The vision of RxSight Inc. Chief Executive Ron Kurtz is turning out to be prescient.
In fact, it’s 234% correct. That’s how much revenue at the Aliso Viejo maker of lenses has grown in the past two years.
“The cataract surgery market is the largest surgical market in the world,” Chief Financial Officer Shelley Thunen told the Business Journal.
“We’re used to competing against much larger players because we have something unique in the marketplace.”
RxSight topped the Business Journal’s annual list of fastest growing public companies in the midsize category, reporting sales of $115.7 million for the trailing 12 months ended June 30.
In this calendar year, analysts are predicting revenue will climb 57% to $139.6 million followed by another 34% jump to $187.1 million in 2025.
Wall Street has richly rewarded the company, sending its shares up fivefold in the past two years to around $50.66 at press time and a $2 billion market cap (Nasdaq: RXST).
Kurtz, who is a medical doctor with extensive prior experience in medical devices, joined RxSight in 2016 when it had no revenue.
“We’re still at the early phase of penetration of the market,” Kurtz told analysts on an August conference call to discuss second quarter results. “The more we move the technology forward, the more it gives people a reason to adopt.”
Nobel Prize Winner Helped Developed Idea
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.
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.
In RxSight’s system, the cataract is removed and the doctor inserts RxSight’s 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 of 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 added.
In the most recent quarter, the company reported it sold 24,214 adjustable lenses, up 92% from the same period last year. It also reported an installed base of 810 light delivery devices, which are in ophthalmologists’ offices.
It boosted its annual forecast to $139 million to $140 million, up from a prior prediction of $132 million to $137 million.
“The ability to adjust the optical power of the lens after surgery is increasingly valued by both doctors and patients for the excellent clinical outcomes and personalized approach it enables,” Kurtz said in the company second quarter statement.
Kurtz last year told the Business Journal that no other companies have developed this technology. Thunen last week confirmed that they aren’t seeing competitors.
Going Glasses Free
RxSight does all its manufacturing, research and distribution from its Aliso Viejo campus, which spans 121,000 square feet across four buildings.
“Investors really love that we’re manufacturing in the U.S.,” Thunen said.
Thunen said patients who use RxSight’s light adjustable lens achieve results that are twice as effective as competing premium treatments intended to reduce reliance on eyeglasses.
“The light adjustable lens gives patients a much better chance of being glasses free,” she said.
Thunen said as many as 30 million cataract surgeries take place around the world, annually, adding that nearly 5 million of those surgeries are expected to occur in the United States.
About 1 million of those U.S. cataracts surgeries would be classified as “premium,” Thunen continued.
A premium cataract surgery is where the patient expects to be mostly glasses free once the procedure is completed.
RxSight currently focuses on the U.S. market but also has a presence in Canada.
Expansion beyond the United States and Canada is on the horizon, but Thunan said RxSight needs to obtain regulatory approvals before opening shop in other countries.
“We always say competition is the status quo,” said Thunen, who previously worked with ophthalmologist Kurtz on two other companies.
Those two ventures were sold to larger companies: one went public before being bought by Johnson & Johnson, while the other was acquired pre-revenue by Alcon.
“We’re competing against these [products] that are owned and sold by much larger companies,” Thunen said. “Because of our background, we’re not afraid of doing that.”