opportunity for them and for US and then moving forward. We will continue to evaluate what the broader promotional opportunities are to expand that patient population in conjunction with market access and sustainable reimbursement.

Speaker Change: Great. Thanks, so much guys.

Operator: Thank you. One moment for our next question, please. Our second question comes from the line of James Beers with William Blair. Your line is now open. Hey guys, can you hear me?

Speaker Change: Thank you well know Macquarie next question. Please.

Matt Link: Our second question comes from the line of James Beers with William Blair. Your line is now open.

James Beers: Hey, guys can you hear me.

Operator: Yes.

Operator: Yes. Awesome, thanks for taking the question. Maybe just to start on utilization, obviously great to see things improving in Q1. Could you maybe speak to the exit rate in terms of utilization? I know you're saying low double-digit growth sequentially into Q2. Are you near historical levels yet? Or is that sort of the, you know, gating factor to giving you more confidence into, say, raising the guide?

James Beers: Awesome, Thanks for taking the question.

James Beers: Maybe just to start on utilization, obviously, great to see things improving in Q1.

James Beers: Can you maybe speak to the exit rate in terms of utilization I know youre, saying.

Operator: Low double digit growth sequentially into Q2.

Speaker Change: Near historical levels, yet or is that sort of the gating factor to giving you more confidence into save raising the guide. Thank you.

James Beers: Thank you. Yeah, so at a high level, when we think about utilization trends, typically, you would see the Q2 period seeing higher utilization versus the first quarter period. So that's a typical trend in the industry, and that's something that we also see in our business and expect this year. As we said in our prepared remarks, we expect traditional seasonality this year with higher sales in the second quarter and the fourth quarter versus the first quarter and the third quarter.

Speaker Change: Yes, so at a high level, when we think about utilization trends.

Operator: <unk> you would see that Q2 period seeing higher utilization versus the first quarter period. So that's the typical trend in the industry and that's something that we also see in our business and expect this year as we said in our prepared remarks, we expect traditional seasonality this year with high.

James Beers: Here sales in the second quarter, and the fourth quarter versus the first quarter in the third quarter. So that trend happens in our business and that is consistent with what we're seeing from a utilization perspective, I do think that having another quarter under our belts, we will certainly give us more confidence about what we expect to see in the back half of the year both in terms of.

James Beers: So that trend happens in our business, and that is consistent with what we're seeing from a utilization perspective. I do think that having another quarter under our belts will certainly give us more confidence about what we expect to see in the back half of the year, both in terms of the number of accounts, as well as increasing utilization across those accounts. So those are the critical metrics that we look at as a business in order to predict where we see the business going in the future. So, of course, we will continue to re-evaluate that as we get farther. Did you have a follow-up question, or are you good? Okay. Yes, I can hear you.

James Beers: The number of accounts as well as increasing utilization across those accounts. So those are the critical metrics that we looked at as a business in order to predict where we see the business going in the future. So of course, we will continue to reevaluate that.

Speaker Change: We get partnering to be here.

James Beers: Okay.

Speaker Change: Did you have a follow up question.

James Beers: Yes.

Speaker Change: Can you hear me yes.

Alison Perry Bauerlein: Yeah. Sorry, I thought Margaret might have been hopping on. In terms of the account ads in the first quarter, I guess maybe a little bit lighter than we expected were most of those accounts, the accounts, maybe you lost in the second half of 2023. And I know you're possibly saying, or maybe saying, less account ads factored into the guidance for the back half of the year, but it sounds like maybe you're a little bit more upbeat on that.

Speaker Change: Alright market might've been harping on.

Speaker Change: In terms of the account adds in the first quarter I guess, maybe.

Speaker Change: A little bit lighter than we expected were most of those accounts. The accounts maybe you lost in the second half of 2023 and I know your.

Alison Perry Bauerlein: Possibly seeing or may be saying.

Alison Perry Bauerlein: Less account adds factored into the guidance for the back half of the year, but it sounds like maybe a little bit more upbeat on that so maybe could you just speak to the account adds in the first quarter and then how you expect that to transition.

