Q2 2024 Sight Sciences Inc Earnings Call

August 1, 2024

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Speaker Change: Welcome to the Sight Sciences 2nd Quarter 2024 Earnings Results Conference Call. At this time, all participants are in a listen-only mode.

Speaker Change: 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, and you will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again.

Trip Taylor: I would now like to turn it over to your first speaker today, Trip Taylor, Director of Investor Relations. Please go ahead.

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

Speaker Change: I would now like to turn it over to your first speaker today, Trip Taylor, Investor Relations. Please go ahead. Thank you. Thank you.

Speaker Change: 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 Ali Bauerlein.

Speaker Change: Also in attendance is Sight Sciences Chief Commercial Officer Matt Link.

Speaker Change: Earlier today, Sight Sciences released financial results for the three months ended June 30, 2024, in Narrowed 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.

Speaker Change: I would 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.

Speaker Change: These forward-looking statements include statements related to the company's anticipated financial performance, operating results, liquidity position, and ability to achieve cash flow break-even,

Speaker Change: Ability to Achieve Current and Long-Term Strategic Objectives

Speaker Change: Market Opportunity, and Ability to Enter New Markets and Capture Market Share.

Speaker Change: pricing strategy and the impact of proposed rules on payment rates, product reimbursement, coverage and strategy, expectations regarding regaining commercial momentum, account utilization and engagement, clinical trial strategy and results, and the disposition of the patent infringement case.

Unnamed Speaker: Forward-looking statements are based on estimates and assumptions as of today. I will now turn the call over to Paul. Thanks, Trip.

Speaker Change: Board-looking statements are based on estimates and assumptions as of today.

Speaker Change: 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.

Speaker Change: 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.

Speaker Change: can be found in its public filings with the Securities and Exchange Commission, including the risk factors section of the company's annual report on Form 10-K and quarterly reports on Form 10-Q .

Speaker Change: The company undertakes no obligation to publicly update or revise any forward-looking statements except as required by law.

Speaker Change: On this call, management may refer to financial measures that were not prepared in accordance with generally accepted accounting principles in the United States.

Speaker Change: including Adjusted Operating Expenses.

Speaker Change: 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 results.

Speaker Change: 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.

Speaker Change: I will now turn the call over to Paul.

Paul Badawi: Our second quarter results represent consistent commercial and operational execution throughout the quarter as 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. Additionally, we continue to prioritize operational excellence as we maintain solid margins and exercise diligent expense management. Quarterly cash usage declined by almost 30% compared to the prior year period, reflecting disciplined spend while still allowing for investment in all of our critical value drivers.

Paul Badawi: Thanks, Trip.

Paul Badawi: Our second quarter results represent consistent commercial and operational execution throughout the quarter, as 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.

Paul Badawi: In the surgical glaucoma segment, we drove sequential increases in utilization and the number of accounts ordering our products.

Paul Badawi: In our dry eye segment, the Sahara one-year data was published, which represents a critical milestone in support of our efforts to establish equitable market access for interventional dry eye treatments.

Paul Badawi: Additionally, we continue to prioritize operational excellence as we maintain solid margins and exercise diligent expense management.

Paul Badawi: Quarterly cash usage declined by almost 30 percent compared to the prior year period, reflecting disciplined spend while still allowing for investment in all of our critical value drivers.

Paul Badawi: For the second quarter, we generated total revenue of $21.4 million, reflecting sequential growth of 11% in line with our expectations. I will now turn to a more detailed discussion of our business segments, starting with our surgical glaucoma segment. As a reminder, if the recently proposed draft LCDs from May become effective in their current form, procedures that use our Omni and Scion technologies would continue to be eligible for Medicare coverage nationwide, and a related increase in Medicare facility payment rates for procedures reported with CPT code 66174, a code that is currently used to report our Comprehensive Omni procedure.

Paul Badawi: For the second quarter, we generated total revenue of $21.4 million, reflecting sequential growth of 11% in line with our expectations.

Paul Badawi: We are excited about the tremendous opportunity to execute on our long-term goals and reestablish double-digit growth driven by continued adoption of both of our paradigm-shifting interventional technologies.

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 $20.2 million.

Paul Badawi: representing sequential growth of 11% compared to the first quarter of 2024. The sequential improvement tracked to our expectations year-to-date and we remain confident in double-digit growth in this segment in the second half of 2024 as compared to the same period in the prior year.

Paul Badawi: As a reminder, if the recently proposed draft LCDs from May become effective in their current form, procedures that use our Omni and Scion technologies would continue to be eligible for Medicare coverage nationwide.

Paul Badawi: We believe our technology is critical to the thousands of surgeons who use OMNI routinely and is an important part of the glaucoma treatment continuum.

Speaker Change: We are extremely proud of Omni's differentiated clinical profile, as demonstrated in high-quality, long-term, peer-reviewed data, which we believe will continue to support access to the technology for the appropriate patient population.

Speaker Change: Separately and importantly, on the reimbursement front in July , CMS published the 2025 proposed Medicare payment rules for hospital outpatient and ASC procedures, along with physician professional fees.

Speaker Change: The ASC Payment Rule for 2025 proposed to grant device-intensive status and a related increase in Medicare's facility payment rate for procedures reported with CPT code 66174, a code that is currently used to report our Comprehensive Omni procedure.

Speaker Change: These proposed rules are not considered final until the final rule is published, which we expect to occur in the fourth quarter of 2024.

Speaker Change: We firmly believe device-intensive status has always been appropriate for our omni-technology and procedure, and receiving confirmation of this status has been a long-term initiative for the company.

Speaker Change: As part of our omni-market access efforts, we have diligently worked to establish device-intensive status for CPT code 66174, so we are very pleased with this proposal from CMS.

Speaker Change: If the rule is finalized with device-intensive status for this code, effective January 1, 2025, it will result in an increase to Medicare's ASC facility payment of approximately $600, or 29%, compared to Medicare's ASC payment rates for 2024.

Speaker Change: Should device intensive status be finalized for this code, we believe this would be a meaningful development that would enhance our value proposition from a facility economics perspective for omni-technology versus both mixed stent implants and goniotomy procedures.

Speaker Change: We are encouraged by this development and plan to provide further updates once the final rule is published.

Speaker Change: Now, I'll focus on the progress made against our core strategic initiatives this quarter.

Speaker Change: Within our surgical glaucoma segment, we remain steadfastly focused on a few critical drivers that we believe are keys to solidifying long-term success for the business.

Speaker Change: which include increasing surgeon utilization across all accounts and re-engaging with accounts that ceased or decreased orders during the LCD uncertainty period last year. In addition, we are working to increase the pipeline of new surgeons who will be trained on Omni and Scion.

Speaker Change: Looking first at utilization, as discussed before, the differentiated efficacy of our technology across the spectrum of disease severity has made Omni a leading minimally invasive interventional technology for surgeons managing primary open-angle glaucoma patients.

Speaker Change: We are focused on increasing utilization with accounts already using Omni and have been successful here over the past two quarters. Utilization of ordering accounts was up 5% from the first quarter of 2024.

Speaker Change: We believe the recent improvement in utilization is evidence of recovery and is a testament to the unique benefits of Omni and Scion and their importance to surgeons and patients.

Speaker Change: Jumping to re-engagement with accounts. In the second quarter of 2024, we experienced an increase in the number of accounts ordering surgical glaucoma products compared to the first quarter of 2024, which highlights our growing momentum as the year has progressed.

Speaker Change: 1,131 customers ordered surgical glaucoma products in the second quarter, up 5% from the first quarter of 2024, and flat from the second quarter of 2023.

Paul Badawi: While we are continuing to work to further increase this number, our progress during this quarter represents a positive trend that we expect to continue moving forward and again highlights the importance of Omni and Scion in the market. As we progress through the year, we are increasing the number of surgeons scheduled to be trained on Omni and Scion. In the first half of 2024, we trained over 150 surgeons on Omni and over 100 surgeons on Scion.

Speaker Change: While we are continuing to work to further increase this number, our progress during this quarter represents a positive trend that we expect to continue moving forward and again highlights the importance of Omni and Scion in the marketplace.

Speaker Change: As we progress through the year, we are increasing the number of surgeons scheduled to be trained on Omni and Scion. The growing clarity on reimbursement following the newly proposed LCDs is enabling a more normal environment for new surgeon training.

Speaker Change: Increasing the transurgent base is an important step that will continue to be a vital aspect of our growth strategy.

Speaker Change: In the first half of 2024, we've trained over 150 surgeons on Omni and over 100 surgeons on Scion.

Paul Badawi: We believe we are well positioned for growth due to the shifting mindset among glaucoma surgeons towards interventional glaucoma, the comprehensive nature of the OMNI procedure, the proposed increase in facility reimbursement that would improve the overall economics of OMNI versus our competitors, and our continued organizational optimization. Now, I'll turn to our dry eye business.

Speaker Change: We believe we are well positioned for growth due to the shifting mindset among glaucoma surgeons towards interventional glaucoma, the comprehensive nature of the OMNI procedure, the proposed increase in facility reimbursement that would improve the overall economics of OMNI versus our competitors,

Speaker Change: and our continued organizational optimization.

Paul Badawi: Since its inception, we have established our long-term mission of pioneering the field of interventional dry eye with a three-pronged strategy: developing best-in-class technology, delivering superior long-term clinical outcomes supported by RCTs, and executing an effective market access strategy. We have spent a decade developing and enhancing our transformative tier care technology and an effective procedural option for certain patients with meibomian gland disease or MGD. Peer care technology has been used in over 60,000 dry eye procedures despite operating in a cash-pay environment.

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

Speaker Change: Since its inception, we established our long-term mission of pioneering the field of interventional dry eye with a three-pronged strategy.

Speaker Change: Developing best-in-class technology. Delivering superior long-term clinical outcomes supported by RCTs.

Speaker Change: and Executing an Effective Market Access Strategy.

Speaker Change: We have spent a decade developing and enhancing our transformative tear care technology, an effective procedural option for certain patients with meibomian gland disease, or MGD.

Speaker Change: We estimate there are over 11 million U.S. patients diagnosed with MGD, the leading cause of dry eye disease.

Speaker Change: The tear care procedure targets the diseased meibomian glands directly and comprehensively, thereby addressing the root cause of evaporative dry eye disease.

Speaker Change: TearCare technology has been used in despite operating in a cash pay environment.

Paul Badawi: Over the past six years, we have executed two large RCTs for care, one designed for regulatory clearance purposes, and the other designed for payer coverage determination. Both RCTs met their primary endpoint. Most recently, our second RCT, Sahara, demonstrated the superiority of tier care over the market-leading prescription dry eye therapeutic, Restasis, for the study's primary objective endpoint. The six and twelve month data from the Sahara trial have been published and serve as the foundation for the third leg of our three-pronged strategy, establishing equitable market access based on our growing body of robust clinical evidence.

Speaker Change: Over the past six years, we executed two large RCTs for care care, one designed for regulatory clearance purposes, and the other designed for payer coverage determinations.

Speaker Change: Both RCTs met their primary endpoint. Most recently, our second RCT, Sahara, demonstrated the superiority of tier care over the market-leading prescription dry eye therapeutic, Restasis, for the study's primary objective endpoint.

Speaker Change: The 6- and 12-month data from the Sahara trial have been published and serve as the foundation for the third leg of our three-pronged strategy, establishing equitable market access based on our growing body of robust clinical evidence.

Speaker Change: From this, we will continue to lay the foundation for market access and deliver our technology to those who can benefit from the procedure.

Speaker Change: We recently published the 12-month results of the Sahara RCT, which demonstrated improved signs and symptoms of dry eye disease for tear care patients crossed over from Restatus.

