Sight Sciences, Inc.

Good day, ladies and gentlemen, and welcome to the Site Sciences second quarter 2021 financial results conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. An instruction will follow at that time. If anyone should require operator assistance, please press star, then the zero key on your touchstone telephone. As a reminder, this call may be recorded. I would now like to introduce your host for today's conference, Mr. Philip Taylor, Investor Relations. You may begin.

Thank you, and thank you all for participating in today's call. Presenting today are Site Sciences Co-Founder and Chief Executive Officer, Paul Badawi, and Chief Financial Officer, Jesse Selnick. Earlier today, Site Sciences released financial results for the three months and six months ended June 30th, 2021. A copy of the press release is available on the company's website. Before we begin, I'd like to remind everyone that comments made by management today and answers to questions will include forward-looking statements. Those include statements related to Site Sciences' future financial and operating results and plans for developing and marketing new products. Forward-looking statements are based on estimates and assumptions as of today and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied by these statements, including the risks and uncertainties described in site sciences filings made with the SEC. The company undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law. For more information, please refer to the forward-looking statements notices, and risk factors in our recent SEC filings. And with that, I will turn the call over to Paul.

Thank you, Tripp, and thank you to everyone joining us on our first earnings call as a publicly traded company. Our Chief Financial Officer, Jesse Selnick, and I look forward to updating you on our performance in the second quarter, and our Chief Commercial Officer, Sean O'Neill, is also with us today. Since our story may be new to many of you, I'd like to start by providing an overview of Sight Sciences, our mission, our guiding principles, and our growth strategy. We are gratified and humbled that many new and existing investors participated in our IPO and are joining us on our journey to transform the lives of patients suffering from the world's most prevalent eye diseases. Eye sight is fundamental to our quality of life. Over 50% of the human brain is devoted to vision, and over 80% of the information we need to perceive the world enters through our eyes. Our overarching goal is to improve quality of life by protecting and enhancing our most precious sense, vision. Sight Sciences is not a conventional eye care company. I started Sight over a decade ago with my brother David, a world-class ophthalmologist. We came up with the all-encompassing name Sight Sciences while performing simulated glaucoma experiments out of the garage of Dan O'Keefe. our first outside employee and our current vice president of research and development. We believe from the very beginning that if we did things right and had some good fortune along the way, we could methodically build a platform eye care company serving many disease categories through the development of novel and improved medical devices. To fully address the breadth and importance of our mission, we built our company for the long run from day one. Many years later, and thanks to the efforts of our now almost 200 talented team members, we've created and commercialized two differentiated products in what we believe to be very underserved areas of eye care. And we intend to create many more in the coming years. We thrive on transforming ophthalmology and optometry through products that target the underlying causes of the world's most prevalent eye diseases. We seek to develop interventional solutions and an interventional mindset in eye care that can replace conventional outdated approaches, thereby creating new treatment paradigms while also maintaining a laser focus on optimized patient care as our utmost priority. Many investors and industry participants are curious why we have initially chosen to pursue and tackle both primary open-angle glaucoma and dry eye, two very different disease categories. The simple answer is that we will pursue opportunities wherever we can leverage our organic, clinically differentiated problem-solving methods and expertise to develop and commercialize products for improved clinical outcomes that empower eye care providers or ECPs to take the best care of their patients. Moving on now to our four pillars of product development. Days at site are spent competing head-on against serious eye diseases with an obsession on developing devices to meaningfully improve the standard of care in eye care. We are hyper-focused on developing and commercializing clinically transformative products that maximally empower eye care providers to take the best care of their patients. Our focus on product development is governed by four fundamental requirements that we believe are mission critical to delivering the most robust and consistent clinical outcomes for patients. Number one, disease physiology mastery. We review and analyze all available clinical data, science, and