Second Sight Shares Double After Artificial Retina Unveil

 

On a market valuation of $311 million, prosthetic eye manufacturer Second Sight completed a $32 million IPO on Wednesday, offering 3.5 million shares at an initial stock price of $9. The company then watched its shares soar more than 150 percent, opening at $17, and then reaching $22.45 before settling down to a $19.97 end of day price.

Second Sight has generated buzz in the healthcare community due to the innovative work it is doing with an implantable, artificial retina it has designed called the ARGUS II. The Argus II was developed by ophthalmologists at the University of Southern California and earned FDA approval for treatment of specific forms of blindness in February 2013. During the FDA’s trials, the artificial retina’s were implanted in 50 patients and basic tasks of daily living were tested, such as walking unassisted down a sidewalk without tripping or stepping off. Other tasks included matching black, grey, and white socks; and reading letters from a computer screen. In January of 2014, after satisfying the FDA and receiving clearance, researchers at the University of Michigan’s Kellogg Eye Center implanted the devices in two blind patients.

Second Sight now appears to have the artificial retina market completely to themselves. With 300 granted patents and another 150 pending, Second Sight is moving aggressively to protect its revenue stream as it pushes onward with its monetization strategy. ARGUS II is approved to treat only a very specific form of blindness, a degenerative condition called Retinitis Pigmentosa that slowly claims a patients eye sight until they are left fully blind. There are an estimated 375,000 potential Retinitis Pigmentosa patient’s for Second Sight to market its new vision restoring retina device too.

The company is slogging through the process of getting its device approved by Medicaid for reimbursement. At $140,000, the treatment is not cheap. However, Second Sight has already received coverage approvals from Medicaid, and has worked out coding standards. The final step is negotiating and securing Medicaid payment approvals, a step that must be completed at a regional level.

For now, Second Sight is a company with a novel new medical device and a sizeable market to deliver it too. However, the company is hemorrhaging money, running an operating loss of –851 percent of revenue. Despite the slow road to mass monetization, analysts are excited about Second Sights future, with some analysts predicting a $35.30 per share high water mark.


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