Paul Badawi: The Phase 2 crossover of the Sahara RCT included subjects who were previously treated with ristasis for six months and then subsequently took an offer of stasis before receiving a single tear care treatment suggests that the clinically significant efficacy of tear care appeared to be the same whether or not a study patient had prior treatment with Restasis and that similar results could be expected when tear care is used as a primary or secondary treatment for dry eye.

Speaker Change: The Phase II crossover of the Sahara RCT included subjects who were previously treated with ristasis for six months and then subsequently taken off ristasis before receiving a single tear care treatment.

Speaker Change: These patients experienced further statistically significant improvements in the signs and symptoms of dry eye disease.

Speaker Change: The first two phases of the Sahara RCT, month 6 and month 12 endpoints,

Speaker Change: suggest that the clinically significant efficacy of tear care appeared to be the same whether or not a study patient had prior treatment with Restasis, and that similar results could be expected when tear care is used as a primary or secondary treatment for dry eye disease.

Paul Badawi: The next milestone for the Sahara RCT will be the publication of the results of the third and final phase of the trial. Phase 3 of the Sahara trial follows the Tier Care Crossover Cohort through to 24 months, and we expect it to be published in 2025. The goal of this phase is to gain more clarity on requisite treatment frequency and the clinical impact of repeat peer care treatments as needed.

Speaker Change: The next milestone for the Sahara RCT will be the publication of the results of the third and final phase of the trial.

Speaker Change: Phase 3 of the Sahara trial follows the Tier Care Crossover Cohort through to 24 months, and we expect it to be published in 2025. The goal of this cohort is to gain more clarity on requisite treatment frequency and the clinical impact of repeat tier care treatments as needed.

Speaker Change: With the 6-month and 12-month data in hand, we are already having meaningful conversations with payers. Still, we are excited for the final trial phase and believe it will only continue to build on our growing library of compelling clinical data supporting the tiered care procedure.

Speaker Change: Along with the support from our tiered care clinical data, we have also recently begun introducing the results from our budget impact analysis to our discussions with payers.

Speaker Change: In May, we presented the analysis at ISPOR, the International Society for Pharmacoeconomics and Outcomes Research, and we are pleased with the early response to our model, which showcases the health economic impact and system savings for tear care versus restasis.

Speaker Change: As we have always intended, following the successful results of the Sahara RCT, we have positioned our technology to ensure that the clinical and economic value of the procedure is appropriately reflected.

Paul Badawi: As Tier Care's body of clinical evidence continues to grow, our investment and value proposition are also evolving. Following a thorough analysis, we'll be modifying our pricing structure to more accurately reflect the clinical and health economic value of the Tier Care procedure as demonstrated in both Phase 1 and Phase 2 of the Sahara RCT and our budget impact model. We have recently informed existing Tier Care customers of the future price increase, which will be effective on October 1st, 2024. We expect our list price to increase to $1,200 per set of Tier Care Smart Lists.

Speaker Change: As Tear Care's body of clinical evidence continues to grow, our investment and value proposition are also evolving.

Speaker Change: Following a thorough analysis, we will be modifying our pricing structure to more accurately reflect the clinical and health economic value of the Tier Care procedure as demonstrated in both Phase I and Phase II of the Sahara RCT and our Budget Impact Model.

Speaker Change: We have recently informed existing Tier Care customers of the future price increase, which will be effective October 1st, 2024. We expect our list price to increase to $1,200 per set of Tier Care Smart Lids.

Paul Badawi: Appropriate reimbursement at the level supported by our evidence would still show compelling economics and value to patients, payers, and eye care providers, as well as to Sight Sciences as the manufacturer that has invested over $100 million in developing and commercializing this technology. Our strategy within dry eye for the rest of 2024 and beyond has shifted to achieving fair and equitable reimbursement. We are encouraged by the work we are doing now with payers, which we believe has put us on track toward long-term success.

Speaker Change: Appropriate reimbursement at the level supported by our evidence would still show compelling economics and value to patients,

Speaker Change: payers, and eye care providers, as well as to Sight Sciences, as the manufacturer that has invested over $100 million in developing and commercializing this technology.

Speaker Change: Our strategy within Dry Eye for the rest of 2024 and beyond has shifted to a targeted focus on achieving fair and equitable reimbursement. We are encouraged by the work we are doing now with payers, which we believe has put us on track toward long-term success.

Paul Badawi: To this point, we've had a small number of tiered care commercial claims paid on a case-by-case basis, and we continue to do the foundational work needed to establish broader coverage on a larger scale with commercial payers and Medicaid.

Speaker Change: To this point, we've had a small number of peer care commercial claims paid on a case-by-case basis, and we continue to do the foundational work needed to establish broader coverage on a larger scale with commercial payers and Medicare.

Paul Badawi: The critical drivers of conversations with payers are strong clinical data and health economics, and we believe we have established a solid position from both perspectives. With high-impact, peer-reviewed Level 1 clinical evidence and demonstrated health economic benefits now in hand, we believe we are well-positioned to drive forward coverage conversations and remain on track to begin receiving positive coverage policy decisions in 2025. As we look to the future, we remain committed to our long-term goals and feel we are currently operating from a position of strength with the ability to execute them successfully. Surgical glaucoma and dry eye represent significant opportunities to capture market share, develop new interventional markets, and drive a return to double-digit growth.

Speaker Change: The critical drivers of conversations with payers are strong clinical data and health economics, and we believe we have established a solid position from both perspectives.

Speaker Change: With high-impact, peer-reviewed Level 1 clinical evidence and demonstrated health economic benefits now in hand, we believe we are well positioned to drive forward coverage conversations and remain on track to begin receiving positive coverage policy decisions in 2025.

Speaker Change: As we look to the future, we remain committed to our long-term goals and feel we are currently operating from a position of strength with the ability to execute them successfully.

Speaker Change: Surgical glaucoma and dry eye represent significant opportunities to capture market share, develop new interventional markets, and drive a return to double-digit growth.

Paul Badawi: We look forward to capitalizing on upcoming catalysts and delivering positive results. I will now turn the call over to Ali to discuss our finances. Thanks, Paul.

Speaker Change: We look forward to capitalizing on upcoming catalysts and delivering positive results.

Speaker Change: I will now turn the call over to Ali to discuss our financials.

Ali Bauerlein: Before I turn to the second quarter financial results, I want to mention that we continue to execute both our strategic and operational goals and are confident in our ability to support these goals moving forward. 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 second quarter, total revenue was $21.4 million, which reflects 11% sequential growth and an expected decrease of 9% compared to the second quarter of 2023.

Ali: Thanks, Paul. Before I turn to the second quarter financial results, I want to mention that we continue to execute both our strategic and operational goals and are confident in our ability to support these goals moving forward.

Ali: We plan on achieving cash flow break-even without the need to raise additional equity capital and are excited about our long-term growth opportunity.

Ali: Moving back to the second quarter, total revenue was $21.4 million. This reflects 11% sequential growth and an expected decrease of 9% compared to the second quarter of 2023.

Ali: Surgical glaucoma revenue for the second quarter was $20.2 million, down 5% versus the comparable period in the prior year, and up 11% compared to the first quarter of 2024.

Ali: This decrease was primarily driven by lower utilization and a lower average selling price in the second quarter versus the same period in the prior year.

Ali: Our dry eye revenue for the second quarter was $1.1 million, down 46% compared to the second quarter of 2023.

Ali: This expected decline was primarily due to fewer new accounts and related smart hub sales as a result of the planned reduced sales infrastructure and the focus on the next phase of our commercial strategy for our dry ice segment, which involves achieving market access.

Ali: Gross margin for the second quarter was 86%, flat compared to the same period in the prior year. Surgical glaucoma gross margin in the second quarter was 88%, down slightly from 89% in the same period in the prior year, primarily driven by product sales mix.

Speaker Change: Dry eye gross margin in the second quarter declined to 46% compared to 55% in the same period in the prior year, primarily due to product sales mix and higher overhead costs per unit in the current period due to lower production volume.

Ali Bauerlein: Total operating expenses for the second quarter were $31 million, a decrease of 12%, compared to $35.3 million in the second quarter of 2023, which reflects reduced operating expenses and improved operating expense leverage in the second quarter of 2024 as compared to the same period in the prior year. Adjusted operating expenses were $26.6 million for the second quarter, a decrease of 15% compared to $31.5 million for the same period last year.

Speaker Change: Total operating expenses for the second quarter were $31 million, a decrease of 12% compared to $35.3 million in the second quarter of 2023.

Speaker Change: which reflects reduced operating expenses and improved operating expense leverage in the second quarter of 2024, as compared to the same period in the prior year.

Speaker Change: The decrease was primarily due to lower personnel-related expenses, partially offset by increased stock-based compensation expenses.

Speaker Change: Adjusted operating expenses were $26.6 million for the second quarter, a decrease of 15% compared to $31.5 million in the same period in the prior year.

Speaker Change: Our loss from operations for the second quarter was $12.7 million, compared to a loss of $15.2 million for the second quarter of 2023.

Ali Bauerlein: Our net loss was $12.3 million, or $0.25 per share, in the second quarter, compared to a net loss of $14.8 million, or $0.30 per share, for the second quarter of 2023. We ended the quarter with $118.2 million of cash and cash equivalents and $35 million of debt, excluding debt discounts and amortized debt issuance costs.

Speaker Change: Our net loss was $12.3 million, or $0.25 per share, in the second quarter, compared to a net loss of $14.8 million, or $0.30 per share, for the second quarter of 2023.

Speaker Change: We ended the quarter with $118.2 million of cash and cash equivalents and $35 million of debt excluding debt discounts and amortized debt issuance costs.

Ali Bauerlein: We used $9.1 million of cash in the second quarter, reflecting continued operational discipline. This was a substantial improvement, 29% less than the $12.8 million cash used in the second quarter of 2023. As a reminder, this does not include any monetary damages awarded in our successful jury trial verdict in our patent infringement case against Outlaw. The final ruling is still pending the judge's determination to confirm the jury's verdict, establish ongoing royalty damages, and or determine any potential enhancements, and is subject to a. Moving to our outlook for the full year 2024, we still expect double-digit surgical glaucoma revenue growth in the second half of 2024, compared to the same period in the prior year, as we regain commercial momentum and expand utilization and our customer base.

Speaker Change: We used $9.1 million of cash in the second quarter, reflecting continued operational discipline. This was a substantial improvement, 29% less than the $12.8 million cash used in the second quarter of 2023.

Speaker Change: As a reminder, this does not include any monetary damages awarded in our successful jury trial verdict in our patent infringement case against Alcon.

Speaker Change: The final ruling is still pending the judge's determination to confirm the jury's verdict, establish ongoing royalty damages, and or determine any potential enhancements, and is subject to appeal.

Speaker Change: Moving to our outlook for the full year 2024, we still expect double-digit surgical glaucoma revenue growth in the second half of 2024 compared to the same period in the prior year as we regain commercial momentum and expand utilization and our customer base.

Ali Bauerlein: However, we expect dry eye revenue to decrease due to our increase in dry eye pricing effective October 1st, 2024, which we believe will have a significant negative impact on cash pay volumes in the second half of 2024 before we expect a return to growth in 2025 with market access. We believe this is the right approach to begin capturing the true clinical and health economic value of tiered care, transform the treatment of MGD, and create a significant new category in IT.

Speaker Change: However, we expect dry eye revenue to decrease due to our increase in dry eye pricing effective October 1st, 2024.

Speaker Change: which we believe will have a significant negative impact on cash pay volumes in the second half of 2024 before we expect a return to growth in 2025 with market access wins.

Speaker Change: We believe this is the right approach to begin capturing the true clinical and health economic value of tear care, transform the treatment of MGD, and create a significant new category in eye care.

Ali Bauerlein: We expect to see strong dry eye revenue growth in 2025 with reimbursement coverage for care and an expanded commercial presence. We expect dry eye revenue for full year 2024 to be less than $3 million, including $2.1 million of revenue achieved through the end of the second quarter.

