RxSight, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the RxSight Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star and then the number one on your telephone. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Philip Tripp-Taylor. Thank you. Please go ahead, sir.

Thank you, operator. Presenting today are RxSight President and Chief Executive Officer Ron Kurtz and Chief Financial Officer Shelley Toonan. Earlier today, RxSight released financial results for the three months ended June 30, 2021. A copy of the press release is available on the company's website. Before we begin, I would like to inform you that comments and responses to your questions during today's call reflect management's views as of today, September 9, 2021 only, and will include forward-looking statements and opinion statements, including predictions, estimates, plans, expectations, and other information. Actual results may differ materially from those expressed or implied as a result of certain risks and uncertainties. These risks and uncertainties are more fully described in our press release issued earlier today and in our filings with the Securities and Exchange Commission. Our SEC filings can be found on our website or on the SEC's website. Investors are cautioned not to place undue reliance on forward-looking statements. We will disclaim any obligation to update or revise these forward-looking statements. We will also discuss certain non-GAAP financial measures. Disclosures regarding these non-GAAP financial measures, including reconciliations with the most comparable GAAP measures, can be found in the press release. Please note that this conference call will be available for audio replay on our website at rxsite.com on the investor calendar page of the news and events section on our investor relations page. With that, I will turn the call over to CEO Ron Kurtz.

Thank you, Tripp, and welcome everyone to RxSight's first earnings call as a publicly traded company. As you know, we completed our initial public offering at the end of July, and I'd like to begin by expressing our entire team's appreciation for the high level of investor participation that resulted in a total of approximately $120 million in net proceeds to support RxSight's ongoing collaboration with doctors, practices, and patients to optimize vision after cataract surgery. Our strong second quarter results demonstrate continued physician and patient adoption of our technology. In the second quarter, we generated $4.9 million in revenue, representing 41% growth compared to Q1 of this year. This revenue was driven by sales of 25 light delivery devices, or LDDs, and 1,825 light adjustable lenses, or LALs. With this progress, our installed base of LDDs grew to 130 practices that have completed over 8,000 LAL implants since U.S. commercial launch. Before I turn it over to Shelley Toonan to review the Q2 financial results in more detail, I'd like to provide an overview of the RxSight opportunity for those who are newer to our story. RxSight is focused on delivering optimal visual outcomes for patients after cataract surgery, which is the most common global surgical procedure across all surgical specialties. Annual cataract surgery volume, which typically exceeds 4 million procedures in the U.S., nearly 30 million globally, dominates surgical ophthalmology, accounting for several times the combined annual number of glaucoma, corneal refractive, and retinal surgeries. In cataract surgery, the eye's natural lens, which has become cloudy or less transparent with age, is removed and replaced with a clear plastic intraocular lens, or IOL. About 85% of the time, patients receive a conventional IOL that replaces the main spherical focusing power of the natural lens, primarily for distance vision. Conventional IOLs do not correct for astigmatism or presbyopia, which together affect nearly all cataract patients. And so nearly all patients implanted with a conventional IOL will need to use glasses after cataract surgery to achieve their best vision. In the U.S., where Medicare pays for the vast majority of cataract procedures, doctors receive a little over $500 for the actual surgical procedure, the preoperative visit, and all postoperative visits out to three months. while the reimbursement for the IOL is about $150. In contrast, for more than 15 years, patients have also been able to choose to pay out of pocket for a premium or advanced technology IOL that also corrects for astigmatism and or presbyopia and can reduce dependence on glasses after cataract surgery. These premium procedures now make up about 15% of the total cataract volume in the U.S. and about 10% globally. The out-of-pocket fee paid by patients is separate from the reimbursement received from Medicare or commercial payers and ranges from about $1,500 to $5,000 in the U.S., depending on the IOL used and local pricing. About two-thirds of this additional fee pays for increased work by the doctor or practice, and about a third is used to pay for increased cost of the premium IOL, which can range from about $400 to $1,100. Now, until the introduction of the RxSight light-adjustable lens, cataract patients considering a premium IOL have had to make decisions before surgery about their priorities for distance, intermediate, and near vision, as well as their willingness to accept tradeoffs between visual quality and range of vision. They also have had to depend entirely on their surgeon's ability to select the precise focusing power of the IOL that, once implanted, would produce their desired visual outcomes. These high-stakes decisions can lead to suboptimal results and bothersome visual symptoms such as glare, halo, and loss of contrast vision, which cannot be easily modified after surgery except with another surgical procedure such as LASIK. In comparison, the light-adjustable lens enables a premium process that provides much higher confidence for achieving optimal vision after cataract surgery, both for the patient and the doctor. Because the focusing power of the