Alison Perry Bauerlein: So maybe could you just speak to the account additions in the first quarter and then how you expect that to transition into the second quarter and then throughout the rest of the year. Yeah, as we said in our last earnings call, we expected to see increased utilization to be the first improvement in the core metrics versus the account addition. So we do expect our active accounts to increase throughout 2024. That's a key focus for us.

Alison Perry Bauerlein: And to the into the second quarter and then throughout the rest of the year. Thank you.

Alison Perry Bauerlein: Yeah, as we said in our last earnings call, we expected to see increased utilization to be the first improvement in the core metric versus the account additions. So we do expect our active accounts to increase throughout 2024, that's a key focus of us.

Alison Perry Bauerlein: But in these early stages of rebuilding, post the LTV uncertainty period, we were focusing our reps on the highest value activities, and that included focusing on accounts that we're already ordering from and getting those ordering patterns back up. So our long-term strategy is still the same. It's a mix of increasing utilization of existing customers, re-engagement with lost customers, and training new customers. So it's kind of a mix.

Alison Perry Bauerlein: But in these early stages of rebuilding post the LCD uncertainty period, we were focusing our reps on the highest value activities and that includes focusing on accounts that we're already ordering and getting their ordering pattern back.

Alison Perry Bauerlein: So our long term strategy.

Alison Perry Bauerlein: It's still the same it's a mix of increasing utilization of existing customers re engagement with lost customers and training new customers up.

Alison Perry Bauerlein: And when we look at going farther into 2024, all three of those are contributors to our growth and getting back to double-digit growth. But in the first quarter, we were primarily focused on utilization, and that was planned.

Alison Perry Bauerlein: So it's kind of a mixed and when we look at going farther into 2020 for all three of those are contributors to our growth and getting back to double digit ROE, but in the first quarter. We were primarily focused on utilization and that that was the plan that was what we <unk>.

Alison Perry Bauerlein: Tended to do.

James Beers: That was what we intended. Great, thank you. Thank you so much.

Speaker Change: Great. Thank you.

Operator: One moment for our next question, please. Our next question comes from the line of Joanne Winch, with Citi. Your line is now open. Hi, this is Philippe. I'm from Joanne.

Speaker Change: Okay conclude Walmart well Macquarie next question. Please.

Alison Perry Bauerlein: Okay.

Alison Perry Bauerlein: Okay.

Alison Perry Bauerlein: Our next question comes from the line of Joanne Wuensch with Citi. Your line is now open.

Operator: Just quickly, for accounts that you're looking to re-engage with from the LCD withdrawal period, I was just wondering, how are those conversations going? And I guess, what are your expectations for conversions? And maybe, what is your biggest hurdle for converting those accounts back to using Omni again? Hi, this is Matt. I'll take that one.

Philippe: Alright. This is Felipe Jerome this quickly.

Operator: Okay.

Philippe: As we engage with.

Philippe: LCD withdrawal period I was just wondering how are those conversations going and I guess what are your expectations for conversions and maybe like what is your biggest hurdles are for converting those accounts not cool using army again.

Matt Link: Look, our engagements overall have been very positive. I think the market overall has seen a recovery in MIGS procedures and volumes on the heels of the withdrawal of the LCD. There's no real material limitation in terms of engaging those accounts, and those engagements and conversations are ongoing.

Operator: Hi, This is Matt I'll take that one look our engagements overall have been very positive I think the market overall has been.

Matt Link: <unk> has seen recovery.

Matt Link: In migs procedures and volumes.

Matt Link: On the heels of the withdrawal of the LCD Theres no real material limitation in terms of engaging those accounts.

Matt Link: As Ali said, from the very beginning of the year, we anticipated the recovery coming in the form of increased utilization. Our sales force has done a phenomenal job, as I think was indicated and demonstrated in Q4, in the face of the LCD, maintaining a high level of engagement with our core accounts. But there's also a capacity consideration here. As we talked about in the second half of last year, we didn't materially reduce our headcount. We saw some modest headcount attrition that we didn't immediately move to backfill.

