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

All right. Can you guys -- can everybody hear me? Yes. All right. Well, let's get started. I just want to thank everybody for coming tonight. I appreciate all the support. Matt Gibson, thanks for doing a ton of work to organize this event. We're excited. We have a great agenda tonight. We're going to spend the full hour talking about MIGS reimbursement...

Oh, yes.

No. Wait. Actually -- actually, no. We're not going to do that. [Technical Difficulty] Excited to just to introduce the company, introduce our mission what we're doing in dry eye with TearCare, our investigators, our incredible SAHARA study and the incredible outcomes there. So just starting off, Sight Sciences for those of you, who are less familiar with the company, we're an ophthalmic medical device company. We are committed to innovation, committed to our customers, ophthalmologists and optometrists. Our philosophy on innovation is to be disruptive to develop things that we believe can elevate the standard of care. How do we do that? I think we've done it with TearCare. We've done it with our OMNI Surgical System on the glaucoma side. We've tried to equip eye care providers with technologies that allow them to minimally invasively and comprehensively intervene at the root underlying cause of disease and to do so in a user-friendly manner, user-friendly to the ECP and user-friendly to the patient. We believe if we can do that, if we can deliver these technologies and commercialize them with excellence and train with excellence and develop really strong relationships with our customers, we can help over time, elevate the standard of care for millions of patients suffering from these chronic diseases, in our case, dry eye and glaucoma. Dry eye is a really exciting space. It's getting more and more exciting by the minute. We obviously are focused on treating the root underlying cause of dry eye. At least the majority of dry eye is due to accelerated evaporation, and you can trace back the evaporation to disease meibomian glands. They're obstructed. We've developed a technology and the procedure that allows ophthalmologists and optometrists to address that obstruction, address all of the meibomian glands and all of the eyelids to evacuate those obstructions, hopefully allow the meibomian glands to resume the production of good, clear liquid Meibum that coats the tear and slows down tear evaporation. We're committed to -- we obviously believe if we deliver these technologies that address the root underling cause of disease comprehensively, we should create a differentiated efficacy profile. And so how do we prove that? We like to prove it through rigorous clinical evidence, ideally, either large-scale real-world evidence, RCTs, in this case, with TearCare, SAHARA is an amazing RCT. I think it's one of the most compelling RCTs in the dry eye space ever. I believe it's the first large-scale drug versus device RCT, I don't know. I can't think of another dry eye study that's being -- has a 2-year endpoint. We have a 6-month superiority endpoint to Restasis. Dr. Ayres is going to talk about the exciting clinical data. But it's a very, very rigorous study. It's our second RCT. We completed our first RCT with many of our clinical investigators in the room several years ago. The first study was for regulatory approval and the second study was for market access. We believe patients deserve access to care. And in evaporative dry eye, meibomian gland disease, there isn't a procedure that patients have reimbursed access to. And so, years ago, we [ sought out ] we said, okay, we have -- we're developing very compelling technology. We're starting to see the clinical results. We think they're disruptive enough that we can aim really high and maybe even pioneer market access in this category. But what will it take? And in reimbursement, it's probably not wise to guess. Whenever I guess, I'm wrong, even when I feel like I'm informed, I'm wrong. But we were able to go talk to payers before designing this protocol. So we talk to our clinical investigators, we talk to payers, we ask them, what do you need to see to support market access. If we're able to bring you compelling clinical data, what does it need to tell you either. And what they wanted to see was how does TearCare compare to something that they are paying a lot for today. And so, the market leading dry eye therapeutic is Restasis. They were pretty unanimous, do a head-to-head study with Restasis, ideally show superiority and then tell us what's the durability treatment effect, right? So if we decide to cover TearCare, what are we -- is it 1 treatment a year? Is it 2 treatments per year. And over the tens of thousands of cases that we've seen in the cash pay environment, we've seen 1 to 2 treatments per year typically. Now it depends on the patient, it depends on the eyecare provider, the procedure provided, severity of disease, et cetera, but 1 to 2 treatments per year. And so, we embarked on this study. We're committed to transforming this category. We've made significant investments, long-term investments in evaporative dry eye. We want to be the company in partnership with our investigators to bring TearCare to the market in a way that it's reimbursed, and patients have access to the great clinical outcomes that Dr. Brandon Ayres going to share with us in a moment. So that's our commitment to the space to continue to develop and commercialize disruptive innovations that we believe can elevate the standard of care. And so, I am happy to introduce Dr. Brandon Ayres. We've been working with Dr. Ayres for many years on a number of studies. I think we had, I believe, 25 different sites. He was one of our principal investigators, cornea specialist, Co-Chair of the Cornea Fellowship at the one and only Wills Eye Hospital.

