Second Sight Medical Products (EYES)

Lisa Wilson Investor Relations
Will McGuire President and Chief Executive Officer
Pat Ryan Chief Operating Officer
John Blake Chief Financial Officer
Amit Dayal H.C. Wainwright
Kyle Bauser Dougherty & Company
Call transcript
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Thank you, ladies and gentlemen, for standing by and welcome to today's program entitled, Second Sight Medical Products’ Fourth Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] As a reminder, today's program may be recorded.

I would now like to introduce your host for today's program, Lisa Wilson, Investor Relations. ahead. go Please

Lisa Wilson

on Good Operating quarter Jonathan. of welcome Second Financial Officer; Second With to Communications, President of Will Thank Chief Officer and and results afternoon, John call. fourth Executive me Sight. Second XXXX Relations Ryan, Wilson call This Sight's are Investor McGuire, Chief you, Pat for and today's Officer; is Sight. In-Site Chief Lisa Blake,

three the financial and market, of company a results the XX, for detailing The Second be the section months At release the close secondsight.com. the XXXX. XX press issued website December Investor ended can release at of Sight press accessed Relations through

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

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

forward-looking statements. may results the those materially differ in Actual projected from

as required available The on any disclaims be specifically secondsight.com. company's month law. intent or statements, obligation by Sight the except these webcast Second call one update of to archived for will this website, forward-looking

press XXXX. then, so the and related call webcast, SEC made have on the those Second replay recent the recorded Sight filings. releases please company's listening to archived Since be may XX, and held of to most the discussed, benefit For March was reference topics this who may announcements or

that, CEO, McGuire. with call Sight's over Second Will turn to I'll the And

Will McGuire

Thank you, call this you our all Lisa, joining afternoon. thank and for

Sight. impending to departure address I'd from my like First, Second

to and press Diego. position the have in that home my I accepted release issued last closer in a was similar San company family a much with As stated week, is

due the industry. member the past four-plus To remaining Second and am for at to in a in I'm a Board Sight. company a has have leaving team much not with involved honored be clear, years of years, very Board I the with I This is and any forward support am Directors. Second the look me Board of sense led have as to of over grateful shown disagreement over the I involved Sight a unlike XX to with medical device talented any been the purpose, such with

subject We Early quarterly sixth after implanted have the call first goal the been to our R&D made discussions efforts years. over significant as our two with the with has XX-month our Feasibility the last subject for consistently the FDA, execute Study reached since progress our have as against now and well Orion important continued in milestone

introduction next-generation of Xs technology CE a this for team is market planning a and and Mark FDA now the received this wearables our year. also for approval We Argus limited conditional Certification key later

today financial XXXX you as well results. as our CFO. review calls, from reimbursement hear efforts will past on As John will the John our Blake,

including with number of the before companies, leader several will updates, in provide that senior leadership public our C-level employees. the while X,XXX the has hear medical our year Ryan, Pat device medical approach status positions who of you starting and progress, held of talented Pat addition, R&D Feasibility In discussions a XX-plus managing FDA. Study another Orion organizations Pat will Early at from devices. member is a career COO. a was also our a our team, officer Pat naval

In Sight Second have Williams' I Pat, the under to leadership Before support Chairman he for has moving the few over expect the forward. our beat over in team organization and the efforts Greg also days, full acting I expressed and past great CEO. Greg fully meetings want to that the call say confidence with and his team to strong miss entire reiterated turning not as his in a confidence

I that, turn Pat call the over With to now Ryan. will Pat?