literature that is relevant to a disease to achieve a sound understanding of its underlying causes, which we then use to guide the development of our product. Number two, treatment of underlying causes. Healthy eyes are self-regulating marvels of evolution, biomechanics, chemistry, and physiology. We believe that restoring the natural functionality of diseased eyes by comprehensively treating underlying causes of diseases provides the optimal combination of effectiveness and safety. Number three, intuitive design. Our products are designed to transform complex, impractical, or invasive treatment approaches into intuitive, minimally invasive, user-friendly procedures. Our product development goals are focused on delivering a preferred go-to treatment of choice to ophthalmologists and optometrists. Number four, patient access. We seek to maximize the availability and accessibility of our products for as many patients as possible. We believe that our devices have the potential to offer differentiated clinical, experiential, and economic value to all eye care stakeholders. With the goal and expectation to clinically lead any category we enter, we must have conviction that all four criteria are attainable before we begin a new project. Most of our ideas do not advance into development because they fail to satisfy all of our requirements. Today, We have commercialized two products that successfully ran the gauntlet of our rigorous product development process for use in adults with primary open-angle glaucoma, or POAG, the world's leading cause of irreversible blindness, and in situations where the medical community recommends application of a warm compress, including dry eye disease, the number one reason for a patient visit to an eye care provider. We believe both Omni and TierCare are poised to have tremendous global clinical impact in the years ahead. Maximizing global clinical impact requires more than a transformative product. It requires meticulous ECP training and commercial excellence. Over the past three years, our commercial leadership team has built distinct sales and marketing teams and training programs for both Omni and TierCare. Our commercial team works passionately with thousands of ophthalmologists and optometrists, prospects and customers. We hear that we have a reputation among eye care providers and within the industry as the team doing great things the right way and the team you want to join. We strive to continue to earn this reputation every day. Because of our commitment to the relentless pursuit of improved patient care and outcomes, we are rewarded with the best gift possible, customers choosing our product as the reliable go-to intervention when the clinical stakes are high and when we believe we can have significant impact on patient quality of life. Our passion and commitment to help our customers fight disease rises in lockstep with the clinical severity of the situation, not just with the size of a market. There is no greater satisfaction or joy to me personally or to the dedicated people of Site Sciences than to be blessed with a meaningful role in improving the lives of patients. We are gratified and humbled that many of you have chosen to join us on our mission to protect and enhance the eyesight of patients around the world in the years to come. We believe that substantial shareholder value accrues disproportionately to those select healthcare companies that can rely on putting the patient first as their competitive advantage. Now, moving on to our three key strategic value drivers. Our strategy will always include further innovation in devices intended for use in our two core disease areas, primary open-angle glaucoma and dry eye disease, as well as potential expansion of our pipeline into other eye diseases, both in the U.S. and internationally. In the near term, however, we will be laser-focused on advancing three key strategic imperatives for our two current commercial products. Number one, continuing to expand OMNI's adoption and usage by surgeons for adult patients with POAG in the established combination cataract segment of the minimally invasive glaucoma surgery, or MIGS, market. Please keep in mind that this share expansion will prepare these surgeons to perform procedures within the standalone segment, which brings us to number two, continued development of the virtually greenfield and substantially larger standalone POAG segment of the MIGS market, And number three, expanding our labeling and indications for use for tear care for the treatment of evaporative dry eye disease, while also advancing market access among Medicare and commercial payers. In the second quarter, we made substantial progress in all three of these goals. Our first two goals relate to advancing the treatment of adult patients with POAG by offering a device that can be used for a minimally invasive intervention. POAG is a pressure-based disease, and elevated intraocular pressure, or IOP, is the greatest risk factor associated with POAG, and therefore the focus of treatment. Cataract surgery on its own is known to have IOP-lowering benefits, and today the MIGS market is segmented into procedures performed in combination with cataract