SGHT - NASDAQ

Good day, and thank you for standing by. Welcome to the Sight Sciences First Quarter 2024 Earnings Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Trip Taylor, Investor Relations and Financial. Please go ahead.

Thank you for participating in today's call. Presenting today are Sight Sciences Co-Founder and Chief Executive Officer, Paul Badawi; and Chief Financial Officer, Ali Bauerlein. Also in attendance is Sight Sciences' Chief Commercial Officer, Matt Link. Earlier today, Sight Sciences released its financial results for the 3 months ended March 31, 2024, and reaffirmed revenue and adjusted operating expense guidance for full year 2024. A copy of the press release is available on the company's website at investors.sightsciences.com. I'd like to remind everyone that comments made by management today and answers to questions will include forward-looking statements within the meaning of the federal securities laws. These forward-looking statements include statements related to the company's anticipated financial performance, operating results and liquidity position, current and long-term strategic objectives, market opportunity, business and commercial strategy, ongoing litigation, product reimbursement, coverage and strategy, efficacy of our products, expectations regarding regaining commercial momentum, account utilization and engagement and clinical trial strategy and results. Forward-looking statements are based on estimates and assumptions as of today are neither promises nor guarantees and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed or implied by these statements. A description of some of the risks and uncertainties that could cause actual results to differ materially from those indicated by the forward-looking statements on this call can be found in its public filings with the Securities and Exchange Commission, including in the Risk Factors section of the company's annual report on Form 10-K and quarterly reports on Form 10-Q. The company undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law. On this call, management may refer to financial measures that were not prepared in accordance with generally accepted accounting principles in the United States, including adjusted operating expenses. The company believes these non-GAAP financial measures are important indicators of its operating performance because they exclude items that are unrelated to and may not be indicative of its core operating results. See the company's earnings release for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures as well as additional information about the company's reliance on non-GAAP financial measures. I will now turn the call over to Paul.