Pat Ryan

next-generation Today, well I path, initiatives. and as Orion, ongoing Thanks, Drug with Will. clinical research as regulatory concerning our Argus and will Will ongoing share U.S. recent Study on for updates the Feasibility Food Administration discussions our Orion's for wearables mentioned, Xs as Early development approvals the

subject pleased the with begin for February me report Early the are and XXXX results. Orion last in and the the Study. sixth to Feasibility XX-month testing Let We completed

of from This for device with square than the As one motion pre-October visual visual the a level, lower grading to testing scored loss October a positive Perception results are three experienced XX-month perception reminder, this multiple this on XXXX. XXXX key returned individual, has on direction the across not is perception function Despite measures, who measures. acuity. better levels. particular but the of and in significantly individual all localization, off subject

impact On as system FLORA, Assessment was Rated of perception. in which is six-month neutral, the unchanged time the Low on functional Vision the rated Orion Functional vision patient's point change the or the from Observer before the well-being and

share the the subject can for sixth has milestone, Now results group. that crossed overall XX-month the we

or receiving scored the of XXX% on scored functional on rated six of better X.X the a three individuals on than on vision. device vision. or positive or device square acuity, scale better On of On visual six the of LogMAR system XX%, well-being localization, better five benefit six and or than or significantly Orion individuals motion, individuals off. FLORA, On five direction positive scored with grading six with XX%, were at or On six mild of XX% off. as of significantly individuals,

a a with pivotal forward shared, we and was the results six study extremely over From are time adverse same in safety the period. believe previously event support adverse encouraging perspective, there one non-serious as U.S. to events serious These sufficient and moving

the the Argus pivotal for trial. used endpoint quarter, FDA will primary trial, with last be efficacy FLORA As clinical which the to update XX, noted II an we have the FLORA in regarding agreement original the

actually performing reminder, is the by ability a an orientation after asks daily series an specialists, it with is living who and such a The laundry. performed tasks, hurting as light to mobility spends or FLORA sidewalk third-party, if specialist sorting sources low benefit, perform if each the providing time home determines or these subject a system finding their and their then following procedure. questions of assessment in observes is vision specialists each subject if The it tasks. is neutral independent As the in

is underway. Validation XX for FLORA

how we tasks the functional performed of that observe tasks on reflects required versus a provides learning task over vision be accumulated all these rating the then the the to the user would the a of benefit and The This on as difficult observer years in process, are performing section. system we’ve certain part was to in focusing perform. Orion of the tests. provide that functional and task on the taking system. the entails without will number As the The difference observer-related with off independent system level these them score with vision

their real-world of subjects can things, the administer it provide XX the the impact. is among of that observers then tool participation independent this perform most is measure important demonstrating validation the our believe with that tool experts impact Orion appropriate To for FLORA daily very to and the date, that consistent in appropriate begun we the of is XX have ensures multiple multiple in life. we XX validation XX someone consistent prove impact validation. FLORA the functions technology. Through other the process, believe the to technology three the can The to FDA on and results assessment how FLORA of measurement We way because, Orion’s

to until notice. due suspended distancing we protocols, However, have validation social COVID-XX further efforts

for We primary FDA continue pivotal engage the endpoint with about trial. the to actively safety

determining to we expect that working Rather, of endpoint Early have any acceptable ongoing. on year. this adverse by the technology of to this safety around delay through third emphasize first-in-class not our discussions does the Feasibility this here relative resolve had Study end hoped last we year, end agency are the what with of the parameters data. by concerns the safety issue break event the want to for are a to quarter alignment like While now the reflect is We I should be serious an Orion. the

now Turning development for and Orion. to research

to on We are and continuing work the Orion wearables. next-generation implant

as issues. Based versus filing shifted has It’s schedule current to out the at of internal our of expect we have half first project on Our occur IDE now reflecting technical somewhat, our year-end schedules, in not target any work the XXXX that we previous an result XXXX. additional identified necessary.

update through to continue the year. progress as We we will you

include reducing implant improving a improvements the reminder, case resistance. thickness the the and impact electronics to As the of

functionality. None ergonomics, include improvements the to implant of proposed wearables robustness. wearables, changes the affect the For and aesthetics or

a pleased Xs. submit us requires as before Turning and approval received the conditional to to receive product some that, I’m marketing The calling full to have to of week, we start are wearables. this from make what straightforward and next-generation for conditional FDA approval FDA Argus product. we our can relatively approval we changes labeling announced these the share now earlier to

of improved The and for the an the processing be for and freely as and and new pivotal aesthetically will We the standards marketed and European video powerful new that can, both unit, world. introduced and controlled These base be more Argus technology an for part or Xs. pleasing. environmental a Orion in important conform safety next-generation significantly the glasses. pace in study. received camera mark with protection entire This at the will include the therefore, This will wearables a more within be new ergonomically that health, used improved sold also CE is a U.S. VPU, that wearables technology system means system serve products new Union

quarter over who will call efforts I to turn for as XXXX that, reimbursement Orion will well as to fourth our results. the discuss secure With John? our financial John,