LAL can be modified non-invasively after implantation in the eye using RxSight's office-based light delivery device, or LDD, doctors can perform a standard refraction after surgery to specifically fit the LAL to the patient. The same process routinely used for prescribing glasses, contact lenses, and selecting LASIK targets. Not surprisingly, the overall precision and accuracy of the LAL procedure is also very similar to these other refractive corrections, allowing the LAL to deliver 20-20 distance vision without glasses at about twice the rate of competing premium IOLs. As reported by several of our customers, patients are able to leverage this precision as well as the LAL's broadened and elevated depth of focus to select visual corrections in both eyes that optimize both the range and quality of vision, with up to twice as many patients with 20-20 vision at all distances using both eyes compared to leading multifocal IOLs. Unlike these other premium IOLs, the LAL is not associated with loss of contrast vision or increased glare halo as compared to a conventional monofocal IOL. Using postoperative adjustability, we believe that doctors and practices adopting RxSight technology are able to confidently deliver optimal quality and range of vision to their patients and to expand their premium IOL business by converting a larger percentage of patients to higher revenue procedures. In a recent survey of RxSight practices, two-thirds of the patients receiving an LAL were converted from either conventional IOL procedures that provide no additional revenue or from non-adjustable stigmatism correcting IOLs that typically provide less than half the revenue of a light-adjustable lens procedure. The higher reported revenue from LAL procedures leads to a rapid payback period for the light delivery device, with higher ongoing revenue thereafter. We believe it is the combination of better visual outcomes and higher premium IOL revenue that defines the RxSight value proposition, attracting doctors and practices to offer this technology to their patients. To facilitate LAL adoption, we are focused on increasing our network of light delivery devices, as well as the number of doctors recommending and using the light adjustable lens in the relatively concentrated ophthalmic market. As previously announced, we are very excited that Steve Everly joined our excite last month as Vice President of U.S. Sales. He is working directly with Eric Weinberg, our Chief Commercial Officer, and the rest of our commercial team on executing our growth strategy. Today, they are continuing to expand our U.S. commercial team, including both the core team primarily focused on selling light delivery devices and a larger group mainly tasked with LAL procedural growth. Since the end of the first quarter of 2021, we've expanded our total commercial team from 55 to 76. This includes an increase in the LDD sales force from six to nine with planned further expansion to 12 by the end of the year, as well as an increased of our procedure focus team from 36 to 51 employees. In addition to these sales and marketing efforts, we continue to advance our product to improve patient outcomes and surgeon experience. We have introduced a number of important technology developments since our initial commercial launch, including increasing the range of astigmatism correction in IOL powers and reducing the number of required light treatments. Beginning in early Q3, we introduced a next-generation light-adjustable lens we call ActiveShield, which reduces the LAL sensitivity to UV light from the environment and therefore reduces the potential consequences of noncompliance with UV protective glasses used prior to the last light treatment, thereby addressing concerns over potential patient lapses that may have previously limited which patients were offered the LAL. ActiveShield also adds flexibility for the timing of postoperative light treatments that might otherwise have been more tightly scheduled so they could be completed more quickly. Given the importance of these improvements and customer excitement around them, our team was able to ramp production of the ActiveShield LALs and the necessary upgrade kits for the light delivery device so that we could rapidly roll out the updates. We're happy to announce today that all U.S. light delivery devices are fully upgraded for use with the Active Shield LAL, and the vast majority of ambulatory surgery centers have the Active Shield LALs available for use. Now, while we did meet with some customers in May at the Hawaii and I meeting, we've been able to have additional in-person conference opportunities in July, both at the ACOS and ASCRS meetings. Despite the pandemic, the ASCRS conference, which is traditionally the second largest ophthalmic meeting, was well attended, particularly at our booth on the exhibit floor, where we had over 15 talks by and for doctors, as well as 10 presentations at the meeting itself. It's noteworthy that this was our first opportunity to exhibit at a live meeting since our U.S. commercial launch, as all meetings were canceled after Q1 2020 due to COVID. We were also able to have our first in-person user group meeting with over 70 customers attending a highly interactive program. We are, of course, cognizant of the continuing pandemic, and though U.S. cataract procedures have steadily increased since the low point of Q2 2020, we are closely monitoring for potential impacts from the rise of the Delta and other COVID-19 variants. The vast majority of cataract procedures are performed in ambulatory surgery centers that remain open despite the rise in COVID-related hospitalizations. However, there may be more pronounced effects in some geographic regions, and it is possible that attendance at the American Academy of Ophthalmology meeting in New Orleans scheduled in early November may be affected by local COVID conditions as well as the effects of Hurricane Ida. With that, I'd like to turn it over to Shelly for details on the second quarter financial results.