One and only.

In Philadelphia.

Land of cheese steaks.

That's right. [indiscernible] [ UPenn ]. So anyway, very excited to introduce you, Dr. Ayres and having you share the exciting SAHARA clinical data.

All right. Thanks, Paul.

Thank you.

All right. Thanks. It is funny. I have -- we do a fair amount of speaking. I've never been so nervous about presenting something in front of a relatively small group of people, but thank you so much for having me. We wanted to bring to use some of the data on the SAHARA study, which is the TearCare comparing Restasis study. Again, my name is Brandon Ayres. I'm from the cornea service at Wills Eye, land of cheese steaks and pretzels. So let's talk about dry eye for a little bit, and let's show you some pretty exciting data. Restasis is probably one of the most studied medications in ocular surface disease, right? It's been around since about 2003. There's more prescriptions written for that for chronic dry eye than [ end of medication ]. There's more publications on that than any other. But cyclosporine can be difficult. We have issues with our patients. It's not a friendly medication on the ocular surface. There's lots of burning and stinging. So we'll often ask for patients to use this drop twice a day for 6 months, 12 months a year forever, and compliance is an issue because of the burning and stinging. And sometimes they're relatively slow onset of action. Figuring that Restasis may not really take full effect for about 6 months. And that comes into play when we look at the study design for the SAHARA study. Now TearCare is completely different. This is application of thermal energy or heat to the eyelids followed by compression of the oil glands to clear the meibomian glands, a different way of tackling dry eye, tackling a different sort of world of dry eye when we sort of artificially divide dry into aqueous tear deficiency or not enough tears versus evaporative dry eye, where the quality of the tear isn't enough, so you get evaporative loss leading to dry eye and inflammation. So it's a little bit of a chicken or the egg. Does inflammation come first? Or does the inflammation come from clogging of the glands. And if we can treat that, will we then decrease inflammation downstream. So comparing a drop versus a procedure is quite different, and we'll often get questions from our patients, well, hey, doc, which is better? What do you think I should do? Should I do a treatment? Or should I do a medication? And my answer is usually, well, I think you should do this or in my experience, you should do this, or my buddy says, they do well with this. But I couldn't really say I know this. And now with the SAHARA study, I can actually talk to my patients and say, well, this is what we actually know because we did some science on this. So the aim of this study was to compare the effectiveness of the TearCare procedure with Restasis at 6 months in 2 different primary endpoints and a couple of secondaries. And because of the onset of action Restasis at 6 months, we chose 6 months for our primary endpoint. And these patients had 2 TearCare procedures, one at the onset of the study and 1 at 5 months. This is what the TearCare system looks like. And if you haven't seen this or had it in your hand, that is a charger, a USB charger, that little thing that looks like a puck. It's about the size of a hockey puck to give you a sense of size. It easily fits in your pocket. That is the microcomputer that regulates the smart lids, which are right here. These will actually they have an adhesive that stick to the temple. And these are basically the thermal couplers. Those will heat up and they will stick to the eyelid. So patients can sit in the office, they have these adherent to their skin. They can keep the eye open. They sit in a chair and that temperature has raised to about 113 degrees for 15 minutes, all regulated and checked by the Smart Hub. And then that last little device you see in the background is the clearance assistant. It's a flat paddle forceps, if you will. And then manually, we will go after the heating procedure, and we will compress the lids along the lower and upper lids to evacuate the meibomian gland. So it's partially regulated by the microcomputer and partially done manually, which actually, I think, has some advantages we can dig into that later. So I mentioned we're going to do some science on this, and there are several different levels of science on what's a good study and what is not. Now a bad study is me taking 1 or 2 of my patients going, yes, I think this works better and so that's kind of my own clinical impression. And according to The Centre for Evidence-Based Medicine, that's going to be a Level 5 study. It's junk. It doesn't mean anything. As you add more controls, as you add more patients, you move up the scale to better and better studies, better and better science. And by the time you get to, where the SAHARA study is, which is at the top level, right, we have an individual. Now this was actually a multicenter, but it is one study, one SAHARA study. It is randomized, it's controlled and it's masked. There is inherent bias in every study if it's not masked. Patients want to do well. They want to be good students. They want to show something that works. Physicians want something to work. So if the physician isn't masked, it is not going to be a good study. This was a masked study, and I think that's critical. Not only is it one of the biggest and only studies of its kind, it was set up properly. So this is at the top level of study quality. The only thing better would be if we had multiple SAHARA studies and then we combine the data that's like a meta-analysis study. So this is good science. And this is what the