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Operator
Greetings and welcome to the Site Sciences Third Quarter 2021 Earnings Results Conference Call. At this time, I'll participate in the early mode, and this call is recorded. It is my pleasure to introduce your host, Tripp Taylor from Gilmartin Group. Thank you. You may begin.
Tripp Taylor
Thank you for participating in today's call. Presenting today are Site Sciences Co-Founder and Chief Executive Officer, Paul Badawi, Chief Financial Officer Jesse Selnick, and Chief Commercial Officer Sean O'Neill. Earlier today, Site Sciences released financial results for the three months and nine months ended September 30, 2021. A copy of the press release is available on the company's website at investors.sitesciences.com. I would like to remind everyone that comments made by management today and answers to questions will include forward-looking statements within the meaning of the federal securities laws. Those include statements related to SiteScience's anticipated financial performance and operating results, market opportunity, the future impact of COVID-19 on operations, business strategy, and plans for developing and marketing new products. Forward-looking statements are based on estimates and assumptions as of today and are neither promises nor guarantees and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied by these statements. A description of some of the risks and uncertainties that could cause actual results to differ materially from those indicated by the forward-looking statements on this call can be found in the risk factors section of the Form 10-Q filed today and other filings with the Securities and Exchange Commission. 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 statement notices and risk factors in the recent SEC filings. I will now turn the call over to Paul.
Paul Badawi
Thank you, Tripp. And thanks to everyone for joining us on our second earnings call as a public company. I'm very excited to update you on our business and share our significant accomplishments across our commercial, clinical, regulatory, and patient access initiatives, as well as our thoughts on the 2022 payment rules released by CMS last week. Jesse will then discuss our third quarter financial results before we open up the call for questions. To start, I will highlight... Our resilient site team persevered, and we set new records for quarterly revenue as a company and for our surgical glaucoma segment. Our total revenue increased to $13.1 million, representing growth of 51% compared to the third quarter of last year. We believe we are also one of the very few eye care businesses to report meaningful sequential U.S. growth in Q3 over Q2 2021, despite significant reimbursement noise in surgical glaucoma and the continuing impacts of COVID. Although the third quarter is typically seasonally lower than the second quarter, our surgical glaucoma segment revenue increased to $12.4 million, representing 4% sequential growth from our then-record second quarter revenues, and growth of 58% versus the third quarter of last year, driven by strong new account growth and increased utilization of our surgical glaucoma product, Omni. I'd like to remind everyone of the core principles of our company that allow us to persevere and succeed in any operating environment. We focus on the patient first, always. We improve the lives of patients suffering from eye diseases by protecting and enhancing their most precious sense, vision. We aim to develop safe and effective products that address the underlying causes of the world's most prevalent eye diseases. Our current commercial products are Omni and Tear Care. Both products are the result of our rigorous product development process, which incorporates four key pillars. First, we master the physiology of a disease to gain a full understanding of the often multifactorial causes. We use this foundational knowledge base to guide our development of solutions that optimize treatment of the underlying causes of a disease. We then apply our iterative design process to develop products that are intuitive for the physicians to use. To pass the final test of our rigorous product development process, we must prove out a viable patient access strategy, either through existing avenues or by pioneering new routes. Leveraging these four pillars, we have created our first two products that have demonstrated improved clinical and real-world outcomes, empowering eye care providers to offer the best care for their patients. Having passed the rigorous test posed by our four product development pillars, we believe that both Omni and TierCare are competitively differentiated within their respective eye care markets. This product differentiation is substantiated by the commercial performance, market receptivity, and ECP feedback on both Omni and TierCare. our organic innovation and product development model works very well. So expect to hear more from us on the product development front in due course. Over the near and medium term, we will continue to prioritize three key strategic value drivers. Number one, continuing to expand OMNI's adoption and usage by surgeons for adult patients with primary open-angle glaucoma, or POAG, in the established combination cataract segment. of the minimally invasive glaucoma surgery, or MIGS, market. Converting this key group of surgeons paved the way for them to perform standalone procedures, which brings us to number two, continued development of the virtually green field and substantially larger standalone segment of the MIGS market. And number three, seeking an expanded indication for use for tear care for the application of localized heat therapy in adult patients with evaporative dry eye disease, when used in conjunction with manual expression of the meibomian glands, while also advancing market access initiatives, including payer-tailored RCTs that can help create care care insurance access to patients whose eye care professionals believe care care is appropriate for them. We are pleased with our progress advancing each of these objectives. Our success requires cross-functional collaboration and teamwork through outside sciences. including commercial performance and expansion, the design, execution, and publication of clinical studies, achieving key regulatory milestones, and finally expanding market access. Our first two goals relate to advancing the treatment of adult patients with POAG. OMNI has been clinically demonstrated to be safe and effective for intraocular pressure reduction for adult patients with POAG. 