Q4 2024 Sight Sciences Inc Earnings Call
Speaker Change: Hello, and welcome to the Sight Sciences 4th quarter, 2024 earnings conference call.
Speaker Change: At this time, all participants are in a listen only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising that your hand has been raised.
Speaker Change: To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. It is now my pleasure to introduce
Speaker Change: Thank you for participating in today's call, presenting today our Sight Sciences co-founder and chief executive officer Paul Badawi and chief financial officer, Alison Bauerlein.
Speaker Change: Also in attendance is Sight Sciences Chief Commercial Officer, Matt Link. Earlier today, Sight Sciences released financial results for the fourth quarter in full year ended December 31, 2024, and initiated revenue and adjusted operating expense guidance for full year 2025.
Speaker Change: A copy of the press releases 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 board looking statements within the meaning of the federal security laws.
Speaker Change: These forward-looking statements include statements related to the company's anticipated financial performance.
Operating Results [inaudible]
liquidity position and ability to achieve cashflow break even. [inaudible]
2025 Revenue and Adjusted Operating Expense Guidance
Speaker Change: Interrupt Impact to Gross Margin and the primary factors impacting our ability to achieve our guidance, ability to achieve current and long-term strategic objectives and value drivers, market opportunity and ability to enter new markets and capture.
Speaker Change: Market Share. The continued adoption of the company's products by Surgeons, pricing strategy.
Speaker Change: Product reimbursement coverage and strategy, including the company's ability to achieve positive reimbursement coverage policies for tear care, expectations regarding commercial momentum, account utilization and engagement, the company's pipeline of interventional.com line dry eye technology.
Speaker Change: the timing of the release of new product under development, clinical trial strategy and results, and the disposition of ongoing patent litigation.
Speaker Change: Or looking statements are based on estimates and assumptions as of today are neither promises nor guarantees and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied by these statements.
Speaker Change: A description of some of these risks and uncertainties can be found in the company's public filings with the Securities and Exchange Commission, including in the Risk Factor section of its annual report on form 10K and quarterly reports on form 10Q.
Speaker Change: The company undertakes no obligation to publicly update or revise any forward-looking statements except is required by law.
Speaker Change: On this call, management refers to certain financial measures that were not prepared in accordance with generally accepted accounting principles in the United States, 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.
I will now turn the call over to Paul.
Thanks, Tripp!
Speaker Change: Earlier today, we reported our financial results for the fourth quarter of 2024. In the quarter, we generated total revenue of 19.1 million, a 2% increase compared to the same period in
Speaker Change: A result reflected continued commitment and hard work with our team as we remain steadfast in our mission to be a leader in the development of transformative interventional technologies that allow I care providers to procedurally elevate the standards of care, empowering people to keep seeing.
Speaker Change: Our current products address significant unmet needs in glaucoma and dry eye. Two of the biggest markets in eye care.
Speaker Change: Effectively serving the physicians and patients in both of these markets with our innovative interventional technologies is our top priority.
Speaker Change: As we closed out 2024, we were pleased to see progress on multiple fronts during the fourth quarter. We experienced an increase in surgical glaucoma ordering accounts and revenue both sequentially and compared to the fourth quarter of 2023, as well as account re-engagement momentum.
Speaker Change: We also made advancements towards our goal of achieving equitable market access for our tear-care technology with an increased number of claims reimbursed under commercial plans.
Speaker Change: The clinical highlights for our technologies included the publication of three-year standalone clinical data, which demonstrated the long-term effectiveness of Omni and managing primary open-angle glaucoma
Speaker Change: and the publication of the Tier Care Budget Impact Analysis, which showed a direct relationship between increased utilization of Tier Care in place of prescription medications and total cost savings from a U.S. payer perspective.
Speaker Change: And finally, throughout 2024 we were disciplined in managing our expenses and improving working capital, which contributed to a 62% reduction in net cash use for the year.
Speaker Change: As we enter 2025, we are focused on our key strategic initiatives which include building commercial momentum and migs through our continued commitment to customer education and engagement, establishing equitable reimbursement for tear care.
Speaker Change: Publishing new clinical and cost data supporting the adoption and use of our portfolio of interventional technologies.
Speaker Change: and progressing our robust pipeline, including an upcoming next-generation Omni release.
Speaker Change: We believe that 2025 will be a transformational year for Sight Sciences as we expect to achieve initial positive coverage and or payment decisions for tear care, which would be the first of its kind for interventional M.G.D. treatments.
Speaker Change: We have started the year strong with our national sales meeting and the American Glaucoma Society meeting last week. We had enthusiastic engagement and buy-in from our team and our clinician partners with respect to our strategic initiatives and how to drive the interventional mindset across eye care providers in both Glaucoma and dry eye disease.
Speaker Change: We believe with the focus and execution of our internal teams, combined with a growing number of partnerships with KOLs across the industry, Sight Sciences will continue to enable the paradigm shift in procedural interventional care.
Diving into our surgical glaucoma segment [inaudible]
Speaker Change: Although the mix market has been in flux for the last 18 months, we now have improved visibility into the new market environment, and we believe the comprehensive procedure performed with Omni will continue to be a market-leading choice for surgeons.
Speaker Change: Locoma is a very serious disease and remains the world's leading cause of irreversible blindness, with an estimated 83 million diagnosed primary open angle glaucoma patient worldwide.
Speaker Change: We believe Miggs will continue to play a critical role in controlling the disease in terms of both inter-ocular pressure and medication reduction, and Omni remains a clear leader in the Miggs category.
Speaker Change: In the fourth quarter of 2024, we generated 9% growth in surgical glaucoma revenue compared to the same period in the prior year, and up 1% sequentially from the third quarter of 2024.
Speaker Change: In the face of the LCD-related headwinds and mixed procedures, our team worked with our surgeon partners who were adopting their treatment algorithms to align with the final Medicare LCDs.
Speaker Change: As a reminder, these LCDs included the elimination of Medicare coverage in most states from multiple mixed procedures that are completed at the same time as cataract surgery.
Speaker Change: With these restrictions, a surgeon must now choose one makes procedure at a time for these patients.
Speaker Change: Despite this dynamic environment, our hard work still resulted in important progress in several areas including a sequential increase in ordering accounts and positive momentum with account re-engagement and utilization.
Speaker Change: After operating in this new MIGD environment during the last six weeks to the fourth quarter of 2024, we realized the headwinds were larger than initially anticipated.
Speaker Change: We estimate that the multiple mix claims build was roughly a mid-teens percent of total mix claims build, but we believe that Omni has had a higher utilization than the overall market in these stack procedures.
This dynamic is factored into our 2025 Revenue Guidance.
Speaker Change: While in the short term, we do anticipate an industry-wide decline in total utilization of mixed devices, we are confident that we have identified a pathway from which we can generate positive momentum to maintain our leadership position.
Speaker Change: We are focused on surgeon education on the clinical benefits of earlier interventions with the comprehensive omni procedure.
Reengagement Efforts with Accounts, Highlighting Reimbursement Clarity [inaudible]
Enhanced Competitive Counter-Celling [inaudible]
Investment and Targeted Commercial Resources [inaudible]
Speaker Change: Optimize Sudo-Fake Extendalone Omni Market Development Strategy through Refined Patient Targeting in Selection.
and an upcoming new product launch.
Speaker Change: Additionally, there remains opportunity in continuing to train new surgeons and expand utilization. As we believe we have trained less than half of the mixed-trained surgeons in the United States, many surgeons still have not fully adopted MIGs as a standard of care for glaucoma patients.
Speaker Change: As a reminder, the student-fake standalone segment consists of patients three or more years out from prior cataracts surgery, who may or may not have had a mixed procedure at the time of cataracts surgery, but whose IOP is not well controlled on two or more medications.
Speaker Change: These later-stage patients are at risk of disease progression, and most are likely on their way to an invasive and complicated procedure, like a Tribeca electomira tube shot.
Speaker Change: We believe that standalone intervention performed with Omni can be effectively utilized for these patients to potentially delay or avoid the need for the riskier advanced procedures and improve patient care.
Speaker Change: Our team has been engaging with our customers on the topic of omni as an optimal treatment for this underserved patient population, and the message has been resonating.
Speaker Change: Lastly, I want to briefly touch on our pipeline, specifically our next plan product launch in the Omni family. We are excited to introduce Omni Edge to market, which is planned for the first half of 2025.
Speaker Change: The addition of Omni-Edge is intended to accommodate varying physician preferences and patient needs in today's evolving makes marketplace.
Speaker Change: Omni Edge, with intelligent visco delivery, is designed to increase the amount of visco elastic delivered with our patented motion synchronized delivery system.
Speaker Change: to ensure the consistency, reproducibility, and safety surgeons have come to trust in the Omni procedure.
Speaker Change: With this product, we are reinforcing our commitment to best serving both our serving customers and the patients they care for.
Speaker Change: The addition of Omni Edge reflects our strong relationship with our customers, our ongoing dedication to enhancing our products, and our ability to rapidly respond to the evolving needs of the
Speaker Change: Now I will turn to our dry eye business where we also continue to make solid progress on our strategic initiatives.
Speaker Change: Our fourth quarter results in dry eye reflect our focus on reimburse market access and new pricing, which went into effect October 1, 2024.
Speaker Change: We are dedicated to achieving equitable market access for peer care as our top priority and I am pleased with the advancements we are making toward this goal. We are continuing to engage in meaningful conversations with payers supported by the positive results of the 12-month Sahara study.
Speaker Change: Along with the recently published Budget Impact Analysis, which we believe will help support positive coverage and or payment decisions in 2025.
Speaker Change: We estimate there are over 13 million U.S. patients diagnosed with my Bohemian gland disease or M.G.D., the leading cause of dry eye disease.
Speaker Change: Historically, treatment options for these patients have been dominated by prescription and over-the-counter eye drops, which primarily focus on increasing cure volume and aqueous deficient patients.
Speaker Change: Because there is currently no reimbursed interventional treatment that addresses the root underlying cause of M.G.D., we believe there is a significant unmet need within this patient population.
Speaker Change: Our long-term strategy is to be a pioneer in the estimated $3 billion core market for patients with moderate to severe MGD for candidates for an interventional procedure.
Speaker Change: We've been highly intentional in executing our strategy, beginning with developing best in class technology, followed by delivering superior long-term clinical outcomes demonstrated through randomized clinical trials, and now, we're advancing an effective market access strategy to establish equitable reimbursement for peer care.
Speaker Change: Our methodical approach has led us to the cusp of unlocking this multi-billion dollar market opportunity this year.
Speaker Change: Clinically, the effectiveness of tear care was shown in the landmark Sahara trial, which evaluated treatment with tear care compared to the leading prescription eye dropper stasis for patients with dry eye disease.
Speaker Change: Following the successful completion and publication of Phase 1 and Phase 2 of the Sahara RCT in 2023 and 2024 respectively.
Speaker Change: We are pleased to announce the patient visits for the third and final phase of Sahara, which was designed to assess the durability and procedural treatment effect of tear care through 24 months.
Speaker Change: We're completed in October 2024. We expect the results from this final phase of the Sahara RCT to be published in 2025.