surgery, which we refer to as the combination cataract segment, and procedures performed on their own, which we refer to as the standalone segment. This segmentation is largely artificial and primarily the result of MIGS bypass stents only being indicated for use in combination cataract procedures, which has necessitated this unnatural division for the past decade. In their pivotal clinical trials, trabecular bypass stents demonstrated modest incremental efficacy over the IOP-lowering effect of cataract surgery alone. Trabecular bypass stents are not indicated for use in standalone MIGS procedures in the U.S. The surgical decision-making criteria and clinical effectiveness and consistency requirements for standalone MIGs are elevated beyond those for combination cataract procedures. We believe both the degree of effectiveness and the consistency of effectiveness are crucial factors for both patients and surgeons when considering a procedure. For patients, we believe the anxiety that may accompany the need for ocular surgery can be tempered with the knowledge that there is a high likelihood of success. For surgeons, consistent outcomes simplify the treatment choice and the decision to perform a procedure. We believe this is especially important for standalone MIG procedures, which must deliver a very high consistency of effectiveness and a very high degree of effectiveness to not only justify the procedure, but also provide surgeons with enough confidence to recommend standalone surgery to their patients and take them to the operating room for a singular reason. We believe devices capable of delivering consistently effective results will be crucial to unlocking the standalone market, as well as capitalizing on the full potential of the combination cataract market, which we believe is currently capturing less than one-third of its potential procedure volume in the U.S. In March of this year, the FDA cleared an expanded indication for use for OMNI that we believe bridges the unnatural divide between combination cataract and standalone MIGs. and which we believe covers the broadest patient population among all mixed devices supported and FDA cleared based on ab interno clinical data. Importantly, this indication for use broadly covers the reduction of intraocular pressure for all adult patients with POAG without limitation with respect to severity of disease, mild, moderate, and advanced, or LEN status, phagic patients, combination cataract patients, and pseudophagic patients. We believe this is the holy grail indication in MIGS, and we intend to invest very aggressively in the clinical and commercial development of Omni. So why did Omni's clinical performance achieve such a broad indication in MIGS? We believe that Omni has two critical physiological and clinical advantages. Number one, Omni is capable of comprehensively addressing up to all 360 degrees of the disease conventional outflow pathway. Implantable focal treatments address a smaller segment of the diseased outflow pathway. And number two, OMNI is capable of addressing all three points of resistance in the conventional outflow pathway, trabecular meshwork, Schlemm's canal, and the distal collector channels. As shown in our ROMEO multicenter study used for FDA clearance and label expansion, use of OMNI for sequential, combined, and comprehensive canaloplasty and trabeculotomy has been demonstrated to safely, effectively, and consistently lower IOP in adult patients with POAG in both combination cataract and standalone settings. We have always viewed MIGS as a single market that seeks to improve the lives of any patient with POAG. Despite the intense entrenched competition, since Omni's launch in early 2018, we have deliberately chosen the universe of over 3,000 MIGS-trained surgeons as our highest priority customer targets. We have successfully trained a large number of these surgeons and brought them up the Omni learning curve. In the second quarter of 2021, we sold Omni to nearly 700 ordering facilities, and we still have many more to go. While our commercial team deservingly received so much praise for their incredible achievements, we collectively believe it all starts with our clinically transformative mission and the clinically differentiated surgical technology we developed and perfected over a 10-year period. Our focus on putting the patient first and mastering the physiology of glaucoma allowed us to create a product that comprehensively and effectively reduces IOP and that we believe surgeons love to use. We painstakingly designed Omni with the goal of transforming effective but complex and invasive surgeries into safer, routine, and minimally invasive yet equally effective procedures with an elegant device that surgeons can master within an intuitive learning curve. Our goal in pursuing existing mixed-trained surgeons was to facilitate an exceptional training and support experience that would allow surgeons to achieve such high levels of confidence in the safety, effectiveness, and consistency of OMNI that they would prefer the device to reduce IOP in adult POAG patients in all settings, consistent with its broad clearance, including standalone cases which have a higher clinical bar than