Speaker Change: We expect to see strong dry eye revenue growth in 2025 with reimbursement coverage for tear care and an expanded commercial presence.

Speaker Change: We expect dry eye revenue for full year 2024 to be less than $3 million, including $2.1 million of revenue achieved through the end of the second quarter.

Ali Bauerlein: As a result, we are narrowing our guidance expectations for revenue to 81 to 83 million from our prior range of 81 to 85 million, representing growth of approximately 0 to 2% compared to 2023. We expect third quarter 2024 revenue to be down compared to the second quarter of 2024, primarily due to typical seasonality, and up slightly versus the comparable period in the prior year, primarily driven by increased omni-utilization with existing and new accounts, partially offset by lower tier care demand.

Speaker Change: As a result, we are narrowing our guidance expectations for revenue to $81 to $83 million from our prior range of $81 to $85 million, representing growth of approximately 0 to 2% compared to 2023.

Speaker Change: We expect third quarter 2024 revenue to be down compared to the second quarter of 2024, primarily due to typical seasonality and up slightly versus the comparable period in the prior year, primarily driven by increased omni-utilization with existing and new accounts.

Ali Bauerlein: As mentioned, we expect the new pricing structure for Tier Care will result in lower demand for the second half of 2024, particularly in the fourth quarter when the new pricing structure becomes effective. However, over the long term, we do not believe pricing will impact adoption of the technology or demand once fair and equitable reimbursement is established. With respect to 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 minimal production builds planned in the second half of the year for our dry ice.

Speaker Change: Partially offset by lower tier care demand.

Speaker Change: As mentioned, we expect the new pricing structure for Tier Care will result in lower demand for the second half of 2024, particularly in the fourth quarter when the new pricing becomes effective.

Speaker Change: Over the long term, we do not believe pricing will impact adoption of the technology or demand once fair and equitable reimbursement is established.

Speaker Change: With respect to 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 minimal production bills planned in the second half of the year in our dry high segment.

Operator: We are narrowing our guidance expectations for full year 2024 for adjusted operating expenses to $107 to $109 million from our prior range of $107 to $110 million, representing a decrease of approximately 1 to 3% compared to 2020. We remain 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, please open the line for questions.

Speaker Change: We are narrowing our guidance expectations for full year 2024 for adjusted operating expenses.

Speaker Change: to 107 to 109 million.

Speaker Change: from our prior range of 107 to 110 million, representing a decrease of approximately one to 3% compared to 2023.

Speaker Change: We remain 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.

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

Operator: Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.

Speaker Change: Thank you. At this time, we will conduct a 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.

Operator: Please stand by while we compile the Q&A raw file. Our first question comes from the line of Tom Stephan of Stiefel. Your line is now open. Great. Hey, everyone.

Speaker Change: To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster.

Speaker Change: Our first question comes from the line of Tom Stephan of Stiefel. Your line is now open.

Tom Stephan: Thanks for taking the questions. Maybe I'll start with surgical glaucoma. And for the second half, if I run the implied two-year CAGR for that business, it comes out to about maybe mid to high single-digit growth. And that compares to CAGRs, I think, in the low teens for 1H24.

Tom Steffen: Great. Hey, everyone. Thanks for taking the questions. Maybe I'll start with surgical glaucoma.

Speaker Change: And for the second half, if I run the implied two-year CAGR.

Speaker Change: for that business. It comes out to about maybe mid to high single-digit growth and that compares to CAGRs, I think, in the low teens for 1H24.

Ali Bauerlein: So maybe can you talk about why the potential deceleration in the back half for surgical glaucoma on a two-year CAGR basis? Yeah, I can take that, Tom. So, you know, obviously, in 2023, in particular, we were dramatically impacted by the proposed LCDs that were ultimately withdrawn. And we've recently seen more favorable LCDs proposed that did not include coverage restrictions for Omni or Scion. So, you know, obviously, that impacted our growth, particularly in the second half of 2023.

Speaker Change: So maybe can you talk about why the potential deceleration in the back half for surgical glaucoma on a two-year, K-year basis?

Speaker Change: Yeah, I can take that, Tom. So, you know, obviously, in 2023, in particular, we were dramatically impacted, associated with the proposed LCDs that were ultimately withdrawn. And we've recently seen more favorable LCDs proposed that did not include coverage restrictions for Omni or Scion.

Speaker Change: You know, obviously that impacted our growth, particularly in the second half of 2023, and our focus in 2024 was really to regain that momentum and get back to recovery and double-digit growth off of that phase.

Ali Bauerlein: And our focus in 2024 was really to regain that momentum and get back to recovery and double-digit growth off of that phase. And so that's really what we've been executing to ensure that recovery is tracking to our expectations in the first half of 2024. And now we have proposed LCD clarity, and we do expect to be back to double-digit surgical glaucoma revenue growth in the second half of 2024. And we do believe that we're set up very nicely looking farther ahead into 2025 and beyond with both the proposal of device intensive, which could be an accelerant for us in terms of growth, as well as just our overall efficacy profile of Omni as a very comprehensive procedure.

Speaker Change: And so that's really what we've been executing, too, that recovery is tracking to our expectations in the first half of 2024, and now we have proposed LCD clarity, and we do expect to be back to double-digit surgical glaucoma revenue growth in the second half of 2024.

Speaker Change: And we do believe that we're set up very nicely looking farther ahead into 2025 and beyond with both the proposal of device-intensive, which could be an accelerant for us in terms of growth.

Speaker Change: as well as just our overall efficacy profile of Omni as a very comprehensive procedure. So, of course, we were impacted if you look back over time in that 2023 period, but we feel like we are set up for success and we have been executing per that plan in 2024.

Ali Bauerlein: So, of course, we were impacted if you look back over time in that 2023 period, but we feel like we are set up for success, and we have been executing on that plan in 2025.

Ali Bauerlein: That's great, Culler. Thanks, Ali. And then my follow-up, just two parts, both pretty quick. First, are you maintaining the 2025 double-digit growth expectations that I think you've talked about in the prior two calls? And then, Ali, what's maybe a rough revenue run rate that gets you to cash flow break-even if you're able to provide some guardrails there? Thanks.

Speaker Change: Got it. That's great, Culler. Thanks, Allie. And then my follow-up, just...

Speaker Change: First, are you maintaining the 2025 double-digit growth expectations that I think you've talked about in the prior two calls? And then, Allie, what's the next step?

Speaker Change: Maybe a rough revenue run rate that gets you to cash flow break even If you're able to provide some guardrails there. Thanks

Ali Bauerlein: Yeah, thanks, Tom. So at a high level, we're not prepared today to give 2025 guidance. It would be a little premature for us to do that.

Speaker Change: Yeah, thanks, Tom.

Speaker Change: At a high level, we're not prepared today to give 2025 guidance, it would be a little premature for us to do that, but we do feel very confident in our ability to continue to

Ali Bauerlein: But we do feel very confident in our ability to continue to gain share over time and grow this market. As we've said many times before, we have both a large combined cataract market for Omni as well as a standalone market. And we do see that market developing over time, which should lead to significant growth in that double-digit range.

Speaker Change: gain share over time and grow this market, as we've said many times before, we have both

Speaker Change: a large combination cataract market for Omni as well as a stand-alone market. And we do see that market developing over time that should lead to significant growth in that double-digit range. So we are continuing to have strong beliefs in our ability to execute on that growth plan and to return to growth in 2025 and beyond.

Speaker Change: Of course, peer care is also an accelerant of that growth if we can achieve market access wins. And so that's something that we're very excited about when we look to 2025 and beyond.

Ali Bauerlein: And for your second question on cash flow, we haven't put out any type of particular target yet around what level of revenue would be needed to achieve cash flow breakeven. But you've seen us make substantial improvement over the last year and a half, really, since the end of 2022, when we had cash usage in 2022 of about $75 million. And you see, this quarter, we had cash usage of about $9 million, so down significantly if you run that cash utilization rate.

Speaker Change: And for your second question on cash flow, we haven't put out any type of particular target yet around what level of revenue would be needed to achieve cash flow breakeven, but you've seen us make substantial improvement over the last year and a half, really.

Speaker Change: Since the end of 2022, when we had cash usage in 2022 of about $75 million, and you see this quarter, we had cash usage of about $9 million, so down significantly if you run rate that cash utilization. So, we feel like we're in a great spot. We've been very efficient with our operating expenses.

Ali Bauerlein: So, we feel like we're in a great spot. We've been very efficient with our operating expenses while also regaining momentum on the revenue side, and we feel like we are properly funded to reach our goal. Good. Thanks, Allie.

Speaker Change: while also regaining momentum on the revenue side and we feel like we are properly funded to reach our goals.

Speaker Change: Great. Thanks, Allie. Thanks, everyone.

Speaker Change: Thank you. One moment for our next question.

Speaker Change: Our next question comes from the line of David Saxon of Needham & Company. Your line is now open.

Operator: If you can maybe give some color, you know, what are your expectations for the second half of 24 for cash burn. I guess you expect to make further improvements, or maybe how are you thinking about driving leverage there while also investing in the Guacamo business and building out the dry eye market access team? Yeah, thanks for the question. And we do expect to continue to show improvements in cash burn over time, both in the second half of 2024 and into 2025 as well. So that is a focus of the company to continue to execute on those plans and to be efficient with our spend. So that's the plan.

Speaker Change: Hello, this is Joseph on for David. Maybe just picking up on the cash burn. If you can maybe give some color, you know, what are your expectations for

Speaker Change: second half of 24 for cash burn. I guess you expect to make further improvements or I guess maybe how are you thinking about driving leverage there while you know also investing in the guacamole business and building out the dry eye market access team.

Speaker Change: Yeah, thanks for the question. And we do expect to continue to show improvements in cash burn over time, both in the second half of 2024 and into 2025 as well.

Speaker Change: So that is a focus of the company, to continue to execute on those plans and to be efficient with our spend.

Operator: We haven't provided any specific targets on cash burn in those periods, but we have been executing a, Okay, understandable, maybe missed part of it. Yeah, I mean, I think you answered it was just, you know, kind of how are you thinking about driving leverage while also, you know, investing in what will come with business in dry eyes. Yeah, so that's been built into our assumptions to continue to invest in those key activities, both commercial activities as well as our R&D activities that we think are important for our long-term success. So that's been built into our models.

Speaker Change: So, that's the plan. We haven't provided any specific targets on cash burn in those periods, but we have been executing appropriately.

Speaker Change: Okay, understandable. And what was the second question?

Speaker Change: Maybe missed part of it. Yeah, I mean, I think you answered it was just, you know, kind of how are you thinking about driving leverage walls and, you know, investing in.

Speaker Change: Welcome to business in dry eye.

Speaker Change: Yeah, so that is built into our assumptions to continue to invest in those key both commercial activities, as well as our R&D activities that we think are important for our long-term success. So that's been built into our models.

Ali Bauerlein: More dry eye investments will come in 2025. As we see market access wins in specific markets, then we will target additional resources into those regions to work with partners in those spaces. So that's less of a 2024 impact and more of a 2025 impact, but those are incremental investments. That's not a significant shift to our overall expense plan. Okay, great. Perfectly clear. And then, maybe just one more.

Speaker Change: More of the dry eye investments will come in 2025. As we see market access wins in specific markets, then we will target additional resources added into those regions to go work with the partners in those spaces. So that's less of a 2024 impact and more of a 2025 impact.

Speaker Change: But those are incremental investments, that's not a significant shift to our overall expense planning.

Operator: For any of the doctors or practices that have gotten peer care, you know, claims paid out, what are you kind of seeing in terms of volumes there? Have they been stable or growing? I guess if there are other doctors in the practice, are you seeing, you know, their claims drive other adoptions? So, we're still very early in the process of getting claims paid for care. While we've seen a low level of claims being paid at reasonable rates that we're very pleased with, it is still very much in the early innings.