Speaker Change: In December 2024, we announced the results of the Tier Care Budget Impact Analysis, which was published in the Expert Review of Ophthalmology Journal. The analysis, projected over a two-year period, compared the financial impact of Tier Care to commonly prescribed dry eye medications.
Speaker Change: Key findings indicated that a 20% increase in market share of tear care compared to prescription dry eye medications would yield an estimated annual savings of $36.87 per member per year across all plan members in a hypothetical health plan with 1 million covered lives.
Speaker Change: The study also demonstrated a direct relationship between increased utilization of tear care in place of prescription medications and total cost savings from a US payer perspective.
Speaker Change: We believe the budget impact analysis results are a contributor to a manufacturer's formulary listing, a reimbursement submission, and we are introducing the results of this analysis in our conversations with payers.
Speaker Change: We feel the combination of the strong clinical data from the Sahara RCT and the findings of this budget impact analysis created compelling case repairs to establish coverage and or payment for treatments performed with tear care and an appropriate reimbursement level.
Speaker Change: We are encouraged that a number of care care plans have already been paid through commercial insurance.
Speaker Change: Finally, on dry eye, our established commercial infrastructure has engaged with over 1,500 eye care facilities who have invested in care care hubs and performed over 65,000 tear care procedures to date. This foundation will allow us to hit the ground running as reimbursement from tear care
Speaker Change: Artier Care Track Record of Significant Eyecare Provider Adoption, along with the Historic Cash Pay Results, Validate, the Patient Demand, and Clinical Need for Our Product.
Speaker Change: We believe these early indicators suggest demand will grow following any positive coverage or payment decisions.
Speaker Change: This catalyst, along with our commercial preparedness, represents an opportunity for a significant growth in
Speaker Change: We've made significant progress in executing on our strategic initiatives and we remain confident in our business and in our continued ability to be a leader in addressing the unmet needs served by our innovative technologies.
Speaker Change: Concertical Glaucoma through a continued commitment to education and engagement with our customers. We remain focused on building commercial momentum and the new mixed market environment, while also developing the pseudo-fake standalone market for Army.
Speaker Change: In dry eye, we plan to continue working towards making care care, the first mover and reimbursed interventional dry eye in 2025 for the millions of patients suffering from dry eye disease.
Speaker Change: I will now turn the call over to Ali to discuss our financial results in 2025 guidance.
Ali: Thanks, Paul. Before I turn to the fourth quarter of financial results, I want to reiterate that while we remain focused on improving our strategic and operational initiatives, we do settle from a position of financial stability. We are confident in our ability to support our goals moving forward and expect to achieve cash flow breakeven without the need to raise additional equity capital.
Ali: Looking back to the fourth quarter of 2024, total revenue was 19.1 million.
Ali: This reflects the 2% increase compared to the same period in the prior year.
Ali: Gross and surgical glaucoma revenue was offset by an expected decline in tear-care revenue as our tear-care price increased when into effect and we shifted our focus towards establishing reimbursement coverage and or payment position.
Ali: Search Cobalcoma Revenue felt short of our expectation, primarily due to the new Medicare LCDs effective mid-quarter, which had a more pronounced impact on the fourth quarter search Cobalcoma Revenue has been expected.
Ali: Search for Walcoma Revenue for the fourth quarter of 2024 with 18.8 million, up nine percent versus the same period in the prior year. The increase was primarily driven by ordering a count, which increased by seven percent, and account utilization, which increased by six percent.
Ali: Utilization decreased sequentially, and while the expected lower utilization in the fourth quarter compared to the third quarter due to the restriction of multiple megs, utilization was lower than anticipated.
Ali: 138 customers ordered surgical glaucoma products in the fourth quarter, up 3% from the third quarter of 2024, and up 7% from the fourth quarter of 2023.
Ali: Our dry eye revenue for the fourth quarter of 2024 was 0.3 million, a decrease from 1.6 million in the same period in the prior year.
Ali: They expected decline, which primarily due to fewer smart-lived sales, which was a result of our focus on the next phase of our commercial strategy for our dry ice segment, which involves achieving reimburse market access.
Ali: Gross margin for the fourth quarter was 87% an increase compared to 85% in the same period in the prior year, primarily due to increased surgical glaucoma product mix.
Ali: Total operating expenses for the fourth quarter were 28.5 million, an increase of 5% compared to 27.1 million in the fourth quarter of 2020. Primarily due to higher personnel related expenses, partially offset by lower legal expenses in the comparative periods.
Ali: Adjusted operating expenses were 24.4 million to the fourth quarter, an increase of 9% compared to 22.3 million in the same period in the prior year.
Ali: Our net loss for the fourth quarter was 11.8 million or 23 cents per share compared to a net loss of 10.7 million or 22 cents per share for the fourth quarter of 2023.
Ali: We ended the quarter with 120.4 million of cash and cash equivalent and 40 million of debt excluding debt discounts and amortized debt issuance costs.
Ali: We generated 1.8 million of cash in the fourth quarter, reflecting continued operational discipline and an improvement in working capital.
Ali: Cash generated in the fourth quarter included a 5 million drawdown under our terms law.
Ali: It was an improvement compared to the 6.4 million of cash used in the fourth quarter of 2023.
Ali: Cash used in the 12 months ended December 31, 2024, with 17.8 million, compared to 46.9 million in the full year of 2023.
Ali: As a reminder, we have not received any monetary damages awarded in our successful jury trial verdict in our patent infringement case against Alfon.
Ali: The final ruling is still pending the judge's determination whether to confirm the jury's verdict, establish ongoing royalty damages, and or determine any potential enhancement, and its subject to appeal.
Ali: Moving to our revenue outlook for the full year 2025, we are initiating our revenue guidance of 70 to 75 million. This guidance range takes into account the impact to the mixed market following the effectiveness of the new Medicare LCD.
Ali: While patient demand and need for treatment will continue to grow in 2025 and beyond, we expect total claims bill will be reduced in 2025 due to the multiple makes restriction.
Ali: This guidance range also assumes revenue of approximately 1 million for the full year 2025 for our dry eye segment and does not contemplate achievement of positive reimbursement coverage and or payment decisions for our dry eye segment.
Ali: Looking closer at the first quarter of 2025, we expect revenue to be down low to mid-double digits compared to the same period in the prior year. This contemplates a full quarter impact at the multiple-makes procedure restriction.
Ali: I also wanted to briefly address our potential tariff exposure in light of the recently implemented 20% tariff on all goods from China. A significant portion of our omnium-sion products and certain tear-care system components are produced and assembled by a single manufacturing facility in China.
Ali: Although we do have a US-based manufacturer to produce an assemble omniproduct and have other supply arrangements for the production of certain tier-care system components, the estimated manufacturing costs for other suppliers are currently higher than our China-based manufacturer, including the 20% additional tarot.
Ali: We intend to continue monitoring this situation and assessing any appropriate remediation steps but we expect this will have an impact on our gross margin and results of operations in 2025 as long as the tariffs are in effect.
Ali: We plan to work diligently to offset these incremental costs with other business adjustments.
Ali: We are also initiating our guidance expectations for full year 2025, adjusted operating expenses of 105 to 107 million.
representing an increase of 4 to 6% compared to 2024.
Ali: The expected increase includes investments in pseudo-fake standalone surgical wild-comal market development, tear-fair market access, and increased research
Ali: This guidance does not assume expansion of the commercial dry eye team in response to the achievement of positive reimbursement coverage and or payment decision.
Ali: 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: Certainly, as a reminder to ask a question, please 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. One moment please.
Danielle Antalfi: Nerfers question comes from the line of Danielle and Talfy with UBS.
Danielle Antalfi: Hey, good afternoon, guys. Thanks so much for taking the question.
Danielle Antalfi: I had two questions, one on Meg's and one on peer care, or on me, I'm sorry, but just how is market development on the standalone Meg's market going? I mean, I know that's a big opportunity here, and I know you guys are...
Danielle Antalfi: are, you know, you've got a lot going on right now, but just curious about how you see that evolving. I'm taking 20, 25 off the table, more thinking about the long-term trajectory and what heavy lifting needs to be done to get that market really going, and then just to follow up on tier care.
Bye-bye.
Matt Link: Hi, thanks for the question. This is Matt. I'll take a stab and obviously Paul and Ali can weigh in. I think we see
Very good momentum.
Cambly capturing and sort of benefiting from a broader...
Adoption of an interventional mindset along the entire continuum.
Matt Link: of the Lachoma care. And I think it's really important to characterize that while we participate in our focus in the surgical and procedural intervention side today, there's obviously a lot of work to be done today.
Other non-surgical interventions.
Matt Link: that are very valuable that we hear about in the community. And we think those are naturally benefiting our efforts in our messages around a broader adoption of interventional mindset in glaucoma surgery, both in combo mix.
Matt Link: and for the Certificate standalone market development efforts. And so our team's done a phenomenal job, engaging, incredible group of thought leaders. We're truly passionate about this intervention, building not just marketing materials, but curriculum.
Matt Link: focused on education, including as Paul referenced in the prepared remarks.
Matt Link: from dedicated events and educational symposium at AGS and so we're happy with where we are today in terms of
Matt Link: Establishing that effort. We know ultimately driving a paradigm shift in mind shift in sort of the procedural care. Take time and so we're committed to working with our clinical partners and affecting that and we expect it will continue to build out through the course of 25 well into 26 and beyond.
Speaker Change: I would just add to that, just to Matt's points, developments like sustained release pharmaceuticals like an increased awareness of the benefits of SLT laser interventions.
Potentially as a first line treatment over daily topical medications.
Speaker Change: This is being discussed actively every day in the glaucoma community so as those types of interventions also become more broadly adopted I think it does help everybody and just as Matt said the interventional mindset will help drive.
Speaker Change: Omnies Growth in standalone intervention at an earlier stage, and just a...
Speaker Change: Ultimately, it comes down to the clinical outcomes need to be there, and I just wanted to add that we...
Speaker Change: Did I publish some very compelling three-year standalone clinical data, real-world evidence of how omniproforms?
Speaker Change: in a pseudo-phagic standalone glaucoma patient who has high IOP and is on multiple medications in the hands of an average surgeon, the clinical results over a three-year period or extremely compelling. So that will also be helpful as we try to drive this interventional mindset.
Speaker Change: Okay, got it. That is very helpful context. And then on sheer care, I mean obviously what we're looking for are the wins on the reimbursement side of things.
Speaker Change: and sort of give some mile post maybe on, you know, when I know broadly speaking, you think you'll start seeing some acceleration through the end of this year. But I don't know if you can give any more color on what we should be watching out for there. And that's it for me. Thanks.
Speaker Change: We are really happy with the partners that we're working with that are diligently working with.
Speaker Change: to get these claims submitted and working through the process to eventually establish coverage policies and this is a really critical step towards establishing those reimbursement levels. So, we feel like we are on track here. We've made good progress. We continue to see more and more work with these payers and more acceptance of tear care. And then, of course, we are also leveraging that recently published budget impact analysis. Thank you very much.
and also upcoming will be the 24 month.
Speaker Change: Sakura Data. So we feel like we're in a very good position. We do expect to start getting some tear of policy or payment decisions in 2025.
of court.
