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Thursday, Jun 13, 2024

RxSight Sees The Future

RxSight Inc. started in 1997 on the idea from a Nobel-prize winning scientist that a man-made lens inside an eye could be adjusted using lights after cataract surgery.

That idea is now gaining traction, as the Aliso Viejo company reported sales more than doubled to $49 million in 2022. It’s forecasted revenue this year will climb another 59% to 69%, to $78 million to $83 million.

Chief Executive Ron Kurtz has a simple explanation for the sales growth.

“At its core, it’s the benefits of the technology,” Kurtz told the Business Journal.
“As more people learn and see the result, that leads to growth and interest in the technology.”

RxSight (Nasdaq: RXST) ranked No. 32 on last week’s Business Journal list of publicly traded companies with a $590 million market cap. It also stands at No. 19 on this week’s list of the largest medical device companies in Orange County, with 182 local workers.

The company, whose shares have climbed about 70% since last October, believe they may have a product that could cause a paradigm shift in the industry of cataract surgery, the most common surgical procedure in the world, with approximately 22 million performed in 2020, including 3.7 million in the U.S.

“There aren’t any other companies that have developed this technology,” Kurtz said. “As far as we know, no other company has even begun clinical trials.”

Lens Adjustment

In a typical cataract surgery, the natural lens that has become cloudy is replaced with a man-made lens that is adjusted to the person’s sight before the surgery. After the surgery, if the patient still cannot see well enough, prescription glasses are ordered.

“After surgery, you couldn’t modify optics,” Kurtz said.

In RxSight’s system, the cataract is removed and the doctor inserts its Light Adjustable Lens (LAL).

The company makes the lens out of a composition of silicone polymers and monomers, called macromers, mixed with photo-active molecules and other compounds. The partial polymerization of the LAL results in a solid but soft silicone lens, leaving the photosensitive macromers unpolymerized and distributed throughout the lens.

A few days after the surgery, the company’s Light Delivery Device uses proprietary software and algorithms to deliver a short UV exposure treatment that polymerizes specific portions the lens according to a predefined pattern of light.

The adjustment takes 60 seconds and is noninvasive. In subsequent visits, more adjustments may be made until the patient gets the desired vision, which is then “locked in.”

About 80% of RxSight have 20/20 vision afterwards, which Kurtz said is “much higher” than competing products. The new eyesight should last a lifetime, Kurtz said.

“It’s complicated to figure out what to do, but relatively simple in practical terms,” he said.
Nobel, Golden Goose Winners

The original concept for the lens was conceived in the 1990s by co-founders Dr. Daniel Schwartz, who has more than 20 patents in ophthalmology, and Robert Grubbs, a California Institute of Technology professor who went on to win a Nobel Prize in chemistry in 2005 for the development of “the metathesis method in organic synthesis.”

Another important scientist involved in the development has been Christian Sandstedt, who has worked at the company since 2000 and is currently its vice president of IOL Development.

Its board of directors includes some heavyweights in the industry, including Chairman J. Andy Corley, a co-founder of Chiron Vision Corp., one of the early pioneers in LASIK surgery, and William Link, who is often considered one of Orange County’s best early investors in medtech.

Kurtz himself has a long pedigree in the industry.

Last September, the American Association for the Advancement of Science gave the “Golden Goose Award” to Kurtz and Tibor Juhasz, two of five researchers credited for scientific breakthroughs leading to the development of bladeless LASIK.

This discovery eventually led Juhasz and Kurtz in 1997 to create what would become Irvine’s IntraLase, a company credited with changing the refractive surgery landscape for ophthalmic surgeons and patients alike. IntraLase was eventually bought by Santa Ana’s Advanced Medical Optics in 2007. Kurtz also co-founded LenSx Lasers Inc., which was acquired by Alcon in 2010.

In 2015, Kurtz joined what was then called Calhoun Vision, which at that time had 20 employees. After he became CEO, he changed the name to RxSight and moved the company from Pasadena to Orange County, which Kurtz calls the center of the ophthalmology industry.

RxSight completed its clinical trials in 2017 and launched its product at the end of 2019. It went public in 2021, raising $132 million in an initial public offering at $17.50 per share. Since then, the share price has largely remained below the IPO price, dipping below $10 for a time in early 2022.

“When we went public, the market fell out completely and it hasn’t got any better,” Chief Financial Officer Shelley Thunen said. “While our stock has performed well in a difficult environment, it takes time” to grow investor knowledge.

Confidence Booster

There’s been recent signs of increased confidence; the company’s share price has risen since February when it issued another 4.6 million shares at $12.50 each to raise another $53.7 million.

At press time, the shares traded around the IPO price of $17.50 each.

Since the IPO, it’s used the money to boost its employee count to 300, including growing its sales force. It brought its manufacturing back in house. Its footprint has expanded from 5,000 square feet to 117,000 square feet spread among four buildings in Aliso Viejo.

“The nice thing about Orange County is when you don’t know how big you’ll be when you start up, you like to have a lot of different adjacent buildings that you can grow into,” Kurtz said.

The company’s loss widened last year to $66.8 million from $48.7 million in 2021. RxSight executives have told investors it has enough cash on hand to last until it becomes profitable.

“We’ve done well on both (fundraisers) in very difficult markets,” Thunen said. The key to a higher price, she said, is “like all publicly traded companies—it’s blocking and tackling —continuing to perform.”

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