add-on combination cataract MIGS procedures. As we have made tremendous inroads in the established combination cataract segment, we believe this phenomenon is already starting to occur. Many of our surgeons have indeed chosen to expand their use case for Omni to treat adult POAG patients in standalone settings. Based on the results of an internal field study we conducted late last year, we estimate that approximately 20% of the procedures using Omni were standalone cases in 2020. I would like to note that our surgeons' early increased usage of Omni was achieved even without the benefit of our standalone marketing campaign, which we launched after Omni received its expanded FDA label in March of this year. We believe the U.S. standalone MIG segment is approximately five times larger than the $1 billion U.S. combination cataract segment and is substantially undeveloped. Our plan to fully develop standalone usage among both comprehensive ophthalmic surgeons who perform the vast majority of eye surgeries, including cataract surgeries, as well as glaucoma specialists, includes a first-of-its-kind market education, awareness, and development program that seeks to introduce and educate the primary eye care providers who first diagnose and treat POAG patients, both general ophthalmologists and optometrists, to the possibility and benefits of earlier MIGS intervention, regardless of the patient's lens status. We are currently developing methods to track our progress in the standalone segment on a more consistent and reportable basis and look forward to sharing more information about our progress in the coming quarters. We believe the standalone mild to moderate POAG segment is the most exciting in all of MIX. We couldn't be more thrilled to be in a position to deliver the power of sight to adult POAG sufferers who do not require cataract surgery. So that summarizes our first two value drivers. continuing to take share in the existing combination cataract MIG segment and leading the development of the much larger standalone MIG segment. Moving on now to our third value driver is our tier care system and development program. We currently market tier care as a power heating pad for the application of localized heat where the current medical community recommends the application of a warm compress to the eyelids. We purposefully built tier care to deliver a precise, and tightly controlled level of thermal energy through the outer eyelids over a 15-minute period in a comfortable office-based procedure. After over five years of product and clinical development and multiple rounds of iteration and product optimization, we introduced TierCare in mid-2019 in a controlled launch with approximately 10 reps covering the entire United States. Gathering additional data to demonstrate TierCare's safety and effectiveness through clinical trials, advancing dialogue with third-party payers regarding appropriate coverage and payment for tear care treatments, and working with the FDA to obtain clearance for an expanded indication for use for dry eye disease and MGD are key pillars of our tear care strategy. Dry eye complaints are the number one reason for patient visits to an eye care provider, and there are over 17 million people diagnosed with dry eye in the U.S. Out of an estimated nearly 40 million total dry eye patients in the U.S., and 739 million global sufferers. We believe the U.S. market for effective MGD treatment procedures could exceed $10 billion annually. Dry eye is a multifactorial disease that is typically characterized by insufficient tear production, known as aqueous deficient dry eye, or poor quality tears that evaporate too quickly, known as evaporative dry eye. Recent studies have determined that evaporative dry eye which is most commonly associated with meibomian gland disease, or MGD, is associated with 86% of dry eye cases. Yet dry eye treatments that aim to treat aqueous deficiency or inflammation represent 95% of manufacturer revenues. This represents a huge disconnect between the way dry eye is treated today and the actual underlying cause of disease. We studied dry eye extensively and concluded that the optimal way to help patients suffering from this potentially debilitating disease was to develop an effective way to treat MGD, the most common cause of dry eye. Meibomian glands line the top and bottom eyelids and produce an oily secretion called meibom. In healthy eyes, meibom has a clear olive oil-like consistency and forms the outermost lipid layer of tears. Meibom is released with each blink and forms a protective barrier over the tears and prevents premature tear evaporation. When the glands become blocked or obstructed, meibom gets trapped in the glands and hardens. As the disease progresses, the consistency of meibom can degrade to a toothpaste-like consistency, which precludes it from reaching the tear film and providing protection against premature tear evaporation. Despite the prevalence of MGD as the leading cause of dry eye, treatments have focused on over-the-counter and prescription eye drops that either treat aqueous deficiency or inflammation. The leading prescription dry eye eye drops have annual revenue in excess of $1.5 billion, yet