Speaker Change: This will take multi years to have all coverage across most of the payer plans, but we can have significant revenue generated off of some key wins this year, assuming that we can establish appropriate and fair free investment levels. So, I think we're in a really good spot and we're really excited about the tear care opportunity and it really should be a catalyst for us this year as we can show progress. [inaudible]
and some of those coverage or payment decisions.
Okay, thank you so much.
Thank you.
Speaker Change: Our next question comes from the line of Tom Stephan with Stephen.
Thank you.
Tom Steffen: Great, hey guys, thanks for taking the questions. One on glaucoma, and then one on dry eye, I'll start with glaucoma. Alison, I appreciate the one few 25 guidance.
Tom Steffen: Can you talk a bit just about surgical glaucoma trends?
Tom Steffen: Year to date, obviously the LCDs were impactful and I think more disruptive than expected in 4Q, but how was the market trended since then up until this point?
Tom Steffen: I mean, arch-rens, showing signs of normalizing, are they worsening kind of as the years progressed? Maybe if you can just talk about where we stand today on that program.
Tom Steffen: Yeah, sure. You know, so far I think that we're tracking as expected in the first quarter. Obviously there was more uncertainty around what people would do in response to the effectiveness of the LCDs in the middle of November seems like we've gotten to a point where there is more clarity around what people are doing after those mixed restrictions have gone into place. And we feel like we have had good conversations with
and Dale Badawi.
Tom Steffen: Need that type of treatment profile is really important, but we really continue to see omnibus across the treatment paradigm of glaucoma patients.
Speaker Change: So we feel like we're in a good spot. The first quarter has trended as expected and obviously we've taken into account what we've seen quarter to date in terms of setting our guidance and setting directional guidance for the first quarter as well.
Speaker Change: Got it. That's helpful. And then a quick follow up to that. I mean, you talked about getting more clarity around.
sort of white [inaudible]
Speaker Change: a bit on that surgeon behavior, I guess, they're having to decide between stents in canal plastic or stents in goniotomy, sort of the decoupling. If you can elaborate on that, that'd be great. And then my tier care question is just around kind of price. I mean, the increase on smart leads, it's obviously...
Speaker Change: Been out there for a little while now. I'm guessing your reimbursement efforts with ramping have been kind of part of your discussions with the dry eye customers. So maybe if you can talk about.
Speaker Change: sort of surgeon feedback and receptivity to tear care potentially being a reimbursed.
Speaker Change: I guess I'm just wondering if there's any pushback at all around taking something that's cash pay, something that's lucrative for these doctors and introducing reimbursement to the equation which I think ophthalgists generally make cringe at. [inaudible]
David Bauerlein, David Sight Sciences
in certain instances. Hopefully that question makes sense. Thanks.
Speaker Change: Tom, we're going to try to unpack that, starting with the Omni or the MIG utilization and to look, there's been a very clear response in the market. Five of the seven Macs no longer allow for a billion of combo MIGs.
and obviously the providers have...
Speaker Change: Change their practice pattern and accordance with that. I think the exciting thing here is, as we stated, multiple times.
when you think about...
sort of the core tenants and requirements of mixed surgery.
Speaker Change: Safety, Advocacy in the ability to treat a patient comprehensively in accordance with the disease, Ami fulfills all of those and so that puts us in an incredible position.
Speaker Change: I think to continue to capture our fair share as the market goes through this transition as Ali's already articulated as we see this play out in Q1, things are progressing in a manner consistent with their expectations.
Speaker Change: I think the other thing to then think about is not just the impact of the elimination of combo mix.
Speaker Change: We'll experience this on a sort of a year-to-year comparison basis through the middle of Q4.
but there's still an incredible unmet need in the market.
to continue to offer...
Speaker Change: Interventional procedures and technology to a wider range of glaucoma patients, both at the time of cataract surgery and post cataract surgery. And so you yourself haven't been at AGS this past weekend. Understand that that's still an incredible unmet need. And so we among many still see the market.
Speaker Change: as incredibly prepared to grow and expand, and we will continue to build on the demonstrated track record efficacy of Omni to fulfill that and make sure that we're meeting the needs of both physicians and their patients.
Amen.
Speaker Change: Second side, as it relates to tear care, and again I want to make sure I'm trying to address all of the components of your question there. I think it's critically important when we talk about.
The transition to a cash pay environment.
I think it's you and others are well aware.
Our providers have, I think, really sought to provide.
Speaker Change: the massive unmet need in dry eye and my booming gland disease specifically. But the rarity is even those that have done that effectively represent a small fraction of the overall provider community of ECPs, I care providers that are treating these patients, which is why it's so underserved.
Speaker Change: We have walked hand in hand with these providers and certainly with those thought leaders to both form into strategy to develop the clinical evidence, including the Sahara RCT and the economic requirement to ...
Make this a sustainable procedure.
in a reimbursed environment. [inaudible]
Excited to say that that partnership has continued.
Speaker Change: Through our discussions around the price increase that we implemented in the middle of last year, and that price increase is intended to reflect both the clinical and economic value that is being provided by the technology and the provider to the patient and to the system, and so that has been a partnership that we've been in lock step.
for this entire process. [inaudible]
Speaker Change: and with our commercial infrastructure that remains in place, they've done an amazing job of continuing to engage those providers.
Speaker Change: and drive the advocacy to build awareness around the need for coverage in this procedure. And that's really the foundation of the progress we've seen and Ali spoke to earlier around the claims that have been submitted, demonstrating the demand to both commercial pairs and Medicare administrative contractors.
Speaker Change: leading to what we have described as, obviously, progressively productive conversation. So, I hope I've hit on sort of the key themes and elements to what you're at there, but certainly, if there's something we didn't or Paul really has something else, we can fill it in.
Speaker Change: I would just add on the cash pay on the cash pay piece, I think we did early on when we began our journey to establish, to be the pioneer in establishing.
Speaker Change: Reimbursed Market Access to these procedures because we felt that the millions of patients who couldn't afford to pay for these procedures that they should have access to them.
Speaker Change: There was some resistance because it was a cash pay only market. We didn't have the data that would credibly support reimbursement providers didn't yet really know what that reimburse value might look like. [inaudible]
Speaker Change: and some ICAR providers were doing just fine with cash pay and they had a patient population.
Speaker Change: that was happy and could easily afford to pay for these procedures. As Matt mentioned, that's that's a very small subset of providers and when we're successful with reimbursed access to tear care. Thank you.
There will continue to be a handful of providers who may be preferr.
Speaker Change: to stick with cash pay or a hand-flotation to prefer a cash pay option for whatever reason.
Speaker Change: There are options for them, but for the vast majority of this significant multi-billion dollar market and millions and millions of patients who are underserved today, we've decided to pursue a strategy that will help those patients.
Really helpful. Thanks, Paul. Thanks, Matt.
Thanks.
Thank you.
Speaker Change: Our next question comes from the line of Frank Talkinin with Lake Street Capital Markets.
Frank Tocanen: Great. Thanks for taking the questions. It was hoping I could start with a little bit more color around on the edge. Appreciate the initial remarks you made.
Frank Tocanen: and the prepared comments, but maybe takes a little bit deeper into what's left to be completed prior to that being launched maybe specific patient cohorts you think are will particularly benefit from this device and then any changes around pricing. Thank you.
Frank Tocanen: Yeah, hey Frank, it's Paul, Matt can talk about the launch and those other commercial considerations, but just from a development perspective.
Frank Tocanen: Look, we've been the pioneers in the Abenturno Canaloplasty segment.
I'm starting this journey.
Frank Tocanen: over a decade ago, with first iterations on the edge represents, I don't know, the fourth or fifth generation of the...
Frank Tocanen: Omni Technology Advancement. We've paid close attention to the market, to the market needs, taking feedback from our surgeons along the way, and we've been carefully and iteratively.
Frank Tocanen: We want to offer surgeons the control, because that control and reproducibility translates into reliable safety and
Sightman.
Frank Tocanen: And I mention all of this because there are other products either on the market or in development, which have taken a different path.
That's been core to our development thesis is safety first.
Frank Tocanen: And let's increase the volume of this scholastic which increases the level of canal visco dilation which could theoretically increase. [inaudible]
Apocacy
Frank Tocanen: But we want to prove it out very carefully and very methodically. So we're excited about Omni Edge, but it really is yet another round of iteration in our pursuit of maximizing the safety and efficacy of our Omni platform. Matthew want to talk about.
Speaker Change: of safety and efficacy in a robust body of clinical evidence. We're excited not just with Omni Edge but really pursuing more of an Omni family approach to the portfolio to be able to meet the many very needs and preferences of physicians and patients. And so the great news is Omni Urgo, which is in the market today, has achieved the same, a very strong number two position in the overall mixed marketplace. Because...
Speaker Change: of its comprehensive efficacy and ability to address a wide range of patient needs from mild to moderate to approaching severe, but there's an opportunity as Paul described, given the
Speaker Change: Long history of iterative advancement in development and the internal know-how that is uniquely—
Speaker Change: belongs to Sight Sciences. We have the ability, I think, now to be more collaborative with providers and look at providing a range of tools that allow them to treat patients differently. And so this is again another area that we're excited is happening in concert and partnership.
Speaker Change: with providers, and we're excited to introduce On the Edge to the market. I think we think it'll fulfill some unique needs, but we're also excited about what's going to come beyond On the Edge as we continue to move the On the Family forward.
Speaker Change: Okay, that's helpful. And then maybe just for my second one on the dry eye business. Obviously, a lot of commentary around hopefully policy establishment this year. Maybe talk about the months.
Speaker Change: and quarters following policy establishment. How quickly do you think it could ramp from there? My sense is just given familiarity with the product. Hopefully that could be a relatively quick ramp but maybe talk about that and then any incremental commercial investments that might follow.
Speaker Change: Yeah, great question, and you know, a lot of this will have to do with...
Speaker Change: You know, very prudent in our guidance strategy for revenue on dry eyes, but we do expect those wins to come in 2025 and at that point once we see
Speaker Change: You know, individual wins, we can start quantifying what that means in terms of a potential revenue ramp and expense ramp, those types of things.
Speaker Change: What I think is really important to understand is that we do already have a small team of, you know, dry eye sales and marketing and efforts that we have been doing to create knowledge around care care over the last few years and that, you know, commercial infrastructure has created a base of 1500.
Speaker Change: I fear providers that have invested in hubs and they've done 65,000 tear-fair procedures today. So we have done a lot of work to establish
Speaker Change: Training on tear-care, understanding of when a tear-care would be appropriate and then driving those cash pay persons.
Speaker Change: Features. So that foundation, I do think will allow us to hit the ground running as we get reimbursement into place. So I think we are in a very good spot. There is [inaudible]
Speaker Change: a huge need for this type of treatment option for patients. We know that patients struggle with
Dry Eyed Drop.
and there are, you know, adherence challenges around that.
Go back.
Speaker Change: Alison Bauerlein was one more thing, is that in addition to the critical investment in our commercial infrastructure.
Speaker Change: Curtin guidance includes committed investment already underway for operational infrastructure as well to support the business and scale. So I think we've taken a sort of prudent approach to this, not getting out in front of the necessary investment, but ensuring the critical infrastructure is in place to support those early wins.