Speaker Change: Okay, great. Perfectly clear.

Speaker Change: And then maybe just one more.

Operator: So, there is not anything that we would extrapolate out of that at this point or say that that's driving volume at this point. These are really about establishing coverage and payment over time, but these are still very small overall claims paid at this point. Okay, thank you very much for taking our questions. Thank you. Thank you. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. I am showing one more question. One second. One moment, please.

Speaker Change: For any of the doctors or practices that have gotten peer care, you know, claims paid out, what are you kind of seeing in terms of volumes there? Have they been stable or growing? I guess if there are other doctors in the practice, are you seeing, you know, their claims drive other adoption?

Speaker Change: So, we're still very early in the process of getting claims paid for care care while we've seen.

Speaker Change: you know, a low level of claims being paid at reasonable rates that we're very pleased with, it is still very much early innings. So there is not anything that we would extrapolate out of that at this point or saying that that's driving volume. At this point, these are really about establishing coverage and payment over time. But

Speaker Change: These are still very small overall claims paid at this point.

Speaker Change: Okay, thank you very much for taking our questions.

Speaker Change: Thank you.

Speaker Change: Thank you. 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 1 1 again.

Speaker Change: I am showing one more question. One second. One moment, please.

Operator: Our next question comes from the line of Joanne Wunsch from Citi. Your line is now open. Hey guys, this is Philippe from Fringe-O-Land.

Speaker Change: Our next question comes from the line of Joanne Wunsch from Citi. Your line is now open.

Joanne Wunsch: I was just wondering if you could start with the mix of omni usage in standalone and combination procedures, and then just on standalone reimbursement, it seems like you got a really significant bump compared to your competitors. I guess, like, where do you think you're going to shake out in terms of adoption once those facility fees are implemented? Thanks. Yeah, so I can take that at a high level.

Speaker Change: Hey guys, this is Philippe on Frigiland. Um, I was just wondering if you could start with the mix of Omni usage and standalone and combination procedures and then just on standalone reimbursement It seems like you got a really significant bump compared to your competitors. I guess like

Speaker Change: Where do you think you're going to shake out in terms of adoption once those facility fees are implemented? Thanks.

Ali Bauerlein: The standalone market for us, we don't have specific claims-based data to look at procedure volume to know specifically whether somebody is doing a standalone procedure or a combined cataract procedure. So we don't have that specific visibility. However, we do estimate that about 85% of the procedures are done in combination with a cataract, and about 15% of our procedures are done on a standalone basis. However, when we look at the claims data for the entire space, it's more like 5% are done on a standalone basis.

Speaker Change: Yeah, so I can take that. At a high level, the stand-alone market for us

Speaker Change: We don't have specific claims-based data to look at procedure volume to know.

Speaker Change: Specifically, whether somebody is doing a standalone procedure or a combination cataract procedure. So we don't have that specific visibility.

Speaker Change: However, we do estimate that about 85% of the procedures are done in combination with a cataract, and about 15% of our procedures are done on a standalone basis.

Ali Bauerlein: So certainly, we are a key part of that standalone market and a key developer of that market. And, you know, we see this as having great growth potential over time. And the second part of your question, again, was:

Speaker Change: When we look at the claims data for the entire space,

Ali Bauerlein: Just on your expectations for adoption with the updated facility fees, especially the standalone market, because it seems like you got the biggest bump in facility fees compared to your competitors. Thank you. Yeah, just to clarify, the proposed increase is still pending final approval, which we would expect to learn in the second half of the year, late October, early November. So that's still pending, and we'll obviously have further commentary at that time. I think the other thing to call out is that the proposed increase in reimbursement for CPT 66174 does not apply to standalone specifically. It applies to the broader code.

Speaker Change: And the second part of your question again was...

Speaker Change: Yeah, just to clarify, the proposed increase is still pending final approval, which we would expect to, you know, learn in the second half of the year, late October , early November . So that's still pending. And we'll obviously have further commentary at that time. I think the other thing to call out is that

Speaker Change: The proposed increase in reimbursement for CPT 66174 does not apply to stand-alone specifically, it applies to the broader code.

Ali Bauerlein: That is a code often utilized in conjunction with the procedure enabled by Omni, and so there definitely is some correlation. I think when we look at the standalone opportunity, as Ali said, we continue to see that Sight and Omni specifically are a significant contributor to the standalone market opportunity. More broadly, I think we're very encouraged by the continued growth and development of an interventional mindset, looking at how to use procedural intervention earlier in the continuum of care for glaucoma patients.

Speaker Change: That is a code often utilized in conjunction with the procedure enabled by Omni.

Speaker Change: More broadly, I think we're very encouraged by the continued growth and development of an interventional mindset, looking at how to use procedural intervention earlier in the continuum of care for glaucoma patients.

Ali Bauerlein: We also believe that in a standalone case, when the sole purpose of surgery is the treatment of glaucoma, the clinical profile and demonstrated clinical efficacy of Omni are significant in terms of the ability to provide the best available treatment for those patients.

Ali Bauerlein: So certainly, we're going to continue to monitor the proposed rule change and potential increased facility payment with device intensive for 66174 and further determine what we think that can provide in terms of a tailwind to Omni utilization and further growth and development of the standalone market. But overall, we're pleased with our team's effort to continue to lean into the standalone market and the overall market's continued acceptance and adoption of these interventional types of procedures for standalone patients. And Felipe, this is Paul.

Paul Badawi: Just to add to Ali and Matt's comments, this has to happen. Interventional glaucoma has to happen. In stand-alone, in particular, patients are treated with eyedrops for years. Maybe they'll get SLT, and need more eyedrops. Their disease inevitably progresses, and we're trying to demonstrate that intervening earlier in a minimally invasive, safe, and effective manner is ultimately better for the patient in the long term. What's the best way to demonstrate that?

Speaker Change: We're trying to demonstrate that intervening earlier in a minimally invasive, safe and effective manner is ultimately better for the patient long term. What's the best way to demonstrate that?

Paul Badawi: It's with real-world clinical data on a large scale. And so Omni, since we launched Omni in 2018, it's been used in both combination cataract and stand-alone settings. And now we have the benefit of being able to mine that large scale real world evidence to see how Omni is performing in these standalone patients in the hands of the average glaucoma surge patient. And so that exercise is underway. We're in the middle of it.

Paul Badawi: Actually, I think we're more on the tail end of it. Hopefully, we'll be able to see the analysis of Omni's real-world performance in standalone patients in this IRIS registry, get it submitted for publication, hopefully within the next, you know, two to three months, and hopefully published in the next few quarters. And I think that real-world evidence is going to be helpful to that next potential standalone glaucoma surgeon who's considering using Omni as an earlier standalone surgical intervention to be able to see how the procedure performs in the hands of a number of colleagues. This evidence is critical to continuing to develop the standalone mark, and we're really excited about it. Hopefully, we'll see some effect in 2025.

Speaker Change: This evidence is critical to continuing to develop the standalone market, and we're really excited about it. Hopefully we'll see some effect in 2025.

Paul Badawi: And then just on Dry Eye, if you could just give us an update on kind of how conversations are going with commercial payers, that would be helpful. Thank you for taking the questions. Yeah, so I think I'll echo Ali's earlier comments that we're still in the early days in our conversation and communication with all payers, not just commercial payers, but also the Medicare administrative contractors. So, we're encouraged by the conversations we've had to

Speaker Change: Great, and then just on dry eye, if you could just give us an update on kind of how conversations are going with commercial payers, that'd be helpful. Thank you for taking the questions.

Speaker Change: Yeah, so I think I'll echo Ali's earlier comments that we're still early days in our conversation and communication with all payers, not just commercial payers, but also the Medicare administrative contractors. So, we're encouraged by the conversations we've had to date. I think the important thing is to point to the fact that.

Paul Badawi: I think the important thing is to point to the fact that the reason that we're encouraged and the nature of the conversations being positive really hinges on the quality of clinical evidence and the demonstrated economic benefit. Of tier care for these patients, you know, with my bovine gland dysfunction and the unique category creating opportunity we have with tier care. So, again, early in those conversations, but encouraged that the data and the investments made by Sight Sciences into this category are being well received in the conversations we're currently having with them. And just to add a final comment, specific to Matt's enthusiasm around the coverage discussions. We see that for us, tiered care coverage right now is driven by four key drivers, and they're all very positive.

Speaker Change: up to your care for these patients, you know, with myobromine gland dysfunction and the unique

Speaker Change: category creating opportunity we have with tier care. So again, early in those conversations, but encouraged

Speaker Change: that the data and the investments made by Sight Sciences into this category are being well-received in the conversations we're currently having with payers.

Speaker Change: Specific to Matt's enthusiasm around the coverage discussions, we see for us tiered care coverage right now is driven by four key drivers.

Paul Badawi: That's Sahara Phase 1 through six-month treatment, head-to-head with Restasis. That has been published. Sahara Phase 2, that's the crossover arm of Restasys patients treated with a single tear care treatment and see how they're doing at 12 months, further significant improvements in all signs and symptoms. That was just published in May.

Matt: And they're all very positive. That's Sahara Phase 1 through six-month treatment, head-to-head with Restasis. That's been published.

Speaker Change: Sahara Phase 2, that's the crossover arm of Restasis patients treated with a single tear care treatment and see how they're doing at 12 months, further significant improvements in all signs and symptoms. That was just published in May. And then the other two drivers of tear care coverage

Paul Badawi: And then the other 2 drivers of tear care coverage, the budget impact model, where we compare the cost impact of tear care versus Restasys, that's been completed and submitted for publication, very positive. And lastly, the most recent driver, the cost effectiveness analysis. So that's an analysis that we recently conducted. It will hopefully be submitted for publication within the next one to two months and hopefully published maybe early next year.

Speaker Change: Budget Impact Model, where we compare the cost impact.

Speaker Change: of Tier Care versus Restatis. That's been completed and submitted for publication. Very positive. And lastly, the most recent driver, the cost-effectiveness analysis.

Speaker Change: So that's an analysis that we've recently conducted. It will hopefully be submitted for publication within the next one to two months and hopefully, you know, published maybe early next year.

Paul Badawi: So with Sahara Phase I, Sahara Phase II, the budget impact model, and cost-effectiveness analysis, those are the critical drivers to having highly productive coverage conversations, and that's ongoing. Thank you. One moment for our next question. Our next question comes from Tom Stephan of Stiefel. Your line is now open. Great. Thanks for letting me hop back in here.

Speaker Change: So with Sahara Phase 1, Sahara Phase 2, budget impact.

Speaker Change: model and cost-effectiveness analysis. Those are the critical drivers to having highly productive coverage conversations, and that's ongoing.

Speaker Change: Thank you.

Speaker Change: One moment for our next question.

Speaker Change: Our next question comes from Tom Stephan of Stiefel. Your line is now open.

Tom Stephan: Just a follow-up on dry eye, sort of a two-parter again. I guess first, how did you arrive at that number, specifically $1,200, as it's a pretty significant step up from the current price? And then my main question is... You know, I guess it is fair to assume there is a strong level of confidence that payers will reimburse at these types of levels to make it worth it for the doctors? And hopefully, that makes sense. But any color there would be would be helpful.

Tom Steffen: Great. Thanks for letting me hop back in here. Just a follow-up on dry eye, actually.

Tom Steffen: I guess first, how did you arrive at that number, specifically $1,200, as it's a pretty significant step up from the current price? And then my main question is...

Tom Steffen: You know, I guess is it fair to assume there is a strong level of confidence that payers will reimburse at these types of levels to make it worth it for the doctors? And hopefully that makes sense, but any color there would be would be helpful. Thanks.

