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Second Sight Medical Products (EYES)

Participants
Lisa Wilson IR
Robert Greenberg Chairman
Tom Miller CFO
Will McGuire President and CEO
Call transcript
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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Second Sight Q3 Results Call. [Operator Instructions].

As a reminder, this conference is being recorded, Thursday, November 2st, 2017. I would now like to turn the conference over to Lisa Wilson, Investor Relations. ma'am. ahead go Please

Lisa Wilson

are XXXX. Good Chief earnings welcome Wilson, call. Sight. Will today's for Kai. the Chairman third of Officer; Board Investor for the Second Tom and The Relations ended press quarter Second release a Directors; call on the me company XXXX This President Miller, Chief With Robert afternoon issued you, be months Greenberg, can Financial release to section website of nine Officer. financial and and press McGuire, Sight's Relations At Dr. secondsight.com. Executive the results Thank accessed the is Lisa September Investor and XX, close Second of market, the at three detailing through Sight of

call from there. You also can this access the of webcast

would available filings events remind statements to on future Such get the statements as Before this in uncertainties, Actual performance. are materially These Securities those press forward-looking are expectation, guarantees differ in from everyone call express Litigation of I Second forward-looking future we Reform those information on Act. performance, made involve be SEC. defined forecast, forward-looking a started, projected risks the based regarding Sight's and and Second today Private including any projection, and intent that statements release the future belief, of conference afternoon's with noted to the statements Sight's and as management not forward-looking today's results considered may by company's may or that anticipation, like statements.

shortly completion two telephone will as the for or statements replay of required A this obligation law. weeks. specifically to after Sight call available update except intent call Second of be the forward-looking any by disclaims next these

information the website, The dial-in today's the on available be webcast archived for find secondsight.com. company's one month release. will press You'll in

have this made then, archived on the benefit may replay to the to topics Second XXXX. November announcements XX, Since who held webcast, of may those recorded listening was Sight discussed. call or be the For related and

with So, turn Dr. press call the to recent over And I'll that, company's filings. Chairman, SEC please the reference Sight's most Robert Greenberg. releases and Second

Robert Greenberg

joining continue achieving and Thank am we good you you, call progress to that very all this three I make to pleased our key goals. report towards Lisa afternoon. our thank for

First of our to implant implemented validate will recently of performing increasing commercial at measured centers least model, the our by on success quarter. excellence average senators new one per be number

to to we demonstrate will in success Second, clinical expand ability be able testing there which our measured will addressable individual's humans be our market. sighted that confidence us treat by to better will give

first make and Finally, Orion strides. With respect to we implant the to patient significant continue to-date progress to clinical this year. R&D our

We study was feasibility and approval August received anticipate full implanting We first the approval Our to remain U.S. similar clinical on the better RP a Germany conditional sided in will for as this in FDA and this initiatives announced in pursue moved at the today. we The shortly with better Orion begin for year. we study the earlier subject track. plan indication expanded feasibility XXXX. to RP side

as faster We potentially and application priority device, an us official also lower receive Orion this get allow with FDA that the to Orion for at review be designation a submitted to to eligible would request cost. a market to designation breakthrough and

review turn as quarter to invaluable Gregoire continue Tom? as experience will of as our that Europe of Tom transition the over like team financial depth regions the third and I'd to and We build appointment VP With be VP Their to Affairs. as of the Clinical now momentum our with Pacific General management upon strengthen to well his Asia we Vandeputte business. to our of call continue results. to of Manager the new and of Cosendai Frank role the

Tom Miller

Bob. you, Thank

were CMS sales higher net rates the XXXX third higher of $X.X quarter per to in some company quarter revenue The compared $X.X received due in third to reimbursement collection of implant million revenue. the the XXXX XXXX. million For the deferred of and

$XXX,XXX XX immediately volume and XX European higher implants declined in procedures compared the is preceding third to of to XXXX CMS to in decline average quarter Our prior collection European of the the in of revenue. U.S. due quarter. to per summer of implant a implant XXXX mix quarter during elective the higher the scheduling during The the quarter the in months XX pricing, seen dip second the year XXXX have we the due compared largely and of to benefit units XX,XXX implants volume the where markets difficulty This our $XXX,XXX of deferred revenue in holidays. during third implant was reflecting historically during of

units a we year quarter the the of quarter a During excess third prior included In of XXXX. to declined seven loss the generated gross North to a in compared compared in higher quarter development inventory Orion in reserve credit included to spending the quarter grant $X XX primarily XXXX. staffing on increase slow slow due work the for to due consultants including of development XXXX first loss revenue in previously quarter, in initial performed efforts R&D to during was Gross compared $XXX,XXX gross offset fully of were design. $XXX,XXX of quarter that a to the Europe, a grant of related from to units. East offset XXXX continue a balance in outside the XXXX. XXXX reserve quarter completed of in compared million was by four by million $XXX,XXX third of and third quarter. during five for inventory of the the year of profit of third this implants partially XXXX moving the quarter America lower the XX% product gross end of revenue established to million The approximately spending quarter prior on $X.X and the million. the as the down $X.X moving Grant inventory prototype utilized $X.X Asia to due to quarter volume for declined same implant profit costs of we of to new reverse quarter We the third third $XXX,XXX to XXXX in as the Middle were the

