(PRESS RELEASE) MENLO PARK, CA — Sight Sciences, Inc. (“Sight Sciences” or the “Company”), an eyecare technology company focused on developing and commercializing innovative, interventional technologies that elevate the standard of care, today reported financial results for the second quarter ended June 30, 2024, and narrowed financial guidance for full year 2024.
Recent Business and Second Quarter 2024 Financial Highlights
- Generated total revenue of $21.4 million, an increase of 11% compared to the prior quarter and a decrease of 9% compared to the same period in the prior year.
- Achieved total gross margin of 86% compared to 86% in the same period in the prior year.
- Reduced cash usage to $9.1 million, a decrease of 29% compared to $12.8 million cash used in the second quarter of 2023, reflecting continued operational discipline.
- Surgical Glaucoma ordering account utilization increased 5% and the number of active accounts increased 5% compared to the first quarter of 2024. These sequential trends highlight recovery from the LCD uncertainty period and growing momentum within the Surgical Glaucoma segment through the first half of 2024.
- The Company has recently informed existing TearCare customers of a future list price increase to $1,200 per set of TearCare SmartLids effective October 1, 2024. The Company is modifying its pricing structure to more accurately reflect the clinical and health economic value of the TearCare procedure as demonstrated in both Phase 1 and Phase 2 of the SAHARA RCT and its budget impact model.
Recent Clinical and Reimbursement Highlights
- Announced the publication of the Phase Two twelve-month results of the SAHARA RCT demonstrating improved signs and symptoms of dry eye disease for patients crossed over from Restasis to TearCare. Trial results demonstrated patients treated with a single interventional eyelid procedure enabled by TearCare technology after receiving twice-daily Restasis for six months during Phase One realized further clinically meaningful improvements in the signs and symptoms of dry eye disease at month six through month twelve beyond the improvements seen with Restasis during the first six months.
- The Centers for Medicare and Medicaid Services (“CMS”) published the 2025 Proposed Medicare Payment Rules for hospital outpatient department and ambulatory surgery center (“ASC”) settings, along with the proposed 2025 Medicare physician fee schedule. The ASC payment rule for 2025 includes a proposal to grant device-intensive status and adopt a related proposed increase in Medicare’s facility payment rate for canaloplasty procedures reported with CPT code 66174, a code that is currently used to report the Company’s comprehensive OMNI Surgical System (“OMNI”) procedure. If the rule is finalized with device-intensive status for CPT code 66174, it will result in an increased ASC facility payment compared to 2024 Medicare payment amounts, per the table below, effective January 1, 2025. These proposed rules are not considered final until the final rule is published, which we expect to occur in the fourth quarter of 2024.
Management Commentary
Paul Badawi, co-founder and chief executive officer of Sight Sciences commented, “In the second quarter we continued to establish commercial momentum as we drove mid-single digit sequential increases in account utilization and active customers in our Surgical Glaucoma segment, and recovered the net customers lost during the LCD uncertainty period. With increasing clarity on coverage eligibility, thousands of surgeons can continue to routinely use our OMNI technology for glaucoma patient management, and this allows us to focus on supporting expanded use cases for the technology, reengaging existing customers who were awaiting coverage clarity, and training new surgeons who would like to perform the procedure enabled by OMNI.”
Mr. Badawi continued, “In parallel, we continue to advance our Dry Eye business with further clinical and market access progress. The recent publication of the twelve-month SAHARA results and the soon to be published budget impact model more accurately demonstrate the true value of the TearCare technology. We intend to ensure this value is appropriately distributed across stakeholders by pioneering market access for interventional dry eye procedures. Reimbursement at the levels supported by our evidence shows compelling economics and value to patients, payors, and eyecare providers. We are inspired by the opportunities in front of us and remain steadfast in our commitment to elevating the standards of care in eyecare.”
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Second Quarter 2024 Financial Results
Revenue for the second quarter of 2024 was $21.4 million, a decrease of 9% compared to the same period in the prior year. Surgical Glaucoma revenue was $20.2 million, a decrease of 5% compared to the same period in the prior year. This decrease was primarily driven by lower account utilization and a lower average selling price in the second quarter versus the same period in the prior year. Dry Eye revenue was $1.1 million, a decrease of 46% from the same period in the prior year. The expected decline was primarily due to fewer new accounts and related SmartHub sales, as a result of the planned reduction in sales infrastructure, and the Company’s focus on the next phase of its commercial strategy for its Dry Eye segment, which involves achieving market access.