Thanks, Trip. We continue to advance our mission of developing transformative, interventional technologies that allow eye care providers to procedurally elevate the standards of care, empowering people to keep seeing. In the first quarter, we saw an increase in the utilization of our Surgical Glaucoma technologies as compared to the previous quarter and the first quarter of 2023 and continue to demonstrate operational excellence with our strong gross margins and disciplined expense management. We are executing on our strategic initiatives to facilitate appropriate and equitable market access and expand our clinical evidence portfolio in both segments. Our first quarter performance only increases our excitement about 2024 and the long-term opportunities in front of us. We believe that our compelling commercial strategies into multibillion-dollar market opportunities, robust clinical efficacy supporting our differentiated interventional portfolio and experienced management team have created a tremendous opportunity to drive durable and profitable growth over the coming years. We generated total revenue of $19.3 million in the first quarter, representing a record for our first quarter period. Growth was 3% sequentially from the fourth quarter of 2023 and 2% compared to the first quarter of 2023. At the same time, we significantly decreased our cash usage to $10.8 million in the first quarter of 2024, compared to $17.7 million in the first quarter of 2023, while still investing in our commercial and R&D value drivers and after taking into account our debt restructuring payments and typical first quarter bonus payments. I will now turn to a more detailed discussion of our business segments, starting with our Surgical Glaucoma segment. We are pleased with our quarterly performance with Surgical Glaucoma revenue of $18.3 million, representing sequential growth of 6% compared to the fourth quarter of 2023 and growth of 5% compared to the same period in the prior year. OMNI is positioned as an important MIGS technology that surgeons rely on to treat their glaucoma patients and our recovery trajectory attracting to our expectations. We remain confident in our ability to continue expanding our position in the Surgical Glaucoma market for both combination cataract uses and stand-alone uses. We have strategically focused on a few critical drivers to build long-term success within our Surgical Glaucoma segment. Our main priorities are to increase surgeon utilization across all accounts and reengage accounts who ceased or decreased their orders during the LCD uncertainty period. We also continue to focus our efforts on increasing the pipeline of new surgeons to be trained on OMNI and SION. Growth in the first quarter of 2024 was driven primarily by increased utilization from existing accounts of OMNI and SION, which had both sequential growth and growth when compared to the same period in the prior year. This is a testament in large part to the leading clinical profile of OMNI, which demonstrates the efficacy of OMNI at lowering both IOP and IOP-reducing medications, for a broad set of primary open-angle glaucoma patients. In parallel, we are actively reengaging with accounts that have ceased or decreased their orders during the LCD uncertainty period, during the second half of 2023, before the LCDs were withdrawn in late December 2023. As a reminder, we experienced net account attrition of approximately 6% during that period, which we believe was primarily due to the uncertainty caused by the LCDs in the same period. We expect returning accounts to contribute toward further regaining momentum in the second quarter to help drive low double-digit sequential growth from the first quarter of 2024 and toward double-digit growth in the second half of the year versus the comparable period in the prior year. Another core aspect of our strategy is building our funnel of surgeons to be trained on procedures enabled by our OMNI technology. We are pleased to see that our funnel has increased over the past few months and we expect this funnel to continue to strengthen throughout the remainder of 2024. Producing robust clinical data also remains a critical piece of our strategy to drive increased adoption and utilization of OMNI. The compelling results from the prospective multicenter GEMINI 2 study demonstrated sustained and clinically significant IOP reduction of 29% at 3 years and clinically significant reduction of IOP-lowering medication use, as 74% of study patients were medication-free at 3 years. Most recently, we announced the publication of a large-scale real-world clinical outcome study of patients treated by the 3 most common MIGS technologies in AJO International. The results further demonstrated OMNI's strong efficacy profile. Using the American Academy of Ophthalmology's IRIS Registry, the largest specialty society clinical data registry in all of medicine, and the first comprehensive eye disease clinical registry in the United States, this large-scale MIGS study evaluated long-term 2-year, postsurgical outcomes among patients with primary open-angle glaucoma treated with the 3 most commonly used FDA approved or cleared ab interno MIGS devices in the U.S., OMNI, Hydrus Microstent and iStent inject combined with cataract surgery, as well as for cataract surgery alone. The results from this study reported that the comprehensive outflow procedure performed with the OMNI Surgical System technology was effective at lowering both IOP and IOP-reducing medication use at 2 years. The results were further evidence of the OMNI procedure durable efficacy at 2 years and were consistent with our many prior published studies. We are excited to see that large-scale real-world studies of MIGS standards of care provide further evidence of the robust IOP reduction and medication reduction, associated with the comprehensive outflow procedure enabled by OMNI. The body of evidence supporting OMNI's clinical efficacy continues to expand, continuing to strengthen our belief that the comprehensive outflow procedure enabled by OMNI is a critical procedure in the field of glaucoma that is elevating the standard of care. We will continue prioritizing the production of powerful long-term clinical data, and we anticipate delivering additional compelling results in the future. We are very proud of our published high-quality, long-term data, including the GEMINI 2 and IRIS studies. Should new proposed LCDs emerge, we believe these data along with our existing body of clinical evidence will continue to support coverage of the procedure enabled by OMNI for the appropriate patient population. I want to emphasize our belief that the reimbursement profile for OMNI today is sufficient to drive high growth. At the same time, when we look at the clinical profile of the procedure enabled by our technology, we believe there are opportunities to better align OMNI''s coding coverage and payment profiles with the clinical value OMNI actually delivers. We look forward to continued engagement with the MACs, CMS, commercial payers and other stakeholders, as part of our ongoing efforts to maintain and improve appropriate and equitable market access for glaucoma patients and their surgeons to the procedures enabled by our OMNI technology. To