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Second Sight Reports Third Quarter 2017 Financial Results
Recent Company Highlights:
-
Generated net sales of
$1.6 million in the third quarter of 2017, compared to$1.2 million in the third quarter of 2016; -
Implanted 12 Argus® II Retinal Prosthesis Systems (
Argus II) during the third quarter of 2017, compared to 19 in the second quarter of 2017, and 14 in the third quarter of 2016; - The Company anticipates a strong fourth quarter of 2017, with over 20 Argus II surgeries completed or scheduled to date;
-
Received full approval from the
U.S. Food and Drug Administration (FDA ) to begin the Orion™ Cortical Visual Prosthesis System (Orion) feasibility clinical study, allowing two U.S. sites, the University of California atLos Angeles (UCLA) andBaylor College of Medicine (Baylor ) inHouston , to enroll up to five total patients; -
Appointed
Frank Vandeputte as Vice President and General Manager, EMEA andAsia Pacific , who will lead all commercial activities outsideNorth America and focus on the Company’s direct and indirect market strategies, and Gregoire Cosendai as Vice President, Clinical Affairs, who will focus on expanding the population of patients treatable by the Argus II and the Orion clinical program, targeting millions of additional patients who today have no other treatment option; -
Received approval from Bundesinstitut für Arzneimittel und
Medizinprodukte (BfArM), the German competent authority, to begin a
ten-patient study in
Germany to implant and evaluate the Argus II in better sighted retinitis pigmentosa (RP) patients; and, The Centers for Medicare Services (CMS) issued a finalMedicare outpatient payment rate for 2018 of$122,500 for Argus II and the associated surgical implantation procedure.
“We are making excellent progress against all of our 2017 stated goals.
Our Centers of Excellence model in
“We also made significant clinical progress on the R&D front. German
authorities approved the protocol we submitted for a clinical trial to
treat better sighted RP patients with our
Third Quarter 2017 Financial Results
Total revenue was $1.6 million for the third quarter of 2017, compared with $1.2 million in the third quarter of 2016. The Company received a higher revenue per implant due to the higher CMS reimbursement rate in 2017, and the collection of some deferred revenue.
Gross profit was $609,000 in the third quarter of 2017, compared to a
Total operating expenses in the third quarter of 2017 were $7.4 million,
compared to
Net loss for the third quarter of 2017 was $6.7 million, or
The non-GAAP adjusted net loss for the third quarter of 2017, excluding
non-cash charges, was
Nine Months Ended
For the nine months ended
Gross profit in first nine months of 2017 was
Total operating expenses during the first nine months of 2017 were $22.8
million versus
Operating loss in the first nine months of 2017 was $21.2 million,
compared to an operating loss of
Net loss for the nine months ended September 30, 2017 was $21.1 million,
or
2017 Key Objectives
-
Validate revised Centers of Excellence commercial model in
North America in order to demonstrate adoption - Implant Orion in humans, creating the opportunity to treat up to six million blind individuals worldwide who today have no options
- Demonstrate the ability to treat better-sighted Retinitis Pigmentosa (RP) patients in order to expand our treatable population beyond bare light RP
Conference Call
As previously announced, Second Sight management will host its third quarter 2017 conference call as follows:
Date | Thursday, November 2, 2017 | |||||
Time | 4:30 PM EDT | |||||
Telephone | U.S: | (800) 954-0586 | ||||
International: | (212) 271-4657 | |||||
Webcast (live and archive) |
www.secondsight.com under the 'Investor Relations' section. |
|||||
A replay of the conference call will be available for two weeks after the call's completion by dialing (800) 633-8284 (U.S.) or (402) 977-9140 (International). The conference ID for the replay is 21861643. The archived webcast will be available for 30 days via the aforementioned URL.