Okay, that's all from Thanks for taking the questions
Thank you.
Speaker Change: And our next question comes from the line of David Saxon with Needham & Company.
David Bauerlein, Thomas Stephan, Malgorzata Andrew, Thomas Stephan, Malgorzata Andrew
Great. Hi, Paul and Ali. Thanks for taking my questions.
Speaker Change: If I could just start with a clarifying question on tear-care SPs and start if I missed this, but the ASP looks to be like under 300 on a unit basis, so is that just...
Speaker Change: Buying discounting or how should we think about kind of the go-forward real-life pricing relative to the $1,200 list price?
Speaker Change: And then my first question is just on Chris Margin, so just back of the envelope math, I'm getting to like 84% for surgical Chris Margin's post tariff.
Speaker Change: Is that a good way to think about the year? And then for dry eye, I didn't hear you mention any impact there. So, are there any factors that would impact dry eye gross margin as we go through 2025?
Speaker Change: Yeah, so quick. Let me make sure I get all those questions answered.
Speaker Change: here. So first, just starting with ASP on the dry eye side. So as we said, we established new pricing effective October 1st and that list price was about 1200. Of course, there are some discounts off of that as we work with our partners. But the ASP for new purchases is still relatively high, you know, in the thousand range.
However, there are some-
Speaker Change: historical sales that were already committed under contracts that continue at the lower prices for the next couple of quarters. So that volume is still occurring for contractual requirements. So that's where you see the lower average ASP associated with those contractual requirements. But what we're really working with our partners on reimbursed access. Let's go ahead.
Speaker Change: That all is focused on the higher pricing smart lids that are at that appropriate level based on the clinical value of the tear care procedure.
Does that make sense?
Yeah, no, that's super clear.
Speaker Change: Okay, so on the tariff side, I think your math might be a little much in terms of our impact, so just thinking through it.
Speaker Change: You know, only a portion of our cost of good souls is actually our bill of material. So of course, only that bill of materials that is coming directly from China would have an impact associated with the the tariff. [inaudible]
Speaker Change: Charge. And of course, I would also note that this is something that will phase in over time because we already do have existing inventory of product that
Speaker Change: that does not have a tariff associated with it. We are also actively engaged with our partners to try and reduce that impact of the tariff, whether that's, you know.
Renegotiations of costs, supply chains, and looking at specific components.
Speaker Change: All of that is in progress as well as looking at our medium to long-term planning on where their product is manufactured.
Speaker Change: So we think that we will be able to mitigate most of the terror impacts with the actions that we're taking, but there should be some modest impact to the PNL in 2025.
Speaker Change: Okay, that's very clear. Thanks for all that colorality. And then hopefully, you know, we can be considered my second question just on the competitive landscape. There's another kind of canal, plastic, flash strip, back to a lot of me device that just wanted to, I think this past weekend. So kind of how are you thinking about. Yeah, that's right.
Speaker Change: Omni-Volumes with that new product launching, is there anything baked into guidance? That would be helpful. Thanks so much.
Speaker Change: I'll just add a few comments, David, and maybe Matt can add some as well. Over the years we've seen a number of...
Speaker Change: of new entrance into the, you know, visco dilation category as I remarked previously. We've
Speaker Change: We believe Omni has a very strong position as the pioneer in this category and as we describe with Omni Edge and future.
Speaker Change: Iterations of Omni and the family of products were developing. We expect to continue to stay far ahead of any new entrance. [inaudible]
Speaker Change: So we've seen this in the past. I think the one you're referring to is from a company that has also released a disco delivery device two years ago that we saw. These things get introduced.
Speaker Change: There will be some trialing. That trialing can be disruptive for a period of time. It's not new. Again, we've seen it in this category for a while, but we've also seen how strong the omniproduct market fit is.
today.
So, again, we haven't seen any clinical evidence.
Speaker Change: It's just like the products that were really squiggly prior, haven't seen clinical evidence, haven't really seen strong labels, haven't seen usability, haven't seen any cases, so all of this is DVD.
Speaker Change: If and when these things appear, there will be trialing, that trialing can be disruptive for a period of time and we continue to try to innovate quickly, listen to the market, respond to our surge in needs and stay as far ahead as we can.
Yeah, I'd say, if you comment for me or...
Speaker Change: Yes, the question is, as Paul said, there's a long history of products attempting to enter this.
Speaker Change: Second of the market in disrupt, we've seen trialling, that's certainly been contemplated in our expectations for the year. Going back to prior conversations on edge and evolving family of omniproducts.
Speaker Change: There is no company in the space that better understands the requirements for these procedures and sightseys and we'll continue to lean heavily into that, we'll continue to invest in that, we'll continue to develop iterative advancements in the technology and partnership with clinicians to fulfill that and so far we've been rewarding, we expect we will continue to be.
Speaker Change: And just to follow on the guidance comment there, you know, our approach to guidance here was to put a prudent guidance range in place that took into account both the impact of these mixed restrictions, this dynamic competitive mix environment that we're in and of course the uncertainty on timing of the tear care reimbursement wins. So you think that we've set appropriate guidance that takes into account those factors and allows us to perform effectively this year.
Great. All right. Thanks so much for all the color.
Matthew O'brien: Thanks. Thank you. And our next question comes from line of Matthew O'Brien with Piper Sandler.
Matthew O'brien: Hey, this is Philan from Matt. Thanks for taking our questions. One on cadence. I know you said that the first quarter is expected to be down low double digits. Is the assumption that surgical glaucoma can show growth in the second half of the year? And if that's the case, what's driving that assumption? Thank you.
Matthew O'brien: Yeah, so that's not inherent in the guidance range provided that there would be growth in the back half of course the easiest comp for us will be the fourth quarter, but where we fall in that that growth over the fourth quarter will continue on, you know, exactly where we are within that range of guidance.
Matthew O'brien: So, we do expect that this, you know, big restrictions is an impact that affects the entire market. You know, this is a 15% or so impact associated with these claims that
Matthew O'brien: cannot be performed. While the patient visits are still occurring, the number of migs claims being filled will be reduced by that. Our estimates are about 50,000 procedures will be removed.
Matthew O'brien: from the claims data. And so that is something that impacts the entire industry. This is not specific to Omnie. Of course, we think we have the slightly outside impact just on our percentage of staff procedures that were performed.
but
Matthew O'brien: The industry itself is not growing faster than that inherent headwind that we have for 2025. Now we do expect as you get into 2026, it's going to get back to fundamental.
Matthew O'brien: How is the overall market growing in terms of patients, in terms of surgical mixed procedures?
and then also, how are we developing that pseudo-fake it?
Matthew O'brien: standalone opportunity. So those are the things that we are looking to and inherent in guidance is, you know, that we do expect surgical glaucoma to be down in 2025 compared to 2024. Hopefully that helped.
Speaker Change: No, that's very helpful. Then just one quick one on the standalone opportunity compared with the combo. I was just curious if you're seeing as much pressure from these LCD changes on that front or is it a little bit better than your combo business.
10% or so of claims.
Billed for MIG.
Speaker Change: is done on a standalone basis, then about 90% is done in combination with the cataract procedure. So mass majority of the volume is still happening in combination with cataracts. Now of course the standalone opportunity is many multiple size of the combo cataract.
Market, but we have to develop that market opportunity.
Speaker Change: The focus here is more around creating that interventional mindset with surgeons to think about intervening instead of just giving another med to medication to a patient. So that is really the focus there. There is no, there are no restrictions of doing multiple mig stacked mig.
on a standalone basis. [inaudible]
Speaker Change: explicitly in the guidance. The focus is on restrictions and combination with cataracts that multiple migs cannot be performed at the same time as cataract surgery. So they are kind of separate and different dynamics from that perspective.
Very helpful. Thanks so much.
Thank you.
Speaker Change: And our next question comes from the line of McCauley-Killbing with William Blair.
Speaker Change: Hi everyone, this is McCullough from Margaret. Thanks for taking that question.
Speaker Change: It was good to see with the order and accounts up to him for some reason.
David Bauerlein, Thomas Stephan, Malgorzata Andrew, Thomas Stephan, Malgorzata
Emma Colley, we can't hear you clearly.
Speaker Change: Sorry, I don't know if other people can hear. We're not able to hear the question clearly. No, his audio is going in and out.
Hey everyone, do you have me? That's better.
Apologies about that.
Speaker Change: I'm just wondering if you experienced any backlog of surgeons once the LCD became effective in November and I know you touched on it a bit, but wanted to double that on what's implied in the guide on utilization versus adding new facilities, especially as if you look at that first quarter guide.
Speaker Change: Yeah, so, I mean, we don't provide that specific level of detail. Obviously, we are focused on increasing our accounts and increasing our utilization over time. Now, utilization will be the most challenged in 2025 out of those two because of the restrictions on multiple mix. So, we do expect to be able to grow our ordering accounts, but we don't provide specific guidance on that.
Speaker Change: Okay, fair enough. And then, um, no, the, the Alconon Princeman case is still ongoing here, but saw there was a status update earlier this week. Um, so maybe just remind us where we are in that process. Uh, the base case scenario, maybe for monetary damages. Um, and if that does hit the balance. [inaudible]
Speaker Change: You know, in the next few quarters, the balance sheet in the next few quarters here, where would you prioritize that additional cash, whether that be more geared towards, you know, expanding the commercial infrastructure versus accelerating some R&D initiatives? Thanks for taking my questions.
Speaker Change: We did not resolve the parties, did not resolve the dispute as part of the poor ordered mediation process that was recently concluded. So we are still we are now back to waiting for the judge to make a final ruling and to either to confirm the jury's verdict, establish an ongoing royalty damages and or determine any potential enhancements. And of course all of that is still subject to appeal. So we will await the court's decision. And we don't have timing. This is all.
Paul in the court.
Speaker Change: The decision of when they decide to rule and then of course because it's subject to appeal this process could continue to stretch out. So we'll continue to provide updates as we have them in terms of cash utilization. We as we said earlier, we do believe we are properly funded without needing any equity capital to reach our brave even goals. We'll continue to provide updates as we continue to provide updates as we move forward.
Speaker Change: and you know we always are looking for the right things to invest in across the organization and that is typically if you would expect commercial expansion as we have success in dry eye as we look at pseudo-fake market development.
Speaker Change: as we look at our pipeline and look at ways to continue to innovate. Those are the things that we would be focused on, as you would expect, from any med tech company with goals of growing over time and really being a true leader in the space.
Speaker Change: Alright, thank you, and I'm showing no further questions, so with that I'll hand the call back over to CEO Paul Badawi for any 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.
David Bauerlein, David Saxon, Matthew Link, Thomas Stephan, Malgorzata Andrew, Joseph Conway
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David Bauerlein, Thomas Stephan, Malgorzata Andrew, Thomas Stephan, Malgorzata
David Bauerlein, Thomas Stephan, Malgorzata Andrew, Thomas Stephan, Malgorzata Andrew, Thomas Stephan, Malgorzata David Bauerlein, Thomas Stephan, Malgorzata
[music]
Music Music Music Music Music Music
[inaudible]
Music Music Music Music Music
[music]
Speaker Change: David Bauerlein, David Bauerlein, Thomas Stephan, Malgorzata Andrew, Joseph Conway, Phillip Dantoin
Speaker Change: David Bauerlein, Thomas Stephan, Malgorzata Andrew, Thomas Stephan, Malgorzata Andrew
Speaker Change: Hello, and welcome to the Sight Sciences 4th quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode.
