RxSight, Inc.

Thank you for standing by, and welcome to RxSite fourth quarter 2021 earnings conference. At this time, all participants are in a listen-only mode. If you require any assistance during the conference, please press star zero. Now it's my pleasure to turn the conference to Philip Taylor. The floor is yours.

Thank you, operator. Presenting today are RxSite's President and Chief Executive Officer, Ron Kurtz, and Chief Financial Officer, Shelley Toonan. Earlier today, RxSight released financial results for the three months and full year ended December 31st, 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, March 8th, 2022 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 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'll turn the call over to CEO Ron Kurtz.

Good afternoon, everyone, and thank you for joining us. I'll begin with an overview of our progress in 2021 and more specifically in Q4, followed by a discussion of our plans for further growth in 2022. Shelley Toonan will then take us through the financial details for Q4, as well as for our 2022 guidance, after which we will open up the call for questions. 2021 was a very productive year for RxSight. We accelerated the adoption of our Light Adjustable Lens, or LAL, completed a successful IPO, introduced key product advancements like Active Shield, and rapidly expanded our U.S. commercial team. These accomplishments, coupled with the LAL's unique ability to deliver precisely customized vision for patients, as well as to expand premium cataract surgery revenue for doctors and practices, have created substantial momentum for RxSight to drive continued growth in 2022. Our primary growth driver is building out the infrastructure of postoperative LAL treatments. This involves both the sale of light delivery devices or LDDs to new practices, as well as the training of new doctors and staff, thereby enabling more patients to select the LAL for premium cataract surgery. In the fourth quarter, we added 45 LDDs to the network of clinical sites offering postoperative LAL treatments. bringing the installed base to 206 at the end of 2021, and representing a substantial increase from the 31 LDDs sold in Q3 of 2021. We believe our strong Q4 LDD sales were driven by a combination of factors, including positive references from existing ArcticSight customers using our ActiveShield LAL, favorable seasonality, and expanding productivity of our LDD sales force and process. As we have noted before, peer-to-peer technology endorsements are very important in ophthalmology, and willingness to recommend RxSight to a friend or colleague is the key question we ask on our annual customer survey. For the survey performed in Q4 2021, just after the conversion of all RxSight practices to the ActiveShield LAL, we recorded an extremely high 97% willingness to recommend. I'll discuss more about ActiShield in a moment, but we believe the very positive reception this technology advancement received from then-current RxSight practices influenced a number of new accounts to purchase LDDs in Q4 so that they could offer the LAL to their patients. In Q4, we also likely benefited from favorable seasonality, which is a long-standing occurrence within ophthalmic capital equipment purchasing cycles. The annual meeting of the American Academy of Ophthalmology, the largest ophthalmic conference of the year, returned to an in-person event in Q4. Though international attendance was low, we experienced excellent engagement and interactions with a high volume of US doctors, both in our booth and at other venues. With good visibility to their overall capital spending in 2021, many of these practices were able to move ahead with LDD purchases and take advantage of end-of-year tax savings. The last driver of Q4 performance we will discuss is our LDD sales force, which increased from six professionals at the time of the IPO in July to 18 at the end of Q4. This highly experienced team has deep relationships with doctors in their regions and has continued to mature and expand the LDD sales funnel as we further penetrate the market. While growth of our LDD installed base is a major driver for increased LAL sales, The 2,959 LALs implanted during the fourth quarter represented a significant jump from the 1,977 implanted during Q3. We saw increased LAL use across both new and established accounts from Q3 to Q4, suggesting that the introduction of ActiveShield was continuing to have an impact on utilization. Active Shield provides an extra layer of UV protection on the surface of the lens, giving doctors and patients confidence that they will not damage the LAL if they are not fully compliant with UV protective glasses. Coupled with the patient's ability to test drive and optimize their vision, this additional level of confidence creates a positive feedback loop. Importantly, in Q4, we also began a collaboration with RxSight Practices to collect real-world clinical data on an ongoing basis. So far, approximately 70 practices have agreed to share data captured and stored on their LDD, which includes the final refraction of each patient, as well as other useful clinical information. In a subset of approximately 50 practices operating under an IRB-approved protocol, we also began to collect additional data one to three months after completion of all light treatments. A preliminary snapshot of both these data sets was shared at the American European College of Ophthalmic Surgery, or ACOS, last week, indicating that over 90% of more than 500 eyes analyzed to date had very low residual refractive error after the final adjustment, less than a half diopter of residual severe or astigmatism. These real-world results, which included a number of complex patients, are superior to any reported for other premium IOLs and are on par with both our Phase III data and published reports for LASIK, which is considered the standard for refractive procedure accuracy and precision. In a validation of observations we have previously noted, approximately 75% of patients elected to customize their vision in both eyes to optimize their binocular vision at a range of distances. Because the LDD also records the target refraction at each adjustment, the collected data also indicates that for more than half of patients, the refractive goal was changed during the adjustment period, suggesting most patients were taking advantage of the ability to test drive and make small adjustments to their vision. Approximately 160 LALIs also underwent depth of focus evaluation, demonstrating an extended range of vision without glasses. similar to currently marketed enhanced and extended depth of focus IOLs. However, unlike these IOLs, the LAL minimizes residual refractive error and does not increase glare or halo or reduce best corrected or contrast vision relative to a conventional monofocal IOL. Additional presentations of this expanding data set are planned for the American Society of Cataract and Refractive Surgery, or ASCRS, meeting in May, as well as at the AAO meeting in October. We also anticipate that our newly formed team of LAL account managers will use this data to help doctors optimize the results and educate their teams and patients on the clinical benefits of the LAL. Because the patient's refractions are stored in our LDD, we are the only cataract company that can easily collect such large-scale data. I would also like to provide an update on the lower cost to manufacture LDD, which we have reported on previously. As you may recall, this device will have the same functionality and performance as our current LDD, and so we do not consider it a growth driver. However, its introduction is expected to reduce our cost of sales and improve our gross margin. We continue to expect to receive FDA approval for this device in Q2 of this year. However, we expect to ship our current LDD at least through the end of the year to mitigate significant industry-wide supply chain risks. Since components for our current LDD have been in the supply chain longer, we believe we are more likely to be able to procure them during this difficult period. I also want to provide an update on our request for labeling changes related to indoor UV spectacles use with the Active Shield LAL. Because the functionality of the Active Shield LAL has already been approved and is being used on a daily basis by doctors and patients, we also do not consider this labeling change to be a growth driver. Based on FDA's request for additional data, we do not anticipate approval for these labeling changes this year. As we look to 2022 and beyond, we believe the major growth catalyst for RxSight will continue to be growing awareness of the LAL's superior clinical results, including its ability to allow patients to test drive and optimize their vision before making a final decision. Superior outcomes help practices convert more patients to higher revenue LAL procedures, thereby driving both a better medicine and better business value proposition. By leveraging real-world data that we can uniquely collect and increased access to doctors, our expanded sales team is already building on the momentum established in 2021. With that, I'd like to turn it over to Shelley for more details on the fourth quarter and on 2022 guidance.