Sight Sciences, Inc. (SGHT) Earnings Call Transcript & Summary

My name is Craig Bijou. I'm a medical device analyst here at BofA, and it's a pleasure to have Sight Sciences with us today. From the company, Paul Badawi, CEO; and Ali Bauerlein, the new CFO as of a couple of weeks ago. So great. Paul, Ali, thank you for coming.

Thanks for having us.

So I guess, want -- just want to start, you guys reported Q1 results last week, pretty strong results. So maybe if you can start with a brief recap of where you saw the growth, a couple of key metrics for the quarter.

Yes, I'm happy to take that question and happy to be here. Thanks for having us. The quarter was another great quarter for us. We continue to take share in the MIGS space. We had sales of about $18.8 million, which was up nicely, about 26% compared to the last quarter of 2022 -- the first quarter of 2022. And really, the mass majority of the sales were driven by our continued success with the OMNI product, and smaller contributors being growth of the SION products within that surgical glaucoma segment as well as growth in our Dry Eye segment. So we really saw success across our entire business in the first quarter. We also were focused on showing improved operating expense leverage, as we look to use the resources we already have and use them more effectively to drive sales without adding to our cost infrastructure. So it really was a successful quarter for us. Of course, we saw normalized seasonality of it being down a little bit compared to the sequential quarter comparison, but we were very proud of our results in the quarter and see a bright future for us as we look forward into the remainder of 2023 and expect our total full year guidance range, $89 million to $94 million, which is growth of 25% to 32%. So we're very focused on hitting that goal. And again, the primary driver of that is within our MIGS area, Surgical Glaucoma and specifically the OMNI product.

That's great. And I believe guidance, you reiterated guidance -- or reaffirmed guidance. And maybe just if we stick with guidance, just talk about kind of the cadence, how we should think about the cadence, if there's any seasonality that was kind of built into Q1 and then how we should think about each quarter going through the year on the top line and also expenses, too.

Yes, yes. Happy to take that. The first quarter was kind of our more normalized seasonality. Last Q1, Q1 of 2022, was actually a little bit stronger than normal. When we look at the first half of 2023, we expect sales to be very similar in cadence of the percent of the total, as what we saw last year. So it was about 45% of sales last year. We think that's a reasonable target looking at the first half of 2023 as well. And on the expense side, overall, we expect about $30.5 million of adjusted OpEx spend per quarter. And we do expect in the second quarter, though, those -- just given timing of expenses to be on the higher end of that, but expect to average that for the course of the year. So we think we're set up very nicely, both in terms of top line results as well as OpEx leverage.

Great. And maybe shifting to OMNI. And the importance, obviously, it's your largest product. You've talked about the importance of kind of getting into the standalone MIGS procedure. I think you've -- some of the feedback that we've heard from ASCRS this past weekend was that there might be an increase in interest in standalone. So one, I kind of wanted to get your perspective on what you were hearing at the conference. How does that compare to some of the commentary or some of the feedback you heard in prior years? And I guess, maybe start there, and then I can dig in a little bit.

Sure. Yes, happy to take that. I think the buzz around standalone at -- last weekend is ASCRS conference was definitely at an all-time high. I would say, since we received our expanded label for OMNI in March of 2021, we've had a very focused effort on educating the market around standalone. As we continue to train surgeons on OMNI in the existing combo cataract segment, every single one of those surgeons can and will become a standalone surgeon. It's the same surgeon, same product, same procedure, same reimbursement pathway, and it's just a matter of driving standalone patients. There are millions of these patients who are being seen in the offices, optometry practices, ophthalmology practices. They're being prescribed meds, 1 med, 2 meds, 3 meds. Their disease is unfortunately progressing. So OMNI offers a very nice, safe, minimally invasive and effective surgical alternative to intervene earlier. So since we got our expanded label in March of 2021, which covered mild-to-moderate standalone intervention, we've deliberately been educating the market now. And I think I'd say it's been growing in terms of the buzz this entire time. I think ASCRS, yes, it's at an all-time high, but I think we've been growing the standalone market nicely. That business is growing just like our combo cataract business is growing. And for us, it's about training more surgeons on OMNI. Every time we train a new surgeon on OMNI, that becomes a potential standalone surgeon, generating more clinical data on standalone. It's a very safe and effective procedure, and the more and more clinical data we can generate to prove will help drive further adoption of standalone. And lots of education, educating the referral provider community. So we've been doing that. Again, at ASCRS, there were a number of our surgeons who love using OMNI in standalone and are, frankly, making it part of their regular practice. We're starting to see surgeons who are dedicating OR time, blocks of time in the OR for standalone OMNI. So if you extrapolate that, everything starts anecdotally, what we're seeing more and more of that. And if you extrapolate, you can see a future where standalone glaucoma surgery is one of the top procedures in the ASC.

And just to -- maybe to put it in perspective, I guess, for investors, where is standalone penetration today? And I do think -- we've talked about this, I think you're ahead of where the market is. But maybe a little bit of perspective of that penetration of standalone and where you guys are and positioned.

Yes. I think, roughly, based on some claims analyses, the standalone market, standalone glaucoma surgery as a percentage of total MIGS surgery, including combo cataract, is about 5%. We believe our business, OMNI, OMNI is using combo cataract versus OMNI is using standalone glaucoma surgery. About 15% of OMNI's utilization is on a standalone basis. So certainly, we believe we're driving the growth in the standalone market. Our mix is ahead of the market's mix.

And over the last couple of years, you mentioned that it's kind of been building the momentum for standalone. And I don't know if you have been seeing or hearing points of resistance. But what, if any, push back to standalone have you heard? And you mentioned clinical data. Is it clinical data that gets people over the hump? Is it just time, anecdotal feedback, results, personal anecdotal results? But...