Speaker Change: After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand has been raised.
Speaker Change: To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. It is now my pleasure to introduce
Speaker Change: Thank you for participating in today's call, presenting today our 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. Earlier today, Sight Sciences released financial results for the fourth quarter in full year ended December 31, 2024, and initiated revenue and adjusted operating expense guidance for full year 2025.
Speaker Change: 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 board looking statements within the meaning of the federal security laws.
Speaker Change: These forward-looking statements include statements related to the company's anticipated financial performance.
Operating Results [inaudible]
liquidity position and ability to achieve cash flow break even.
2025 Revenue and Adjusted Operating Expense Guidance [inaudible]
Speaker Change: Interrupt Impact to Gross Margin and the primary factors impacting our ability to achieve our guidance, ability to achieve current and long-term strategic objectives and value drivers, market opportunity, and ability to enter new markets and capture.
Speaker Change: market share. The continued adoption of the company's products by surgeons, pricing strategy.
Speaker Change: Product reimbursement coverage and strategy, including the company's ability to achieve positive reimbursement coverage policies for tear care, expectations regarding commercial momentum, account utilization and engagement, the company's pipeline of interventional.com and dry eye technology.
Speaker Change: the timing of the release of new product under development, clinical trial strategy and results and the disposition of ongoing patent litigation.
Speaker Change: Board-looking statements are based on estimates and assumptions as of today are neither promises nor guarantees and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied by these statements.
Speaker Change: A description of some of these risks and uncertainties can be found in the company's public filings with the Securities and Exchange Commission, including in the risk factors section of its annual report on form 10K and quarterly reports on form 10Q.
Speaker Change: The company undertakes no obligation to publicly update or revise any foreign looking statements except is required by law.
Speaker Change: On this call, management refers to certain financial measures that were not prepared in accordance with generally accepted accounting principles in the United States, 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 the 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.
David Bauerlein, Thomas Stephan, Malgorzata Andrew, David Saxon
Thanks, Trip.
Speaker Change: Earlier today, we reported our financial results for the fourth quarter of 2024. In the quarter, we generated total revenue of 19.1 million, a 2% increase compared to the same period in the prior year.
Speaker Change: Our results reflect a continued commitment and hard work of our team as we remain steadfast in our mission to be a leader in the development of transformative interventional technologies that allow I care providers to procedurally elevate the standards of care, empowering people to keep seeing.
Speaker Change: Our current products address significant unmet needs in glaucoma and dry eye. Two of the biggest markets in eye care.
Speaker Change: Effectively serving the physicians and patients in both of these markets with our innovative interventional technologies is our top priority.
Speaker Change: As we closed out 2024, we were pleased to see progress on multiple fronts during the fourth quarter. We experienced an increase in surgical glaucoma ordering accounts and revenue both sequentially and compared to the fourth quarter of 2023, as well as account re-engagement momentum.
Speaker Change: We also made advancements towards our goal of achieving equitable market access for our tear-care technology with an increased number of claims reimbursed under commercial plans.
Speaker Change: The clinical highlights for our technologies included the publication of three-year standalone clinical data, which demonstrated the long-term effectiveness of
Speaker Change: and the publication of the Tearcare Budget Impact Analysis, which showed a direct relationship between increased utilization of tear care in place of prescription medications and total cost savings from a U.S. Pair of Perspective.
Speaker Change: And finally, throughout 2024 we were disciplined in managing our expenses and improving working capital which contributed to a 62% reduction in net cash use for the year.
Speaker Change: As we enter 2025, we are focused on our key strategic initiatives which include building commercial momentum and migs through our continued commitment to customer education and engagement, establishing equitable reimbursement for tear care.
Speaker Change: and progressing our robust pipeline, including an upcoming next-generation Omni release.
Speaker Change: We believe that 2025 will be a transformational year for Sight Sciences as we expect to achieve initial positive coverage and or payment decisions for tear care, which would be the first of its kind for interventional MDD treatments.
Speaker Change: We've started the year strong with our national sales meeting and the American Glaucoma Society meeting last week. We had enthusiastic engagement and buy-in from our team and our clinician partners with respect to our strategic initiatives and how to drive the interventional mindset across eye care providers in both Glaucoma and dry eye disease.
Speaker Change: We believe with the focus and execution of our internal teams, combined with a growing number of partnerships with KOLs across the industry, Sight Sciences will continue to enable the paradigm shift in procedural interventional care.
Diving into our surgical glaucoma segment.
Speaker Change: Although the mix market has been in flux for the last 18 months, we now have improved visibility into the new market environment and we believe the comprehensive procedure performed with Omni will continue to be a market leading choice for surgeons.
Speaker Change: Lachoma is a very serious disease and remains the world's leading cause of irreversible blindness, with an estimated 83 million diagnosed primary open angle glaucoma patient worldwide.
Speaker Change: We believe Migs will continue to play a critical role in controlling the disease in terms of both intraocular pressure and medication reduction and Omnia remains a clear leader in the Migs category.
Speaker Change: In the fourth quarter of 2024, we generated 9% growth in surgical glaucoma revenue compared to the same period in the prior year, and up 1% sequentially from the third quarter of 2024.
Speaker Change: In the face of the LCD-related headwinds and mixed procedures, our team worked with our surgeon partners who were adopting their treatment algorithms to align with the final Medicare LCDs.
Speaker Change: As a reminder, these LCDs included the elimination of Medicare coverage in most states from multiple mixed procedures that are completed at the same time as cataract surgery.
Speaker Change: With these restrictions, a surgeon must now choose one makes procedure at a time for these patients.
Speaker Change: Despite this dynamic environment, our hard work still resulted in important progress in several areas including a sequential increase in ordering accounts and positive momentum with account re-engagement and utilization.
Speaker Change: After operating in this new-mixed environment during the last six weeks to the fourth quarter of 2024, we realized the headwinds were larger than initially anticipated.
Speaker Change: We estimate that the multiple makes claims build was roughly a mid-teens percent of total makes claims build, but we believe that Omni has had a higher utilization than the overall market in these stack procedures.
This dynamic is factored into our 2025 revenue guidance.
Speaker Change: While in the short term, we do anticipate an industry-wide decline in total utilization of mixed devices, we are confident that we have identified a pathway from which we can generate positive momentum to maintain our leadership position.
Speaker Change: Keep in keeping in mind that patient demand and need for glaucoma treatment will continue to grow in 2025 and beyond.
Speaker Change: We are focused on surgeon education on the clinical benefits of earlier interventions with the comprehensive omni procedure.
Reengagement Efforts with Accounts, Highlighting Reimbursement Clarity [inaudible]
Enhance Competitive Counter-Selling
Investment and Targeted Commercial Resources [inaudible]
Speaker Change: Optimize Sudo-Fake Expandalone Omni Market Development Strategy through Refined Patient Targeting in Selection.
and an upcoming new product launch.
Speaker Change: Additionally, there remains opportunity in continuing to train new surgeons and expand utilization. As we believe we have trained less than half of the mixed trained surgeons in the United States, and many surgeons still have not fully adopted MIGs as a standard of care for glaucoma patients.
Speaker Change: As a reminder, the student-fake standalone segment consists of patients three or more years out from prior cataract surgery, who may or may not have had a mixed procedure at the time of cataract surgery, but whose IOP is not well controlled on two or more medications.
Speaker Change: These later stage patients are at risk of disease progression, and most are likely on their way to an invasive and complicated procedure, like the Trebek-Elektomyra tube shot.
Speaker Change: We believe that standalone intervention performed with Omni can be effectively utilized for these patients to potentially delay or avoid the need for the riskier advanced procedures and improve patient care.
Speaker Change: Our team has been engaging with our customers on the topic of omni as an optimal treatment for this underserved patient population, and the message has been resonating.
Speaker Change: Lastly, I want to briefly touch on our pipeline, specifically our next plan product launch in the Omni family. We are excited to introduce Omni Edge to market, which is planned for the first half of 2025.
Speaker Change: The addition of omniage is intended to accommodate varying physician preferences and patient needs in today's evolving makes marketplace.
Speaker Change: Omni Edge, with intelligent visco delivery, is designed to increase the amount of visco elastic delivered with our patented motion synchronized delivery system.
Speaker Change: To ensure the consistency, reproducibility, and safety, surgeons have come to trust in the Omni procedure.
Speaker Change: With this product, we are reinforcing our commitment to best serving both our customers and the patients they care for.
Speaker Change: The addition of Omni Edge reflects our strong relationship with our customers, our ongoing dedication to enhancing our products.
Speaker Change: and our ability to rapidly respond to the evolving needs of the eye care community.
Speaker Change: Now I will turn to our dry eye business where we also continue to make solid progress on our strategic initiatives.
Speaker Change: Our fourth quarter results in dry eye reflect our focus on reimburse market access and new pricing, which went into effect October 1, 2024.
Speaker Change: We are dedicated to achieving equitable market access for peer care as our top priority, and I am pleased with the advancements we are making toward this goal.
Speaker Change: Along with the recently published Budget Impact Analysis, which we believe will help support positive coverage and or payment decisions in 2025.
Speaker Change: We estimate there are over 13 million U.S. patients diagnosed with mybomian gland disease or M.G.D., the leading cause of dry eye disease.
Speaker Change: Historically, treatment options for these patients have been dominated by prescription and over-the-counter eye drops, which primarily focus on increasing cure volume and aqueous deficient patients.
Speaker Change: Because there is currently no reimbursed interventional treatment that addresses the root underlying cause of M.G.D., we believe there is a significant unmet need within this patient population.
Speaker Change: Our long-term strategy is to be a pioneer, and the estimated $3 billion core market for patients with moderate to severe MGD who are candidates for an interventional procedure.
Speaker Change: We have been highly intentional in executing our strategy, beginning with developing best-in-class technology, followed by delivering superior long-term clinical outcomes demonstrated through randomized clinical trials, and now we are advancing an effective market access strategy to establish equitable reimbursement for peer care.
Speaker Change: Our methodical approach has led us to the cusp of unlocking this multi-billion dollar market opportunity this year.
Speaker Change: Clinically, the effectiveness of tear care was shown in the landmark Sahara trial, which evaluated treatment with tear care compared with the leading prescription eye dropper states this for patients with dry eye disease.
Speaker Change: Following the successful completion and publication of Phase 1 and Phase 2 of the Sahara RCT in 2023 and 2024 respectively.
Speaker Change: We are pleased to announce that patient visits for the third and final phase of Sahara, which was designed to assess the durability and procedural treatment effect of tear care through 24 months, were completed in October 2024. We expect the results from this final phase of the Sahara RCT to be published in 2025.