About the Orion Visual Cortical Prosthesis System
Second Sight, the manufacturer of the Argus II®
Retinal Prosthesis System (Argus II), has developed a new device, the
Orion. A proof-of-concept clinical trial at
About the Argus II Retinal Prosthesis System
Second Sight's Argus II System provides electrical stimulation that
bypasses the defunct retinal cells and stimulates remaining viable cells
inducing visual perception in individuals with severe to profound
Retinitis Pigmentosa. The Argus II works by converting images captured
by a miniature video camera mounted on the patient's glasses into a
series of small electrical pulses, which are transmitted wirelessly to
an array of electrodes implanted on the surface of the retina. These
pulses stimulate the retina's remaining cells, intending to result in
the perception of patterns of light in the brain. The patient must learn
to interpret these visual patterns, having the potential to regain some
visual function. The Argus II was the first artificial retina to receive
widespread commercial approval, and is offered at approved centers in
About Second Sight
Second Sight's mission is to develop, manufacture and market innovative
implantable visual prosthetics to enable blind individuals to achieve
greater independence. Second Sight has developed, and now manufactures
and markets, the Argus® II Retinal Prosthesis System. Enrollment has
been completed in a feasibility trial to test the safety and utility of
the Argus II in individuals with Dry Age-Related Macular Degeneration.
New hardware and software to improve the quality of the vision produced
is underway. A clinical trial to study the Argus II in better-sighted
subjects earlier in the disease was recently approved in
Safe Harbor
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange and Exchange Act of 1934, as amended, which are intended to be covered by the "safe harbor" created by those sections. All statements in this release that are not based on historical fact are "forward looking statements." These statements may be identified by words such as "estimates," "anticipates," "projects," "plans," or "planned," "seeks," "may," "will," "expects," "intends," "believes," "should" and similar expressions or the negative versions thereof and which also may be identified by their context. All statements that address operating performance or events or developments that Second Sight expects or anticipates will occur in the future are forward-looking statements. While management has based any forward looking statements included in this release on its current expectations, the information on which such expectations were based may change. Forward-looking statements involve inherent risks and uncertainties which could cause actual results to differ materially from those in the forward-looking statements, as a result of various factors including those risks and uncertainties described in the Risk Factors and in Management's Discussion and Analysis of Financial Condition and Results of Operations sections of our Annual Report on Form 10-K as filed on March 16, 2017, and our other reports filed from time to time with the Securities and Exchange Commission. We urge you to consider those risks and uncertainties in evaluating our forward-looking statements. We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. Except as otherwise required by the federal securities laws, we disclaim any obligation or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein (or elsewhere) to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
Reconciliation to Non-GAAP Financial Measures
In addition to reporting all financial information required in accordance with generally accepted accounting principles (GAAP), the Company is also reporting Non-GAAP net loss and Non-GAAP net loss per share which are non-GAAP financial measures. Non-GAAP net loss and Non-GAAP net loss per share are not measurements of financial performance under GAAP and should not be used in isolation or as a substitute or alternative to net income, operating income or any other performance measure derived in accordance with GAAP, or as a substitute or alternative to cash flow from operating activities or a measure of the Company’s liquidity. In addition, the Company's definition of Non-GAAP net loss and Non-GAAP net loss per share may not be comparable to similarly titled non-GAAP financial measures reported by other companies. Non-GAAP net loss and Non-GAAP net loss per share, as defined by the Company, represent net loss adjusted for non-cash stock-based compensation and a reserve for excess inventory. Management believes that these non-GAAP financial measures provide useful supplemental information regarding the performance of the Company’s business operations and facilitates comparisons to the Company’s historical operating results. For a full reconciliation of Non-GAAP net loss to the most comparable GAAP financial measures, please see the tables at the end of this press release.