during at regulatory the the Clinical R&D quarter to at expect grant We third prior essentially the XXXX compared fourth revenue the flat costs $XXX,XXX and costs remain will quarter. overall levels in current $XXX,XXX quarter. of and year during were

at for to over testing patient regulatory II expect flat million new third during XXXX third see next Orion We quarter algorithms and for the and the and and to clinical quarters third quarter the implant both few our sighted Argus software quarter of externals. administrative the costs in Selling, of general cortical of Germany clinical trials the increase of and costs XXXX. trials due generation better $X.X were next activity XXXX to related the

We over the expect as II. commercial SG&A our the see few increase some to Argus to efforts next increase in related we quarters

the $X.X a Our for share. net prior to loss compares of was $X.XX share in of of loss or per net XXXX loss This a the $X.X or quarter. year a million of loss third per $X.XX quarter million,

of was net net net share a loss can our non-GAAP in found the to XXXX. the per full $X.XX our our quarter third non-GAAP compared a loss release. net GAAP the $X.XX of earnings share non-GAAP of be tables of Our A for to loss third in per including loss reconciliation quarter reconciliation at the end

cash in With an one turn should believe of or of cash that over Will Moving call this anticipate results. week XXXX. as XXXX at financing free ATM we money of market review with Will? have business last market to financial $XX.X sets third will first as to This We need added many the have million Form provide I'd the a we XX, like registration on to our to quarter no sufficient the quarter We flexibility we debt. us our the we filed through to integrated September balance statement [ph] with options. funds with sheet, SX of that it.

Will McGuire

great changes our has with considerably stronger to XXXX. management begin The like a even I'd team. and to and Tom. stronger the for close Thanks, become we're positioned to team XXXX

in adoption technologies will strategy access General and experienced leader Pacific Frank the record both He indirect of building three-decade of and First markets has a long creating commercial a VP Vandeputte, our Asia operations. track and needed Manager and our driving has and European and appointed make direct centers been we're of excellence. highly innovative businesses. new launching Frank to ensure global changes

well corporate Sighted as Next Gregoire our Clinical priorities focusing will RP to Orion of Affairs. will and role European market Orion in assumed efforts of patient RP will now Sight's of of the Cosendai, formerly the as Second on with Better of initiation Better I Operations clinical He initiation goals. VP subjects. trial lead be trials Sighted our has expanding trial to turn His the feasibility our XXXX Germany. the like first VP

Bob are making goals. As all our of against progress great we stated mentioned

in a traction model centers First, and on an we excellence are of are number centers cases perform North America our of seeing getting with increasing regular Argus schedule.

and patients. the retina Second preparing encouraging Sighted to with German we RP our programs innovative are is of for testing begin results proceeding trial stimulation Better

this human and program end to continues against subjects prepared year. to clinical and company Orion execute related to we're the goals the first the our R&D Finally, of all regulatory implant by

on remain and ambitious Our to with track achieve and we expect execution goals but them. are focus

centers XXXX two plan QX we into had in excellence. zero is new now compared center North with quarter Let's in of to rate QX. four the higher QX this will our and and ongoing centers expectations our rate detail on agreement centers add carefully perform we at of coverage. excellence regional selected an York progress mutual or six expanded centers two centers In saw to clear of with brings implanting more implanting another in we strategy reimbursement America XXXX. in number new little of new one in at QX exclusive At with the a Each which an dive total to centers end added expectation of as centers of the some per accomplishments. refined New that

four centers QX the in already rate new with in fact, three well XXXX above implants In an planning per targeted three the added in scheduled new contributed surgeries one end. additional and year quarter are before have of

strong with forward began look before quarter fourth momentum we delivering fourth in Finally, the to our to and America quarter. North a turning strong database,

us, critical Our serves of volume our year maintain to four excellence earlier to is the is to for as of that independent and become goal an of which person planning center teams. the and patient least a our medical on us telephone for centers screen greater quarter of rehab the independently passed patients asset funnel significant important our few continues per This patients the candidates site, patient who database we most and in post-surgery have valuable excellence. last predictability an candidates grow, component professional. patient by Last database contains has qualified calls our it strategy highly a discussed another we adopted of our allowing at a efficient XX

seeing QX XX months surgery We that patients to from grew growth are this number report have As qualified. of list database. list ultimately our aggressively database now the X/Xrds investing come of II that we of move we treated from the for to from being Argus last in the independently year X December and since being been can estimate this the candidates Recall with screened. within we qualify X dominant end patient and forward will

on a an U.S. Sighted RP base the Better I eligible not the point or also in Argus expanded label for move eligible our patients patients. I the for are Orion like Before includes that be of that that would out portion may also

options some future. the of every North we quarter for candidates we for holiday typically in other qualify expanded our difficult mixed fact, in Outside had treatment quarter were results many multiples Europe of is Argus a there today in the implants. able as in countries. schedule our summer for challenging given a In of QX consideration implants our terms patient America, are of for elective now are to patient database in