none are indicated for or have a mechanism targeting the number one cause of dry eye, MGD. Currently, Medicare and commercial insurers have not established any meaningful reimbursement for MGD treatment procedures. We at Sight Sciences have developed a very thoughtful, well-informed, and long-term strategy designed to change that. Although we believe that a patient-paid business model for TierCare exists based on our own experience to date, we also believe that to maximize the reach of our procedure and technology and provide a comprehensive solution for the broadest range of MGD sufferers, patient access and appropriate reimbursement for clinicians utilizing TierCare must improve. We are seeking to expand TierCare's indication for use and are working with the FDA on this front. Our current controlled launch of the product for its indication has allowed us to begin commercialization with specialized and reputable customers while also initiating our long-term focused care care market access strategy. Just as we built site sciences for the long term, we are taking a long-term approach to developing devices for potential MGD indications. We have chosen not to maximize short-term revenue in favor of a more thoughtful strategy that has the potential to provide access to care care for the largest number of patients with MGD. if cleared for an expanded label. Now, moving on to clinical evidence, which is critical to everything we do. Generating robust clinical evidence is crucial to development and commercialization of our products. Beginning with dry eye and our Olympia RCT, tear care was associated with statistically significant clinical improvements in all assessed signs and symptoms of dry eye disease. The results of Olympia were published in a leading peer-reviewed journal, and we expect two other articles to be published in other leading journals in the coming months. We are also pleased to announce that enrollment in our second TierCare RCT, Sahara, is progressing nicely. Sahara is a crucial part of our market access and development strategy for TierCare. Last year, we convened a panel of medical directors from eight payers to understand their criteria for establishing an appropriate coverage and payment program for TierCare. We used very clear and consistent feedback from these numerous payer discussions to design the Sahara Protocol. In this head-to-head RCT that has begun, we are evaluating the efficacy of TierCare as compared to a leading prescription dry eye medication and are also assessing the durability of TierCare treatments over a 24-month period. We look forward to providing you further updates on Sahara and the other facets of our TierCare Market Access Development Plan over the coming quarters as we continue to make progress. Please do keep in mind that patient access for tear care is a long-term endeavor and may not always progress in a linear fashion each quarter, but it's certainly the right strategy to ensure patients have access to treatment as we pioneer procedure-based, reimbursed dry eye, and unlock this multibillion-dollar segment in the process. We also have multiple clinical trials ongoing or planned in MIGS with OMNI, Among the ongoing and planned clinical trials for OMNI are several exciting head-to-head RCTs versus either the leading trabecular bypass stents or eventually versus the standard of care early intervention prescription hypotensive medications. These studies will evaluate the effectiveness of OMNI in reducing intraocular pressure, the only treatable risk factor associated with POAG, and alleviating the burden of hypotensive medications as compared to these alternatives. In terms of completed OMNI studies, the 12-month primary endpoint data from our Gemini study, our first prospective multicenter clinical trial of OMNI in the U.S., was presented at the ASCRS conference in Las Vegas last month. We observed that sequentially performed 360-degree canaloplasty and 180-degree trabeculotomy procedures using OMNI and combination cataract surgeries resulted in clinically significant reductions in both IOP and the need for IOP-lowering medications through 12 months. We plan to submit the results of GemIIni for publication in peer-reviewed journals and present the results at other major ophthalmology conferences in the future. We are also pleased with the progress we are making with the FDA on our upcoming IDE trial for OMNI that, if approved and finalized, will allow us to study the safety and effectiveness of canalopathy-only procedures using OMNI and U.S. clinical trials. We expect to have further updates resulting from our discussions with the FDA on our canaloplasty alone IDE within the coming months. As a reminder, OMNI is currently cleared for canaloplasty followed by trabeculotomy to reduce IOP in adult patients with POAG. The purpose of a canaloplasty alone study under IDE would be to seek FDA clearance for a new indication for use for OMNI for use in canaloplasty only procedures to reduce IOP in adult patients with POAG. If Omni is cleared for this new canaloplasty-only indication, we believe this new indication for use would provide surgeons with additional flexibility to customize treatment based on the needs of each