John Blake

Thank Pat. you,

to activities. our more to turning the share financials, reimbursement updates a Before have regarding few I business

with Centers few weeks had Medicaid team. national Baltimore ago, CMS. continued coverage to and ongoing we our have dialogue or the We productive Medicare CMS and the meeting another for A went with Services,

of full group the one was Orion, results, of subjects. impact firsthand our including We potential took representatives XX-month Early the about our an to hear Orion. opportunity introduce Study Orion even This Feasibility endpoints to for to progress excellent update CMS the EFS and CMS this on the pivotal study clinical with life-changing opportunity for

upon determining focus national regulatory discussions CMS be population will appropriate main moving gaining for of reimbursement Medicare coverage pathway approval. Orion Our widespread forward the for the or

reimbursement understand We also the approached their of private for payers expectations requirements data and to Orion. supporting

of that have for for how we of Orion coverage. the of patient age portion sizable will private average younger aspect the Preparing an Given payers population is Orion insurance a plan we will candidates, important commercialization. expect private

Finally, H.R. Lives Orion. as devices to comes pieces officials early and opportunities Capitol that staff breakthrough Orion. for value house S.XXXX, before mentioned to Critical on or before, – We subjects there and their for that discuss to when financials, our Extend bill of month Act currently with such the are one Orion Act would XXXX. return as next importance to XXXX, certainty it The to new Senate elected scheduled to of being Products Hill reimbursement bill address as meet is proposed Will such with moving the XXXX, legislation technologies breakthrough the innovative of two were Patient Breakthrough is of Ensuring Access to of coverage various

later will trip date. our coronavirus, rescheduled be the a to to due However,

Turning the with NASDAQ stock financials. executed listing remain now compliant to split reverse a January, requirements. to In we X:X

compared Our our and million million in $X.X in year sales full results XXXX. the expectations. Net period quarter $X.X are the with XXXX line to in fourth fourth of were quarter for financial the same in

three ASP price an Revenue devices same was quarter of set GAAP of in XXXX, XX recognized XXXX average in by for an implants compared average the reimbursement basis, the the $XXX,XXX with U.S. higher XXXX of $XXX,XXX in period a of with in on fourth rate selling an reflecting with CMS

XXXX. the to Orion in from grants, compared cost prototypes. was million produce fourth and quarter XXXX funding quarter increase of the development of reflects primarily The to net $X.X expense, in fourth of million $X.X Research

including We costs development have and verification to facilities increase to expect production that periods, related and and development reflecting Orion additional activities. personnel Orion to prototypes, transitioned activities in validation such research personnel expenses previously future and of as

quarter $X.X and Clinical from fourth net million slightly Orion The of million lower decrease decreased costs $X grants, fourth of quarter to from Early the the in regulatory the Feasibility attributable to XXXX from Study. XXXX. funding in of is

the We assess expect costs experience. conduct user regulatory trials enhancements increase as the to clinical Orion clinical related and to to additional and we in future

of XXXX, Selling expense the commercial the non-cash $X.X XXXX quarter going of executive stock of in in fourth transition of X. million of a the forward. $X.X result to froth and activities to is lower the marketing expense million G&A quarter million was fourth $X quarter $X.X in of XXXX. million is compared The fourth Argus was decrease $X.X $X.X to XXXX. million the General due administrative of quarter million for compared in and is compensation flat our decrease and to remain costs expense from primarily expected deemphasizing

of XX, of had XXXX, As equivalents we December million. and cash cash $XX.X

million, for cash we quarter runway burn second cash quarter of a Our the into and have was $X.X fourth XXXX. the

very expect future. our currently financing and in near that updates strategy around are discussions provide in We to the on

instruction. I’ll open to that, the go questions. the With Operator, with please ahead call


Wainwright. from comes from line first of Dayal H.C. Amit Our Instructions] [Operator the question

Your question, please.