Speaker Change: In December 2024, we announced the results of the Tier Care Budget Impact Analysis, which was published in the expert review of Ophthalmology Journal. The analysis projected over a two-year period compared the financial impact of Tier Care to commonly prescribed dry eye medications.
Speaker Change: Key findings indicated that a 20% increase in market share of tear care compared to prescription dry eye medications would yield an estimated annual savings of $36.87 per member per year across all plan members in a hypothetical health plan with 1 million covered lives.
Speaker Change: The study also demonstrated a direct relationship between increased utilization of tear care in place of prescription medications and total cost savings from a US payer perspective.
Speaker Change: We believe the budget impact analysis results are a contributor to a manufacturer's formulary listing, a reimbursement submission, and we are introducing the results of this analysis in our conversations with payers.
Speaker Change: We feel the combination of the strong clinical data from the Sahara RCT and the findings of this budget impact analysis create a compelling case for payers to establish coverage and or payment for treatments performed with tear care at an appropriate reimbursement level.
We are encouraged that a number of care care claims have already been paid through commercial insurance.
Speaker Change: Finally, on dry eye, our established commercial infrastructure has engaged with over 1,500 eye care facilities who have invested in care care hubs and performed over 65,000 tear care procedures to date. This foundation will allow us to hit the ground running as reimbursement from tear care
Speaker Change: Our Tier Care Track Record of Significant Eye Care Provider Adoption, along with the Historic Cache Pay Results, Validate, the Patient Demand, and Clinical Need for Our Product.
Speaker Change: We believe these early indicators suggest demand will grow following any positive coverage or payment decisions.
Speaker Change: This catalyst, along with our commercial preparedness, represents an opportunity for a significant growth with inflection.
Speaker Change: We've made significant progress in executing on our strategic initiatives, and we remain confident in our business and in our Continuity to be a leader in addressing the unmet needs served by our innovative technologies.
Speaker Change: In surgical glaucoma, through a continued commitment to education and engagement with our customers, we remain focused on building commercial momentum in the new mixed market environment, while also developing the pseudo-fake standalone market for Omni.
Speaker Change: In dry eye, we plan to continue working towards making tear care, the first mover and reimbursed interventional dry eye in 2025 for the millions of patients suffering from dry eye disease.
Speaker Change: I will now turn the call over to Ali to discuss our financial results in 2025 guidance.
Ali: Thanks, Paul. Before I turn to the fourth quarter of financial results, I want to reiterate that while we remain focused on improving our strategic and operational initiative, we do so from a position of financial stability. We are confident in our ability to support our goals moving forward and expect to achieve cash flow breakeven without the need to raid the additional equity capital.
Ali: Looking back to the fourth quarter of 2024, total revenue was 19.1 million.
Ali: This reflects a 9% increase compared to the same period in the prior year.
Ali: Gross and surgical glaucoma revenue was offset by an expected decline in tear-care revenue as our tear-care price increased when into effect and we shifted our focus towards establishing reimbursement coverage and or payment decisions.
Ali: Search Cobalcoma Revenue fell short of our expectations, primarily due to the new Medicare LCDs effective mid-quarter, which had a more pronounced impact on the fourth quarter search Cobalcoma Revenue has been expected.
Ali: Search for Gualcoma Revenue to the fourth quarter of 2024 with 18.8 million, up 9% versus the same period in the prior year. The increase was primarily driven by ordering a count, which increased by 7% and account utilization, which increased by 6%.
Ali: Utilization decreased sequentially, and while the expected lower utilization in the fourth quarter, compared to the third quarter due to the restriction of multiple megs, utilization was lower than anticipated.
Ali: 138 customers ordered surgical glaucoma products in the 4th quarter, up 3% from the 3rd quarter of 2024 and up 7% from the 4th quarter of 2023.
Ali: Our dry eye revenue for the fourth quarter of 2024 was 0.3 million, a decrease from 1.6 million in the same period in the prior year.
Ali: The expected decline was primarily due to fewer smart lid sales, which was a result of our focus on the next phase of our commercial strategy for our dry ice segment, which involves achieving reimburse market access.
Ali: Gross margin for the fourth quarter was 87%, an increase compared to 85% in the same period in the prior year, primarily due to increased surgical glaucoma product mix.
Ali: Total operating expenses for the fourth quarter were 28.5 million, an increase of 5% compared to 27.1 million in the fourth quarter of 2028, primarily due to higher personnel related expenses, partially offset by lower legal expenses in the comparative period.
Ali: Adjusted operating expenses were 24.4 million to the fourth quarter, an increase of 9% compared to 22.3 million in the same period in the prior year.
Ali: Our net loss for the fourth quarter was $11.8 million or $23 cents per share compared to a net loss of $10.7 million or $22 cents per share for the fourth quarter of 2023.
Ali: We ended the quarter with 120.4 million of cash and cash equivalent, and 40 million of debt, excluding debt discounts, and amortized debt issuance costs.
Ali: We generated 1.8 million of cash in the fourth quarter, reflecting continued operational discipline and an improvement in working capital.
Ali: Cash generated in the fourth quarter included a 5 million drawdown under our term law.
Ali: It was an improvement compared to the 6.4 million of cash used in the fourth quarter of 2023.
Ali: Cash used in the 12 months ended December 31, 2024 with 17.8 million compared to 46.9 million in the full year of 2023.
Ali: As a reminder, we have not received any monetary damages awarded in our successful jury trial verdict in our patent infringement case against Alfon.
Ali: The final ruling is still pending the judge's determination whether to confirm the jury's verdict, establish ongoing royalty damages, and or determine any potential enhancement. And it's subject to appeal.
David Bauerlein, David Bauerlein, David Bauerlein,
Ali: Moving to our revenue outlook for the full year 2025, we are initiating our revenue guidance of 70 to 75 million. This guidance range takes into account the impact to the mixed market following the effectiveness of the new Medicare LCD.
Ali: While patient demand and need for treatment will continue to grow in 2025 and beyond, we expect total claims bill will be reduced in 2025 due to the multiple-makes restriction.
Ali: This guidance range also assumes revenue of approximately 1 million for the full year 2025 for our dry eye segment and does not contemplate achievement of positive reimbursement coverage and or payment decisions for our dry eye segment.
Ali: Looking closer at the first quarter of 2025, we expect revenue to be down low to mid-double digits compared to the same period in the prior year. This contemplates a full quarter impact of the multiple-makes procedure restriction.
Ali: I also wanted to briefly address our potential tariff exposure in light of the recently implemented 20% tariff on all goods from China. A significant portion of our on-the-and-sion products and certain tear-care system components are produced and assembled by a single manufacturing facility in China.
Ali: Although we do have a US-based manufacturer to produce an assembly on the products and have other supply arrangements for the production of certain tier-care system components, the estimated manufacturing costs for our other suppliers are currently higher than our China-based manufacturer, including the 20% additional tarot.
Ali: We intend to continue monitoring this situation and assessing any appropriate remediation steps, but we expect this will have an impact on our gross margin and results of operations in 2025 as long as the tariffs are in effect.
Ali: We plan to work diligently to offset these incremental costs with other business adjustments.
Ali: We are also initiating our guidance expectations for full year 2025 adjusted operating expenses of 105 to 107 million, representing an increase of 4 to 6 percent compared to 2024.
Ali: The expected increase includes investments in pseudo-fake standalone surgical wild-comal market development, tear-fair market access, and increased research
Ali: This guidance does not assume expansion of the commercial dry eye team in response to the achievement of positive reimbursement coverage and or payment decision.
Ali: We remain focused on further penetrating and expanding a 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: Certainly, as a reminder to ask a question, please 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. One moment please.
Speaker Change: Norfers question comes from the line of Danielle and Talfy with UBS.
Danielle Antalfi: Hey, good afternoon, Daddy. Thanks so much for taking the question.
Danielle Antalfi: I had two questions, one on makes and one on peer care or on me, I'm sorry, but just how is market development on the standalone makes market going? I mean, I know that's a big opportunity here and I know you guys are
Danielle Antalfi: are, you know, you've got a lot going on right now, but I'm just curious about how you see that evolving. I'm taking 20, 25 off the table, more thinking about the long-term trajectory and what heavy lifting needs to be done to get that market really going, and then just to follow up on tier care.
[inaudible]
Danielle Antalfi: Hi, thanks for the question. This is Matt. I'll take a stab and obviously Paul and Ali can weigh in. I think we see
Speaker Change: Very good momentum, candidly capturing and sort of benefiting from a broader adoption of an interventional mindset along the entire continuum.
Speaker Change: of glaucoma care. And I think it's really important to characterize that while we participate in our focus in the surgical and procedural intervention side today, there's obviously other non-surgical interventions.
Speaker Change: that are very valuable that we hear about in the community. And we think those are naturally benefiting our efforts and our messages around a broader adoption of interventional mindset in glaucoma surgery, both in combo mix.
Speaker Change: and for the Certificate standalone market development efforts. And so our team has done a phenomenal job engaging incredible group of thought leaders.
Speaker Change: We're truly passionate about this intervention, building not just marketing materials but curriculum.
Speaker Change: focused on education, including as Paul referenced in the prepared remarks.
Speaker Change: from dedicated events and educational symposium at AGS and so we're happy with where we are today in terms of establishing that effort. We know ultimately driving a paradigm shift in mind shift and sort of the procedural care. Take time and so we're committed to working with our clinical partners. Thank you very much.
Speaker Change: and affecting that, and we expect it will continue to build out through the course of 25, well into 26 and beyond.
Speaker Change: I would just add to that, just to Matt's points, developments like sustained release pharmaceuticals like an increased awareness of the benefits of SLT laser interventions.
Potentially as a first line treatment over daily topical medications.
Speaker Change: This is being discussed actively every day in the glaucoma community so as those types of interventions also become more broadly adopted I think it does help everybody and just as Matt said the interventional mindset will help drive.
Speaker Change: Omnies Growth in Standalone intervention at an earlier stage. And just, uh...
Speaker Change: Ultimately, it comes down to the clinical outcomes need to be there and I just wanted to add that we...
Speaker Change: Did publish some very compelling three-year standalone clinical data, real-world evidence of how omniproforms
Speaker Change: in a pseudo-phagic standalone glaucoma patient who has high IOP and is on multiple medications in the hands of an average surgeon, the clinical result over a three-year period or extremely compelling. So that will also be helpful as we try to drive this interventional mindset.
Speaker Change: Okay, got it. That is very helpful context. And then on peer care, I mean obviously what we're looking for are the wins on the reimbursement side of things.
Speaker Change: and sort of give some mile post maybe on you know when I know broadly speaking you think you'll start seeing some acceleration through the end of this year. But I don't know if you can give any more color on what we should be watching out for there. And that's it for me. Thanks.
Speaker Change: We are really happy with the partners that we're working with that are diligently working with.
Speaker Change: to get these claims submitted and working through the process to eventually establish coverage policies, and this is a really critical step towards establishing those reimbursement levels. So we feel like we are on track here. We've made good progress. We continue to see more and more work with these payers and more acceptance of tear care. And then of course, we are also leveraging that recently published budget impact analysis. Thank you very much.
and also upcoming will be the 24-month.
Speaker Change: Zachara Data. So we feel like we're in a very good position.
