It has been more than 30 years since ophthalmic device maker Staar Surgical Co. (Nasdaq: STAA) developed its first implantable lens to treat vision issues.
It’s been less than two months since the $1.1 billion-valued company announced it had moved its headquarters and executive team from Monrovia in the San Gabriel Valley to Lake Forest, making it Orange County’s second-largest publicly traded company in the ophthalmological industry. Its market cap trails only $2.5 billion-valued San Clemente-based Glaukos Corp. (NYSE: GKOS).
The company’s goals haven’t changed much over the years, or through the relocation, according to Chief Executive Caren Mason.
Staar aims to “make it easy, make it simple, make it clear for patients seeking visual freedom from the hassles and inconveniences of glasses or disposable contact lens,” Mason told the Business Journal last month at its new headquarters off Bake Parkway.
The company develops implantable lenses for vision correction so patients don’t have to wear glasses or contact lenses. Its principal products are implantable contact lenses, or ICLs, used in refractive surgery to treat myopia, and intraocular lenses, or IOLs, for cataract surgery.
What has changed of late besides the move to OC? The company’s growth plans.
Staar’s revenue is expected to climb 22% to $151 million this year and another 21% to $182 million next year, according to the average estimate of five analysts surveyed by Yahoo Finance.
The company appears to be preparing for that revenue jump.
It’s looking to hire, even after adding 150 employees over the last three years. The company now employs over 500 companywide with about 75 in Orange County.
Mason said the company is on track to hit analyst estimates of 30%-plus ICL unit growth and to improve its gross and operating margins.
She also reiterated a company forecast to grow the top line 20%.
Product Positioning
How big is the appetite for living life without glasses or contacts?
The global market for LASIK, or laser-assisted in-situ keratomileusis, currently the best known and most commonly performed surgery used to correct vision errors, totaled $1.6 billion in 2015 and is expected to exceed $2.6 billion by the end of 2024, according to a study by Transparency Market Research.
Individuals are increasingly opting for vision correction surgeries in place of glasses and contact lenses for appearance and convenience, the study said.
The Staar Implantable Collamer Lens, also known as Staar ICL, is a growing alternative to such laser vision correction procedures like LASIK.
“They are the market leader in phakic IOLs,” said Newport Beach’s James Mazzo, global president for Carl Zeiss Meditec’s Ophthalmic Devices Strategic Business Unit.
Phakic refers to an eye that still has its natural lens.
“They continue to innovate, which is the hallmark of our ophthalmic industry,” Mazzo said.
Mason agrees on the need for innovation in terms of new devices, as well as the marketing of those products.
“We want to be more aggressive moving forward … to change the profile of the relationship with customers who previously placed the lens as an alternative to Lasik correction,” Mason said, pointing out the product “should be considered as a premium and primary refractive procedure for vision correction.”
The ICL is a small and soft lens that is inserted through a three millimeter incision and does not require a suture.
Unlike LASIK, which surgically reshapes the cornea, the ICL can correct a wide range of myopia, or nearsightedness, without the removal of corneal tissue. It also can be removed and replaced if there are changes in vision or a new prescription is needed.
International Demand
Staar’s core technology, the Visian ICL family of lenses, posted global sales above $100 million for the first time last year. International demand drove the increase; sales climbed 91% in China, 90% in Japan, 37% in South Korea and 31% in Germany.
The ICL came out in 1996. It received European CE Mark in 1997 and FDA approval for the treatment of myopia in 2005.
Patient Experience
Mason, who holds a bachelor of arts degree from Indiana University Bloomington, was previously chief executive at Verinata Health Inc., a parental genetic test provider that was sold to San Diego-based Illumina Inc. (Nasdaq: ILMN) in 2013 for $350 million.
In 2015, Mason joined Staar as chief executive at a time when the shares were just above $7 each.
Within two years, she doubled worldwide sales of ICL lenses. More ICLs have been implanted since her arrival than the prior 15 years of the ICL combined. The company passed 1 million for implanted lens in April.
Mason “has done an excellent job at Staar,” Mazzo said.
It’s been on a Wall Street roller coaster since the start of last year; shares in the past year tripled to as high as $54 in September and since have fallen to about $24.29 and a $1.1 billion market cap as of last week.
Mason owns shares and options worth about $18 million.
The company’s success of late is largely due to creating strategic partnerships with refractive surgeons and their practices including co-marketing support, Mason said.
Partners include Memira Holding and Aier Eye Hospital Group Co., the largest refractive surgery providers in Scandinavia and China, respectively.
Mason said that China is the only country that has launched an “ICL marathon-like patient education event” where doctors and patients meet and speak, “and within 24 hours you can have the lenses put in.”
China has more than 530 million people with myopia. China President Xi Jinping has declared it an epidemic.
“The number of people with high myopia alone is greater than the totality of those with other types of vision defects,” according to a 2015 research report published by Peking University.
US Opportunity
Staar has less of a presence in the U.S. due to prior safety concerns by the FDA, which in 2014 issued a warning letter over the design and quality issues of its Monrovia facilities.
Last year, the FDA lifted the warning letter.
The company is continuing to invest in and expand the Monrovia facility, as well as the new headquarters in Lake Forest, where construction of clean rooms is underway, the company said last month.