Matt Link: Those engagements and conversations are ongoing as I always said from the very beginning of the year, we anticipated a recovery coming in the form of increased utilization. Our salesforce has done a phenomenal job as I think was indicated and demonstrated in Q4 in the face of the LCD to remain a high level of engagement with our core accounts, but yes. There is.

Matt Link: Also a capacity consideration here as we talked about in the second half of last year, we didn't materially reduced head count we saw some modest head count attrition that we didnt immediately move to backfill.

Matt Link: And in Q1, we spoke about how we would continue to build back into reinvestment within the sales organization. So we really think about that in terms of capacity, more so than infrastructure. And so a lot of this is about building capacity. Sight Sciences is a growth company. We have been a growth company, and to some extent, that was obviously interrupted in the second half of last year with the uncertainty of the LCDs.

Matt Link: And in Q1, we spoke about how we would continue to build back into reinvestment within the sales organization. So we really think about that in terms of capacity more so than infrastructure and so a lot of this is about building capacity.

Matt Link: This is a growth company, we have been a growth company and.

Matt Link: And to some extent that was interrupted obviously in the second half of last year with the uncertainty of the LCD and as we see the rate of recovery. That's been demonstrated in Q1 as well as we see in early Q2 that certainly gives us some measure of confidence to continue our investment in that's a key factor as we think about increasing not just utilization within the active accounts, but new.

Matt Link: And as we see the rate of recovery that's been demonstrated in Q1, as well as what we see in early Q2, that certainly gives us some measure of confidence to continue our investment. And that's a key factor as we think about increasing, not just utilization within an active account, but new accounts and then a new surge in engagement through new training. Thank you. All right, thank you.

Matt Link: And then new surgeon engagement through new surgeon training.

Speaker Change: Thank you.

Matt Link: Alright.

Matt Link: In Q1, our next question.

Matt Link: Okay.

Operator: One moment for our next question. Alright, our next question comes from the line of Tom Stephan with Stifle. Your line is now open.

Client Scaffold: Our next question comes from the line of client scaffold with stifle. Your line is now open.

Operator: Great. Hey guys, thanks for the questions. Congratulations on the nice quarter. I'll start with the competition. Maybe can you elaborate a bit on how, I guess, MIGS competition is qualitatively factored into guidance and your long-term outlook as well? You know, there's obviously a lot of innovation happening in Glaucoma. So, I guess, You know, I'm wondering if you can just talk about how this is contemplated in both the near term and the long term. Yeah, sure.

Speaker Change: Great Hey, guys. Thanks for the questions Congrats on the nice quarter.

Speaker Change: I'll start with competition.

Thomas M. Stephan: Maybe can you elaborate a bit on how I guess mix competition is qualitatively factored into guidance.

Operator: Your long term outlook as well.

Operator: Obviously, a lot of innovation happening in glaucoma, So I guess I.

Operator: I'm wondering if you can just talk about how this is contemplated in both the near term and the long term view and then I have a follow up.

Alison Perry Bauerlein: I'll take that and let others jump in to add their thoughts as well. You know, our overall approach to guidance was to be prudent here and put out achievable targets as we were coming out of the LCD uncertainty period. So we think we have set the right bar for the company, given those dynamics, as well as the dynamics on the dry eye side of the business this year. In terms of what we see from competitive dynamics, we think the MIGS market is a healthy market right now.

Speaker Change: Yes, Charlotte I'll take that and let others jump in.

Speaker Change: Their thoughts as well our overall approach to guidance was to be prudent here and put out achievable targets as we were coming out of that LTE uncertainty periods that we think we have the right bar for the company given those dynamics as well as the dynamics on the dry side of the business this year.

Alison Perry Bauerlein: It is a growing market. There's great innovation happening, and that brings more and more attention to doing standalone procedures, expanding the interventional mindset. All of that is great for us. When we look at our products and the clinical advocacy profile that we provide, we think that that will continue to help us and others in this industry continue to grow and shape the future of glaucoma.