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 superficial and primarily the result of MIGS bypass stents only being indicated for use in combination cataract procedures. 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. 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, FACIC, which refers to patients who have not had cataract surgery, combination cataract, as well as pseudofacic. which refers to patients who have had cataract surgery. We believe this clearance and Omni's expanded indication represented a significant clarifying step forward in identifying which MIGS procedures are appropriate for certain broad indications, rather than as a do-no-harm add-on to widespread cataract surgeries. This clearance was supported by a substantial body of real-world, multi-center clinical data. We continue to invest very aggressively in the clinical and commercial development of Omni, including further enhancements to Omni's indication for use, which I will describe in more detail later. We believe that Omni has two critical physiological and clinical advantages. Number one, Omni can comprehensively address up to 360 degrees of the disease conventional outflow pathway. Canal implants address a much smaller segment. And number two, Omni can address all three points of resistance in the conventional outflow pathway, while canal implants cannot. We believe Omni's differentiated efficacy and indication for use, coupled with our commercial excellence, have driven our best-in-class commercial performance, as evidenced by our share gain in combo cataract and market expansion with stand-alones. We've made significant inroads penetrating the adult POAG segment of the MIGS market with our exceptional customer experience initiative, which includes a meticulous surgeon and facility training program. We have already trained a substantial portion of our highest priority customers, the universe of over 3,000 MIGS trained surgeons. In the third quarter of 2021, approximately 725 facilities ordered omni-surgical systems, which included very healthy growth in new customers. The most exciting opportunity to expand the usage of OMNI lies in the five times larger standalone segment, where surgical intervention decisions rely far more heavily on procedure effectiveness and consistency relative to combination cataract procedures, in which we believe the concomitant canal implant procedure is often viewed as a do-no-harm add-on in the mild patient. To even be considered as the sole reason to take a patient to the operating room, standalone MIGS interventions like OMNI must safely deliver a very high consistency and degree of effectiveness. Typically, surgeons first master using OMNI in combination cataract procedures because they have already been trained in that MIGS setting. As surgeons gain confidence in OMNI, we have observed a natural progression towards also using OMNI in standalone procedures. In two sequential procedures, Omni allows surgeons to address up to 360 degrees of the conventional outflow channel, dilating and expanding Schlemm's canal and the collector channels with canaloplasty, followed by unroofing of diseased trabecular meshwork during a single surgical session, supported by favorable safety data from clinical studies and post-market use. Although our customers and surgeons will largely be the same in both segments, We believe the estimated $5 billion standalone segment requires a new go-to-market approach to improve awareness and educate the broader POAG community about the new treatment possibilities enabled by OMNI. This outreach program expands our contact points beyond cataract surgeons and glaucoma specialists to also encompass primary eye care providers who typically first diagnose and treat POAG with medications, as well as patients. We are excited to help ophthalmologists, optometrists, and patients better understand the potential advantages of intervention with Omni. We continue to see significant potential to expand usage of Omni and are executing a plan to take full advantage of the opportunity that will include targeted expansion of our sales team in 2022 with incremental investment in reps who will focus specifically on office-based clinical education and stand-alones. We also made significant progress advancing clinical trials and augmenting the body of published literature and high-quality peer-reviewed journals that support the safety and efficacy of Omni for use in future expanded indications for which we are developing the product. In August, we announced the publication of an article on clinical ophthalmology analyzing 24-month outcomes from a single center open-label study of the Omni surgical system conducted in Germany. The study reported that use of OMNI to perform a standalone mixed procedure in mild to moderate open-angle glaucoma patients resulted in statistically significant reductions in both IOP and IOP-lowering medication use at 24 months. Mean baseline IOP in the study decreased from 24.6 millimeters mercury preoperatively to 14.9 millimeters mercury at 24 months, or approximately a 40% IOP reduction. Mean baseline IOP-lowering medication also decreased from 1.9 average medications per patient to 0.5 medications at month 24, with nearly 60% of eyes free of IOP-lowering medication. Last week, we announced the publication of another article on clinical ophthalmology that associated MIGS using OMNI with suppressed diurnal fluctuations in IOP, a clinically meaningful and independent risk factor for the progression of glaucoma. In that study, 95% of patients had a diminished peak IOP postoperatively when compared to preoperative measurements. And finally, earlier today, we announced FDA authorization to proceed with our precision RCT under IDE. We designed this trial to evaluate the safety and effectiveness of OMNI for use in canaloplasty alone procedures. In precision, we will compare results from combination cataract procedures in three trial arms, canaloplasty alone using OMNI, canaloplasty followed by trabeculotomy using OMNI, and canal implants. We believe precision will represent the largest