America we those we're quarter the better momentum as I'm be final North confident like the a in markets. from our year Frank of well. into more and With indirect growth expect much on on curve results direct seeing soon markets will Fortunately, heading predictable significant and board,

and now noted Turning a morning outpatient in press surgical rate Argus implantation this issued CMS reimbursement, II $XXX,XXX Medicare XXXX payment final our release for as of associated to for the procedure.

this pleased this drive outcome the opportunity centers and in additional We are XXXX. excellence provides adoption with to with of

the of or Our approximately the Medicare now coverage in XX% includes U.S. XXX U.S. population. million

we're XXXX, our made determining coverage growing half technology team with recent in will affected demonstrates in the policy. it evaluation three acceptance the concerns. them reimbursement the of final start like have their coverage addressed negative the we've recently In progress and decision program based MACs with received soon. our our of through medical we've of making I'd of we that will Canada We for continue the reversal with met remaining dialogue Health be England technology and Argus commissioning be to decision expect renowned the Argus this directors this from was recommendations only NHS as note on positive serve worldwide all is we will II, Technology tentative organizations assessments. this previous procedures. their of the confirmed to Advisory interactions reimburse by for first OHTAC's a to does Not bellwether as If study OHTAC a OHTAC Ontario II Committee, decision others for its good until with RCTE the

are also reimbursement our making national and reimbursement in relevant regions. are progress A submitted in in have information recently is and clinical authority and to for expanding the Belgium. good Turkey application under in additional Italy review we in economic decisions final reimbursement We several waiting still

RP turn population technology. a submitted made treat our larger we've clinical This patient significant Sighted significant approximately to progress, approved Argus with authorities is XX the current a population patients trial German trial RP the to treat. where clinical [ph] we is targeting our protocol because we Better Now that it's than of let's patients Indian for

indication XXXX. in plan with to similar FDA a expanded also pursue We

Argus improve ramping by stimulation system. during begun outlined and promising The testing. in next into changes we of provided up for advanced If actual our current continue only are patient most programs, usefulness and calls to the generation and these have develop the algorithms we an vision system have retinal the test programs been patients advanced our past which As could quality testing incorporated stimulation Argus testing has clinical QX. require developing Simultaneously retinal we artificial software been Argus, successful in program a camera new testing more Last year eye next submissions thereafter. new in powerful and to it be addressed times with specifically We're moving progress address retinal which is a the patient new with because wear, fronts, population least with many the unit. all the technology regulatory prosthesis. human than is track to these processing larger certainly a externals externals on forward Orion a blindness shortly has on can that early important begin potential but with not video

approval Bob, August by conditional lifted their by has FDA on As outlined the conditions in company prior XXth. the announced

before in We end year. implant in Medical UCLA approvals the We are Houston. U.S. at finalizing our and Center contracts first Baylor obtaining final the the in anticipate of IRB

pursuing also program. FDA's in are We participation devices the breakthrough

for objectives if cost move offers closing that As to the our of the most significantly adoption In a and process an gained in the innovative centers and with address executing. on commercialization clinical name America drivers we model centers. to program important by In meet streamlined number from of the for could traction focusing needs, has medical be unmet this North to continue excellence regulatory the time increasing development demonstrated year applies reduced. technologies accepted by

U.S. in are patients our and resulted covered U.S. population have new by markets growing include number we million. Taiwan, in Outside Korea our have database America the Russia. promising of XX We and efforts ever-increasing increase reimbursement large North the patient including qualified of of South a an entered to almost

commercialization. close treating of we treatable ground-breaking And this away, Our no agencies soon patients. program with the the clinical to are as concerning we patient first of population significantly discussions are RP something is the Better will scheduled our with Orion our ultimate several lastly technology forward expanding with years and to longer begin programs promise Vision moving RP regulatory path

Finally, will I proceed With the co-workers at that of and hard Second Sight dedication our their I call blind. want questions. please to to with my to thank for mission the instructions. for Operator, work sight giving open dedicated

Operator

there at this [Operator time. questions are Instructions]. And no

Robert Greenberg

call participation investors our for Have day. thanks on Thank for support everyone a to to and you their again today. our continued their great

Operator

you and participation that your We the disconnect does your Ladies that thank lines. for ask conference call for and please gentlemen conclude you today.