Tom Stephan: Thanks. Hey, Tom, it's Matt. I'll take the first shot at this, and obviously Ali and Paul can weigh in.

Tom Steffen: Hey Tom, it's Matt. I'll take the first shot at this and obviously Allie and Paul can weigh in. And I guess what I'd really turn to is the comments Paul just made.

Matt Link: And I guess what I'd really turn to are the comments Paul just made. The quality and the strength of the data, plus the compelling comparison in savings associated with the health economic impact model are really what informed the price increase. Timing is important. Obviously, we had a view of where clinical evidence would land, but ultimately, it's the sequence of not just completing the enrollment, the study, doing the analysis, but also submitting for publication, actually seeing that publication, and then utilizing the data from that publication to drive the analysis, some of which is still pending in its own right from a health economic standpoint.

Paul Badawi: The quality and the strength of the data, plus the compelling comparison.

Speaker Change: and savings associated with the health economic impact model are really what informed the price increase. Timing is important. Obviously, we had

Paul Badawi: A view of where clinical evidence would land.

Speaker Change: But ultimately, it's the sequence of not just completing the enrollment, the study, doing the analysis, but it's submitting for publication, actually seeing that publication,

Tom Steffen: and then utilizing the data from that publication to drive the analysis, some of which is still pending in its own right from a health economics standpoint. So, you know,

Matt Link: So, a very judicious and thoughtful approach to that. A lot of internal analysis. We're very fortunate to have a group of advisors that we've been able to speak to as well, truly understanding the benefit in addition to data. What are the practical real-world implications when you implement this in a clinical setting, which I think is a part of what the question you're asking is about. And so, we feel really good about where we are, as stated earlier in response to other questions.

Tom Steffen: Very judicious and thoughtful approach to that. A lot of internal analysis. We're very fortunate to have

Tom Steffen: a group of advisors that we've been able to speak to as well, truly to understand the benefit in addition to data, what's the practical real-world implications when you implement this in a clinical setting, which I think is a part of what the question you're asking is about.

Matt Link: We're early in our discussions with payers. I think everybody understands that this is a process and a transition period, but the nature of those conversations has such that the analysis supported the price that we set. That's great, Colin. Thanks, Matt.

Tom Steffen: And so we feel really good about where we are. As stated earlier in response to other questions, we're early in our discussions with payers. I think everybody understands that this is a process and a transition period, but the nature of those conversations are such, and the analysis supported the price ad set.

Operator: Thank you. I am showing no further questions at this time. I would now like to turn it back to Paul Badawi, CEO, 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. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. [inaudible] ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? 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, ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? Good day, and thank you for standing by. Welcome to the Sight Sciences Second Quarter 2024 Earnings Results Conference Call. At this time, all participants are in a listen-only mode.

Trip Taylor: 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-one-one on your telephone, and you will then hear an automated message advising that your hand is raised. To withdraw your question, please press star-one-one again. Please be advised that today's conference is being recorded. I would now like to turn it over to your first speaker today, Trip Taylor, Director of Investor Relations. Please go ahead.

Paul Badawi: Thank you. I am showing no further questions at this time. I would now like to turn it back to Paul Badawi, CEO , for closing remarks.

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, Ali Bauerlein. Also in attendance is Sight Sciences Chief Commercial Officer, Matt Link.

Paul Badawi: 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.

Speaker Change: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Speaker Change: ?? ?? ?? ?? ??

Speaker Change: [inaudible]

Speaker Change: www.SightSciences.com

Trip Taylor: Earlier today, Sight Sciences released financial results for the three months ended June 30, 2024, and narrowed 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 laws. These forward-looking statements include statements related to the company's anticipated financial performance, operating results, liquidity position, and ability to achieve cash flow breakeven, ability to achieve current and long-term strategic objectives, market opportunity, and ability to enter new markets and capture market share.

Trip Taylor: Pricing Strategy and the Impact of Proposed Rules on Payment Rates, Product Reimbursement, Coverage, and Strategy, Expectations Regarding Regaining Commercial Momentum, Account Utilization and Engagement, Clinical Trial Strategy and Results, and the Disposition of the Patent Infringement Case Forward-looking statements are based on estimates and assumptions as of today, and they 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.

Speaker Change: Good day and thank you for standing by. Welcome to the Sight Sciences 2nd Quarter 2024 Earnings Results Conference Call.

Speaker Change: To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded.

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 the risk factors section of the company's annual report on Form 10-K and quarterly reports on Form 10-Q. 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.

Speaker Change: I would now like to turn it over to your first speaker today, Trip Taylor, Investor Relations. Please go ahead. Thank you. Thank you.

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 results. 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.

Trip Taylor: Thanks Trip. Our second quarter results represent consistent commercial and operational execution throughout the quarter as 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 surgical glaucoma segment, we drove sequential increases in utilization and the number of accounts ordering our product. In the dry eye segment, the Sahara one-year data was published, which represents a critical milestone in support of our efforts to establish equitable market access for interventional dry eye treatment.

Speaker Change: Also in attendance is Sight Sciences Chief Commercial Officer Matt Link.

Speaker Change: Earlier today, Sight Sciences released financial results for the three months ended June 30, 2024 in Narrowed 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.

Trip Taylor: Additionally, we continue to prioritize operational excellence as we maintain solid margins and exercise diligent expense management. Quarterly cash usage declined by almost 30% compared to the prior year period, reflecting disciplined spend while still allowing for investment in all of our critical value drivers. For the second quarter, we generated total revenue of $21.4 million, reflecting sequential growth of 11% in line with our expectations.

Paul Badawi: We are excited about the tremendous opportunity to execute on our long-term goals and re-establish double-digit growth driven by continued adoption of both of our paradigm-shifting interventional technologies. I will now turn to a more detailed discussion of our business segments, starting with our surgical glaucoma segment. We are pleased with our quarterly performance, with surgical glaucoma revenue of $20.2 million, representing sequential growth of 11% compared to the first quarter of 2024. The sequential improvement tracked to our expectations year to date, and we remain confident in double-digit growth in this segment in the second half of 2024 as compared to the same period in the prior year. As a reminder, if the recently proposed draft LCDs from May become effective in their current form, procedures that use our Omni and Scion technologies would continue to be eligible for Medicare coverage nationwide.

Speaker Change: Ability to achieve current and long-term strategic objectives.

Speaker Change: On this call, management may refer to financial measures that were not prepared in accordance with generally accepted accounting principles in the United States.

Speaker Change: including Adjusted Operating Expenses.

Paul Badawi: We believe our technology is critical to the thousands of surgeons who use OMNI routinely and is an important part of the glaucoma treatment continuum. We are extremely proud of Omni's differentiated clinical profile as demonstrated in high-quality, long-term, peer-reviewed data, which we believe will continue to support access to the technology for the appropriate patient population. On the reimbursement front, in July, CMS published the 2025 proposed Medicare payment rules for hospital outpatient and ASC procedures, along with physician professional fees. The ASC Payment Rule for 2025 proposed to grant device-intensive status and a related increase in Medicare facility payment rates for procedures reported with CPT code 66174, a code that is currently used to report our comprehensive Omni procedure. These proposed rules are not considered final until the final rule is published, which we expect to occur in the fourth quarter of 2024.

Speaker Change: I will now turn the call over to Paul.

Paul Badawi: We firmly believe device intensive status has always been appropriate for our Omni technology and procedure, and receiving confirmation of this status has been a long-term initiative for the company. As part of our Omni Market Access efforts, we have diligently worked to establish device intensive status for CPT code 66174, so we are very pleased with this proposal from CMS. If the rule is finalized with device-intensive status for this code, effective January 1, 2025, it will result in an increase to Medicare's ASC facility payment of approximately $600, or 29%, compared to Medicare's ASC payment rates for 2024.

Paul Badawi: Should the device-intensive status be finalized for this code, we believe this would be a meaningful development that would enhance our value proposition from a facility economics perspective for OmniTechnology versus both mixed stent implants and goniotomy. We are encouraged by this development and plan to provide further updates once the final rule is published. Now, I'll focus on the progress made against our core strategic initiative this quarter. Within our surgical glaucoma segment, we remain steadfastly focused on a few critical drivers that we believe are keys to solidifying long-term success for the business, which include increasing surgeon utilization across all accounts and re-engaging with accounts that ceased or decreased orders during the LCD uncertainty period last year.

Paul Badawi: In addition, we are working to increase the pipeline of new surgeons who will be trained on Omni and Psion. Looking first at utilization, as discussed before, the differentiated efficacy of our technology across the spectrum of disease severity has made Omni a leading minimally invasive interventional technology for surgeons managing primary open angle glaucoma patients. We are focused on increasing utilization with accounts already using Omni and have been successful here over the past two quarters. Utilization of ordering accounts was up 5% from the first quarter of 2024.

Paul Badawi: We believe the recent improvement in utilization is evidence of recovery and is a testament to the unique benefits of Omni and Scion and their importance to surgeons and patients. In the second quarter of 2024, we experienced an increase in the number of accounts ordering surgical glaucoma products compared to the first quarter of 2024, which highlights our growing momentum as the year has progressed. 1,131 customers ordered surgical glaucoma products in the second quarter, up 5% from the first quarter of 2024 and flat from the second quarter of 2023.

Paul Badawi: While we are continuing to work to further increase this number, our progress during this quarter represents a positive trend that we expect to continue moving forward and again highlights the importance of Omni and Scion in the market. As we progress through the year, we are increasing the number of surgeons scheduled to be trained on Omni and Scion. The growing clarity on reimbursement following the newly proposed LCDs is enabling a more normal environment for new surgeon training. Increasing the transurgent base is an important step that will continue to be a vital aspect of our growth strategy.

Paul Badawi: In the first half of 2024, we trained over 150 surgeons on Omni and over 100 surgeons on Scion. We believe we are well positioned for growth due to the shifting mindset among glaucoma surgeons towards interventional glaucoma, the comprehensive nature of the OMNI procedure, the proposed increase in facility reimbursement that would improve the overall economics of OMNI versus our competitors, and our continued organizational optimization. Now I'll turn to our dry eye business.

Paul Badawi: Since its inception, we have established our long-term mission of pioneering the field of interventional dry eye with a three-pronged strategy: developing best-in-class technology, delivering superior long-term clinical outcomes supported by RCTs, and executing an effective market access strategy. We have spent a decade developing and enhancing our transformative tiered care technology and effective procedural option for certain patients with meibomian gland disease, or MGD. We estimate there are over 11 million U.S. patients diagnosed with MGD, the leading cause of dry eye disease. The tear care procedure targets the diseased meibomian glands directly and comprehensively, thereby addressing the root cause of evaporative dry eye disease.

Paul Badawi: We are extremely proud of Omni's differentiated clinical profile, as demonstrated in high-quality, long-term, peer-reviewed data, which we believe will continue to support access to the technology for the appropriate patient population.

Speaker Change: These proposed rules are not considered final until the final rule is published, which we expect to occur in the fourth quarter of 2024.

Speaker Change: As part of our omni-market access efforts, we have diligently worked to establish device-intensive status for CPT code 66174, so we are very pleased with this proposal from CMS.

Speaker Change: We are encouraged by this development and plan to provide further updates once the final rule is published.

Speaker Change: Now, I'll focus on the progress made against our core strategic initiatives this quarter.

Speaker Change: Within our surgical glaucoma segment, we remain steadfastly focused on a few critical drivers that we believe are keys to solidifying long-term success for the business, which include increasing surgeon utilization across all accounts and re-engaging with accounts that ceased or decreased orders during the LCD uncertainty period last year.

Speaker Change: In addition, we are working to increase the pipeline of new surgeons who will be trained on Omni and Scion.

Speaker Change: We believe the recent improvement in utilization is evidence of recovery and is a testament to the unique benefits of Omni and Scion and their importance to surgeons and patients.