prospective MIGS RCT ever initiated based on our target of 459 subjects receiving a MIGS procedure. We plan to use the results of precision to support a premarket submission to the FDA, seeking clearance for an expanded indication for use of OMNI in canaloplasty alone procedures to reduce IOP in adult patients with POAG. If we are successful, surgeons would have additional flexibility to use OMNI to customize treatment and expand their preferred use case, particularly for milder cases. Additionally, we hope to share data from Precision with payers who are influential arbiters of patient access. CMS and other payers rely in part on review of relevant medical data published in peer-reviewed journals when making coverage and payment policy decisions. We believe our clinical trials would demonstrate clinically significant improvements in health and economic outcomes. Our market access team made significant progress securing coverage among private payers for Omni procedures in recent months. We're pleased to report that the OMNI procedure is now covered and reimbursed by MACS and private payers representing an estimated 75% of all medical benefit covered lives. We are grateful for the support of the AAO and AGS who continue to support our efforts. We continue to make progress and look forward to providing further updates over the coming quarters. Last week, the Centers for Medicare and Medicaid Services issued a final rule that includes updates on policy changes for Medicare payments to physicians and facilities. These final rules will go into effect on January 1, 2022, subject to the issuance of any updates or corrections by CMS. Payments related to CPT Code 66174, which is used to report procedures performed with OMNI, were among those that were revised. As a whole, we are quite pleased with the Medicare payment landscape that will bring modest increases in payment for canaloplasty and trabeculotomy in the ASC and HOPD settings from 2021 to 2022. Our preliminary assessment of the physician fee and facility fee payment rates remains the same as when the proposed rules came out in July as we were going public. We believe OMNI's professional fees will be in a better relative position in 2022 versus 2021, compared to its combination cataract implant competitors. Although the approximate professional payment for canaloplasty will decrease by $209 to $739, which was expected given the elegant procedural advancements made by the Omni technology for this procedure, the focus of our discussions with physicians continues to center on the strength of our clinical data. Nonetheless, physician reimbursement for canaloplasty will remain significantly superior to reimbursements for both standalone cataract surgery as well as cataract surgery in combination with canal-based implants. In routine combination cataract procedures using OMNI, the approximate total physician fee will be $1,003 versus $664 for the new canal implant combination cataract code, CPT66991, and $529 for standalone routine cataract surgery, CPT66984. In complex combination cataract procedures using OMNI, The approximate physician fee will be $1,101 versus $832 for the new canal implant in combination with complex cataract code CPT66989. Our near-term reimbursement objective is to continually improve the competitiveness of payments for procedures performed with OMNI. We believe the combination of, one, OMNI's highly differentiated efficacy, two, the relative advantage, of the 2022 physician fees and modest increase in facility fees for 66174, three, ongoing clinical feedback from Omni users, and four, our demonstrated historical growth trajectory will allow us to continue to take share from the combo cataract canal implants and advance our leadership in the five times larger standalone segment. We are pleased that CPT code 66174 will realize a modest increase of about 2% in both the ASC setting, which accounts for over 80% of Omni's U.S. revenues, and the HOPD setting. Payments for canalplasty will increase 2.5% to $1,919 in the ASC setting and 2.1% to $4,000 in the HOPD setting. In 2022, ASCs will receive over $850 more for a standalone Omni procedure than for a standalone cataract procedure. For HOPDs, the difference for these same two procedures will exceed $1,800. In 2021, ASCs received 953 more for combination cataract procedures using canal implants than for combination cataract canaloplasty procedures. This gap will be reduced by $158 for 2022, and we will continue our efforts alongside the medical societies, patient advocacy groups, and the surgical community to seek more equitable reimbursement. We sought device-intensive status for CPT code 66174 in the ASC setting, which would have resulted in an increase in payments to ASCs. CMS declined to assign device-intensive designation for 66174 for 2022. We believe this decision is incorrect and stems from inaccurate hospital reporting of device costs for CPT 66174. We will continue to work with the medical societies, patient advocacy groups, CMS, and other ophthalmic stakeholders to help ensure the accuracy of the billing data that CMS will rely on when deciding whether CPT66174 merits device-intensive status in the future. Our third value driver focuses on tear care, which is currently marketed as a powered heating pad for the application of localized heat where the medical community recommends the application of a warm compress to the eyelids. We purposefully built TierCare to deliver a precise and tightly controlled level of penetrating thermal energy through the outer eyelids and into the meibomian glands on the posterior side of the eyelids in a comfortable office-based procedure. We introduced TierCare in a controlled launch two years ago with approximately 10 reps covering the United States. Our plan for 2022 includes modest expansion of our TierCare sales force to fill in high-value geographic white space our controlled launch team cannot fully cover. We are developing and seeking FDA clearance of an expanded indication of tear care for the application of localized heat therapy in adult patients with evaporative dry eye disease due to meibomian gland dysfunction when used in conjunction with manual expression of meibomian glands. Dry eye is a multifactorial disease that is most commonly characterized by poor quality tears that evaporate too quickly. Study data show