protocol looks like. Essentially, every patient, of course, had to have dry eye, and they had to have a rapid tear break up time, which puts them into the very large category of evaporative dry eye, both of which could be treated with either a procedure or a medication. It would be the physician's choice. They're going to be randomized one-to-one either with treatment with branded Restasis. So this wasn't generic. This was branded Restasis or the TearCare procedure. We'll then look at our primary endpoints at month 6. Now again, in the TearCare arm, patients had a treatment on entry into the study and then again at 5 months. And that was done to help optimize both medications to try and look to see when both medications should be working at their best. We know that Restasis takes 6 months. There are some early evidence through the [indiscernible] studies that the TearCare procedure would have a maximum effect at about 4 weeks and then begin to decline. So we have 2 different treatments that have peak effectiveness at very different time sets. So we tried to set the study to really maximize both treatments, so we would really see how patients would do. And then, we'll look at our primary endpoints and secondary endpoints. And there's another arm to the study, which is a crossover study, which we will not cover today. That is still in process. We're still collecting data on it, so I can't present it. So 345 patients in the study, the largest study of its kind, the only study of its kind to my knowledge. Our primary endpoints are going to be tear break up time, how quickly do the tears begin to evaporate on the surface, as well as the Ocular Surface Disease Index a well-studied and validated questionnaire for patients that separates them into no, mild-to-moderate or severe dry eye. Some secondary endpoints, a lot of the meibomian gland secretion score with [indiscernible]. These [ weird ] words, meibomian gland secretion score, meibomian glands yielding any liquid score and -- is what comes out of the meibomian glands. We look at it in the study, we are actually compressing the oil glands. We are grading 15 oil glands along the inferior lid and what comes out in the quality of them. We'll also look at the SANDE score and the Eye Dryness Score, which are self-reported symptom scores for patients for dry eye. And what you see right off the back is when we compare at all time points for tear break up time are -- one of our primary endpoints, the TearCare system outperforms Restasis at all time points. So right off the back, it works well. And these p-values are highly significant. This is well below a p-value of 0.05, meaning this is truly going to happen, this should be repeatable. If it's science, it should be repeatable, and this definitely is going to be repeatable. And you also would notice how quickly it works, something that patients want is to feel better and can feel better quickly. They want to know how fast this is going to work. Well, here, even at 1 week, we see really an impressive result when it comes to tear break up time. Now all those other words, meibomian glands yielding any liquid, meibomian glands secreting clear liquid, meibomian gland secretion score, all of this increase. And interestingly here, if you look, again, the speed of onset, we would expect Restasis to take longer to creep up, and you do see that, but we have a statistically significant improvement in almost all of these scores outside of 1, which is at month 3 with glands yielding clear liquid, where we thought we may actually see an increase and a decrease in the effectiveness of TearCare, so we are beginning to get to the end of its maybe improvement cycle, then it picks up once again with that treatment at month 5. So when it comes to treating the lid margin disease, there is no question that the TearCare procedure outperforms Restasis in multiple qualities. And if you want to see a further drill down of this, [ Dr. Hopenacian ] has his poster in the back there, that drills down this a little bit more in depth than the slide we have here. So these are all of our -- or some of our secondary endpoints in the SAHARA study. Now what about corneal staining and conjunctival standing? Two other things that we are assessing on their month 1, 3 and 6. This is showing us that at all time points when it comes to corneal staining, both Restasis and TearCare improve staining from baseline, okay? But we don't see a separation in staining between [ or ] statistically significant separation staining between the TearCare and Restasis arm. Now this does not show that TearCare doesn't work or Restasis doesn't work. It just shows that in this study, they worked about equally when it comes to clearance of corneal staining. So it's at least on par with the standard of care that we've been using for a long time. Now conjunctival staining is another thing that we like to look at using lissamine green staining. The conjunctiva is one of the signs that we look for, for early disease, as well as early recovery. The conjunctiva is a very important harbor of our goblet cells, which regulate the ocular surface. So seeing improvement [ in staining ] on the conjunctiva is very important in a dry eye study. And what this shows us is that all time points, the TearCare patients did better than baseline, and they get there a lot faster than the Restasis arm. The Restasis arm in conjunctival staining was not significant -- significant against baseline. Again, so it did not change the patient's baseline until they got to month 3 and then at 6. By month 6, actually Restasis and TearCare were performing about the same, but it took a lot longer for those Restasis patients to get there. So when it comes to speed of onset, it seems to be