Speaker Change: which highlights our growing momentum as the year has progressed.

Speaker Change: 1,131 customers ordered surgical glaucoma products in the second quarter, up 5% from the first quarter of 2024, and flat from the second quarter of 2023.

Speaker Change: Increasing the transurgent base is an important step that will continue to be a vital aspect of our growth strategy.

Speaker Change: In the first half of 2024, we've trained over 150 surgeons on Omni and over 100 surgeons on Scion.

Speaker Change: We believe we are well positioned for growth due to the shifting mindset among glaucoma surgeons towards interventional glaucoma.

Speaker Change: The Comprehensive Nature of the Omni-Procedure

Speaker Change: The proposed increase in facility reimbursement that would improve the overall economics of Omni versus our competitors, and our continued organizational optimization.

Paul Badawi: TearCare technology has been used in over 60,000 dry eye procedures, despite operating in a cash-pay environment. Over the past six years, we have executed two large RCTs for dry eye care, one designed for regulatory clearance purposes and the other designed for payer coverage determination. Both RCTs met their primary endpoint. Most recently, our second RCT, Sahara, demonstrated the superiority of tier care over the market-leading prescription dry eye therapeutic, Restasis, for the study's primary objective endpoint.

Paul Badawi: The six and twelve month data from the Sahara trial have been published and serve as the foundation for the third leg of our three-pronged strategy, establishing equitable market access based on our growing body of robust clinical evidence. From this, we will continue to lay the foundation for market access and deliver our technology to those who can benefit from the procedure. We recently published the 12-month results of the Sahara RCT, which demonstrated improved signs and symptoms of dry eye disease for tear care patients crossed over from Restesia. The Phase 2 crossover of the Sahara RCT included subjects who were previously treated with ristasis for six months and then subsequently took an offer stasis before receiving a single tier care treatment.

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

Speaker Change: Since its inception, we established our long-term mission of pioneering the field of interventional dry eye with a three-pronged strategy.

Speaker Change: Developing best-in-class technology. Delivering superior long-term clinical outcomes supported by RCTs.

Speaker Change: and Executing an Effective Market Access Strategy.

Speaker Change: We have spent a decade developing and enhancing our transformative tier care technology, an effective procedural option for certain patients with meibomian gland disease, or MGD.

Speaker Change: We estimate there are over 11 million U.S. patients diagnosed with MGD, the leading cause of dry eye disease.

Speaker Change: The tear care procedure targets the diseased meibomian glands directly and comprehensively, thereby addressing the root cause of evaporative dry eye disease.

Speaker Change: TearCare technology has been used in operating in a cash pay environment.

Speaker Change: Over the past six years, we executed two large RCTs for care care, one designed for regulatory clearance purposes, and the other designed for payer coverage determinations.

Speaker Change: The six and 12-month data from the Sahara trial have been published and serve as the foundation for the third leg of our three-pronged strategy, establishing equitable market access based on our growing body of robust clinical evidence.

Speaker Change: From this, we will continue to lay the foundation for market access and deliver our technology to those who can benefit from the procedure.

Speaker Change: We recently published the 12-month results of the Sahara RCT, which demonstrated improved signs and symptoms of dry eye disease for tear care patients crossed over from erstatis.

Speaker Change: The Phase 2 crossover of the Sahara RCT included subjects who were previously treated with ristasis for six months and then subsequently taken off ristasis before receiving a single tear care treatment.

Paul Badawi: These patients experienced further statistically significant improvements in the signs and symptoms of dry eye disease. The first two phases of the Sahara RCT, month 6 and month 12 endpoints, suggest the clinically significant efficacy of tear care appeared to be the same whether or not a study patient had prior treatment with Restasis and that similar results could be expected when tear care is used as a primary or secondary treatment for dry eye disease.

Speaker Change: These patients experienced further statistically significant improvements in the signs and symptoms of dry eye disease.

Speaker Change: The first two phases of the Sahara RCT, month 6 and month 12 endpoints,

Speaker Change: suggest the clinically significant efficacy of tear care appeared to be the same whether or not a study patient had prior treatment with Restasis, and that similar results could be expected when tear care is used as a primary or secondary treatment for dry eye disease.

Paul Badawi: The next milestone for the Sahara RCT will be the publication of the results of the third and final phase of the trial. Phase 3 of the Sahara trial follows the Tier Care Crossover Cohort through to 24 months, and we expect it to be published in 2025. The goal of this cohort is to gain more clarity on requisite treatment frequency and the clinical impact of repeat care treatments as needed. With the 6-month and 12-month data in hand, we are already having meaningful conversations with payers.

Speaker Change: The next milestone for the SAHARA RCT will be the publication of the results of the third and final phase of the trial.

Paul Badawi: Still, we are excited for the final trial phase and believe it will only continue to build on our growing library of compelling clinical data supporting the tiered care procedure. Along with the support from our Tier Care clinical data, we have also recently begun introducing the results from our budget impact analysis to our discussions with payers. In May, we presented the analysis at ISPOR, the International Society for Pharmacoeconomics and Outcomes Research, and we are pleased with the early response to our model, which showcases the health economic impact and system savings for Tier Care versus Restation.

Speaker Change: Along with the support from our Tier Care clinical data, we have also recently begun introducing the results from our budget impact analysis to our discussions with payers. In May, we presented the analysis at ISPOR, the International Society for Pharmacoeconomics and Outcomes Research, and we are pleased with the early response to our model, which showcases the health economic impact and system savings for Tier Care versus Restasis.

Paul Badawi: As we have always intended, following the successful results of the Sahara RCT, we have positioned our technology to ensure that the clinical and economic value of the procedure is appropriately reflected. As Tier Care's body of clinical evidence continues to grow, our investment and value proposition are also evolving. Following a thorough analysis, we'll be modifying our pricing structure to more accurately reflect the clinical and health economic value of the Tier Care procedure as demonstrated in both Phase 1 and Phase 2 of the Sahara RCT and our budget impact model. We have recently informed existing Tier Care customers of the future price increase, which will be effective on October 1st, 2024. We expect our list price to increase to $1,200 per set of Tier Care Smart Lists.

Speaker Change: As Tear Care's body of clinical evidence continues to grow, our investment and value proposition are also evolving.

Paul Badawi: Appropriate reimbursement at the level supported by our evidence would still show compelling economics and value to patients, payers, and eye care providers, as well as to Sight Sciences, as the manufacturer that has invested over 100 million dollars in developing and commercializing this technology. Our strategy within dry eye for the rest of 2024 and beyond has shifted to achieving fair and equitable reimbursement. We are encouraged by the work we are doing now with payers, which we believe has put us on track toward long-term success.

Speaker Change: Appropriate reimbursement at the level supported by our evidence would still show compelling economics and value to patients,

Speaker Change: payers, and eye care providers, as well as to Sight Sciences as the manufacturer that has invested over $100 million in developing and commercializing this technology.

Paul Badawi: To this point, we've had a small number of commercial peer care claims paid on a case-by-case basis, and we continue to do the foundational work needed to establish broader coverage on a larger scale with commercial payers and Medicare.

Speaker Change: To this point, we've had a small number of tiered care commercial claims paid on a case-by-case basis, and we continue to do the foundational work needed to establish broader coverage on a larger scale with commercial payers and Medicare.

Speaker Change: The critical drivers of conversations with payers are strong clinical data and health economics, and we believe we have established a solid position from both perspectives.

Speaker Change: With high-impact, peer-reviewed Level 1 clinical evidence and demonstrated health economic benefits now in hand, we believe we are well-positioned to drive forward coverage conversations and remain on track to begin receiving positive coverage policy decisions in 2025.

Speaker Change: As we look to the future, we remain committed to our long-term goals and feel we are currently operating from a position of strength with the ability to execute them successfully.

Speaker Change: Surgical glaucoma and dry eye represent significant opportunities to capture market share, develop new interventional markets, and drive a return to double-digit growth.

Paul Badawi: We look forward to capitalizing on upcoming catalysts and delivering positive results. I will now turn the call over to Ali to discuss our finances. Thanks, Paul.

Speaker Change: We look forward to capitalizing on upcoming catalysts and delivering positive results.

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

Ali: We plan on achieving cash flow break-even without the need to raise additional equity capital and are excited about our long-term growth opportunity.

Ali: Moving back to the second quarter, total revenue was $21.4 million. This reflects 11% sequential growth and an expected decrease of 9% compared to the second quarter of 2023.

Ali Bauerlein: Surgical glaucoma revenue for the second quarter was $20.2 million, down 5% versus the comparable period in the prior year, and up 11% compared to the first quarter of 2024. This decrease was primarily driven by lower utilization and a lower average selling price in the second quarter compared to the same period in the prior year. Our dry eye revenue for the second quarter was $1.1 million, down 46% compared to the second quarter of 2023. The expected decline was primarily due to fewer new accounts and related smart hub sales as a result of the planned reduced sales infrastructure and the focus on the next phase of our commercial strategy for our dry eye segment, which involves achieving market access. Gross margin for the second quarter was 86%, flat compared to the same period in the prior year.

Speaker Change: Surgical glaucoma revenue for the second quarter was $20.2 million, down 5% versus the comparable period in the prior year, and up 11% compared to the first quarter of 2024.

Speaker Change: This decrease was primarily driven by lower utilization and a lower average selling price in the second quarter versus the same period in the prior year.

Speaker Change: Our dry eye revenue for the second quarter was $1.1 million, down 46% compared to the second quarter of 2023.

Speaker Change: This expected decline was primarily due to fewer new accounts and related smart hub sales as a result of the planned reduced sales infrastructure and the focus on the next phase of our commercial strategy for our dry ice segment, which involves achieving market access.

Speaker Change: Gross margin for the second quarter was 86%, flat compared to the same period in the prior year. Surgical glaucoma gross margin in the second quarter was 88%, down slightly from 89% in the same period in the prior year, primarily driven by product-sales mix.

Ali Bauerlein: Surgical glaucoma gross margin in the second quarter was 88%, down slightly from 89% in the same period in the prior year, primarily driven by product sales. Dry eye gross margin in the second quarter declined to 46% compared to 55% in the same period in the prior year, primarily due to product sales mix and higher overhead costs per unit in the current period due to lower production volume. Total operating expenses for the second quarter were $31 million, a decrease of 12%, compared to $35.3 million in the second quarter of 2023, which reflects reduced operating expenses and improved operating expense leverage in the second 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 increased stock-based compensation.

Speaker Change: Total operating expenses for the second quarter were $31 million, a decrease of 12% compared to $35.3 million in the second quarter of 2023.

Speaker Change: which reflects reduced operating expenses and improved operating expense leverage in the second quarter of 2024 as compared to the same period in the prior year.

Speaker Change: The decrease was primarily due to lower personnel-related expenses, partially offset by increased stock-based compensation expenses.

Ali Bauerlein: Adjusted operating expenses were $26.6 million for the second quarter, a decrease of 15% compared to $31.5 million for the same period in the prior year. Our loss from operations for the second quarter was $12.7 million, compared to a loss of $15.2 million for the second quarter of 2023. Our net loss was $12.3 million, or $0.25 per share, in the second quarter. We ended the quarter with $118.2 million of cash and cash equivalents and $35 million of debt, excluding debt discounts and amortized debt issuance costs.

Speaker Change: Adjusted operating expenses were $26.6 million for the second quarter, a decrease of 15% compared to $31.5 million in the same period in the prior year.

Speaker Change: Our loss from operations for the second quarter was $12.7 million, compared to a loss of $15.2 million for the second quarter of 2023.

Speaker Change: Our net loss was $12.3 million, or $0.25 per share, in the second quarter, compared to a net loss of $14.8 million, or $0.30 per share, for the second quarter of 2023.

Speaker Change: We ended the quarter with $118.2 million of cash and cash equivalents and $35 million of debt excluding debt discounts and amortized debt issuance costs.