that 86% of dry eye cases are associated with MGD. The most common dry eye treatments used today address aqueous deficiency or inflammation and represent 95% of manufacturer revenues. None of the leading prescription eye drop medications are indicated for or have a mechanism targeting the most prevalent underlying cause of dry eye, MGD. To compound this issue, Medicare and commercial insurers have not established any meaningful reimbursement for MGD treatments. Dry eye is the number one reason for visits to an eye care provider, and we believe the U.S. market for effective MGD treatment could exceed $10 billion annually. We are executing a very thoughtful and well-informed strategy to unlock the potential market for tear care and its authorized indications by pioneering optimal patient access to effective MGD care through health insurance. We want to maximize the reach of our tear care technology and intend to provide a comprehensive solution for the broadest range of MDD sufferers. As with our value drivers for surgical glaucoma, our Dry Eye Strategic Initiative also involves cross-functional support from our clinical, regulatory, market access, and commercial teams. On the regulatory front, we submitted a pre-market notification to the FDA in September that we hope will result in clearance for an expanded indication for use of tiered care in the coming months. In parallel with our tiered care regulatory efforts, Enrollment continues nicely in our second TierCare RCT, Sahara, which will evaluate the efficacy of TierCare compared to a leading prescription dry eye medication and assess the durability of TierCare treatments over a 24-month period. Articles based on results from our first RCT, Olympia, have been published in two leading peer-reviewed journals. In Olympia, TierCare was compared to LipoFlow. Among the recent publications was an article in Cornea, reporting that a single use of tear care significantly alleviated the signs and symptoms of dry eye disease in patients with MGD. We expect data from Olympia, Sahara, and other studies will support several additional articles in peer-reviewed journals. I would like to conclude my remarks by addressing why we sued Ivantis. In brief, we sued to protect our investments in research and development and to protect the market share and margins of our product. My brother and co-founder David and I began developing breakthrough ophthalmology technologies over 15 years ago. In the years that followed, we have continuously invested in research and development. We incorporated many of these innovations in successful commercial products like Omni and TierCare. Our continuing ability to grow site sciences and invest in R&D depends on obtaining and enforcing intellectual property rights. Our investors deserve to realize value from our inventions. Where we see blatant encroachment on our intellectual property, we must vigorously defend our rights. We owe it to our patients, our company, and our shareholders to hold accountable competitors who seek to profit from our investment. We cannot sit idly by while a competitor uses our intellectual property to compete against our own products. I would also like to note that the patents asserted against Ivantis are not associated with Omni. The four patents in suit relate to our implantable, circumferential, canal scaffolding intellectual property. The hydrous microstent competes directly with Omni in the combination cataract segment. Our lawsuit seeks to enjoin Ivantis from its infringing competition. With that, I'll now turn the call over to Jesse to discuss our third quarter financial results. Jesse?
Jesse
Thank you, Paul. Our total revenue for the three months ended September 30th, 2021 was a record $13.1 million, a 51% increase from the $8.7 million in the same period of 2020, and a 5% sequential increase from $12.5 million in the second quarter of 2021, in what normally is a seasonally weak sequential quarter in our industry. Our combined gross margin for the third quarter was 84%. compared to 70% in the corresponding prior year period and 82% in the second quarter of 2021. Our surgical glaucoma segment revenues for the third quarter were a record $12.4 million, up 58% from $7.9 million in the third quarter of 2020, and a sequential increase of 4% from $12 million in the second quarter of 2021. While we believe that COVID remains a factor in how all companies now conduct business, Its impact on our commercial opportunity did not significantly change from when we spoke to you in August. Further, we did not observe any tailwind in the quarter from increased omni-trialing due to the proposed rate changes at CMS that were announced in July. We trained modestly more surgeons in the third quarter than we did in the second quarter, reflected more of the long-term growth trajectory in our business rather than any one-time improvements. As I said, rather than enjoying any one-time growth benefit, we believe a number of customers actually offset the hypothetical reimbursement tailwind by deferring OMNI trainings until they could work through their canal implant inventory. There was concern that reimbursement for canal implants would lose significant value after the year ends. Very simply, our results point to the continuation of exemplary, consistent commercial execution. As Paul alluded to in his comments, we have set a standard of consistent market-leading growth at the center of a dynamically changing MIGS market, in which we are gaining dollar and volume share quarter after quarter after quarter, while also growing the overall MIGS market pie with each Omni standalone case. More specifically for this period, our surgical glaucoma sales benefited from an increase in the number of new accounts sold to in the quarter, due in part to a selling environment that had more normalized commercial access to customer facilities than we had seen last year, as well as increased utilization per active account. The results for the quarter were challenged by seasonality factors, such as surge in vacations that increased COVID-related impacts compared to the second quarter that we believe were associated with the Delta variant in July specifically. Gross margin in cervical glaucoma was 87% in the third quarter compared to 75% in the prior year period and 85% in the second quarter. Sequential improvement was