Amit Dayal

see role, are to you coming with stage of filled the CEO in will what think guess, position? Will, at this later, you different do guys I in? different rather company. the search than a the new But be with guess, I And in respect you sooner

Will McGuire

– is it’s And Board. in point on the say within on our Board right committee stages I’d this now. the taking – early we’re

especially position. there where say roles. it’d the good the when in someone John we in interim comments, Greg have for about would really with the we to with feel that’s their CEO the said I are expect team exactly and also me be Pat but as So taking to earlier on I position, over entire and in with hard But

be I sure call, next So But But an now. we’ll for it have to not right predict. really update, hands is company believe would before. good right if now, honestly hard the me I’m do the in

Amit Dayal

for aspects cleared? remain been with on endpoints What respect And have cetera, safety to FDA, guess, of you to out. be you with this the that? Thank the that. I Understood. provide safety the discussions then endpoints, et pushed color Could these any –

Pat Ryan

one. that This is I’ll Pat. take

So shortlist, follow-up, trial. going some again, of adequate plans you endpoints are the were the overall pivotal number endpoints, are at the to that trying to and some preclinical other confirmation that bench post-market and and including, of duration testing subjects a we’ve testing figure developed of be study in subjects, number then of follow-up. out The secondary requirements,

Will McGuire

think call. a bit in is Amit, this I perspective, about endpoint would we a that, talked from Will. safety just this to add little I last that the

We’re focused event rates adverse rate. or event adverse – on the serious serious

what out we’re So, is The there’s adverse what as issue the and would their type endpoint of acceptable. for face we prospective technology to with of will and would think as and we view type work procedure issue be breakthrough form The any patient’s comparative no face rate view that like some the people at acceptable. other we look this is now an being technology there safety could of serious events. – what real is that that rate trying rate acceptable thing through the this that

the really on actually through of acceptable. to is kind working with what it’s get consensus kind agency of So,

we’ll little It’s there So But get a more there. be to than we able think we’ll again, thought. again, we had forward. taking and move just get time think we

Amit Dayal


final one one. Just

early In operating getting expenses the maybe your XXXX how you need terms and into you of for cash think then year, much total XXXX? for will do

John Blake

answer Amit. that. Hi, I’ll is John. This

financing discussing very time. and comment the I then future, we’ll engaging XXXX year. heavier and work plans those for higher in side, So, that little that development given on can’t on operating clinical burn to And be we’re go so at XXXX, near this the pace a our cash we’ll was burn this of that our R&D – cash $XX.X some on be the million, work in than in

Amit Dayal

you Understood. have That’s so Thank much. all I guys.

John Blake

Thank you.


question Bauser [Operator you. Kyle comes & from Instructions] Thank Dougherty Company. the Our next from line of

Your question, please.

Kyle Bauser

Hi, good afternoon.

as CEO, Sorry on but And… to you the leave new see Will, congratulations role.

Will McGuire

Thank you.

Kyle Bauser

the Pat you, for John Thank remarks. and prepared

the it you're but up two HDE still first, I'm or followed be the which I to PMA approval HDE wrong, the by should of designation. with by It trials largely trial straight are is safety pathways clear, endpoint the seems believe design Orion the PMA safety seems to the in trial theory, on But to the pathway, able to be process. pivotal anyways. typically focused maybe will driven you go that just Just I be like and if correct for like, since me either contemplating and one PMA want breakthrough

is there that thoughts be great. First, fair? And any would

Will McGuire

first. mean, I can I that take Yes,

view safety driven overall stating efficacy way and that's shall do think Kyle, of a the way we by given think continuing say, be I the our the size, endpoint, the very discussions accurate safety. will trial endpoint. we on it, not We

by track it the advantages realizing advantages and of we by go devices kind – program, the PMA us. eliminates for the of And to is remaining see we that potential the a advantages to track. so on track breakthrough HDE down don't time other And have any would deciding of best we had advantages, or

sense PMA So all right in for world the breakthrough we us, the think makes now.