that the TearCare patients are doing better. Now how are patients feeling after the TearCare procedure, that's where the Ocular Surface Disease Index study comes into play, as well as the Eye Dryness Score and the SANDE score, symptoms -- symptom assessment in dry eye. Again, across the board, all patients, TearCare and Restasis did well improving from baseline, and they were about equivalent in effect. I'll get out of the way, guys, so if I'm standing in the way of the slides. When it looks at eye dryness score, as well as symptom assessment in dry eye, the patients in the TearCare arm started to accelerate, they got improvement in symptoms faster than the Restasis arm. But by about 6 months, as you would have expected, Restasis is starting to work better, they were equivalent. So at that 6-month time point, both arms of the study work, but the patients in the TearCare arm got there faster. So we're seeing an improvement in speed of effect. Safety is critical. Now both of these are established treatments. This is -- neither of these are new to the ocular surface world. We knew both of these treatments -- well, we should be safe. And in fact, these were very safe. And again, [ Ms. Jackson ] has his poster back there looking at the safety data. We had a sweet selfie of that before the -- it's the most important poster in the room that you can't leave without getting a picture. Both of these are very, very safe. And as you may know, within any trial, any time a patient has any complaint, it gets listed as an adverse event, and then you have to categorize that as associated or not associated. And in the end, we really only had about 8 or 9 patients, who had any kind of significant adverse event. Most of those were actually in the Restasis arm with blurred vision, difficulty tolerating the medications. Both arms had a patient with a little bit of conjunctival injection. Overall, I think it's fair to say that both of these treatments are reasonably safe, and you have the sort of expected adverse events of patients tolerating their medication. So nothing here really jumps off the map or something that we didn't think -- didn't think we would see and important measures such as best corrected vision, intraocular pressurize, neither arm had any sign of a problem there. So again, very, very safe over the 6 months. So if you can remember one thing here, I think it's that the TearCare treatment is actually superior to topical treatment with branded Restasis and improving tear break up time and multiple measures of meibomian gland scores, okay, the quality, the amount of meibomian gland secretions. And I think we could say -- or I know that we can say not to think anymore, we've got science on this, that you get improvement in some of these scores faster with Restasis, but by 6 months, which was our primary endpoint, the 2 actually treated patients reasonably equally when it comes to other patient symptoms. But speed does matter. What's interesting about this or what's different about this is this is a trial, and they're highly regulated, and that's not real world. In this study, patients were given their Restasis. They didn't have to fill a prescription for it. They were called at home to make sure they were using it. In fact, our patients went through -- I think the average was 5.7 bottles of Restasis for that 6 months, which is exactly what they should have used. In the real world, that does not happen. We will often see patients either not get the medication or stop it. So this study maximizes the effect of Restasis because the patients were checked over and over again. It is real world data on TearCare because we do the procedure in the office and then the patient goes home. They don't have to do anything outside that. So this study actually does bias towards medication because the patients were checked on so much. So it's a real world when it comes to TearCare, maybe not real world when it comes to medication treatment. And if this is my own opinion here, if we can take the treatment arm out of the patient's hands quite literally, they don't have to use the drop, you're going to see an increase in compliance because you don't have to worry about it. We do it for them. So I definitely think that the study here warrants further investigation. In fact, we have further investigation going on. The study is not done. We're still looking at the crossover arm. I now have information that I can tell my patients when they say, what would you do? Or what do you think is better? I can now have real level 1 evidence that TearCare is at least as good at and probably better than using topical Restasis at least at 6 months. We learned something new about TearCare in this study. We initially thought that TearCare would probably peak at about a month and then begin to decline and then have another peak when we retreated at month 5. That's why we did that retreatment. What we actually saw in that study was that the TearCare procedures continued to improve over that 6-month period, and then a retreatment further improved their symptoms. So when we do those retreatments for patients, which were often doing already because we know that you lose some effect with this over the course of 6 months, 9 months, a year or more, that second treatment is additive to the first. We didn't see an increase in symptoms, and then a decrease and then another bump in second treatment. We saw an improvement in signs and symptoms. And then a further improvement with that second treatment, something that we didn't know before. That concludes my presentation of the SAHARA data, but I -- are we free to take questions now? Or is there another person talking behind me. Wow, was that good. There's no questions. That's amazing. Yes.