primarily the result of the transition of production to a low-cost, high-volume contract manufacturer in the first half of the year. In our dry segment, revenues were $700,000 or $0.7 million in the third quarter of 2021. Although this represents a decrease from the $0.8 million in the prior year periods, We believe we improve the quality of the revenue by focusing more on specialized dry eye accounts that can help us with our long-term strategy of pioneering market access for MGD. We understand this strategy is not necessarily aligned with the public market valuation environment largely driven by revenue, but we maintain our absolute conviction in TierCare's long-term value and in this approach to maximize value. Beginning in the fourth quarter of 2020, We refocused our dry ice sales team on accounts that would better align with our long-term goal of pioneering optimal access to effective MGD patient care. We anticipated that this strategy would negatively impact near-term results of the time, while our team adjusted before reestablishing strategic long-term growth. Emphasizing this point and to highlight the strength of the effort, following an initial decrease in sales in the fourth quarter of 2020, our dry ice sequential growth has increased 37% per quarter. Revenues for the third quarter of 2021 were 2.4 times the fourth quarter of 2020 when we began this initiative. Beyond the financials, we are pleased with the results of our market access driven strategy, which has resulted in improved targeting of new customers to fit PeerCare's value proposition. Our sequential growth of 20% in the third quarter benefited from a growing number of new facilities sold compared to the second quarter, as well as a larger base of reordering customers. Gross margin in dry was 33% in the quarter versus 12% in the third quarter of 2020 and 3% in the second quarter of 2021. As we discussed on previous calls, dry gross margins will be noisy until we consciously scale the business, at which point we believe we'll be able to generate gross margins approaching those enjoyed by the surgical glaucoma business. Operating expenses in the third quarter of 2021 were $25.1 million. an 87% increase from $13.4 million in the third quarter of 2020, an 18% increase from $21.3 million in the second quarter of 2021. It's important to note that the operating expenses for the quarter included non-cash stock-based compensation of $1.9 million, which on a comparative basis is versus $0.2 million in the prior year and $0.9 million in the second quarter of 2021, both those latter periods being pre-IPO. SG&A expenses for the quarter were $20.8 million compared to $11.2 million in the third quarter of 2020 and $17.8 million in the second quarter of 2021. The increase in SG&A was primarily due to our continued investment and scaling of operations and corporate headcount to support our growth. As part of our planning process for 2022, we identified opportunities to augment our team and further accelerate our growth. We'll continue to make significant investment in our corporate systems and personnel to ensure we make the most of our vast opportunity to improve patients' lives. R&D expenses for the quarter were $4.3 million compared to $2.2 million in the third quarter of 2020 and $3.5 million in the second quarter of 2021. The majority of the increase in R&D expense from 2020 to 2021 was due to three factors. One, an increase in personnel expenses as we build out our clinical and regulatory and R&D departments. Two, contract manufacturing lab supplies and prototype development expenses. And three, clinical studies, which Paul highlighted in his comments. We expect our R&D expense to continue to grow over the near term as we execute our clinical roadmap and build out our internal R&D capabilities. Loss from operations for the three months ended September 30th, 2021 was 14 million, which compares to a loss of 7.4 million for the same period in 2020. and a loss of $11.1 million in the second quarter of 2021. Also, uniquely, in this quarter, we recognized other expense of $2 million compared to $0.2 million in the prior year period. And this was due to a final fair value re-measurement of since-exercise preferred stock horns upon our IPO. To state the obvious, this will not be an expense that will recur going forward, given the change in our cap structure post-IPO. We had a net loss of $17.2 million or $0.43 per share for the third quarter of 2021 based on a weighted average post-IPO share count of 39.8 million shares. This compares to a net loss of $8.1 million or $0.85 per share for the third quarter of 2020 based on a weighted average pre-IPO share count of 9.5 million shares. We ended the quarter with $271.5 million of cash and equivalents and $32.5 million of long-term debt. As a reminder, we completed our initial public offering in mid-July, which generated net proceeds of approximately $252.2 million. Turning to our outlook for 2021, we were revising our full-year revenue guidance to $47.5 million to $48.5 million, which will represent growth of approximately 74% over 2020 at the midpoint. This guidance reflects a continuation of the growth trends we observed in recent quarters and it takes into account continued outstanding growth fundamentals while factoring in seasonality patterns, including fewer selling days in the remaining weeks of 2021 due to holidays and vacations and a presumption of the operating environment that we saw in the third quarter of 2021 and to date in the fourth quarter remains consistent through the year end. With that, I'd like to turn the call back over to Paul for some closing comments.
Paul Badawi
Thank you, Jesse. I hope we've made it very clear how our fundamental commitment to delivering the power of sight to patients with eye disease informs every decision we make. We believe we are one of the very few companies in the medical device sector with the demonstrated capabilities to both innovate disruptively and commercialize with excellence. We strive to operate at an entirely different level, and that was on display this past quarter. where we rose to the occasion, excelled on all fronts, and set commercial records across the board. Jessie and I will now be joined by Sean O'Neill, our Chief Commercial Officer, to answer your questions. Operator, please open up the call for questions.