close our Surgical Glaucoma discussion, I want to comment on the recent results from the patent trial that concluded last week in Delaware. As we noted in our press release earlier this week, the jury found that Sight Sciences' 3 asserted patents were willfully infringed and awarded monetary damages for past infringement. The monetary damages included $5.5 million in lost profits and $28.5 million in royalty damages for sales of the Hydrus Microstent from its commercial launch through trial. As far as next steps, the District Court will entertain post-trial briefings by both parties, including with respect to potential enhancements to the damages and other remedies. And the court's final judgment will be subject to appeal. We have invested considerable capital in research and development to create new and innovative technologies, striving to pioneer novel treatments for chronic eye disease. Our commitment to these investments underscores our mission to expand patient access to transformative and interventional technologies that enhance patient outcomes. Given the substantial investments we have made in our surgical innovations, on behalf of our surgeon customers in glaucoma patients, we have a duty to our stakeholders to safeguard our intellectual property portfolio, and we are pleased with the jury's verdict. Our attention remains steadfast on equipping eye care providers with efficacious technologies and executing on our long-term growth strategy in Surgical Glaucoma and Dry Eye disease. Now I will turn to our Dry Eye business. We believe the TearCare System represents a transformative technology that will elevate the standard of care for evaporative Dry Eye disease treatment. Our long-term strategy has been to pioneer the field of interventional Dry Eye. The interventional dry eye procedure performed with TearCare is designed to address the root cause of evaporative Dry Eye disease, and the growing body of TearCare clinical results strongly support our belief in its safety and efficacy. Clinical trial data has evidenced that TearCare provided patients with a comprehensive, consistent, fast-acting and durable treatment and the SAHARA RCT showed superiority on our primary objective endpoint, tear breakup time, versus the market-leading prescription eye drop RESTASIS. There are over 11 million diagnosed patients, who we think could benefit from the procedure, which we believe creates an approximate $2.5 billion core addressable U.S. market opportunity. Over the last 5 years, we have sold over 55,000 TearCare SmartLids, developed meaningful relationships with important Dry Eye key opinion leaders and achieved the successful 6- and 12-month results of our landmark SAHARA RCT. These developments were critical to build a foundation prior to seeking equitable market access. As part of our original long-term strategy, we are now focused on driving equitable market access for patients that can benefit from the procedures enabled by the TearCare technology. We shifted our resources away from cash pay commercialization efforts toward market access, while reducing our overall commercial spend and infrastructure in the Dry Eye segment, until we have some coverage wins. This year, we have begun discussions with payers with the goal of receiving coverage decisions starting in 2025. Our strategy for these payer discussions is based on articulating the value of TearCare from both clinical and health economic perspectives. We believe the combination of the strong clinical data from our SAHARA RCT and the findings of our budget impact analysis to be discussed in more detail shortly, create a compelling case for payers to cover treatments performed with TearCare at an appropriate reimbursement level. We recently presented at the ASCRS Conference in April, the 12-month results of the SAHARA RCT, demonstrating improved signs and symptoms of dry eye disease for TearCare patients crossed over from RESTASIS. The Phase 2 crossover of the SAHARA RCT showed subjects who were previously treated with RESTASIS for 6 months and then subsequently taken off of RESTASIS and received a single TearCare treatment, experienced further statistically significant improvements in the signs and symptoms of dry eye disease. The first 2 phases of the SAHARA RCT month 6 and month 12 endpoints suggest that the effectiveness of TearCare appeared to be the same, whether or not a study patient had prior treatment with RESTASIS, and that similar results could be expected when TearCare is used as a primary or secondary treatment for dry eye disease. We are extremely pleased that Phase 2 of the RCT, again, demonstrates the strong clinical efficacy of the TearCare procedure. In the final phase of the SAHARA RCT, patients from the TearCare cohort will be followed for a total period of 24 months from baseline with repeat TearCare treatments as needed according to protocol-specified treatment with the goal of understanding treatment frequency. We expect results from this final phase of the SAHARA RCT to be published in 2025. In addition, we believe there are benefits associated with the dry eye treatment technology like TearCare that is not reliant on patient adherence. The ability to avoid the risk of patient noncompliance with a drop regimen further supports the case for prioritizing an interventional in-office treatment over a prescription-based approach. In addition to clinical data, our conversations with payers include our budget impact analysis, which will be presented this month at ISPOR, the International Society for Pharmacoeconomics and Outcomes Research, a leading health economics conference. We anticipate that the compelling model showcasing the health economic impact and savings for TearCare versus prescription drops, will be a powerful tool as we work to establish broad coverage for TearCare. Another part of our strategy to achieve positive coverage decisions is for our customers to properly submit claims for TearCare treatments to payers in a manner that appropriately reflects the value of the procedure. We are happy to report that we are seeing early positive traction with our customers' efforts, and we expect this momentum to continue. Again, our goal is to begin receiving positive coverage decisions from payers starting in 2025. And until then, we will continue working diligently to articulate the clinical and economic benefits of TearCare technology. Looking ahead to the rest of 2024, we believe we are in a position to continue to execute on our strategic priorities and capitalize on our upcoming catalysts as we scale our business with the intent to return to double-digit growth in the second half of 2024 and into 2025. In our Surgical Glaucoma segment, we expect OMNI to capture market share in combo cataract procedures and lead the development of the stand-alone MIGS market. We also remain committed to producing long-term clinical evidence for OMNI. In our Dry Eye segment, we will continue to lay the foundation for market access to interventional eyelid procedures with TearCare. We believe we have an incredible opportunity ahead of us, along with the right strategy and the right team to execute and deliver value for our patients and stakeholders. I will now turn the call over to Ali to discuss our financials.