Speaker Change: We do expect to start getting some tear-care policy or payment decisions in 2025.
Of course.
Speaker Change: This will take multi years to have all coverage across most of the payer plans, but we can have significant revenue generated off of some key wins this year, assuming that we can establish appropriate and fair free investment levels. So I think we're in a really good spot and we're really excited about the tear care opportunity and it really should be a catalyst for us this year, as we can show progress.
and some of those coverage or payment decisions.
Okay, thank you so much.
Thank you.
Speaker Change: Our next question comes from the line of Tom Stephan with Stephen.
David Bauerlein, Thomas Stephan, Malgorzata Andrew, Thomas Stephan, Malgorzata
Tom Steffen: Great, hey guys, thanks for taking the questions. One on glaucoma, and then one on dry eye, I'll start with glaucoma. Ali, appreciate the 125 guidance.
Tom Steffen: Can you talk a bit just about surgical glaucoma trends?
Tom Steffen: Year to date, obviously the LCDs were impactful and I think more disruptive than expected in 4Q but how was the market trended since then up until this point? [inaudible]
Tom Steffen: I mean, arch-rens, showing signs of normalizing or like worsening kind of as the years progressed. Maybe if you can just talk about where we stand today on that road.
Tom Steffen: Yeah, sure. You know, so far I think that we're tracking as expected in the first quarter. Obviously there was more uncertainty around what people would do in response to the effectiveness of the LCDs in the middle of November . Seems like we've gotten to a point where there is more clarity around what people are doing after those mixed restrictions have gone into place and we feel like we have had good conversations with
Tom Steffen: customers, good engagement across the community on where Omni fits into that treatment paradigm and as you know, Omni is a very comprehensive procedure and so being able to really position for the patients that
Tom Steffen: Need that type of treatment profile is really important but we really continue to see on the use across the treatment paradigm of a glaucoma patient.
Tom Steffen: So we feel like we're in a good spot. The first quarter has trended as expected and obviously, you know, we've taken into account what we've seen quarter to date in terms of setting our guidance and setting directional guidance for the first quarter as well [inaudible]
Speaker Change: Got it. That's helpful. And there's a quick follow up to that. I mean, you talked about getting more clarity around.
sort of white [inaudible]
Speaker Change: Doctors are doing with the restrictions in placement, and maybe if you can elaborate.
Speaker Change: A bit on that, Surgeon Behavior, I guess they're having to decide between stents in Canalfastie or Stenson and Goniotomy, sort of the decoupling. If you can elaborate on that, that'd be great. And then my tier-care question is just around kind of price. I mean, the increase on smart lids, it's obviously been out there for a little while now. I'm guessing your reimbursement efforts with...
Speaker Change: Ramping have been kind of part of your discussions with the dry eye customers. So maybe if you can talk about. Thank you very much.
Speaker Change: sort of surgeon feedback and receptivity to peer care potentially being a reimbursed.
Speaker Change: I guess I'm just wondering if there's any pushback at all around taking something that's cash pay, something that's lucrative for these doctors and introducing reimbursement to the equation which I think ophthalgists generally make cringe at.
in certain instances.
and hopefully that question makes sense. Thanks.
Speaker Change: Tom, we're going to try to unpack that, starting with the Omni or the MIG utilization and so look, there's been a very clear response in the market, five of the seven Macs no longer allowed for a billion of combo MIGs.
and obviously the providers have...
Speaker Change: Change their practice pattern and accordance with that. I think the exciting thing here is, as we stated, multiple times.
when you think about...
Speaker Change: sort of the core tenants and requirements of mixed surgery, safety, efficacy, and the ability to treat a patient comprehensively in accordance with the disease, Ami fulfills all of those. And so that puts us in an incredible position.
Speaker Change: I think to continue to capture our fair share as the market goes through this transition and as Ali's already articulated, as we see this play out in Q1, things are progressing and it may not are consistent with their expectations. I think the other thing to then think about is not just the impact of the elimination
Speaker Change: We'll experience this on a sort of a year-to-year comparison basis through the middle of Q4.
but there's still an incredible unmet need in the market.
to continue to offer...
Interventional procedures and technology to a wider range of
Speaker Change: Glaucoma patients, at the time of cataract surgery and post cataract surgery and so you yourself haven't been at AGS this past weekend understand that that's still an incredible unmet need and so we among many still see the market as incredibly
Speaker Change: You know, prepared to continue to grow and expand and we will continue to build on the demonstrated track record efficacy of Omni to fulfill that and make sure that we're meeting the needs of both physicians and their patients.
Emmett.
Speaker Change: Second side as it relates to tear care, again I want to make sure I'm trying to address all of the components of your question there.
I think it's critically important when we talk about-
Speaker Change: The transition to a cash pay environment. I think as you and others are well aware, our providers have, I think, really sought to provide.
Speaker Change: these interventional type of procedural technologies to these patients in need. And we've talked obviously about
Speaker Change: the massive unmet need in dry eye, my booming gland disease specifically.
Speaker Change: But the rarity is even those that have done that effectively represent a small fraction of the overall provider community of ECPs, I care providers that are treating these patients, which is why it's so underserved. And so...
Speaker Change: We have walked hand-in-hand with these providers and certainly with those thought leaders to both form into strategy to develop the clinical evidence, including the Sahara RCT and the economic requirements to ...
Make this a sustainable procedure.
in a reimbursed environment. [inaudible]
Speaker Change: Excited to say that that partnership has continued through our discussions around the price increase that we implemented in the middle of last year and that price increase is intended to reflect both the clinical and economic value that is being provided by the technology and the provider to the patient and to the system. And so that has been a partnership that we've been in lock step. And so that has been a partnership that we've been in lock step. And so that has been a partnership.
through this entire process.
Speaker Change: and with our commercial infrastructure that remains in place, they've done an amazing job of continuing to engage those providers.
Speaker Change: and drive the advocacy to build awareness around the need for coverage in this procedure. And that's really the foundation of the progress we've seen and Ali spoke to earlier around the claims that have been submitted, demonstrating the demand to both commercial pairs and Medicare administrative contractors.
Speaker Change: leading to what we have described as, obviously, progressively productive conversation. So, I hope I've hit on sort of the key themes and elements to what you're at there, but certainly if there's something we didn't or Paul really has something else we can fill it in.
Speaker Change: I would just add, on the cash pay on the cash pay piece, I think we did early on when we began our journey to establish, to be the pioneer in establishing.
Speaker Change: Green burst market access to these procedures because we felt that the millions of patients who couldn't afford to pay for these procedures that they that they should have access to them. [inaudible]
Speaker Change: There was some resistance because it was a cash pay only market. We didn't have the data that would credibly support reimbursement providers didn't yet really know what that reimburse value might look like. [inaudible]
Speaker Change: and some ICAR providers were doing just fine with cash pay and they had a patient population.
Speaker Change: that was happy and could easily afford to pay for these procedures. As Matt mentioned, that's a very small subset of providers and when we're successful with reimbursed access to tear care.
There will continue to be a handful of providers who may be prefer.
Speaker Change: to stick with Cache Pay or a Handful of Patients to prefer a Cache Pay option for whatever reason.
There are options for them.
Speaker Change: But for the vast majority of this significant multi-billion dollar market and millions and millions of patients who are underserved today, we've decided to pursue a strategy that will help those patients.
Really helpful. Thanks, Paul. Thanks, Matt. Thanks
Thank you.
Frank Tocanen: Our next question comes from the line of Frank Talkinin with Lake Street Capital Markets.
Frank Tocanen: Great. Thanks for taking the questions. It was hoping I could start with a little bit more color around the edge. Appreciate the initial remarks we made in the prepared comments, but maybe takes a little bit deeper into what's left to be completed prior to that being launched, maybe specific patient cohorts you think are will particularly benefit from this device and then any changes around pricing.
Frank Tocanen: Yeah, hey Frank, it's Paul. Matt can talk about the launch and those other commercial considerations but just from a development perspective.
Frank Tocanen: Look, we've been the pioneers in the Abenturno Canal Class II segment.
started this journey.
Frank Tocanen: over a decade ago, with first iterations Omni-Ed represents, I don't know, the fourth or fifth generation of the Omni-Technology Advancement. We've paid close attention to the market, to the market needs, taking feedback from our surgeons along the way, and we've been carefully and iteratively...
Frank Tocanen: We want to offer surgeons the control because that control and reproducibility translates into reliable safety and makes it a safety first.
Segment.
Frank Tocanen: And I mention all of this because there are other products either on the market or in development, which have taken a different path. That's been core to our development thesis is safety first.
Efficacy
Frank Tocanen: But we want to prove it out very carefully and very methodically. So we're excited about on the edge, but it really is yet another round of iteration in our pursuit of maximizing the safety and efficacy of our army platform. Matthew, I want to talk about.
Speaker Change: No, I'll just say not to silly edge specifically, but Amni has created a category and validated a category based on a long history.
Speaker Change: of safety and efficacy in a robust body of clinical evidence. We're excited, not just with Omni-Edge, but really pursuing more of the Omni family.
Speaker Change: approach to the portfolio to be able to meet the many very needs and preferences of physicians and patients. And so, the great news is Omni Urgo, which is in the market today, has achieved the staying a very strong number two position in the overall mix marketplace, because
Speaker Change: of its comprehensive efficacy and ability to address a wide range of patient needs from you know, mild to moderate to approaching severe, but there's an opportunity as Paul described,
Speaker Change: Long history of iterative advancement in development and the internal know-how that is uniquely-
Speaker Change: belongs to Sight Sciences, we have the ability I think now to be more collaborative with providers and look at providing a range of tools that allow them to treat patients differently. And so this is, again, another area that we're excited is happening in concert and partnership.
Speaker Change: with providers, and we're excited to introduce On The Edge to the market. I think we think it'll fulfill some unique needs, but we're also excited about what's going to come beyond On The Edge as we continue to move the On The Family forward.
Speaker Change: Okay, that's helpful. And then maybe just for my second one on the dry eye business, obviously a lot of commentary around hopefully policy establishment this year, maybe talk about the months. [inaudible]
Speaker Change: and quarters following policy establishment. How quickly do you think it could ramp from there? My sense is just given the familiarity with the product. Hopefully that could be a relatively quick ramp but maybe talk about that and then any incremental commercial investments that might follow.
Speaker Change: Yeah, great question. And, you know, a lot of this will have to do with...
Speaker Change: is one of the reasons why when we set guidance here, we're not going to try and predict what is that when, when does it happen, what's the size of that, what's the pricing of that, until we actually see it happen. So we've been...
Speaker Change: You know, very prudent in our guidance strategy for revenue on dry eyes, but we do expect those wins to come in 2025 and at that point once we see.
Speaker Change: Individual wins, we can start quantifying what that means in terms of a potential revenue ramp and expense ramp, those types of things.
Speaker Change: What I think is really important to understand is that we do already have a small team of
Speaker Change: you know, dry eye sales and marketing and efforts that we have been doing to create knowledge around tear care over the last few years. And that, you know, commercial infrastructure has created a base of 1,500 eye care providers that have invested in hubs and they've done 65,000 tear care procedures today. So...
We have done a lot of work to establish.
