RxSight, Inc. (RXST) Earnings Call Transcript

Craig Bijou, medical device analyst for BofA. And it's a pleasure to have RxSight here, and from the company, Ron Kurtz, CEO; and Shelley Thunen, CFO. So Ron, Shelley, thank you for coming.

Thank you very much for having us.

So it's a bit of an abbreviated fireside chat, so I kind of want to hit on the hot topics.

ASCRS obviously happened last weekend. And from what we've heard, there was a lot of buzz around you guys. So would just love to hear your feedback from the conference, what the feedback from docs were? How does that compare to prior year conferences? And is there an acceleration in interest in you guys and in your technology?

Yes. Well, thank you, Craig. So I'd start off by saying that the ASCRS conference was very well attended. We heard from the organization that attendance was back to pre-pandemic levels and above 2019. So that was good news. We certainly saw that on the exhibit floor. Our booth was busy for most of the time, and we had a number of presentations both at the main meeting as well as in our booth. Overall, we've seen kind of continued growth and interest in the Light Adjustable Lens over the last couple of years since we've been commercial. And that certainly was true again at the ASCRS meeting with just a larger presence. You went to a number of the main sessions. Even if the LAL wasn't the topic of a talk, it was brought up as an option or as a potential solution for particular patients. So that was nice, and that was reflected also in the booth, a lot of interest from both existing customers and surgeons as well as ones who are considering the technology.

That's great. And I would love -- obviously, your LDD, the system growth has been very strong. LAL utilization, also very strong. Would love to kind of hear how docs are adopting your technology. What are the procedures or what lenses are they kind of using LALs instead of in the premium market? And I guess how do you see that pattern of adoption? Once they do buy a system, how much do they start using LALs as a percentage of their broader premium IOL portfolio?

Yes. So I think that I'll start off by just saying that every practice is different. So it's very different. It's very difficult to generalize. However, over the last couple of years, we've seen a general trend towards more interest in the LAL and faster adoption within the practice. So once a practice adopts the technology, especially now as we are into the customer profiles who are not necessarily -- they're not the early adopters anymore. They are doctors who are -- or practices that are acquiring the technology because they've already observed how it's led to practice successes in their colleagues around the country. And so they're acquiring the technology to be able to offer it to as many patients as possible. So they're coming in with that mindset. And then our team, our field teams are focused on making sure that they succeed as early as possible. And we've learned a lot over the last several years of commercialization. With respect to where patients are coming from, it's interesting, in the last couple of years, we've done a customer survey. Actually a third party has done a customer survey. And we've presented that at various meetings, looking at that question, where are LAL patients coming from? And it's been very consistent for the last couple of years that while we do -- the majority of patients are coming from other premium IOLs, most of those -- a large fraction of patients, about 40% are actually coming from the monofocal market. And at first, that might seem surprising, why are patients who are not choosing a monofocal IOL with the current -- with other premium IOLs, why are they choosing an LAL? But if you look at the cataract population as a whole, about 40% of that population has some ocular comorbidity, some other condition that would make them relatively less of a candidate for a multifocal IOL, which, of course, splits light and reduces contrast vision. And so those might be patients who have had previous corneal refractive surgery. It might be patients who have glaucoma or other ocular conditions that already reduce their vision to some degree and where you don't want to add additional loss from a multifocal IOL. And that's -- those patients are disproportionately becoming LAL patients and drawing new patients into the premium market. And then again, we're offering -- for patients who otherwise would choose a toric IOL, about 1/3 of our patients come from that group, we correct astigmatism about twice as well as a standard toric IOL and also give the patient the ability to customize their vision postoperatively, larger value. And so -- and then the other patients who are coming from presbyopia-correcting IOLs but may like the customization or the lack of optical side effects that are associated with multifocal lenses.

And do you -- I mean do you have visibility on a practice-specific perspective on the percentage of LALs they do of their premium? And I guess -- I know it varies by practice. But on average, are you seeing that kind of tick up? And I guess what ultimately drives that increased percentage of what lens they're using?

Yes. It's very -- we don't have precise data on individual practices. The numbers that I mentioned to you, those are voice of customer. And so you can -- they're not based on quantitative accounting of those -- of what they're doing. Generally, there's a range of adoption, as you would expect. But a metric that The Street looks at and you can look at an aggregate level is the number of LALs per LDD per month that are being used. And that has ticked up considerably over the last couple of years. And we don't manage the business to that number because it's an aggregate number, and we're really focused on at the doctor and the practice level, driving continued adoption. If a practice is doing 5 procedures and we think that they can do more, we'll help them do more. If they're doing 20 procedures and we think they can do more, we'll help them do more for that as well.

Okay. Maybe that's a good segue. You guys reported Q1 results yesterday. And just kind of on the seasonality patterns, if you look at the numbers, you guys -- both LDDs and LALs and the utilization was only down a minor amount compared to Q4, which was better than what we were expecting. But would love to just get a sense for how to think about that seasonality throughout the rest of the year on both the LDDs and the utilization of LALs.