Thanks, Paul. Before I turn to the first quarter financial results, I want to reiterate that we feel we are well positioned to support our financial and strategic goals for the future and are pleased with both our commercial and operational execution throughout the quarter. We plan on achieving cash flow breakeven without the need to raise additional equity capital and are excited about our long-term growth opportunity. Moving back to the first quarter. Total revenue for the first quarter was $19.3 million. This reflects an increase of 2% compared to the first quarter of 2023, primarily driven by increased utilization of OMNI and SION, and partially offset by the expected decline in Dry Eye revenue. Surgical Glaucoma revenue for the first quarter was $18.3 million, up 5% versus the comparable period in the prior year and 6% compared to the fourth quarter of 2023. 1,073 customers ordered Surgical Glaucoma products in the first quarter, up 1% from the fourth quarter of 2023 and up 5% from the first quarter of 2023. Utilization of ordering accounts was up about 10% from the fourth quarter of 2023 and up about 5% from the first quarter of 2023. We believe this improved utilization is a testament to the unique benefits of OMNI and SION and their importance to surgeons and patients. Our Dry Eye revenue for the first quarter was $1 million, down 32% compared to the first quarter of 2023. This expected decline was primarily due to fewer new accounts and related SmartHub sales, as a result of the reduced sales infrastructure after our restructuring in October of 2023, and the focus on the next phase of our commercial strategy for our Dry Eye segment towards achieving market access. For the first quarter of 2024, we had 288 active Dry Eye customers, a 9% increase versus the first quarter of 2023. We also sold about 4,000 Dry Eye treatment lids in the first quarter, a 7% decrease versus the comparable period in the prior year. Gross margin for the first quarter was 86% compared to 84% in the same period in the prior year. The increase in gross margin was primarily driven by higher Surgical Glaucoma gross margin, which was partially offset by lower Dry Eye gross margin. Surgical Glaucoma gross margin in the first quarter of 2024 increased to 88% compared to 86% in the same period in the prior year, primarily driven by a onetime prior year inventory scrap expense. Dry Eye gross margin in the first quarter of 2024 declined to 42% compared to 54% in the same period in the prior year, primarily due to higher overhead costs per unit in the current period primarily due to lower production volumes. Total operating expenses for the first quarter were $31.2 million, a decrease of 7% compared to $33.3 million in the first quarter of 2023, which reflects reduced selling, general and administrative operating expenses and improved operating expense leverage in the first quarter of 2024, as compared to the same period in the prior year. The decrease was primarily due to lower personnel-related expenses, partially offset by the expected increased legal expenses and stock-based compensation expenses. Adjusted operating expenses were $26.6 million for the first quarter, a decrease of 11% compared to $29.7 million in the same period in the prior year. Our loss from operations for the first quarter was $14.7 million compared to a loss of $17.6 million in the first quarter of 2023. Our net loss was $16.2 million or $0.33 per share in the first quarter compared to a net loss of $17.1 million or $0.35 per share for the first quarter of 2023. We ended the quarter with $127.3 million of cash and cash equivalents and $35 million of debt, excluding debt discounts and amortized debt issuance costs. We had $10.8 million of cash used in the first quarter, reflecting continued operating discipline, which included a payment of $3.2 million associated with our debt refinancing, annual bonus payments and higher legal expenses. This was a substantial improvement from $17.7 million cash used in the first quarter of 2023. Moving to our outlook for the full year 2024. We are reiterating our revenue guidance of $81 million to $85 million, representing growth of approximately 0% to 5% compared to 2023. We expect second quarter 2024 revenue to be lower than the comparable period in the prior year, following the impact of the LCDs in the second half of 2023. However, we do expect low double-digit sequential revenue growth in the second quarter of 2024 versus the first quarter of 2024, primarily driven by increased OMNI utilization. We expect this will be followed by double-digit growth in the second half of the year versus the comparative period in the prior year as we regained commercial momentum and expand utilization and our customer base. We expect typical seasonality in 2024 where the second and fourth quarters tend to have stronger utilization than the first and third quarters. We still expect Dry Eye revenue to decline significantly in full year 2024 compared to full year 2023 due to the evolution of our commercial strategy towards market access activities and the restructuring of our Dry Eye team. We expect Dry Eye revenue to have accelerated growth in 2025, with reimbursement coverage and an expanded commercial presence. In terms of gross margin, we continue to expect overall gross margin to be in the mid-80s. However, we anticipate incurring increased overhead cost per unit due to lower production builds planned in 2024 for both segments, the larger impact in the Dry Eye segment. We are reiterating our full year 2024 adjusted operating expense guidance of $107 million to $110 million, representing a decrease of approximately 0% to 3% compared to 2023. We believe we will return to double-digit revenue growth in the second half of 2024 and into 2025. We remain focused on further penetrating and expanding the Surgical Glaucoma and Dry Eye markets, as we execute and deliver on our long-term goals and build for our future. Operator, please open the line for questions.