Operator
Yes, sir. At this time, we will be conducting a question and answer session. To ask a question, press star 1 on your telephone. To ensure that everyone has an opportunity to participate, We ask that you ask one question and one follow-up. Our first question comes from the line of Ms. Cecilia Furlong from Morgan Stanley. Your line is now open.
Cecilia Furlong
Great. Good afternoon, and thank you for taking the questions. I wanted to start with the account growth that you highlighted in the quarter for Omni. And if you could just walk through kind of what you saw, both from a headwind standpoint, anything due to COVID seasonality, but then also how how you were able to open the accounts you were, the trajectory you saw, and as you look into 4Q as well, kind of the roadmap you see there for further account openings.
Jesse
I'll take the first stab at that. We had a very strong quarter. It was a quarter in line with the second quarter in terms of new account openings, amount of trial activities, and the like, you know, our retention metrics were very strong as well. You know, we – what we didn't see is we didn't see a – well, you know, my comments were really around the fact that it's not a one-off level of growth based on sort of noise in terms of the reimbursement market. It was just very much in line with the trajectory that we've enjoyed over the course of the year. And so – You know, I think COVID is baked into how we operate and our customers operate at this point in time. And we have the opportunity to continue to sell and to grow, and we're taking advantage of that opportunity. And so that's why we were able to put up the results that we did.
Jesse
Yes, Cecilia, this is Sean. I would add on that that it continues, you know, our trajectory and confidence continues to be fueled by our focus on the exceptional customer experience that we demonstrated actually across both businesses, Omni and TierCare. And it's really the care and the training of the surgeon, doctor, and staff to ensure positive outcomes from their perspective as well as positive outcomes for their patients. And with that, just continues to grow the confidence for greater utilization and for Omni specifically then in the standalone market, as Paul discussed in his comments.
Cecilia Furlong
Great. Thank you. And I guess, too, I wanted to ask, just in terms of 4Q guidance, what you're factoring in, both from a reimbursement now that everything's been finalized, but anything potential benefits in that as you think about 4Q just ahead of 22 implementation, backlog impact, COVID pressures, just any other dynamics you would call out, as well as what you expect with the new label to be able to see just from the standalone opportunity and continuing to drive that. And thank you.
Jesse
Yeah, I'll start and then Paul and Sean obviously pile on. You know, the guidance is based on the continuation of the growth metrics that we've been posting, largely, obviously, in the surgical glaucoma business. We're not... It doesn't reflect anything. And it reflects the current operating environment. We're not, Cecilia, like, guessing as to competitive reaction based on 2022 changes. You know, we... Our view is that those changes will benefit us, but, you know, the 2021 rates are still in place, and our guidance reflects really just a continuation of the results that we put forward and sort of the forward-leading KPIs that we track closely.
Paul Badawi
I'll just add on to that, Jesse. As it relates to CMS and the final rule in our outlook, I'd like to first state our outlook was, has always been extremely strong prior to our IPO leading up to it and through it, which coincided with the proposed rule. The proposed rule, and more importantly, the final rule, improved our relative position vis-a-vis our competition on both the professional fee, where our 66174 surgeon fee premium widened over canal implant injection fees, following a thoughtful RUC survey of almost 100 ophthalmic surgeons. The surgeon survey results placing a premium on 66174 over implant injections was frankly expected, since we know we ask our surgeons to perform more time-intensive, skillful, circumferential, multi-procedural work that ultimately drives up the consistency and degree of IOP-lowering clinical effects for patients. On the facility fee side of things, we are pleased to see our 66174 facility fee disadvantage narrowed. The cataract stents have always had an advantage on the facility fee, and that advantage narrowed in the final rule. So net to your question, we're relatively better off in 2022 versus 2021 relative to our cataract stent competitors. Our outlook for commercial scale and growth has only been reinforced with more wind behind our backs as we enter 2022 and build on the omni-acceleration we've seen quarter after quarter in 2021 without those CMS relative improvements to 66174. And the last thing I just want to mention quickly is there's a lot of comparison. You know, when these rules come out, they're important, and there's a lot of comparisons between us and the combo cataract stent competition. I think it's really important to remind everybody that our focus and growth market at site, it's the five times larger standalone market. where we stand alone and are pioneering that space. So on that front, in standalone, the 66174 pro fee and facility fee in the final rule is very competitive and attractive compared to cataract surgery alone, both on the professional fee and ASC fee. So generally, we are very bullish in both the combo cataract segment as well as the much larger standalone segment.
Jesse
Yes, Cecilia, this is Sean. I would add on your question around the label. The label continues to be a positive for us as well with the expanded label for Omni and the breadth of the adult patient with primary opening glaucoma and IOP lowering that really is going to be the cornerstone of our market-leading disease state education campaign as well as where we're going to be investing resources to educate the primary care provider. So we are definitely leveraging that expanded label to educate the community on the standalone and continue to pioneer and create leadership role in the standalone space.
Operator
Thank you. Our next question comes from the line of Mr. Matt O'Brien from Piper Sandler. Your line is now open.