Speaker Change: Training on tear care, understanding of when a tear care would be appropriate, and then driving those cash pay.
Speaker Change: Teachers. So that foundation I do think will allow us to hit the ground running as we get reimbursement into place. So I think we are in a very good spot. There is
Speaker Change: A huge need for this type of treatment option for patients. We know that patients struggle with dry eye drop.
Speaker Change: and there are, you know, adherence challenges around that and this is a really unique opportunity for them and if it is covered as a reimbursed product, a really great way to solve the major problem of dry eyes. So, I think we are in a good spot. Again, it will come down to what is the size of that specific wind, what's the region, but we do have that base to build from that should allow us to...
Go back.
Speaker Change: Alison Bauerlein was one more thing, is that in addition to the critical investment in our commercial infrastructure.
Speaker Change: Curtin guidance includes committed investments already underway for operational infrastructure as well to support the business and scale. So I think we've taken a sort of prudent approach to this, not getting out in front of the necessary investment, but ensuring the critical infrastructure is in place.
to support those early wins.
Okay, that's all from Thanks for taking the questions
Thank you.
Speaker Change: And our next question comes from the line of David Saxon with Needleman Company.
David Bauerlein, Thomas Stephan, Malgorzata Andrew, Thomas
David Saxon: Great. Hi, Paul and Ellie. Thanks for tuning my questions. If I could just start with a clarifying question on tier care SPs and start if I miss this, but the ASP looks to be like under 300 on a unit basis. So is that just volume discounting or how should we think about kind of the go forward real life pricing relative to the $1,200 list price?
David Saxon: and then my first question is just on Chris Margin, so just back of the envelope math I'm getting to like 84% for surgical Chris Margin's post-tariff.
David Saxon: Is that a good way to think about the year? And then for dry eye, I didn't hear you mention any impact there. So, are there any factors that would impact dry eye gross margin as we go through 2025?
David Saxon: Yeah, so quick. Let me make sure I get all those questions answered here. So first, just starting with ASP on the dry ice side. So as we said, we established new pricing effective October 1st and that list price was about 1200. Of course, there are some discounts off of that as we work with our partners. But the ASP for new purchases is still relatively high. So we're going to start with ASP on the dry ice side.
in the thousand range. [inaudible]
However, there are some-
David Saxon: historical sales that were already committed under contracts that continue at the lower prices for the next couple of quarters. So that volume is still occurring for contractual requirements. So that's where you see the lower average ASP associated with those contractual requirements. But what we're really working with our partners on reimbursed access. Let's go ahead.
David Saxon: That all is focused on the higher pricing smart lids that are at that appropriate level based on the clinical value of the chair chair procedure.
Does that make sense?
Yeah, no, that's super clear.
Speaker Change: Okay, so on the tariff side, I think your math might be a little much in terms of our impact. So just thinking through it...
Speaker Change: You know, only a portion of our cost of good souls is actually our bill of material. So of course, only that fill of materials that is coming directly from China would have an impact associated with the tariff. [inaudible]
Speaker Change: Charge, and of course, I would also note that this is something that will phase in over time because we already do have existing inventory of product this.
Speaker Change: and does not have a tariff associated with it. We are also actively engaged with our partners to try and reduce that impact of the tariff whether that's...
You know...
Renegotiations of Costs, Supply Chains, and looking at specific components.
Speaker Change: All of that is in progress as well as looking at our medium to long-term planning on where product is manufactured.
Speaker Change: So we think that we will be able to mitigate most of the terror impacts with the actions that we're taking, but there should be some modest impact to the P&L in 2025.
Speaker Change: Okay, that's very clear. Thanks for all that color alley and then hopefully you know what can be considered my second question just
on the competitive landscape. There's another...
Speaker Change: Kind of Canal Plastic, Les Tribeculotomy, Device that just launched, I think this past weekend. So kind of how are you thinking about
Speaker Change: Omni-volumes with that new product launching, is there anything baked into guidance? That'd be helpful. Thanks so much.
Speaker Change: Yeah, I'll just add a few comments, David, and maybe Matt can add some as well. Over the years, we've seen a number of...
Speaker Change: of new entrants into the, you know, VSCO dilation category, as I remarked.
previously. We've been at this for a decade. [inaudible]
Speaker Change: We believe Omni has a very strong position as the pioneer in this category and as we describe with Omni Edge and future.
Speaker Change: Iterations of Omni and the family of products were developing, we expect to continue to stay far ahead of any new entrance. Thank you very much.
Joe
Speaker Change: We've seen this in the past. I think the one you're referring to is from a company that has also released a disco delivery device two years ago that we saw. These things get introduced.
Speaker Change: They will be, there will be some trialing. That trialing can be disruptive for a period of time. It's not new. Again, we've seen it in this category for a while, but we've also seen how strong the omniproduct market fit is.
Good day.
So, again, we haven't seen any clinical evidence.
Speaker Change: It's just like the products that were really quickly prior, haven't seen clinical evidence, haven't really seen strong labels, haven't seen usability, haven't seen any cases.
Speaker Change: If and when these things appear, there will be trialing, that trialing can be disruptive for a period of time and we continue to try to innovate quickly, listen to the market, respond to our surge in needs and stay as far ahead as we can.
Yeah, I'd say it's a good comment from me, or...
Speaker Change: Yes, the question is, as Paul said, there's a long history of products attempting to enter this.
Speaker Change: Second of the market in disrupt, we've seen trialling. That's certainly been contemplated in our expectations for the year. Going back to prior conversations on edge and evolving family of omniproducts.
Speaker Change: There is no company in the space that better understands the requirements for these procedures and sightseys and we'll continue to lean heavily into that, we'll continue to invest in that, we'll continue to develop iterative advancements in the technology and partnership with clinicians to fulfill that and so far we've been rewarding, we expect we will continue to be.
Speaker Change: And just to follow on the guidance comment there, you know, our approach to guidance here was to put a prudent guidance range in place that took into account both the impact of these mixed restrictions, this dynamic competitive mix environment that we're in, and of course the uncertainty on timing of the tear care reimbursement wins. So you think that we've set appropriate guidance that takes into account those factors and allows us to perform effectively this year.
Great. Alright, thanks so much for all the color.
Thanks.
Speaker Change: Thank you, and our next question comes from the line of Matthew O'Brien with Piper Sandler.
Speaker Change: Hey, this is Philan from Matt. Thanks for taking our questions. One on cadence. I know you said the first quarter is expected to be down low double digits. Is the assumption that surgical glaucoma can show growth in the second half of the year? And if that's the case, what's driving that assumption? Thank you.
Speaker Change: Yeah, so that's not inherent in the guidance range provided that there would be growth in the back half, of course the easiest comp.
Speaker Change: You know, exactly where we are within that range of guidance.
Speaker Change: We do expect that this, you know, big restrictions is an impact that affects the entire market, you know, this is a 15% or so impact associated with
These claims that...
Speaker Change: cannot be performed. While the patient visits are still occurring, the number of migraines being filled will be reduced by that. Our estimates are about 50,000 procedures will be removed.
Speaker Change: from the claims data. And so that is something that impacts the entire industry. This is not specific to Omni, of course we think we have a slightly outsized impact just on our percentage of staff procedures that were performed.
but
Speaker Change: The industry itself is not growing faster than that inherent headwind that we have for 2025. Now we do expect as you get into 2026, it's going to get back to fundamental.
Speaker Change: How is the overall market growing in terms of patients, in terms of surgical mix procedures, and then also, how are we developing that pseudo-fake standalone opportunity? So, those are the things that we are looking to and inherent in guidance is...
Speaker Change: that we do expect surgical glaucoma to be down in 2025 compared to 2024. Hopefully that helps.
Speaker Change: No, that's very helpful. Then just one quick one on the standalone opportunity compared with the combo. I was just curious if you're seeing as much pressure from these LCD changes on that front, or is it a little bit better than your combo business?
David Bauerlein, David Bauerlein,
Speaker Change: To be clear, that the standalone market opportunity right now is relatively small, that's still a small...
Speaker Change: Bill for MIG is done on a standalone basis and about 90% is done in combination with the cataract procedure. So mass majority of the volume is still happening in combination with cataracts. Now of course the standalone opportunity is many multiple sides of the combo cataract.
Marked it, but we have to develop that market opportunity.
Speaker Change: The focus here is more around creating that interventional mindset with surgeons to think about intervening instead of just giving another med to medication to a patient. So that is really the focus there. There is no, there are no restrictions of doing multiple mig stacked mig.
on a standalone basis.
Speaker Change: explicitly in the guidance that focus is on restrictions in combination with cataracts that multiple migs cannot be performed at the same kind of cataract surgery. So they are kind of separate and different dynamics from that perspective.
Thank you.
Very helpful. Thanks so much.
Thank you.
Speaker Change: In our next question comes from the line of McCauley-Killbing with William Blair.
Speaker Change: Hi everyone, this is McCallion from Margaret. Thanks for taking that question.
So he's at it during the court.
Good morning and welcome.
We can't, we can't, we can't hear you clearly.
Speaker Change: Sorry, I don't know if other people can hear him. We're not able to hear the question clearly. No, his audio is going in and out.
Hey everyone, do you have me? That's better.
Apologies about that.
Speaker Change: Just wondering if you experienced any backlog of surgeons once the LCD became effective in November and alley, I know you touched on it a bit but wanted to double that on what's implied in the guide on utilization versus adding new facilities, especially as if you look at that first quarter guide.
Speaker Change: Yeah, so I mean, we don't provide that specific level of detail. Obviously, we are focused on increasing our accounts and increasing our utilization over time. Now utilization will be the most challenged in 2025 out of those two because of the restrictions on multiple mix. So we do expect to be able to grow our ordering accounts, but we don't provide specific guidance. So we do expect to be able to grow our ordering accounts, but we don't provide specific guidance.
on that.
Speaker Change: Commercial Infrastructure, Versus Accelerating Some R&D Initiatives. Thanks for taking my questions.
Yeah, sure. So the most recent update is that
Speaker Change: We did not resolve, the parties did not resolve the dispute as part of the for-ordered mediation process that was recently concluded. So we are still, we are now back to waiting for the judge to make a final ruling and to either to confirm the jury's verdict, establish an ongoing royalty damages and or determine any potential enhancements. And of course all of that is still subject to appeal. So we will await the court's decision. We don't have timing. This is all-
Paul in the court.
Speaker Change: The decision of when they decide to rule and then of course because it's subject to appeal this process could continue to stretch out so we'll continue to provide updates as we have them in terms of cash utilization. We as we said earlier, we do believe we are properly funded without needing any equity capital to reach our brave even goals. [inaudible]
Speaker Change: And, you know, we always are looking for the right things to invest in across the organization and that is typically if you would expect commercial expansion as we have success in dry eye as we look at pseudo-fake market development.
Speaker Change: as we look at our pipeline and look at ways to continue to innovate. Those are the things that we would be focused on as it would expect from any, you know, med tech company with goals of growing over time and really being a true leader in the space.
All right, thank you.
Speaker Change: and I'm showing no further questions. So with that, I'll hand the call back over to CEO Paul Badawi for any closing remarks.
Speaker Change: 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.