Shares of Staar Surgical Co. dropped 25% on Feb. 11 after it surprised Wall Street when it reported fourth quarter sales falling 36% to $49 million.
Two weeks later, the Lake Forest-based maker of implantable lenses announced Tom Frinzi was out after two years as chief executive and three years as chairman.
The company appointed Lead Independent Director Stephen Farrell as the new CEO, effective Feb. 26, the day of the announcement.
“I am excited to join Staar as CEO at this critical time,” Farrell said in a statement.
“Although the last few years have been challenging for our business and investors, we are well positioned to deliver strong returns as the refractive surgery market stabilizes and resumes its historic growth.”
Staar, facing weak demand in China, is cutting its workforce by 10%, about 115 employees. Staar also announced that based on its company’s 2025 outlook, it no longer expects to achieve its Vision 2026 Target Sales and Operating Model, originally announced in September of 2023.
Staar said it anticipates a smooth transition given Farrell’s nine years on the board of directors, including the last two as lead independent director. Farrell has previously served as a CEO, a president and a director at three publicly traded companies when they were acquired.
The company also announced that Elizabeth Yeu, who served as member of the board since 2021, has been elected as board chair. Yeu has been a partner at Virginia Eye Consultants since 2014, has served as an assistant professor of ophthalmology at the Eastern Virginia Medical School since 2012 and was president of the American Society of Cataract and Refractive Surgery from 2023 to 2024.
“As an ophthalmologist, I have seen first-hand the life-changing impact that EVO ICL can have on patients,” Yeu said in a statement referring to the company’s principal product. “The global myopia epidemic shows no sign of abating, and I believe that the future is bright for Staar and EVO ICL.”
The stock rose about 6.8% in the seven trading sessions after the announcement. At press time, shares traded at $18.80 and an $927 million market cap.
During Frinzi’s tenure, shares had climbed from $48.54 to almost $78 each in early 2023 before steadily declining in the subsequent months.
The China Problem
Frinzi is stepping down just two years after becoming CEO on Jan. 1, 2023, succeeding Caren Mason.
Frinzi, who has more than 40 years of experience in the ophthalmic and medical device industries, previously told the Business Journal at the time that he accepted the role because he felt “very bullish” on what Staar would become. The company estimates it has a total addressable market of more than 180 million eyes and reports a 99.4% patient satisfaction rate.
During his two-year reign, sales climbed 16% to $313.9 million.
He focused on trying to boost sales in the U.S., which did climb about 36% to $20.5 million over that two-year period. However, that was only 6.5% of the company’s overall sales in 2024.
Its biggest market was China, where sales fell 13% last year to $161 million, a big reason for the companywide 2.3% drop in sales last year.
“Macroeconomic conditions and consumer confidence in China remain weak,” Frinzi said in a Feb. 11 statement. “While the government stimulus announced in September looked promising, the demand for our cash-pay ICLs deteriorated dramatically as we exited the year.”
Its net income swung from $21.3 million in 2023 to a $20.2 million loss in 2024. The company forecasts the loss will continue this year, saying its EBITDA loss will be between $15 million and $50 million.
The company credited Frinzi, who will remain with the company in an advisory role through next January to help with the transition, with helping to drive the global adoption of the company’s EVO Implantable Collamer Lenses (ICL) technology.
“It has been an honor to lead Staar these last two years,” Frinzi said in a statement. “I am proud of what we have accomplished at Staar, and I thank all of our employees for their hard work and dedication.”
Proven Track Record
Farrell brings a “long track record” of success in leading public healthcare companies, according to Staar.
Prior to joining Staar’s board of directors in 2016, he served as CEO and chief financial officer of Convey Health Solutions Holdings Inc., which in 2022 was taken private by TPG Capital in a $1.1 billion deal. The Florida-based company, which Farrell left last year, helps health insurance companies and pharmacy benefit managers manage their end-to-end health insurance processes.
Before Convey, Farrell was president at PolyMedica Corp., a formerly publicly traded provider of diabetes supplies, before it was acquired in 2007 by Medco Health Solutions for $1.5 billion, according to news reports. From 2007 to 2014, he served as a member of the board of directors of Questcor Pharmaceuticals, a biopharmaceutical company that was acquired by Mallinckrodt Pharmaceuticals PLC in 2014.
“We are pleased to have a veteran healthcare executive of Steve’s caliber leading Staar as we do work to navigate current global macroeconomic challenges,” Wei Jiang, Chair of the Board’s Nominating and Governance Committee, said in a statement.
Weakened Consumer Demand in China
Farrell’s appointment comes amid a difficult time for the company.
The company’s 2025 outlook forecasts China ICL sales of less than $5 million for the first half of 2025 as it “works through elevated inventory levels against weak in-market refractive procedure demand,” and approximately $75 million to $125 million for the second half of the year.
Analysts are expecting sales to fall 17% this year to $260.8 million, followed by a 26% increase in 2026.
Before he departed, Frinzi told analysts that the ongoing tariff battle between the U.S. and China shouldn’t affect the company too much because it plans to export to China from its facility in Switzerland.
Staar recently announced plans to lay off 115 employees at two of its California locations, affecting 110 people in Monrovia and five in Aliso Viejo. It had 1,157 employees as of Dec. 31.
The layoffs, effective April 21, coincide with company efforts to lower operating costs by decreasing production output and capital expenditures and operating expenses.
The company currently has three facilities in Orange County, including a manufacturing building in Aliso Viejo, a research office in Tustin and its headquarters in Lake Forest.
Staar last year expanded its local footprint by signing a lease for 2,000 square feet of space in Lake Forest for its company-owned ophthalmology training center, which was temporarily located at its main office two blocks away from the new space.