[Operator Instructions] Our first question comes from the line of David Saxon with Needham & Company.

So I just want to start on guidance. I get all the comments, sequential double-digit growth in the second quarter and then the second half should see double-digit year-on-year growth. I mean, pretty easily bumping up against the top end of the guidance. So my question is just given what you're seeing year-to-date? Why not raise the guide? Is there anything you're seeing that you view as a material risk to the guidance?

Yes, I'm happy to take that question. And our general approach to guidance is to make sure that we set achievable targets based on what we're seeing in the business. We're only one quarter into 2024. And while we've seen great success through this point, we want to see consistent traction with that regaining momentum seeing utilization, continuing to improve as well as new accounts. But at this point in time, we are very happy with what we've seen, particularly in our Surgical Glaucoma segment. So as we get farther into the year, we'll obviously continue to look at what appropriate guidance is, but we are very pleased with the results we saw in Q1 and that we've seen starting into Q2. And we think it's important to put out achievable guidance.

Okay. That makes sense. Maybe for my second question, I'll switch gears to Dry Eye. So I'd love to hear what you're seeing in terms of TearCare claims so far? Is the level of reimbursement in line with expectations and at a level you think could get doctors excited about the procedure? And then kind of secondarily to that, I mean we all know the Dry Eye drop market is very promotional and requires a lot of marketing. Your -- the kind of Dry Eye device, I guess, would have reimbursement to help the doctors economics. But to build patient awareness, do you think you need to spend heavily on marketing and promotional activities like we see in the Dry Eye drop category?

This is Matt. I'll take that one, in 2 parts. First, on the claims. Obviously, we're very excited about the data from SAHARA. And as Paul referenced in his comments, we are preparing for the publication of our economic impact model, but still very, very early days as it relates to claims. It would be premature to really say anything, at this time. What we can say is based on the economic impact model we have, there's reasons to be optimistic around the level of reimbursement, and we believe that level of reimbursement to be both favorable from a provider's perspective and making the economics work within their practice and also favorable from a payer perspective relative to the current standard of care, which we compared the TearCare procedure too. So again, early in these conversations, early in the claims process, but certainly encouraged by what we're seeing and hearing at this stage, and we look forward to provide more feedback on that at a later date. As it relates to the marketing, we fully understand and appreciate that we're in a market-creating opportunity here. This is a pharmaceutical medication space as it relates to the treatment of dry eye. That is a generic disease state that isn't highly differentiated. I believe a lot of the promotional activity is to differentiate from other drops that are available on the market. And we've got this very unique opportunity to create an entire new category for procedural intervention in ocular surface disease, specifically due to meibomian gland disease. And so we absolutely know that there is a marketing opportunity. I think equally, if not more important, there's an education and outreach opportunity to providers. These patients are being seen in clinics across the United States. We know that they are underdiagnosed and undertreated. And so certainly, at the very beginning of this, we believe there is an opportunity for outreach and education to providers to identify the patients that are already in their clinic, when supported with reimbursement, we think that will be a very favorable opportunity for them and for us. And then moving forward, we'll continue to evaluate what the broader promotional opportunities are to expand that patient population in conjunction with market access, in sustainable reimbursement.

Our second question comes from the line of James Beers with William Blair.

Maybe just to start on utilization, obviously, great to see things improving in Q1. Could you maybe speak to the exit rate in terms of utilization? I know you're saying low double-digit growth sequentially into Q2. Are you near historical levels yet? Or is that sort of the gating factor to giving you more confidence into, say, raising the guide?

