Staar Surgical Co. is an Orange County public company worth keeping your eyes on.
With a $2.7 billion market cap, the Lake Forest-based eyecare device maker (Nasdaq: STAA) is OC’s 11th-largest public company by market value. It’s also the largest OC-based publicly traded company in the area’s thriving ophthalmology industry.
Its products stand out in the marketplace, too.
Staar’s implantable contact lenses, or ICLs, are used to treat a wide range of vision impairments through a surgical procedure that takes about 30 minutes on average. ICLs are implanted between the iris and the natural lens, and remove the need for patients to wear glasses or contact lenses.
The procedure is an alternative to laser-based eyecare surgery options like LASIK, which reshapes the cornea without entering the inside of the eye.
ICLs offer a unique product for treating vision issues, and those products have been particularly well-received overseas, especially in Asia, where vision issues like myopia run extremely high.
Staar “has a product that no one else has, or matches the level of reach that it has,” said longtime area ophthalmologic executive Jim Mazzo, co-founder and chairman of local healthcare and tech accelerator Octane.
Staar’s sales growth is also an eye-opener: 21% in 2019, and 37% in 2018.
Wall Street’s noticed. Shares of Staar have climbed 137% to about $60 at press time since March 21; its shares are also up about 72% for the year.
1-Year Anniversary
It’s been a little more than a year since Staar moved its headquarters from Monrovia to Lake Forest, so that the company could better tap the area’s base of ophthalmology workers.
It’s been nearly three months since the corona-virus brought a pause to many elective procedures in the U.S. and other international markets.
Yet, “the move to lens-based surgery continues,” Chief Executive Caren Mason said during the eyecare device maker’s latest earnings call, noting strong growth for the company in its overseas markets.
“The COVID-19 pandemic is highlighting the utility of our EVO family of lenses, not only for surgeons, but for their patients as well,” added Mason, in reference to the company’s principle ICL products. Staar also makes intraocular lenses for cataract surgeries.
“Patient stories of lost disposable contact lenses, fears of running out of contact lenses, glasses that fog up while wearing a mask and concerns about not touching one’s face or eyes have been more prevalent on social media in recent months,” Mason said.
Staar saw its first-quarter sales climb 8% to $35.2 million.
That’s lower than prior growth rates, a result of market closures across various countries it operates in due to the pandemic.
Most markets shut down in the last two or three weeks of the quarter, while markets in Asia came back with momentum late in the quarter, according to Mason, who said first-quarter results “illustrate the advantages of Staar’s positioning as a global company with business in over 75 countries.” The U.S. represents less than 10% of the company’s sales.
“Caren’s done a nice job creating a strong position in the category, with a reach that is global, and has leveraged tremendous assets in Asian markets, where growth is strong,” Mazzo said.
Mazzo equated Mason’s achievements to that of Tom Burns, chief executive of Glaukos Corp., a San Clemente-based maker of eye stents and drugs used for glaucoma treatment. Glaukos (NYSE: GKOS), with a market cap of $1.7 billion, ranks No. 2 among area public companies in the eyecare industry.
“It has a critical position in the marketplace,” Mazzo said of Glaukos, whose competitors include Irvine’s Ivantis Inc., and the eyecare division of Allergan PLC (now part of AbbVie.)
“But in Caren’s space, there isn’t any competition.”
Another place where Mason stands out: Of the top 30 public companies based in OC, Staar is the only one headed by a woman CEO.
New CFO
Staar’s ICLs represented 83% of total sales in the first quarter, according to outgoing Chief Financial Officer Deborah Andrews, who last week turned over the CFO role to Patrick Williams.
Williams has more than 20 years of experience in financial and operational management, with stints at aesthetics firms Sientra Inc. and Zeltiq Aesthetics Inc., a publicly traded firm that was acquired by Allergan in 2017, as well as San Diego device maker NuVasive Inc. (Nasdaq: NUVA).
Asia-Pacific area countries saw a 37% increase in ICL sales during the first quarter, excluding China, Japan and Korea.
China saw a 7% jump, after a shutdown that lasted late January to the end of March, while neither Japan nor Korea slowed down, according to Mason.Â
Japan and Korea posted 79% and 14% sales growth, respectively.
Outside of Asia, Mason noted a 10% uptick in Canadian ICL sales, and a 5% boost in Germany despite a shutdown in the second week of March.
Trials, Emerging Markets
Staar has plans to continue its growth push in new markets in the coming quarters; it has pinned Latin America as a fast-growing, emerging market and looks to ramp sales in Europe following additional regulatory clearance.
“Brazil is a country with an affinity for aesthetic procedures and the largest refractive surgery market in Latin America,” said Mason, noting the company’s renewed regulatory approval in the country and expectation to resume ICL sales there in the second quarter.
Meanwhile, clinical trials in the U.S. were scheduled to resume with study completion expected in June 2023 and European clinical work is back on track.
On July 2, the company received approval to roll out its EVO Viva lens for the treatment of presbyopia, or farsightedness, in CE-marked countries in Europe.
The product will be initially available to patients through eye doctors in Spain, Germany and Belgium, with broader availability in Europe over the coming months, the company said.
The treatment “targets the millions of eyes of opportunity for Staar, for those who want to dispense with their reading glasses,” Mason said.
Manufacturing Resumes
When the coronavirus began circulating in the U.S., Staar paused most production work at its Aliso Viejo and Monrovia facilities in mid-March.Â
Staar resumed manufacturing activities and brought its employees back to work on April 27 with safety enhancements and new protocols.
Looking ahead, the company said it expects double-digit revenue growth in its third and fourth quarters—something it achieved every quarter in 2019.