Matt O'Brien
Afternoon. Thanks for taking my questions. I guess just to follow up on what Cecilia was asking as far as new accounts go, can you kind of frame up what you saw in terms of training competitive clinicians versus kind of those new to MIGs? And then what did you see in Q3 as far as standalone sales versus combo cataract?
Jesse
Hey, Matt, this is Sean. Yeah, so as far as, you know, the training of new surgeons, we continue to focus on the high-volume MIG surgeons as the bolus of our trained universe as we continue to penetrate into those roughly 3,000 MIG-trained comprehensive surgeons in the United States. So we've definitely seen, you know, as we continue to penetrate into that group, because they are the ones that are already well-informed on the anatomy and ankle surgery, and we're gaining confidence with them in that combo space, ultimately leading into our expansion into the standalone space. I know that we are getting some additional data, CPT-level data, to really quantify our penetration in the standalone space, as we've mentioned before. We do have, you know, internal information that shows that we are growing in that space based on our training and conversation with surgeons. And we look forward to providing more detailed information in the future as we get that additional data.
Matt O'Brien
Yeah. Hi, Matt. Sorry.
Paul Badawi
Just on that real quick. We do want to get granular data to report quarterly on our standalone progress, market development progress. We have done some initial CPT analyses for now, just annual results, and we can say that the year of Omni launch in 2018, when we look at CPT 66174 used alone, so standalone 66174, there were approximately 11,800 claims In 2018, that grew. In 2019, the second year of Omni, after Omni's launch, this number doubled to just over 26,900 claims. And then in 2020, despite the COVID pandemic obviously impacting non-life-threatening surgical procedures, saw that number grow significantly again, and there were 30,000 just over 30,000 claims process for standalone use of 66174. So we've asked our market access team to get even more granular data, and we believe that we're going to be able to have at least quarterly data, almost current, very soon. And so we look forward to, in the not-too-distant future, hopefully being able to share quarterly standalone growth of 66174 if we can get that data
Matt O'Brien
Okay, very helpful. And then, you know, I don't know if this is for Paul or for Jesse, but as we think about the fourth quarter, you know, again, it's a nice progression versus Q3, and it sounds like you probably had some headwinds here in Q3. But, you know, the guidance, it's a nice little step up. It's not a huge step up versus Q3, which, you know, again, is a seasonally softer quarter. So why not a little bit more on the guidance side for Q4? And then what I'm really trying to get to is if you just annualize Q4, there's a lot of growth that needs to happen to kind of get to where the street's at for 22. And I know there's new reps coming in, but just what gives you the confidence or what can you help us see that should give us all the confidence in hitting some of these 22 numbers that are a pretty steep ramp? Thanks.
Jesse
You know, Matt, I would encourage you to take a look at it this way. How much quarterly dollar growth does the guidance imply in 2021 versus how we exited 2020? And given all the factors and momentum in the business, does it actually imply a slope increase or not as you look to sort of get comfortable with the 2022 number? You know, we're exiting – when we developed our forecast, we're going to be exiting the year stronger than given sort of the step-ups and guidance than we initially thought to be able to confidently support that number. And, you know, we feel pretty confident we're going to be exiting the year right in that place. You know, it's – The first half of a year is healthier in terms of step functions of growth often, like what our experience has been in this market. I think it's going to be a little bit of a noisy December, to be honest, like in terms of vacations taken, vacation days, true selling opportunity in the back half of the month. But, you know, we think, you know, as we said about the third quarter, when you look at the comps, that this guidance implies, you know, a very healthy amount of sequential growth for an eye care business, particularly a surgical eye care business.
Matt O'Brien
Okay. Thank you.
Operator
Our last question comes from the line of Joanne Wensch from Citi. Your line is now open.
Joanne Wensch
Hi. This is Anthony for Joanne. Thank you for squeezing us in here. I just have one question, and it's a bit more open-ended. What surprised you the most and the least over the past three months, especially just given all the reimbursement costs? Thanks for taking the question.
Paul Badawi
Sorry, could you repeat that? What surprised us the most or what surprised us?
Joanne Wensch
Yeah, sorry if I was breaking up. I just asked what surprised you the most and the least over the past three months?
Paul Badawi
I mean, I don't know. We've been executing to our fundamentals across our three value drivers in a very predictable way, and as you can tell from our top performance this quarter. So We've been, frankly, just focused on continuing to take share in combo cataract, expanding use in standalone, and advancing all of our tier care initiatives. I think we've done that in a very predictable and compelling way. So I don't look back at the last quarter seeing too many surprises. Sorry, that's not an exciting answer, but Sean or Jesse, maybe you guys were surprised by something.
Jesse
No, I would agree, Paul. Anthony, this is Sean. I would say it's not a surprise, but I think the thing that's really been interesting you know a pleasure for us from an execution commercial execution standpoint is just the advocacy that we received from our customer base and the um you know acceptance of the tech both technologies omni and tier care within our strategies to develop the standalone market with the moderate standalone market with with omni and uh to execute against our strategy for patient access uh with with tier care and mgd so I think the acceptance and just the advocacy that we've had from our customer base with these technologies and our go-to-market strategy has been really a high point for us and continues to fuel our confidence as we continue to move forward in both these markets.