Yes. So at a high level, when we think about utilization trends, typically, you would see the Q2 period seeing higher utilization versus the first quarter period. So that's a typical trend in the industry and that's something that we also see in our business and expect this year, as we said in our prepared remarks, we expect traditional seasonality this year with higher sales in the second quarter and the fourth quarter versus the first quarter and the third quarter. So that trend happens in our business, and that is consistent with what we're seeing from a utilization perspective. I do think that having another quarter under our belts will certainly give us more confidence about what we expect to see in the back half of the year, both in terms of number of accounts as well as increasing utilization across those accounts. So those are the critical metrics that we look at as a business in order to predict where we see the business going in the future. So of course, we will continue to reevaluate that as we get further into the year. Did you have a follow-up question? Are you...

Sorry, I thought market might have been popping on. In terms of the account adds in the first quarter, I guess maybe a little bit lighter than we expected where most of those accounts -- the accounts may be you lost in the second half of 2023, and I know you're possibly saying -- or maybe saying less account adds factored into the guidance for the back half of the year, but it sounds like maybe you're a little bit more upbeat on that. So maybe could you just speak to the account adds in the first quarter and then how you expect that to transition into the second quarter and then throughout the rest of the year?

Yes. As we said in our last earnings call, we expected to see increased utilization to be the first improvement in the core metrics versus the account addition. So we do expect our active accounts to increase throughout 2024. That's a key focus of us. But in these early stages of rebuilding post the LTV uncertainty period, we were focusing our reps on the highest value activities. And that includes focusing on accounts that we're already ordering and getting those ordering patterns back up. So our long-term strategy is still the same. It's a mix of increasing utilization of existing customers, reengagement with the lost customers and training new customers. So it's kind of a mix. And when we look at going further into 2024, all 3 of those are contributors to our growth and getting back to double-digit growth. But in the first quarter, we were primarily focused on utilization and that was planned. That was what we intended to do.

Our next question comes from the line of Joanne Wuensch with Citi.

This is [ Felipe ] on for Joanne. Just quickly for accounts that you're looking to reengage with from the LCD withdrawal period. I was just wondering, how are those conversations going? And I guess, what are your expectations for conversions? And maybe like what is your biggest hurdle for converting those accounts back to using OMNI again?

This is Matt. I'll take that one. Look, our engagements overall have been very positive. I think the market overall has seen recovery and MIGS procedures and volumes on the heels of the withdrawal, the LCD. There's no real material limitation in terms of engaging those accounts and those engagements and conversations are ongoing. As Ali said, from the very beginning of the year, we anticipated the recovery coming in the form of increased utilization. Our sales force has done a phenomenal job, as I think was indicated and demonstrated in Q4 in the face of the LCDs to remain a high level of engagement with our core accounts. But there's also a capacity consideration here. As we talked about in -- the second half of last year, we didn't materially reduce headcount. We saw some modest headcount attrition that we did immediately moved to backfill. And in Q1, we spoke about how we would continue to build back into reinvestment within the sales organization. So we really think about that in terms of capacity more so than infrastructure. And so a lot of this is about building capacity. Sight Sciences is a growth company. We have been a growth company. And to some extent, that was interrupted, obviously, in the second half of last year with the uncertainty of the LCDs. And as we see the rate of recovery that's been demonstrated in Q1, as well as we see in early Q2, that certainly gives us some measure of confidence to continue our investment. And that's a key factor as we think about increasing not just utilization within active accounts, but new accounts and then new surgeon engagement through new surgeon training.

Our next question comes from the line of Thomas Stephan with Stifel.

Congrats on the nice quarter. I'll start with competition. Maybe can you elaborate a bit on how, I guess, mix competition is qualitatively factored into guidance and your long-term outlook as well. There's obviously a lot of innovation happening in glaucoma. So I guess, wondering if you can just talk about how this is contemplated in both the near-term and the long-term view? And then I have a follow-up.