Ali Bauerlein: Moving to our outlook for the full year 2024, we still expect double-digit surgical glaucoma revenue growth in the second half of 2024 compared to the same period in the prior year, as we regain commercial momentum and expand utilization and our customer base. However, we expect dry eye revenue to decrease due to our increase in dry eye pricing effective October 1st, 2024, which we believe will have a significant negative impact on cash pay volume in the second half of 2024 before we expect a return to growth in 2025 with market access.

Speaker Change: Moving to our outlook for the full year 2024, we still expect double-digit searchable glaucoma revenue growth in the second half of 2024, compared to the same period in the prior year, as we regain commercial momentum and expand utilization and our customer base.

Ali Bauerlein: We believe this is the right approach to begin capturing the true clinical and health economic value of tiered care, transform the treatment of MGD, and create a significant new category in IT. We expect to see strong dry eye revenue growth in 2025 with reimbursement coverage for tiered care and an expanded commercial presence. We expect dry eye revenue for full year 2024 to be less than $3 million, including $2.1 million of revenue achieved through the end of the second quarter.

Speaker Change: We expect to see strong dry-eye revenue growth in 2025 with reimbursement coverage for care care and an expanded commercial presence.

Ali Bauerlein: As a result, we are narrowing our guidance expectations for revenue to $81 to $83 million from our prior range of $81 to $85 million, representing growth of approximately 0 to 2% compared to 2023. We expect third quarter 2024 revenue to be down compared to the second quarter of 2024, primarily due to typical seasonality, and up slightly versus the comparable period in the prior year, primarily driven by increased omni-utilization with existing and new accounts, partially offset by lower tier care demand.

Ali Bauerlein: As mentioned, we expect a new pricing structure for Tier Care will result in lower demand for the second half of 2024, particularly in the fourth quarter when the new pricing structure becomes effective. However, over the long term, we do not believe pricing will impact adoption of the technology or demand once fair and equitable reimbursement is established. With respect to 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 minimal production builds planned in the second half of the year for our dry ice.

Speaker Change: Over the long term, we do not believe pricing will impact adoption of the technology or demand once fair and equitable reimbursement is established.

Speaker Change: With respect to 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 minimal production bills planned in the second half of the year in our dry-eye segment.

Ali Bauerlein: We are narrowing our guidance expectations for full year 2024 for adjusted operating expenses to $107 to $109 million from our prior range of $107 to $110 million, representing a decrease of approximately 1 to 3% compared to 2021. We remain 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, please open the line for questions.

Speaker Change: We are narrowing our guidance expectations for full year 2024 for adjusted operating expenses.

Speaker Change: to 107 to 109 million from our prior range of 107 to 110 million, representing a decrease of approximately 1 to 3% compared to 2023.

Speaker Change: We remain 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.

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

Ali Bauerlein: 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 11 on your telephone and wait for your name to be announced.

Operator: To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A raw file. Our first question comes from the line of Tom Stephan of Stiefel. Your line is now open. Great. Hey, everyone.

Speaker Change: To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster.

Speaker Change: Our first question comes from the line of Tom Stephan of Stiefel. Your line is now open.

Tom Stephan: Great. Hey, everyone. Thanks for taking the questions. Maybe I'll start with surgical glaucoma. And for the second half, if I run the implied two-year CAGR.

Tom Stephan: for that business. It comes out to about maybe mid to high single-digit growth and that compares to CAGRs, I think, in the low teens for 1H24. So maybe can you talk about why the potential deceleration in the back half for surgical glaucoma on a two-year CAGR basis?

Tom Stephan: So maybe can you talk about why the potential deceleration in the back half for surgical glaucoma on a two-year CAGR basis? Yeah, I can take that, Tom. So, you know, obviously, in 2023, in particular, we were dramatically impacted by the proposed LCDs that were ultimately withdrawn. And we've recently seen more favorable LCDs proposed that did not include coverage restrictions for Omni or Scion.

Ali Bauerlein: So, you know, obviously, that impacted our growth, particularly in the second half of 2023. And our focus in 2024 was really to regain that momentum and get back to recovery and double-digit growth off of that phase. And so that's really what we've been executing, and the recovery is tracking to our expectations in the first half of 2024. And now we have proposed LCD clarity, and we do expect to be back to double-digit surgical glaucoma revenue growth in the second half of 2024.

Speaker Change: And so that's really what we've been executing too, that recovery is tracking to our expectations in the first half of 2024, and now we have proposed LCD clarity, and we do expect to be back to double-digit surgical glaucoma revenue growth in the second half of 2024.

Ali Bauerlein: And we do believe that we're set up very nicely looking farther ahead into 2025 and beyond with both the proposal of device intensive, which could be an accelerant for us in terms of growth, as well as just our overall efficacy profile of Omni as a very comprehensive procedure. So, of course, we were impacted if you look back over time in that 2023 period, but we feel like we are set up for success, and we have been executing on that plan in 2025. I got it.

Tom Stephan: Got it. That's great, Culler. Thanks, Allie. And then my follow-up, just...

Speaker Change: First, are you maintaining the 2025 double-digit growth expectations that I think you've talked about in the prior two calls? And then, Allie, what's going on with that?

Speaker Change: Maybe a rough revenue run rate that gets you to cash flow break even If you're able to provide some guardrails there. Thanks

Tom Stephan: Thanks. Yeah, thanks, Tom. So at a high level, we're not prepared today to give 2025 guidance. It would be a little premature for us to do that.

Speaker Change: Yeah, thanks, Tom.

Speaker Change: At a high level, we're not prepared today to give 2025 guidance, it would be a little premature for us to do that, but we do feel very confident in our ability to continue to

Speaker Change: gain share over time and grow this market as we've said many times before we have both

Ali Bauerlein: So we are continuing to have strong beliefs in our ability to execute on that growth plan and to return to growth in 2025 and beyond. Of course, tiered care is also an accelerant of that growth if we can achieve market access wins. And so that's something that we're very excited about when we look to 2025. And for your second question on cash flow, we haven't put out any type of particular target yet around what level of revenue would be needed to achieve cash flow breakeven.

Speaker Change: So we are continuing to have strong beliefs in our ability to execute on that growth plan and to return to growth in 2025 and beyond. Of course, tiered care is also an accelerant of that growth if we can achieve market access wins.

Speaker Change: And so that's something that we're very excited about when we look to 2025 and beyond.

Ali Bauerlein: But you've seen us make substantial improvement over the last year and a half, really, since the end of 2022 when we had cash usage in 2022 of about $75 million. And you see this quarter, we had cash usage of about $9 million, so down significantly if you run rate that cash utilization.

Ali Bauerlein: Over the last year and a half, really, since the end of 2022, when we had cash usage in 2022 of about $75 million, and you see this quarter, we had cash usage of about $9 million, so down significantly if you run right that cash utilization. So, we feel like we're in a great spot. We've been very efficient with our operating expenses.

Ali Bauerlein: So we feel like we're in a great spot. We've been very efficient with our operating expenses while also regaining momentum on the revenue side, and we feel like we are properly funded to reach our goal. Good. Thanks, Allie.

Speaker Change: while also regaining momentum on the revenue side and we feel like we are properly funded to reach our goals.

Operator: Thanks, everyone. Thank you. One moment for our next question. Our next question comes from the line of David Saxon of Needham & Company. Your line is now open. Hello, this is Joseph on behalf of David. Maybe just picking up on the cash burn. If you can maybe give some color, you know, what are your expectations for the second half of 24 for CashBurn.

Speaker Change: Great. Thanks, Allie. Thanks, everyone.

Speaker Change: Thank you. One moment for our next question.

David Saxon: I guess you expect to make further improvements, or maybe how are you thinking about driving leverage there while also investing in the Guacamo business and building out the Dry Eye market access team? Yeah, thanks for the question. And we do expect to continue to show improvements in cash burn over time, both in the second half of 2024 and into 2025 as well. So that is a focus of the company to continue to execute on those plans and to be efficient with our spend. So that's the plan. We haven't provided any specific targets for cash burn in those periods.

David Saxon: Our next question comes from the line of David Saxon of Needham & Company. Your line is now open.

Ali Bauerlein: But we have been executing, Okay, understandable, and what was the second question? I think I, maybe, missed part of it. Yeah, I mean, I think you answered it was just, you know, kind of how are you thinking about driving leverage while also, you know, investing in what will become a business in dry eyes. Yeah, so that is built into our assumptions to continue to invest in those key, both commercial activities as well as our R&D activities that we think are important for our long-term success. So that's been built into our models. And more dry eye investments will come in 2025.

Speaker Change: Hello, this is Joseph on for David. Maybe just picking up on the cash burn, if you can maybe give some color, you know, what are your expectations for

Speaker Change: second half of 24 for CashBurn. I guess you expect to make further improvements or I guess maybe how are you thinking about driving leverage there while you know also investing in the Guacomo business and building out the dry eye market access team?

Speaker Change: Yeah, thanks for the question. And we do expect to continue to show improvements in cash burn over time, both in the second half of 2024 and into 2025 as well. So that is a focus of the company to continue to execute on those plans and to be efficient with our spend.

Speaker Change: So, that's the plan. We haven't provided any specific targets on cash burn in those periods, but we have been executing appropriately.

Speaker Change: Okay, understandable. What was the second question?

Speaker Change: Maybe missed part of it. Yeah, I mean, I think you answered it was just, you know, kind of how are you thinking about driving leverage walls and, you know, investing in.

Speaker Change: Welcome to business in dry eye.

Speaker Change: Yeah, so that is built into our assumptions to continue to invest in those key both commercial activities as well as our R&D activities that we think are important for our long-term success. So that's been built into our models.

Speaker Change: More of the dry-eye investments will come in 2025. As we see market access wins in specific markets, then we will target additional resources added into those regions to go work with the partners in those spaces. So that's less of a 2024 impact and more of a 2025 impact, but those are incremental investments. That's not a significant shift to our overall expense planning.

Ali Bauerlein: As we see market access wins in specific markets, then we will target additional resources into those regions to go work with the partners in those spaces. So that's less of a 2024 impact and more of a 2025 impact, but those are incremental investments. That's not a significant shift to our overall expense planning.

Operator: Okay, great. Perfectly clear. And then, maybe just one more.

Speaker Change: Okay, great. Perfectly clear. And then maybe just one more. For any of the doctors or practices that have gotten peer care, you know, claims paid out, what are you kind of seeing in terms of volumes there? Have they been stable or growing?

Tom Stephan: I guess if there are other doctors in the practice, have you seen, you know, their claims drive other adoption?

Operator: So, we're still very early in the process of getting claims paid for care care, what we've seen.

Operator: you know, a low level of claims being paid at reasonable rates that we're very pleased with, it is still very much early innings. So there is not anything that we would extrapolate out of that at this point or saying that that's driving volume. At this point, these are really about establishing coverage and payment over time. But

Ali Bauerlein: These are really about establishing coverage and payment over time, but these are still very small overall claims paid at this point. Okay, thank you very much for taking our questions. Thank you. Thank you. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced.

Speaker Change: These are still very small overall claims paid at this point.

Speaker Change: Okay, thank you very much for taking our questions.

Operator: To withdraw your question, please press star 11 again. I am showing one more question. One second. One moment, please.

Speaker Change: Thank you.

Operator: Thank you. 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 1 1 again.

Operator: I am showing one more question. One second, one moment, please.

Joanne Wunsch: Our next question comes from the line of Joanne Wunsch from Citi. Your line is now open. Hey guys, this is Philippe on behalf of Joanne. I was just wondering if you could start with a mix of omni usage and standalone and combination procedures and then just on standalone reimbursement. It seems like you got a really significant bump compared to your competitors. I guess like, where do you think you're going to shake out in terms of adoption once those facility fees are implemented? Thanks. Yeah, so I can take that at a high level.

