Sight Sciences, Inc.

Good day and thank you for standing by. Welcome to the site sciences first quarter 2024 earning results conference call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Tripp Taylor, Investor Relations and Financial. Please go ahead.

Thank you for participating in today's call. Presenting today are SightSciences co-founder and chief executive officer, Paul Badawi, and chief financial officer, Ali Bauerlein. Also in attendance is SightSciences chief commercial officer, Matt Link. Earlier today, SightSciences released its financial results for the three months ended March 31st, 2024, and reaffirmed revenue and adjusted operating expense guidance for full year 2024. A copy of the press release is available on the company's website at investors.sitesciences.com. I'd 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. These forward-looking statements include statements related to the company's anticipated financial performance, operating results and liquidity position, current and long-term strategic objectives, market opportunity, business and commercial strategy, ongoing litigation, product reimbursement, coverage and strategy, efficacy of our products, expectations regarding regaining commercial momentum, account utilization and engagement, and clinical trial strategy and results. Forward-looking statements are based on estimates and assumptions as of today 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 its public filings with the Securities and Exchange Commission, including in the risk factors section of the company's annual report on Form 10-K and quarterly reports on Form 10-Q. The company undertakes no obligation to publicly update or revise any forward-looking statements except as required by law. On this call, management may refer to financial measures that were not prepared in accordance with generally accepted accounting principles in the United States, including adjusted operating expenses. The company believes these non-GAAP financial measures are important indicators of its operating performance because they exclude items that are unrelated to and may not be indicative of its core operating results. See the company's earnings release for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, as well as additional information about the company's reliance on non-GAAP financial measures. I will now turn the call over to Paul.

Thanks, Tripp. We continue to advance our mission of developing transformative, interventional technologies that allow eye care providers to procedurally elevate the standards of care, empowering people to keep seeing. In the first quarter, we saw an increase in the utilization of our surgical glaucoma technologies as compared to the previous quarter and the first quarter of 2023, and continue to demonstrate operational excellence with our strong gross margins and disciplined expense management. We are executing on our strategic initiatives to facilitate appropriate and equitable market access and expand our clinical evidence portfolio in both segments. Our first quarter performance only increases our excitement about 2024 and the long-term opportunities in front of us. We believe that our compelling commercial strategies into multi-billion dollar market opportunities, robust clinical efficacy supporting our differentiated interventional portfolio, and experienced management team have created a tremendous opportunity to drive durable and profitable growth over the coming years. We generated total revenue of $19.3 million in the first quarter, representing a record for a first quarter period. Growth was 3% sequentially from the fourth quarter of 2023 and 2% compared to the first quarter of 2023. At the same time, We significantly decreased our cash usage to $10.8 million in the first quarter of 2024 compared to $17.7 million in the first quarter of 2023, while still investing in our commercial and R&D value drivers and after taking into account our debt restructuring payments and typical first quarter bonus payments. I will now turn to a more detailed discussion of our business segments, starting with our surgical glaucoma segments. We are pleased with our quarterly performance with surgical glaucoma revenue of 18.3 million, representing sequential growth of 6% compared to the fourth quarter of 2023, and growth of 5% compared to the same period in the prior year. Omni is positioned as an important mixed technology that surgeons rely on to treat their glaucoma patients, and our recovery trajectory is tracking to our expectations. We remain confident in our ability to continue expanding our position in the surgical glaucoma market for both combination cataract uses and standalone uses. We have strategically focused on a few critical drivers to build long-term success within our surgical glaucoma segment. Our main priorities are to increase surgeon utilization across all accounts and re-engage accounts who ceased or decreased their orders during the LCD uncertainty period. We also continue to focus our efforts on increasing the pipeline of new surgeons to be trained on Omni and Scion. Growth in the first quarter of 2024 was driven primarily by increased utilization from existing accounts of Omni and Scion, which had both sequential growth and growth when compared to the same period in the prior year. This is a testament in large part to the leading clinical profile of Omni, which demonstrates the efficacy of Omni at lowering both IOP and IOP reducing medications for a broad set of primary open angle glaucoma patients. In parallel, we are actively reengaging with accounts that have ceased or decreased their orders during the LCD uncertainty