We hear a lot about dry eye being underdiagnosed. Can you talk about why that might be? And what are some of the factors that can sort of drive that diagnosis rate up [indiscernible].

Oh boy. All right. So -- yes. So yes -- and so the figure grows every year is 20 million, 30 million, 40 million. About there is -- we'll say, 30 million patients out there, who probably have dry eye, about half of those [ carry a ] diagnosis. So say we have [ 15 to 16 million ] patients out there and only about 1.5 will actually have a medication prescribed. Now if this is a little bit of my opinion, and I might get in trouble for saying this, but if you have a treatment that not everybody believes in, that patients don't always love you have to have a fairly lengthy discussion with that patient about the adverse events, the side effects you're going to use this medication forever. It's hard to buy into that, both on the physician and the patient side. So sometimes it is easier to say use this tear, call me in a year when you're ready to come back. So now that we have some better treatments, interventional treatments that are shown to be effective, both in signs and symptoms or at least in the signs for sure, it's easier to make that diagnose because there's a little bit less discussion. It has been -- I can't tell you how many meetings I've been in, where the question is, how do we get physicians and practitioners to take notice to prescribe more, to be more invested in dry eye. That is a huge challenge that I don't think I'm going to solve in this meeting right here. And if I do, man, we've all made it. But I think having real evidence, real data, not just experiential or in my opinion, kind of data will help practitioners make decisions properly and may actually allow them to treat patients better and take that initiative to say, I have a treatment that will work. I can stand behind it. There's science behind it and let's get treating. I would love it if more people did. It will make my job easier. I wouldn't have to see the tertiary and quaternary referrals. I think earlier intervention is going to be much better than later intervention.