Joanne Wunsch: Our next question comes from the line of Joanne Wunsch from Citi. Your line is now open.

Joanne Wunsch: Hey guys, this is Philippe on Frigiland. I was just wondering if you could start with a mix of Omni usage and standalone and combination procedures and then just on standalone reimbursement It seems like you got a really significant bump compared to your competitors. I guess like

Speaker Change: Where do you think you're going to shake out in terms of adoption once those facility fees are implemented? Thanks.

Ali Bauerlein: Yeah, so I can take that. At a high level, the stand-alone market for us

Ali Bauerlein: We don't have specific claims-based data to look at procedure volume to know.

Ali Bauerlein: Specifically, whether somebody is doing a standalone procedure or a combination cataract procedure.

Ali Bauerlein: So, we don't have that specific visibility, however, we do estimate that about 85% of the procedures are done in combination with a cataract, and about 15% of our procedures are done on a standalone basis.

Ali Bauerlein: When we look at the claims data for the entire space...

Speaker Change: it's more like 5% are done on a standalone basis. So certainly we are a key part of that standalone market and a key developer of that market. And we see this as a large growth potential over time for us.

Speaker Change: And the second part of your question again was...

Ali Bauerlein: So that's still pending, and we'll obviously have further commentary at that time. I think the other thing to call out is that the proposed increase in reimbursement for CPT 66174 does not apply to standalone specifically. It applies to the broader code. That is a code often utilized in conjunction with the procedure enabled by Omni, and so there definitely is some correlation.

Ali Bauerlein: Yeah, just to clarify, the proposed increase is still pending final approval, which we would expect to learn in the second half of the year, late October , early November . So that's still pending, and we'll obviously have further commentary at that time. I think the other thing to call out is that

Ali Bauerlein: The proposed increase in reimbursement for CPT 66174 does not apply to standalone specifically. It applies to the broader code. That is a code often utilized in conjunction with the procedure enabled by Omni, and so there definitely is some correlation.

Ali Bauerlein: I think when we look at the standalone opportunity, as Ali said, we continue to see that Sight and Omni specifically are a significant contributor to the standalone market opportunity. More broadly, I think we're very encouraged by the continued growth and development of an interventional mindset, looking at how to use procedural intervention earlier in the continuum of care for glaucoma patients. We also believe that in a standalone case, when the sole purpose of surgery is the treatment of glaucoma, the clinical profile and demonstrated clinical efficacy of Omni are significant in terms of the ability to provide the best available treatment for those patients.

Ali Bauerlein: We also believe that in a standalone case, when the sole purpose for surgery is the treatment of glaucoma,

Ali Bauerlein: Certainly, we're going to continue to monitor the proposed rule change and potential increased

Speaker Change: acceptance and adoption of these interventional type procedures for standalone patients.

Paul Badawi: Just to add to Ali and Matt's comments, this has to happen. Interventional glaucoma has to happen. In stand-alone, in particular, patients are treated with eyedrops for years.

Felipe: In stand-alone in particular, patients are treated with eye drops.

Paul Badawi: Maybe they'll get SLT, get more eyedrops. Their disease inevitably progresses, and we're trying to demonstrate that intervening earlier in a minimally invasive, safe, and effective manner is ultimately better for the patient in the long term. What's the best way to demonstrate that?

Paul Badawi: It's with real-world clinical data on a large scale. And so Omni, since we launched Omni in 2018, it's been used in both combination cataract and standalone settings.

Speaker Change: And now we have the benefit of being able to mine that large-scale, real-world evidence to see how is Omni performing in these stand-alone patients, in the hands of the average glaucoma surgeon.

Paul Badawi: Hopefully, we'll be able to see the analysis of Omni's real world performance in standalone patients in this IRIS registry, get it submitted for publication, hopefully, within the next, you know, two to three months, and hopefully, published in the next few quarters. And I think that real-world evidence is going to be helpful to that next potential standalone glaucoma surgeon who's considering using Omni as an earlier standalone surgical intervention to be able to see how the procedure performs in the hands of a number of colleagues. This evidence is critical to continuing to develop the standalone mark, and we're really excited about it. Hopefully, we'll see some effect in 2025.

Speaker Change: and hopefully published in the next few quarters. And I think that real world evidence is gonna be helpful to that next potential standalone glaucoma surgeon who's considering using Omni as an earlier standalone surgical intervention to be able to see how the procedure performs in the hands of.

Speaker Change: a number of colleagues. This evidence is critical to continuing to develop the standalone mark and we're really excited about it. Hopefully we'll see some effect in 2025.

Paul Badawi: Great. And then, just to keep us dry eyed, if you could just give us an update on kind of how the conversations are going with commercial payers, that'd be helpful. Thank you for taking the questions. Yeah, so I think I'll echo Ali's earlier comments that we're still in the early days in our conversation and communication with all payers, not just commercial payers, but also the Medicare administrative contractors. So, we're encouraged by the conversations we've had to date.

Speaker Change: Great. And then just on Dry Eye, if you could just give us an update on kind of how conversations are going with commercial payers, that'd be helpful. Thank you for taking the questions.

Paul Badawi: Yes, I think I'll echo Ali's earlier comments that we're still early days in our conversation and communication with all payers, not just commercial payers, but also the Medicare administrative contractors. So, we're encouraged by the conversations we've had to date. I think the important thing is to point to the fact that.

Paul Badawi: The reason that we're encouraged and the nature of the conversation is being positive really hinge on the quality of clinical evidence and the demonstrated economic benefit

Paul Badawi: So, again, early in those conversations, but encouraged that the data and the investments made by Sight Sciences into this category are being well received in the conversations we're currently having with them. And just to add a final comment, specific to Matt's enthusiasm around the coverage discussions. We see for us, tiered care coverage right now is driven by four key drivers, and they're all very positive.

Speaker Change: up to your care for these patients, you know, with myeloid gland dysfunction and the unique

Matt Link: category creating opportunity we have.

Speaker Change: with Tear Care. So again, early in the conversation, but encouraged.

Paul Badawi: that the data and the investments made by Sight Sciences into this category are being well-received in the conversations we're currently having with PEARS.

Paul Badawi: And just to add a final comment, the...

Paul Badawi: specific to Matt's enthusiasm around the coverage discussions. We see for us tiered care coverage right now is driven by four key drivers.

Paul Badawi: And they're all very positive. That's Sahara Phase 1.

Paul Badawi: That was just published in May. And then the other 2 drivers of tear care coverage, the budget impact model, where we compare the cost impact of tear care versus Restasys, that's been completed and submitted for publication, very positive. And lastly, the most recent driver of the cost effectiveness analysis. So that's an analysis that we recently conducted. It will hopefully be submitted for publication within the next one to two months and hopefully published maybe early next year.

Paul Badawi: through six-month treatment head-to-head with Restasys that's been published.

Paul Badawi: Sahara Phase 2, that's the crossover arm of Restasis patients treated with a single tear care treatment and see how they're doing at 12 months, further significant improvements in all signs and symptoms. That was just published in May. And then the other two drivers of tear care coverage

Paul Badawi: Budget Impact Model, where we compare the cost-impact of tiered care versus risk-basis. That's been completed and submitted for publication, very positive. And lastly, the most recent driver, the cost-effectiveness analysis.

Paul Badawi: So that's an analysis that we've recently conducted, will hopefully be submitted for publication within the next one to two months, and hopefully, you know, published maybe early next year. So, you know, with Sahara Phase 1, Sahara Phase 2, Budget Impact Model and Cost Effectiveness Analysis,

Tom Stephan: So with Sahara Phase I, Sahara Phase II, the budget impact model, and cost-effectiveness analysis, those are the critical drivers to having highly productive coverage conversations, and that's ongoing. Thank you. One moment for our next question. Our next question comes from Tom Stephan of Stiefel. Your line is now open.

Tom Stephan: Those are the critical drivers to having highly productive coverage conversations, and that's ongoing.

Tom Stephan: Thank you.

Tom Stephan: One moment for our next question.

Tom Stephan: Our next question comes from Tom Stephan of Stiefel. Your line is now open.

Tom Stephan: Great. Thanks for letting me hop back in here. Just a follow-up on dry eye, sort of a two-parter again. I guess first, how did you arrive at that number, specifically $1,200 as it's a pretty significant step up from the current price.

Tom Stephan: Great, thanks for letting me hop back in here. Just a follow-up on dry eye actually.

Tom Stephan: I guess first, how did you arrive at that number, specifically $1,200, as it's a pretty significant step up from the current price? And then my main question is...

Tom Stephan: And then my main question is, You know, I guess it is fair to assume there is a strong level of confidence that payers will reimburse at these types of levels to make it worth it for the doctors? And hopefully that makes sense. But any color there would be would be helpful.

Speaker Change: You know, I guess, is it fair to assume there is a strong level of confidence that payers will reimburse at these types of levels to make it worth it for the doctors? And hopefully that makes sense, but any color there would be would be helpful. Thanks.

Tom Stephan: Thanks. Hey, Tom. It's Matt.

Tom Stephan: Hey Tom, it's Matt. I'll take the first shot at this, and obviously Allie and Paul can weigh in, and I guess what I'd really turn to is the comments Paul just made.

Matt Link: I'll take the first shot at this, and obviously, Allie and Paul can weigh in. And I guess what I'd really turn to are the comments Paul just made. The quality and the strength of the data, plus the compelling comparison in savings associated with the health economic impact model are really what informed the price increase. The timing is important.

Paul Badawi: The quality and the strength of the data, plus the compelling comparison.

Matt Link: And savings associated with the health economic impact model are really what informed the price increase. And look, timing is important. Obviously, we had.

Matt Link: Obviously, we had a view of where clinical evidence would land, but ultimately, it's the sequence of not just completing the enrollment, the study, doing the analysis, but it's submitting for publication, actually seeing that publication, and then utilizing the data from that publication to drive the analysis, some of which is still pending in its own right from a health economic standpoint. So, a very judicious and thoughtful approach to that. A lot of internal analysis.

Matt Link: A view of where clinical evidence would land.

Matt Link: But ultimately, it's the sequence of not just completing the enrollment, the study, doing the analysis, but it's submitting for publication.

Speaker Change: actually seeing that publication.

Paul Badawi: and then utilizing the data from that publication to drive...

Matt Link: the analysis, some of which is still pending in its own right from a

Matt Link: We're very fortunate to have a group of advisors that we've been able to speak to as well, truly understanding the benefit in addition to data. What are the practical, real-world implications when you implement this in a clinical setting, which I think is a part of what the question you're asking is about.

Matt Link: from a health economic standpoint.

Matt Link: [inaudible]

Matt Link: very judicious and thoughtful approach to that. A lot of internal analysis. We're very fortunate to have a group of advisors that we've been able to speak to as well, truly to understand the benefit in addition to data. What's the practical real world implications when you implement this in a clinical setting, which I think is a part of what the question you're asking is about.

Matt Link: So, we feel really good about where we are. As stated earlier, in response to other questions, we're early in our discussions with payers. I think everybody understands that this is a process and a transition period, but the nature of those conversations is such, and the analysis supported the price as such.

Matt Link: And so we feel really good about where we are, as stated earlier, in response to other questions. We're early in our discussions with payers. I think everybody understands that this is a process and a transition period, but the nature of those conversations are such, and the analysis supported the price ad set.

Matt Link: That's great, Colin. Thanks, Matt. Thank you. I am showing no further questions at this time. I would now like to turn it back to Paul Badawi, CEO, 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. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Matt Link: That's great, Colin. Thanks, Matt.

Matt Link: Thank you. I am showing no further questions at this time. I would now like to turn it back to Paul Badawi, CEO , for closing remarks.

Paul Badawi: 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.

Matt Link: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

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