period during the second half of 2023 before the LCDs were withdrawn in late December 2023. As a reminder, we experienced net account attrition of approximately 6% during that period, which we believe was primarily due to the uncertainty caused by the LCDs in the same period. We expect returning accounts to contribute toward further regaining momentum in the second quarter to help drive low double-digit sequential growth from the first quarter of 2024 and toward double-digit growth in the second half of the year versus the comparable period in the prior year. Another core aspect of our strategy is building our funnel of surgeons to be trained on procedures enabled by our Omni technology. We are pleased to see that our funnel has increased over the past few months, and we expect this funnel to continue to strengthen throughout the remainder of 2024. Producing robust clinical data also remains a critical piece of our strategy to drive increased adoption and utilization of Omni. The compelling results from the prospective multicenter Gemini 2 study demonstrated sustained and clinically significant IOP reduction of 29% at three years, and clinically significant reduction of IOP-lowering medication use, as 74% of study patients were medication-free at three years. Most recently, we announced the publication of a large-scale, real-world clinical outcome study of patients treated by the three most common MIGS technologies in AJO International. The results further demonstrated Omni's strong efficacy profile. Using the American Academy of Ophthalmology's IRIS registry, the largest specialty society clinical data registry in all of medicine, and the first comprehensive eye disease clinical registry in the United States, this large-scale MIG study evaluated long-term, two-year post-surgical outcomes among patients with primary open-angle glaucoma treated with the three most commonly used FDA-approved or cleared Aventurino MIGS devices in the U.S. Omni, Idris Microstent, and iStent Inject, combined with cataract surgery, as well as for cataract surgery alone. The results from this study reported that the comprehensive outflow procedure performed with the Omni surgical system technology was effective at lowering both IOP and IOP-reducing medication use at two years. The results were further evidence of the OMNI procedure's durable efficacy at two years and were consistent with our many prior published studies. We are excited to see that large-scale, real-world studies of mixed standards of care provide further evidence of the robust IOP reduction and medication reduction associated with the comprehensive outflow procedure enabled by OMNI. The body of evidence supporting Omni's clinical efficacy continues to expand, continuing to strengthen our belief that the comprehensive outflow procedure enabled by Omni is a critical procedure in the field of glaucoma that is elevating the standard of care. We will continue prioritizing the production of powerful long-term clinical data, and we anticipate delivering additional compelling results in the future. We are very proud of our published high-quality long-term data, including the Gemini 2 and IRIS studies. Should new proposed LCDs emerge, we believe these data, along with our existing body of clinical evidence, will continue to support coverage of the procedure enabled by Omni for the appropriate patient population. I want to emphasize our belief that the reimbursement profile for Omni today is sufficient to drive high growth. At the same time, When we look at the clinical profile of the procedure enabled by our technology, we believe there are opportunities to better align Omni's coding, coverage, and payment profiles with the clinical value Omni actually delivers. We look forward to continued engagement with the MACs, CMS, commercial payers, and other stakeholders as part of our ongoing efforts to maintain and improve appropriate and equitable market access for glaucoma patients and their surgeons to the procedures enabled by our Omni technology. To close our surgical glaucoma discussion, I want to comment on the recent results from the patent trial that concluded last week in Delaware. As we noted in our press release earlier this week, the jury found that SiteScience's three asserted patents were willfully infringed and awarded monetary damages for past infringement. The monetary damages included $5.5 million in lost profits, and $28.5 million in royalty damages for sales of the Hydrus MicroStent from its commercial launch through trial. As far as next steps, the district court will entertain post-trial briefings by both parties, including with respect to potential enhancements to the damages and other remedies. And the court's final judgment will be subject to appeal. We have invested considerable capital in research and development to create new and innovative technologies. striving to pioneer novel treatments for chronic eye disease. Our commitment to these investments underscores our mission to expand patient access to transformative and interventional technologies that enhance patient outcomes. Given the substantial investments we have made in our surgical innovations on behalf of our surging customers and glaucoma patients, we have a duty to our stakeholders to safeguard our intellectual property portfolio, and we are pleased with the jury's verdict. Our attention remains steadfast on equipping eye care providers with efficacious technologies and executing on our long-term growth strategy in surgical glaucoma and dry eye disease. Now I will turn to our dry eye business. We believe the tear care system represents a transformative technology that will