Financial Tables Follow
SECOND SIGHT MEDICAL PRODUCTS, INC. | |||||||||
AND SUBSIDIARY | |||||||||
Condensed Consolidated Balance Sheets | |||||||||
(in thousands) | |||||||||
September 30, | December 31, | ||||||||
2017 | 2016 | ||||||||
(unaudited) | |||||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash | $ | 639 | $ | 539 | |||||
Money market funds | 12,705 | 10,336 | |||||||
Accounts receivable, net | 668 | 274 | |||||||
Inventories, net | 3,245 | 3,416 | |||||||
Prepaid expenses and other current assets | 462 | 717 | |||||||
Total current assets | 17,719 | 15,282 | |||||||
Property and equipment, net | 1,327 | 1,489 | |||||||
Deposits and other assets | 35 | 39 | |||||||
Total assets | $ | 19,081 | $ | 16,810 | |||||
LIABILITIES AND EQUITY | |||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 826 | $ | 1,156 | |||||
Accrued expenses | 2,330 | 2,088 | |||||||
Accrued compensation expenses | 2,266 | 1,600 | |||||||
Accrued clinical trial expenses | 623 | 629 | |||||||
Deferred revenue | 64 | 85 | |||||||
Deferred grant revenue | - | 104 | |||||||
Total current liabilities | 6,109 | 5,662 | |||||||
Commitments and contingencies | |||||||||
Stockholders’ equity | 12,972 | 11,148 | |||||||
Total liabilities and stockholders’ equity | $ | 19,081 | $ | 16,810 | |||||
SECOND SIGHT MEDICAL PRODUCTS, INC. | |||||||||||||||||
AND SUBSIDIARY | |||||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||
(unaudited) | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||
Net sales | $ | 1,610 | $ | 1,180 | $ | 4,855 | $ | 3,270 | |||||||||
Cost of sales | 1,001 | 2,615 | 3,255 | 6,768 | |||||||||||||
Gross profit (loss) | 609 | (1,435 | ) | 1,600 | (3,498 | ) | |||||||||||
Operating expenses: | |||||||||||||||||
Research and development, net of grants | 1,826 | 1,588 | 5,622 | 3,266 | |||||||||||||
Clinical and regulatory | 629 | 609 | 1,927 | 1,955 | |||||||||||||
Selling and marketing | 2,375 | 2,262 | 7,057 | 6,473 | |||||||||||||
General and administrative | 2,528 | 2,605 | 8,170 | 7,635 | |||||||||||||
Total operating expenses | 7,358 | 7,064 | 22,776 | 19,329 | |||||||||||||
Loss from operations | (6,749 | ) | (8,499 | ) | (21,176 | ) | (22,827 | ) | |||||||||
Interest and other income, net | 33 | 10 | 69 | 18 | |||||||||||||
Net loss | $ | (6,716 | ) | $ | (8,489 | ) | $ | (21,107 | ) | $ | (22,809 | ) | |||||
Net loss per common share – basic and diluted | $ | (0.12 | ) | $ | (0.20 | ) | $ | (0.40 | ) | $ | (0.57 | ) | |||||
Weighted average shares outstanding – basic and diluted | 56,799 | 42,220 | 53,206 | 39,929 | |||||||||||||
SECOND SIGHT MEDICAL PRODUCTS, INC. | ||||||||||||||||
AND SUBSIDIARY | ||||||||||||||||
Reconciliation of Non-GAAP Information to Most Comparable GAAP Measures | ||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Net loss | $ | (6,716 | ) | $ | (8,489 | ) | $ | (21,107 | ) | $ | (22,809 | ) | ||||
Add back non-cash charges: | ||||||||||||||||
Stock-based compensation | 970 | 964 | 3,016 | 2,787 | ||||||||||||
Excess inventory reserve | (275 | ) | 1,044 | (1,731 | ) | 2,611 | ||||||||||
Non GAAP net loss | $ | (6,021 | ) | $ | (6,481 | ) | $ | (19,822 | ) | $ | (17,411 | ) | ||||
Net loss per share | $ | (0.12 | ) | $ | (0.20 | ) | $ | (0.40 | ) | $ | (0.57 | ) | ||||
Add back non-cash charges: | ||||||||||||||||
Stock-based compensation | 0.01 | 0.02 | 0.06 | 0.07 | ||||||||||||
Excess inventory reserve | (0.00 | ) | 0.03 | (0.03 | ) | 0.06 | ||||||||||
Non GAAP net loss per share | $ | (0.11 | ) | $ | (0.15 | ) | $ | (0.37 | ) | $ | (0.44 | ) |
View source version on businesswire.com: http://www.businesswire.com/news/home/20171102006392/en/
Source:
Investor Relations:
Institutional
Investors
In-Site Communications, Inc.
Lisa Wilson,
President
212-452-2793
lwilson@insitecony.com
or
Individual
Investors
MZ North America
Greg Falesnik, Managing
Director
949-385-6449
greg.falesnik@mzgroup.us