I'm going to bring a mic. Hold on?

I guess kind of piggybacking on that. You've had interventions that involve heating the eyelids and then expressing the meibomian glands for a dozen years now, and they haven't really ceased the market. Is it your opinion -- well, why do you think that is? Is it because of a lack of good clinical trials showing the work? Or are there other things?

Well, I think there's multiple factors there. And I think there's -- the interventional side, I sort of touched on this earlier. We have our anti-inflammatory treatment for chronic dry eye, treating the inflammation and watching and see what happens. And then, we have our larger bucket of evaporative dry eye, where all that we have are interventional treatments. And I think that there is a little bit of skepticism, do these work because we have controlled trials showing it's better than a warm compress. But we've never seen large numbers of patients, large controlled data that shows that patients will feel better. And a lot of the drive here is to show that this really works because I can tell you firsthand that if I have a patient, who comes in and then, I think they need treatment, one of the things they're going to say is, I think I do that treatment, but is my insurance is going to cover it. And the moment I say, well, it's not going to cover it. I think it's -- we're going to have to pay out-of-pocket, [ go out ], let me try a medication first and see how they do. I think we'll see more uptake in treatments. And now that we can show these treatments are as good or better as medication, we can get that reimbursement, we can get more patients in. I've got plenty of patients, who really cannot afford any out-of-pocket procedures, but could afford for the procedure to be covered, and would probably do better with it. But again, to get back to our first question, getting practitioners to buy into dry eye treatment has always been a challenge. But studies like this, I think will kind of unlock that door show that these really do work, and they work probably better than what they're currently using. And I think that will stimulate additional use.

Can I add a few comments. I think there's many aspects to this in terms of driving adoption of interventional dry eye procedures, I think, starting with the technology and how TearCare works to comprehensively melt Meibum. It's been precision designed over many years to we believe optimally do that and optimally evacuate the gland. So technology and clinical outcomes need to be optimized, which takes a lot of persistence and a lot of listening to your customers and getting feedback and building that feedback into the device. So we've been committed to it for many, many years now. I think being committed to the category over the long-term commitment, investment, significant financial investment, talking to all of the -- all your customers. And one of them, if you believe that driving adoption of interventional eyelid procedures requires patient access and reimbursement, I think that will take it up to another level. But what do you need to achieve that? Well, you need to be pretty ambitious, right, clinically. So you need to do a study that matters to payers. Payers haven't seen -- to date, clinical studies, clinical evidence that would warrant support for coverage and payment for interventional eyelid procedure. So a study like this, FDA would look at this study and say, why on earth are you doing a device versus a drug and evaporative dry eye versus aqueous deficient dry eye would make no sense to the FDA. We already had our FDA study versus LipiFlow back in the day. And again, many of our friends here, clinical investigators were in that study as well. But this study is designed not for FDA, it's design for payers, and its ambitious study. And I think a lot of people knock Restasis. But if patients are compliant on Restasis, the vehicle oil-based vehicle plus cyclosporine every day, twice a day for 6 months, it's a formidable competitor and [ compare it further ]. So if you go head-to-head with that for 6 months, you need to be very confident in your clinical outcomes and you need to have spent a lot of time on optimizing your product procedure and clinical outcomes. So I think being able to deliver clinically is necessary to be committed to the space for many years and to be financially committed to do the kinds of significant RCTs that it takes, I think, to unlock coverage in this area. And then lastly, of course, it takes just the day-to-day relationships with our customers and our clinical investigators and their commitment to help all of us make it happen on behalf of the patients. So there's a lot that's gone into this from a lot of people over many, many years. We're excited. I think we're -- I think it's right around the corner. I know our market access team is excited, begin talking to payers with the publication of the 6-month data and our budget impact model that should start early next year. And hopefully, we will be very successful in transforming care for dry eye patients altogether very soon.