Yes, sure. I'll take that and let others jump in to add their thoughts as well. Our overall approach to guidance was to be prudent here and put out a capable targets as we were coming out of the LCD uncertainty period. So we think we have set the right bar for the company, given those dynamics as well as the dynamics on the Dry Eye side of the business this year. In terms of what we see from competitive dynamics, we think the MIGS market is a healthy market right now. It is a growing market. There's great innovation happening, and that brings more and more attention to doing stand-alone procedures, expanding the interventional mindset. All of that is great for us when we look at our products and the clinical efficacy profile that we provide, we think that, that will continue to help us and others in this industry continue to grow and shape the future of glaucoma patients. So those are longer-term dynamics in terms of our guidance for 2024. It's really focused on getting back the foundational work, the momentum back with our core accounts and reengaging with accounts. But we see the competitive dynamics to be favorable for OMNI's success in the short term and the medium term and the long term. So we are happy to see that. Anything you guys want to add? Okay.

Great. That's helpful. And then maybe my follow-up would just be on utilization. Really encouraging to see the trends year-over-year and quarter-over-quarter. Ali, you talked about this a bit, but can you expand a little on sort of how those utilization trends look, I guess, across your surgeon base, how widespread or narrow are these recovery trends? Maybe has the sales force been able to move further into driving utilization in sort of those lower volume accounts? Any color there would be helpful.

Yes, Tom, this is Matt. I'll take that. Look, the good news is the trends in utilization we see are broadly across the organization. And I think the other thing really important to characterize is we talk about utilization. We sell through to a facility as the endpoint customer. But the RESTASIS, as you all are aware, there's in many instances, multiple surgeons within those facilities. And so the increased utilization is coming as best we can tell also is a mix between higher utilization on a per surgeon basis, but also surgeons within the facility. And so for our comments earlier, we really think this is a healthy underlying dynamic within the business and gives us an opportunity to really drive volume and density within key markets and really start to leverage some efficiency across our sales force through the increased volumes. Importantly, we recognized that there's still a large number of opportunities for competitive conversions. I think we have historically talked about having trained about 50% of the available MIGS surgeons on OMNI. Not all of those have fully adopted OMNI to the extent we believe they could. And so you really see a really large opportunity to continue to grow on this space that we're talking about, and this goes back to the comment I made a few minutes ago, we are excited to get back to investment into the sales force and driving incremental resources as the business justifies and warrants to continue this growth trajectory. It's not just going to happen on the sales force we have today, but what we will invest in the future. And so again, we talked a lot about at the end of last year and the beginning of this year in Q1, how prudently we managed our dollars and resources in the face of the uncertainty of the LCDs. I know that I speak for everyone, when we say we're a lot more excited to talk about getting back to investment in the organization to scale and sustain the double-digit growth that we're looking towards the back half of this year and into early next year.

Our next question comes from the line of Matthew O'Brien with Piper Sandler.

This is Phil on for Matt. Congrats on the great quarter. I guess my first one on the trial and patent infringements on those 3 patents relating to the canicular scaffold. I was curious as far as future infringement goes with regard to Hydrus and their ability to continue to sell that product. And I understand you might not be able to say much there, but is that perhaps low-hanging share that you could capture in MIGS given similarities?

Yes. We really can't comment on ongoing patent litigation matters about our patent litigation strategy at this point, or what that could potentially mean. Obviously, we were happy to see the results of the jury verdict associated with tax damages and royalties. But the go-forward remedies and those things are all pending future hearing. So those will have to let play out in the court process over time.

That's fair. I figured I'd ask. And then shifting gears, maybe you could just touch on the pipeline you have within the Surgical Glaucoma specifically. Any milestones or launches that investors should be made aware of over the next, call it, 12 to 18 months?

Yes. This is Paul. Obviously, very excited about our pipeline. Products we have commercialized today, OMNI, SION and TearCare were all developed internally. We've proven our ability to innovate effectively and then commercialize effectively as well. So on the pipeline front, we can't share too much at this time, but we have shared in the past and we're continuing to work on intracanalicular scaffold, the Helix stent. That's in animals as we speak. We're excited about that. We'll share more in due course. We are in earlier stages of sustained release as well. Hopefully later this year, we'll hit some milestones that we'll be ready to share with everybody. But excited about what we're working on. I think we've proven our ability to innovate in a differentiated manner in a way that can elevate the standard of care and eye care and love what we're doing and looking forward to sharing more later this year.

This concludes the question-and-answer session part. I would now like to turn it back to Paul Badawi for closing remarks.

Thank you for attending today's call. We appreciate your interest in Sight Sciences, and we look forward to updating you on our progress in the future. Thank you all.