Kyle Bauser

Got it.

once reached be mentioned, items secondary but think as the of, the efficacy And to quickly? that safety need also you'll Okay. post-market, you've and you safety the endpoints endpoint kind on I agreement you and the do size the negotiating remaining fall agree trial But and able endpoint, on you to on just endpoints. rather should here, work mentioned the the through

Will McGuire

a safety in or then serious we sort Yes. negotiation it kind some size endpoint, But of and us – be. the will be which enrolled also, serious with the trial will then is will lock statistics of to adverse needs be which FDA is some And assures guide the rate. would post-market of, overall number likely event the sort sort for Because of majority from goal there what a premarket performance the meeting rate, would overall a of have we that the be the on once premarket will most kind patients adverse about our event of of the portion belief portion post-market. that some and total of is what goal kind of be

kind that yes, rate, things place fall quickly. should once of, decide we, able forward So move be everything will We quite to into that. after

Kyle Bauser

line, prepared mentioned in the push able IDE a be out remarks Okay. Is next year. down the that you kind the it say the And you'll in COVID-XX slowing things in function to time that to across slight safe application Pat, that of first purely is half of of the just board? submit change

Pat Ryan

COVID-XX to yet. due is the No, isn't requirements their impacting are it just really with over This agency ongoing the negotiations be. going to what

So technicalities out. just it's we by, goes those day more costing are still little as us a time. And working each

trying estimate. So in we're our just to be conservative

Kyle Bauser

Sure. mean, in a I anyways to be Yes. it go, there'd ready for was sounds like, COVID-XX. it And delay if even

it'd inevitably. So be pushed out

Pat Ryan

think I so.

Kyle Bauser

mark Got will in that trial here forward discussions nice is on the approval, some be is for conditional it. and installed now with you since in be you on includes Or Orion, then FDA can kind mentioned design but And key of in current takeaway the Argus used the kind CE rolling of to externals, FDA Europe Xs U.S.? lastly, and they'll just trial. you the which Orion the which move and the updates base out have Xs. it, Xs great of the approval Will

Will McGuire

take can is I of part that. Yes, this Will.

be important things wearables We've it's is it got approval. that base we It for the completed. exactly technology. of think an we've use Orion, one won't but the most the that I got

our the with lot should least us So would submission FDA confidence familiar for wearables make make, that positive. think of what see it the Orion and the at that they And on will be of them. it portion review will I being a give more submission, of certainly

that So point. great from it's

product. how As a it in to about perspective, here good far a it's going pretty think And very out, hands the want also work you we roll from all beginning. be and but with it's it We or into but I slow feel just it. as before with pretty a some go is get and then probably on feedback users’ this, testing, it the usually release limited complex experience one supply you go all with like some the deep get something my wide to it pretty

feedback expect addressed. would need I doing fairly yes, it we some get be to it that will to So, be and identifying to or areas but be the limited, improved

Kyle Bauser

sense. That Okay. makes

great. Well, here the thanks my for taking for and questions. Okay, update

Will McGuire

you. Thank


today's further Thank conclude This question-and-answer does the Will program I'd of remarks. program. hand the session like to back any you. to for McGuire

Will McGuire

Yes. today. our joining all for Thank you call

from close of to and by our using all company for Let at this hard for also continued Sight population bringing the the commitment want a subjects to their independence blind reiterate and derive dedication. and I Second breakthrough witnessing individuals. Orion patient when confidence device. their me support gained investors the large work thanking team technology as We great to profoundly satisfaction

we uncertain thoughts our times. these Finally, everyone the navigate around with are as prayers and globe


ladies you program. Thank participation and in today's conference. gentlemen for the conclude does This your

You day. disconnect. Good now may