Jesse
My answer quickly is I was surprised about how strong our results were relative to peers and competitors that have also reported results.
Operator
We have a question from the line of Matt O'Brien for Piper Sandler. Your line is now open.
Matt O'Brien
Oh, thanks. Just two quick follow-ups. There was some consolidation in the space earlier this week. I'm just curious as far as how you think about that consolidation and the impact of the business in 22. And then there's also a little bit more competition on the canaloplasty side that was recently approved, and I'm just curious as far as your thoughts as far as if that'll be a headwind for you guys or if it just maybe opens up the market just because there is so much opportunity in that category.
Paul Badawi
Thanks. I'll take a crack at that, Matt. This is Paul. On the consolidation side, obviously I'm guessing you're referring to the acquisition of Ivantis by Alcon. I think for me what comes to mind, two things come to mind. One, the stents, whether it's hydrous or iStent, those are products indicated in combination with cataract surgery where we've already demonstrated an ability to take share effectively. And it's, you know, that's one-fifth of the market. We have the five times larger standalone market that we are focused on and penetrating effectively. So it's, you know, that doesn't affect us there. And also, you know, we have Sean on the line. Sean was at Alcon for 20-plus years. He's best in class commercially. He's built out a best-in-class commercial leadership team and team throughout the organization. So as it relates to our ability to compete effectively and win, I think our confidence grows every day. Sean, if you want to comment a bit on that.
Jesse
Yeah, absolutely, Paul. Thanks. And, Matt, yeah, we obviously anticipate Alcon's presence to mean additional investment and just recognition of the importance of the MIG space for patient care. But, you know, I think that additional investment in education awareness is overall positive for the marketplace. And because of the performance of Omni to date and our confidence in its differentiated efficacy profile and with the broad indication for use that we have to enter into the standalone MIG market, We're still really, you know, confident in our ability to lead that standalone mixed market and continue to leverage our top commercial talent that we have here and continue to invest and expand here at Site Sciences to meet our strategic objectives. So I think overall, it's a positive. And frankly, those are the same things that are going to allow us to compete regardless of what competitor comes into the marketplace. It's going to continue to be, you know, focusing on our points of differentiation of Omni's ability to address all three points of resistance for those mild to moderate, either in combination with cataracts and most definitely in the standalone space. And just continue to leverage that in our exceptional customer experience to continue to build that leadership position in standalone.
Paul Badawi
And Matt, on your second question regarding potential canaloplasty entrance, I think a couple of things come to mind. maybe four things. Number one is R&D, and I'll get into we are the pioneers of abinternocanalplasty, abinternocanalplasty, and trabeculotomy. We've been at it for many, many years and have been iterating. So the clinical excellence that is omni is the result of tens of thousands of cases, significant clinician feedback, significant iteration of I can tell you it's been a long road to get to the device that we have today that is delivering such incredible results for surgeons and their patients. So it's not easy. So generating a prototype, showing a prototype, maybe even getting a clearance may be straightforward, but delivering a highly dependable, reproducible canaloplasty device that is capable of consistently helping the surgeon circumnavigate a 100, 200 micron diameter delicate canal for 36 to 40 millimeters around consistently is not easy, period. On the clinical front, I haven't seen, I personally haven't seen any clinical data from anybody on another ab interno you know, canaloplasty entrant. I think if we're going to be talking about canaloplasty and labels, I think we need to see clinical data. I think it brings us to the third point from a regulatory perspective. I would ask whichever companies or products that we're discussing here, I would ask them, what is the indication for use? Is it for canaloplasty? Is it for pressure lowering? Is it for primary open-angle glaucoma? Because I'm pretty sure you know, the pathway that we've gone through requires significant clinical data to have a canaloplasty indication and to promote for canaloplasty. And, I mean, we just announced earlier today, maybe some of you have seen it, we put out a press release just before this call, on our IDE for a canaloplasty alone indication. So we have a very large MIG trial, I think the largest that will ever be conducted, 459 patients, to seek MIG. this canaloplasty alone indication. And then lastly, beyond R&D clinical and regulatory, again, I haven't seen any of these devices, but I will say we've been at this for over a decade, and we have a very broad and deep patent estate and intellectual property covering methods and devices of, you know, circumferential canalicular glaucoma surgery. So those are the four things that come to mind as it relates to any potential entrants.
Matt O'Brien
Great. Thanks so much.
Paul Badawi
Sure.
Operator
This concludes our question and answer session. I would like to turn the call back to Paul Badawi for closing remarks.
Paul Badawi
Just want to say thank you all for your time, attention, and interest in flight sciences.
Operator
This concludes today's conference call. You may now disconnect.
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