Alison Perry Bauerlein: In terms of what we see from competitive dynamic. We think the makeup market is a healthy market right now it is a growing market, there's great innovation happening and that brings more and more attention to doing standalone procedure expanding the interventional mindset all of that is great for us when we look.

Alison Perry Bauerlein: Look at our products in the clinical efficacy profile that we provide we think that that will continue to help often and others. In this industry continue to grow and shape the future of glaucoma patients. So.

Alison Perry Bauerlein: Those are longer-term dynamics in terms of our guidance for 2024. You know, it's really focused on getting back the foundational work, the momentum back with our core accounts and reengaging with customers. But we see the competitive dynamics to be favorable for Omni's success in the short term, the medium term, and the long term. So we are happy to see that. Anything you guys would add?

Alison Perry Bauerlein: Those are longer term dynamics in terms of our guidance for 2024.

Alison Perry Bauerlein: It's really focused on getting back the foundational work that that momentum back with our core accounts and re engaging with accounts, but we see the competitive dynamics to be favorable for omni success in the short term and the medium term and the long term. So we are happy to see that.

Speaker Change: Anything to that.

Alison Perry Bauerlein: Okay.

Alison Perry Bauerlein: OK. Great, that's helpful. Thanks, Allie. And then maybe my follow-up would just be on utilization, really encouraging. The trends year over year and quarter over quarter. Ali, you talked about this a bit, but can you expand a little on sort of how those utilization trends look, I guess across your Surgeon Bees?

Speaker Change: Great. That's helpful. Thanks Ali and then.

Speaker Change: Maybe my follow up would just be on utilization.

Alison Perry Bauerlein: Really encouraging to see the trends year over year and quarter over quarter.

Alison Perry Bauerlein: Ali you talked about this a bit but can you expand a little on sort of how those utilization trends look I guess across your surgeon base.

Thomas M. Stephan: You know, how widespread or narrow are these recovery trends? Maybe the sales force has been able to move further into driving utilization and sort of those lower volume accounts? Any color there?

Alison Perry Bauerlein: How widespread are narrow are these recovery trends.

Alison Perry Bauerlein: Maybe has the sales force being able to move.

Alison Perry Bauerlein: Further into driving utilization and sort of those lower volume accounts.

Thomas M. Stephan: Any color there would be helpful.

Matt Link: Yes, Tom, this is Matt. I'll take that. Look, the good news is the trends in utilization we see are broadly across the organization. And I think the other thing really important to characterize as we talk about utilization, you know, we sell through to a facility as the end-point customer. But the reality is, as you all are aware, there are, you know, in many instances, multiple surgeons within those facilities.

Thomas M. Stephan: Yes, Tom this is Matt I'll take that but the good news is the trends in utilization, we see are broadly across the organization.

Thomas M. Stephan: The other thing really important to characterize as we talked about utilization, we sell through to a facility at the endpoint.

Matt Link: Customer, but the reality is as you are aware there is.

Matt Link: In many instances multiple surgeons within those facilities and so the increased utilization is coming.

Matt Link: And so the increased utilization is coming, as best we can tell, also from a mix between higher utilization on a per surgeon basis and also from surgeons within the facility. And so, you know, per our comments earlier, we really think this is a healthy underlying dynamic within the business and gives us an opportunity to really drive volume and density within key markets and really start to leverage some efficiency across our sales force through the increased volumes.

Matt Link: As best we can tell also the mix between higher utilization on a per se surgeon basis, but also surgeons within the facility.

Matt Link: So per our comments earlier, we really think this is a healthy underlying dynamic within the business and gives us an opportunity to really drive.

Matt Link: Volume and density within key markets.

Matt Link: And really start to leverage some efficiency across our sales force due to increased volumes importantly, though we recognize that.

Matt Link: Importantly, you know, we recognize that there are still a large number of opportunities for competitive conversions. I think we have historically talked about having trained about 50 percent of the available mix surgeons on Omni. But not all of those have fully adopted Omni to the extent we believe they could.