elevate the standard of care for evaporative dry eye disease treatment. Our long-term strategy has been to pioneer the field of interventional dry eye. The interventional dry eye procedure performed with tear care is designed to address the root cause of evaporative dry eye disease, and the growing body of tear care clinical results strongly support our belief in its safety and efficacy. Clinical trial data has evidenced that tear care provided patients with a comprehensive, consistent, fast-acting, and durable treatment. And the Sahara RCT shows superiority on our primary objective endpoint, tear breakup time, versus the market-leading prescription eyedropper stasis. There are over 11 million diagnosed patients who we think could benefit from the procedure, which we believe creates an approximate 2.5 billion core addressable U.S. market opportunity. Over the last five years, we have sold over 55,000 tear care smart lids, develop meaningful relationships with important dry eye key opinion leaders, and achieve the successful six and 12-month results of our landmark Sahara RCT. These developments were critical to build a foundation prior to seeking equitable market access. As part of our original long-term strategy, we are now focused on driving equitable market access for patients that can benefit from the procedures enabled by the TierCare technology. We shifted our resources away from cash pay commercialization efforts toward market access, while reducing our overall commercial spend and infrastructure in the dry ice segment until we have some coverage wins. This year, we have begun discussions with payers with the goal of receiving coverage decisions starting in 2025. Our strategy for these payer discussions is based on articulating the value of peer care from both clinical and health economic perspectives. We believe the combination of the strong clinical data from our Sahara RCT and the findings of our budget impact analysis, to be discussed in more detail shortly, create a compelling case for payers to cover treatments performed with tear care at an appropriate reimbursement level. We recently presented at the ASCRIS conference in April the 12-month results of the Sahara RCT, demonstrating improved signs and symptoms of dry eye disease for tear care patients crossed over from urstasis. The phase two crossover of the Sahara RCT showed subjects who were previously treated with Restasis for six months and then subsequently taken off of Restasis and received a single tear care treatment experienced further statistically significant improvements in the signs and symptoms of dry eye disease. The first two phases of the Sahara RCT, month six and month 12 endpoints, suggest that the effectiveness of tear care appeared to be the same, whether or not a study patient had prior treatment with Restasis, and that similar results could be expected when tear care is used as a primary or secondary treatment for dry eye disease. We are extremely pleased that phase two of the RCT again demonstrates the strong clinical efficacy of the tear care procedure. In the final phase of the Sahara RCT, Patients from the tear care cohort will be followed for a total period of 24 months from baseline with repeat tear care treatments as needed according to protocol-specified treatment with the goal of understanding treatment frequency. We expect results from this final phase of the Sahara RCT to be published in 2025. In addition, we believe there are benefits associated with a dry eye treatment technology like tear care that is not reliant on patient adherence. The ability to avoid the risk of patient noncompliance with a drop regimen further supports the case for prioritizing an interventional, in-office treatment over a prescription-based approach. In addition to clinical data, our conversations with payers include our budget impact analysis, which will be presented this month at ISPOR, the International Society for Pharmaco-Economics and Outcomes Research, a leading health economics conference. We anticipate that the compelling model showcasing the health economic impact and savings for tier care versus prescription drops will be a powerful tool as we work to establish broad coverage for tier care. Another part of our strategy to achieve positive coverage decisions is for our customers to properly submit claims for tier care treatments to payers in a manner that appropriately reflects the value of the procedure. We are happy to report that we are seeing early positive traction with our customers' efforts and we expect this momentum to continue. Again, our goal is to begin receiving positive coverage decisions from payers starting in 2025, and until then, we will continue working diligently to articulate the clinical and economic benefits of care care technology. Looking ahead to the rest of 2024, we believe we are in a position to continue to execute on our strategic priorities and capitalize on our upcoming catalysts as we scale our business with the intent to return to double-digit growth in the second half of 2024 and into 2025. In our surgical glaucoma segment, we expect Omni to capture market share in combo cataract procedures and lead the development of the standalone mixed market. We also remain committed to producing long-term clinical evidence for Omni. In our dry eye segment, we will continue to lay the foundation for market access to interventional eyelid procedures with tear care. We believe we have an incredible opportunity ahead of us, along with the right strategy and the right team to execute and deliver value for our patients and stakeholders. I will now turn the call over to Ali to discuss our financials.