Stock Update (NASDAQ:EYES): Second Sight Medical Products Inc Reports Second Quarter 2015 Financial Results


Second Sight Medical Products Inc (NASDAQ:EYES), a developer, manufacturer and marketer of implantable visual prosthetics to provide some useful vision to blind patients, today reported financial results for the three-month period ended June 30, 2015.

“This was our strongest quarter to-date, highlighted by record revenue of $2.7 million,” said Dr. Robert Greenberg, President and CEO of Second Sight. “These significant gains versus the same period last year were driven by our focus on expanding implanting centers around the world, and our efforts to expand reimbursement coverage in the US and abroad. We now have 29 active implanting centers and are in ongoing discussions with more centers around the world. We are also advancing our R&D strategy to help more of the 1.5 million people worldwide that suffer from Retinitis Pigmentosa. Our continued growth will be driven by further penetration in our existing markets, increased volume at current centers and additional implanting centers in new geographic markets,” he added.

“We remain committed to further enhance and develop the Argus II as we explore its potential use in new indications, such as Age-Related Macular Degeneration. We are hopeful that the small pilot study we initiated in June to test the safety and efficacy of the Argus II in patients with Dry AMD will offer hope to the nearly two million people worldwide that suffer from AMD. In addition, we continue to make progress on the Orion I Visual Cortical Prosthesis, a device that would allow us to expand into direct visual cortical stimulation to treat patients with nearly all forms of blindness in which the optic nerve or retina is completely damaged. This market has an estimated six million people,” concluded Dr. Greenberg.

Second Quarter 2015 Financial Results

Total revenue was $2.7 million for the second quarter of 2015, up 335% compared with $611,000 in the second quarter of 2014. The increase was primarily due to a higher number of implanted Argus II retinal prostheses in the second quarter of 2015 versus the year-ago quarter. There were 20 Argus II retinal prostheses implanted in the second quarter of 2015, compared to three for the second quarter of 2014.

Gross profit was $1.1 million in the second quarter of 2015, compared to a gross loss of $382,000 in the second quarter of 2014. The improvement reflects the higher levels of production to meet demand, which allowed Second Sight to lower the overall cost per unit by spreading manufacturing overhead across more units.

Total operating expenses in the second quarter of 2015 were $6.0 million, compared with $5.2 million in the second quarter of 2014, reflecting the Company’s increased investment in sales and marketing, as well as costs associated with being a publicly-traded company. This increase was offset by a decrease in research and development expense due the utilization of $512,000 of grant funding in second quarter of 2015.

Operating loss in the second quarter of 2015 was $4.9 million, compared to an operating loss of $5.6 million for the same period last year.

Net loss in the second quarter of 2015 was $4.9 million, or $0.14 per share, compared with a net loss of $7.5 million, or $0.32 per share, in the prior year quarter. The Company recorded non-cash charges of $640,000 during the second quarter, compared with non-cash charges of $2.2 million during the second quarter of 2014.

Non-GAAP adjusted net loss in the second quarter of 2015, excluding non-cash expenses, was $4.3 million, or a non-GAAP net loss of $0.12 per share, compared to a non-GAAP adjusted net loss of $5.3 million, or $0.23 per share in the second quarter of 2014.

Six Months Ended June 30, Financial Results

For the six months ended June 30, 2015, total revenue was $4.4 million in 2015, compared to $1.3 million in 2014. The increase reflects volume growth in the number of implanted Argus II retinal prostheses.

Gross profit in 2015 was $1.5 million, versus a gross loss of $452,000 in 2014. The improvement is primarily due to increased sales of implants.

Total costs and operating expenses in during the first six months of 2015 were $11.4 million versus $9.6 million during the same period in 2014. This increase is primarily due to additional investments in the business, as well as costs associated with Second Sight being publicly-traded. During the first six months of 2015, the Company utilized $530,000 of grant funding to offset higher research and development spending.

Operating loss in 2015 was $9.9 million, compared to an operating loss of $10.0 million in 2014.

Net loss for the six months ended June 30, 2015 was $9.9 million, or $0.28 per share, compared with a net loss of $14.0 million, or $0.60 per share, in the prior year period. Non-GAAP adjusted net loss for the six months ended June 30, 2015, excluding non-cash expenses, was $8.7 million, or a loss of $0.24per share compared with Non-GAAP adjusted net loss of $9.2 million and $0.40 per share in the prior year period.

As of June 30, 2015, Second Sight had $26.6 million in cash, cash equivalents and investments, compared to $34.6 million as of December 31, 2014.

2015 Objectives

  • Double the number of Centers of Excellence, over 2014, globally to drive further patient adoption.
  • Secure coverage with additional Medicare Administrative Contractors (MACs) across the U.S. and with other payers, in addition to other key markets globally.
  • Initiate and complete enrollment for Age-Related Macular Degeneration Feasibility Clinical Trial.
  • Develop and test a pre-clinical Orion™ I Visual Cortical Prosthesis.
  • Make significant advancements for the Argus II software upgrade scheduled for deployment in 2016.
  • Further expand the patent estate around new products and future development discoveries. (Original Source)

Shares of Second Sight Medical Products closed today at $14.15, up $0.07 or 0.5%. EYES has a 1-year high of $24.02 and a 1-year low of $8.05. The stock’s 50-day moving average is $14.38 and its 200-day moving average is $12.87.

On the ratings front, Rodman & Renshaw analyst Amit Dayal reiterated a Buy rating on EYES, with a price target of $21, in a report issued on July 22. The current price target represents a potential upside of 48.9% from where the stock is currently trading. According to TipRanks.com, Dayal has a total average return of -25.5%, a 16.7% success rate, and is ranked #3630 out of 3724 analysts.

Second Sight Medical Products Inc develops, manufactures and markets implantable prosthetic devices that can restore some functional vision to patients blinded by outer retinal degenerations, such as Retinitis Pigmentosa.