Matt Link: But there is still a large number of opportunities for competitive conversions I think we've historically talked about having trained about 50% of the available.

Matt Link: Migs surgeons on omni not.

Matt Link: Not all of those have fully adopted omni to the extent, we believe they could and so.

Matt Link: And so you really see a really large opportunity to continue to grow on this foundation that we're talking about. And this goes back to the comments I made a few minutes ago. You know, we are excited to get back to investment and into the sales force and driving incremental resources as the business justifies and warrants it to continue this growth trajectory. It's not going to happen on the sales force we have today but what we will invest in the future.

Matt Link: You really see.

Matt Link: Really large opportunity to continue to grow on this base that we're talking about and this goes back to the comment I made just a few minutes ago.

Matt Link: The Salesforce, we have today, but what we will invest in the future. So again, we talked a lot about at the end of last year and the beginning of this year in Q1.

Matt Link: And so, again, we talked a lot about at the end of last year and at the beginning of this year in Q1, how prudently we managed our dollars and resources in the face of the uncertainty of the LCD. I know that I speak for everyone when we say we're a lot more excited to talk about getting back to investment in the organization to scale and sustain the double digit growth that we're looking to achieve towards the back half of this year and into early next year. That's a great caller.

Matt Link: Know that I speak for everyone. When we say we're a lot more excited to talk about getting back to investment in the organization to scale and sustain the double digit growth that we're looking.

Matt Link: Looking towards the back half of this year and into early next year.

Thomas M. Stephan: Congratulations again. Thank you. Thank you so much. One moment for our next question. Our next question comes from the line of Matthew O'Brien with Piper Sandler. Your line is now open. Hey, this is Phil on for Matt.

Speaker Change: Our next question.

Operator: Thanks for taking our questions and congratulations on the great quarter. I guess my first one was on the trial and patent infringements on those three patents relating to the canicular scaffold. I was curious as far as future infringement goes with regard to Hydris and their ability to continue to sell that product.

Operator: I was curious as far as future infringement goes with regard to hydrous and their ability to continue to sell that product.

Matt Link: And I understand you might not be able to say much there, but is that perhaps the low hanging fruit that you could capture in given similar circumstances? Yeah, we really can't comment on ongoing patent litigation matters about our patent litigation strategy at this point or what that could potentially mean. Obviously, we were happy to see the results of the jury verdict associated with past damages and royalties, but the go-forward remedies and those things are all pending future hearings. So those will have to play out in the court process.

Matt Link: We really can't comment on ongoing patent litigation matters about our patent litigation strategy at this point or what that could potentially mean, obviously, we were happy to see the result of the.

Paul Badawi: That's fair. I figured I'd ask. And then, shifting gears, maybe you could just touch on the pipeline you have within surgical glaucoma specifically, any milestones or launches that investors should be made aware of over the next, you know, 12 to 18 months. Yeah, hi, this is Paul.

Paul Badawi: Obviously, very excited about our pipeline, the products we have commercialized today. Omni, Scion, and Tier Care were all developed internally and have proven our ability to innovate effectively and then commercialize effectively as well. So on the pipeline front, we can't share too much at this time, but we have shared in the past, and we're continuing to work on an intracanalicular scaffold, the helix stent, which is in animals as we speak

Paul Badawi: We're excited about that, and we'll share more in due course. We are in the earlier stages of... sustained release as well.

Paul Badawi: Hopefully, later this year, we'll hit some milestones that we'll be ready to share with everybody, but excited about what we're working on. I think we've proven our ability to innovate in a differentiated manner in a way that can elevate the standard of care and eye care. I love what we're doing, and I'm looking forward to sharing more later this year. Thanks so much.

Paul Badawi: Thank you. This concludes the question and answer session. I would now like to turn it back to Paul Badawi for closing remarks. Thank you for attending today's call. We appreciate your interest in Sight Sciences, and we look forward to updating you on our progress in the future. Thank you all. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music, ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ??

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