Gross profit for the second quarter of 2024 was $18.3 million compared to $20.1 million in the same period in the prior year. Gross margin for the second quarter of 2024 was 86%, compared to 86% in the same period in the prior year. Surgical Glaucoma gross margin in the second quarter of 2024 was 88%, compared to 89% in the same period in the prior year, primarily driven by product sales mix. Dry Eye gross margin in the second quarter of 2024 declined to 47%, from 55% in the same period in the prior year, primarily due to product sales mix and higher overhead costs per unit in the current period due to lower production volumes.
Total operating expenses were $31.0 million in the second quarter of 2024, representing a 12% decrease compared to $35.3 million in the same period in the prior year, which reflects reduced operating expenses and improved operating expense leverage compared to the same period in the prior year. The decrease was primarily due to lower personnel-related expenses, which were partially offset by increased stock-based compensation expenses. Research and development expenses were $4.3 million in the second quarter of 2024 compared to $5.2 million in the same period in the prior year, representing a 17% decrease. Selling, general, and administrative expenses were $26.7 million in the second quarter of 2024, compared to $30.1 million in the same period in the prior year, representing an 11% decrease. Adjusted operating expenses were $26.6 million in the second quarter of 2024, down from $31.5 million in the same period in the prior year, representing a 15% decrease.
Net loss was $12.3 million ($0.25 per share) in the second quarter of 2024, compared to $14.8 million ($0.30 per share) in the same period in the prior year.
Cash and cash equivalents totaled $118.2 million and total long-term debt was $35.0 million (before debt discount and amortized debt issuance costs) as of June 30, 2024, compared to $154.5 million and $35.0 million, respectively, as of June 30, 2023. Cash used in the second quarter of 2024 totaled $9.1 million, compared to the same period in the prior year where cash used was $12.8 million, reflecting continued operational discipline.
2024 Financial Guidance
The Company continues to expect double-digit surgical glaucoma revenue growth in the second half of 2024 compared to the same period in the prior year as it regains commercial momentum and expands its customer base and account utilization. However, the Company expects Dry Eye revenue to decrease as it implements an increase in dry eye pricing effective October 1, 2024, which it believes will have a significant negative impact on cash-pay procedure volumes in the second half of 2024, before it expects a return to growth in 2025 with market access wins.
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As a result, Sight Sciences narrows revenue guidance expectations for full year 2024 to approximately $81.0 million to $83.0 million, representing growth of approximately 0% to 2% compared to 2023, versus its prior range of $81.0 million to $85.0 million. The Company expects dry eye revenue for full year 2024 to be less than $3.0 million, including the $2.1 million of revenue achieved through the end of the second quarter.
The Company narrows guidance expectations for adjusted operating expenses for full year 2024 to approximately $107.0 million to $109.0 million, representing a decrease of approximately 1% to 3% compared to 2023, versus its prior range of $107.0 million to $110.0 million.
The Company’s full year 2024 financial guidance is forward-looking in nature, reflecting management’s expectations as of August 1, 2024, and is subject to significant risks and uncertainties that limit its ability to accurately forecast results. This outlook assumes no meaningful changes to the Company’s business prospects or risks and uncertainties identified by management that could impact future results, which include, but are not limited to: changes in the reimbursement environment, including coverage decisions and reimbursement rates; the outcome of clinical trials; the outcome of legal proceedings or regulatory matters; changes in economic conditions, including discretionary spending and inflationary pressures; and supply chain disruptions, constraints and related expenses.
Non-GAAP Financial Measures
Certain non-GAAP financial measures, including adjusted operating expenses, are presented in this press release to provide information that may assist investors in understanding the Company’s financial and operating results. The Company believes these non-GAAP financial measures are important performance indicators because they exclude items that are unrelated to, and may not be indicative of, the Company’s core financial and operating results. These non-GAAP financial measures, as calculated, may not necessarily be comparable to similarly titled measures of other companies and may not be appropriate measures for comparing the performance of other companies relative to the Company. These non-GAAP financial measures are not intended to represent, and should not be considered to be more meaningful measures than, or alternatives to, measures of operating performance as determined in accordance with GAAP. To the extent the Company utilizes such non-GAAP financial measures in the future, it expects to calculate them using a consistent method from period to period.
Conference Call
Sight Sciences’ management team will host a conference call today, August 1, 2024, beginning at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time. Investors interested in listening to the conference call may do so by accessing a live and archived webcast of the event at www.sightsciences.com, on the Investors page in the News & Events section. The webcast will be available for replay for at least 90 days after the event.