POAG patient. We have also made significant progress with Trident, our multinational European RCT. We expect to begin enrolling patients in the fourth quarter across seven countries in Europe. This 12-month RCT aims to study a total of 459 patients mild to moderate open-angle glaucoma patients who will receive on a standalone basis either canaloplasty followed by trabeculotomy using OMNI, canaloplasty only using OMNI, or implantation of trabecular bypass stents. We are particularly excited about Trident because it represents our very first opportunity to compare the performance of OMNI against MIG stents on a standalone basis across a large population, and we are eager to complete enrollment. At the annual meeting of the American Society of Cataract and Refractive Surgeons, or ASCRS, last month, physicians presented the results from five of our clinical studies featuring omni and tear care. Participation and leadership at important meetings like ASCRS are great opportunities for us to present our clinical trial results to a broad audience of ophthalmologists and optometrists and connect with longtime thought leaders, customers, surgeons, and friends. We will continue to make Our presence felt at other eye care industry events in the future, including the annual meeting of the American Academy of Ophthalmology in November and major optometry conferences like AOA and AAO. And finally, moving on to reimbursement and market access. Last month, as many of you may be aware as it relates to MIGS and OMNI, CMS released new proposed fee schedule rules for payments to physicians and outpatient facilities for 2022. These results are subject to a 60-day review period and may be further revised before finalized in November and taking effect on January 1st. Proposed payments related to CPT code 66174, which is used for OMNI procedures, were among those that were revised. The proposed national payment to physicians for 66174 would be $739, a $211 reduction from the current rate. While we are disappointed in the proposed reduction and plan to engage with CMS to increase the recognized value of this procedure in the final rule, we believe the proposed payment, if finalized, will still provide an adequate payment to physicians. We note that this proposed payment still exceeds the proposed payment to physician for cataract surgery by over $200. The proposed payment schedule for outpatient facility is billing CPT code 66174 featured modest increases of about 3% in both the ASC setting, which accounts for approximately 80% of OMNI's revenues, and the HOPD setting. CMS has proposed a 3.5% increase to $1,937 for canaloplasty in the ASC setting, and a 2.6% increase to $4,019 for canaloplasty in the HOPD setting. Under the proposed fee schedule, ASCs would receive over $800 more for a standalone OMNI procedure than for a standalone cataract procedure. In the HOPD setting, the difference is over $1,800. As we have discussed previously, we continue to seek device-intensive status for CPT code 66174, which covers devices including OMNI, in the ASC setting. Device-intensive status for code 66174, if approved, could result in a meaningful increase in payments to ASCs. We continue to work with our societies, CMS, and other stakeholders to encourage assignment of device intensive status, and we will report back when we have more clarity on the subject. The proposed rates cited above do not include device intensive designation for OMNI procedures. CMS and other payers rely in part on review of relevant medical literature when making coverage and payment decisions. We believe that our clinical trial program and subsequent associated peer-reviewed articles will provide further evidence regarding the effectiveness and safety of our products and support decisions regarding coverage and appropriate payments related to use of our products. Additionally, our market access team intends to supplement clinical efficacy and safety data packages with quantifiable health, economic, and outcomes information to illustrate the value of our product to payers and, more importantly, our patients' quality of life. we will continue to work with the major ophthalmology societies, patient advocacy groups, and influential physicians to advocate for appropriate patient access on behalf of Omni and TierCare. The proposed fee schedule also included changes to the billing codes and payments to physicians and facilities related to trabecular bypass stent implantations performed in combination with cataract procedures. The category three CPT code 0191T used for trabecular bypass stent implantation since 2008 will be replaced with new permanent Category 1 CPT codes describing trabecular bypass stent implantation in combination with cataract surgery. While we have analyzed these new codes and proposed payment amounts internally, we will not speculate on proposals related to other products or any impact such proposals could have on surgeons and facilities. The proposed fee schedule rules are publicly available, and we urge investors to draw their own conclusions after careful analysis. I will now turn the call over to Jesse Thelnik, our Chief Financial Officer, to discuss our second quarter financial results. Jesse?