Life Sciences Day. Next up we have the management from Sight Sciences, Paul Badawi and Ali Bauerlein. Bauerlein. I'm so sorry. It's not like I haven't known you for like a decade. It's all right. With a name like Wuensch, I'm always very sensitive to that. Anyway, thank you for coming here today. Her first name is actually Alison. I will change that accordingly. I'm kidding. I'm I'm joking. Middle name, anything? Yes. All right. I want to start from a big picture perspective. You did pre-announce fourth quarter results, highlighting some of the changes in the MIGS landscape. I think that's a great place to start as we think about the Sight Sciences story. Yeah, happy to start there. Thank you for having us here. When we think about the fourth quarter dynamics, first of all, we had in the middle of the quarter, the new LCDs effective for Medicare in five of the seven regions. Those LCDs, first of all, confirmed coverage, ongoing coverage for canaloplasty and goniotomy, which has been a question mark for a year and a half plus now as we worked through those LCD dynamics with those MACs. We were very glad to see that that final LCD went effective, confirming that coverage. On the other side, though, they did restrict the stacking of multiple MIGS in a single procedure at the same time as cataract surgery. That restriction does impact a portion of the market. Typically, patients who needed the most efficacy that had maybe more challenging glaucoma were receiving these additional procedures at the same time. The MACs came to the conclusion that there was not adequate clinical evidence to support the benefits of these multiple MIGS, at least today. In the future, maybe there will be support and coverage for this. Let's pause there for a second because I know I throw around the phrase stacking. All right. I know, I think I know what it means. Maybe we need to rephrase what percentage of procedures are stacking, what percentage of those procedures is Sight Sciences exposed to, and then what exactly is a stacking procedure? I'll start off with the why quote stack procedures. I think glaucoma is a complex disease. The outflow pathway is compromised in different ways. Surgeons find it useful to treat different sources of outflow resistance with different mechanisms of action. A canaloplasty, for example, might dilate the collapsed Schlemm's canal. A trabecular bypass stent will bypass diseased trabecular meshwork. There are other solutions. Goniotomy might also help remove some of the diseased trabecular meshwork. The philosophy, the treatment philosophy is, if I'm in the eye and I can do more for this patient and offer them multiple mechanisms of action that might add up to an invasive alternative that comes with lots of lifelong complications, then I should do that. As Ali mentioned, that's probably more obvious to do for a later stage patient that's more advanced, maybe less obvious on mild, although I think the data will eventually is a good thing. That's the rationale, to try to offer multiple mechanisms of action to the glaucoma patient while you're in the eye. As it relates to Sight Sciences and OMNI, thankfully, we agree with the multiple mechanism of action treatment philosophy. That's why OMNI has been designed the way it's been designed. It's indicated the way it's indicated. It's indicated for a canaloplasty followed by trabeculotomy. Years ago, we saw the opportunity. In talking with our surgeons, where they were trying to hit the disease with multiple mechanisms, we had an opportunity to bring these two different mechanisms together in one device, one procedure. OMNI treats all three sources of resistance in the outflow pathway with, again, a single device, single procedure. It is multi-mechanistic, multi-modal by design. For that reason, while the market is transitioning from two MIGS down to one MIG in combination with cataract surgery, thankfully, we have a solution that we can offer our surgeons that allows them to continue offering multiple mechanisms with one device. Getting back to the market question of what is the real percentage of the market that we're seeing here? First of all, this is stents plus canaloplasty or stents plus goniotomy. Those are the codes that are now restricted under the new LCDs that are effective. Canaloplasty plus goniotomy was already not allowed. That restriction was already in place. It is really stents plus one of the canal-based surgeries that is restricted now. Our estimate is that about 15% of the MIGS claims billed were these stacked combination procedures. That portion of the market will come out of the base as we think about going forward. We do estimate that our percentage was slightly higher, maybe low 20s percentile of total claims were OMNI. We don't have exact numbers here because OMNI doesn't have a unique code. It is more looking at extrapolating from our customer usage. We do know that OMNI was used in combinations with stents slightly more than the general market. Okay. If there are roughly 500,000 MIGS procedures, some 75,000 of them are exposed to this new change? Correct. About 15%. Yeah. Our estimates are a little less on the 500,000 is more like 400,000. Oh, 400,000, you think there's more? Okay. It's fewer exposures. Not the 500,000 that I had originally thought. About 15%. It sounds like yours is of the 15%, maybe 1/2, two-thirds? When you say 20% of total were OMNI, what does that mean? Yeah. When we say that, we mean our exposure. Of your exposure. Our procedures, what percent are done with this stacked procedure? That is in the low 20%. Of total OMNI cases. Correct. Of total OMNI. Thank you. I was trying to back into the math the other way from the total market to the stacking to the percent that you're exposed to. I can do that math to you later. Thank you. All right. What happens now as we think about this? Something you go back and you petition the societies to say, Hey, look, this is actually really good for the patient. Think this. Do you look at different codes that encapsulate two procedures in one? Because my suspicion is they're looking at three bills. And they're like, You can't do three bills. You only can do two. Yeah. First, we work with the surgeon community and remind them of the comprehensive nature of OMNI by itself. Again, the full OMNI procedure is up to 360 degrees of canaloplasty and up to 360 degrees of goniotomy. It is very comprehensive, multi-mechanistic by design. We are active right now in the market making sure that is top of mind, that OMNI by itself is a very comprehensive procedure that delivers the efficacy necessary, whether that is mild, moderate, or advanced patients. That is first and foremost. As it relates to multiple products or stacking, I think there is an interest in generating the clinical data that will be needed to support combination coding. I think the payers are going to want to see that robust long-term clinical evidence. I think the surgeon community has significant interest in it. I think the societies do. I think industry does. We believe it's the right thing for patients, for surgeons to have the flexibility to treat their patient with whatever they see fit. Ultimately, the clinical data needs to show it. I think there's a number of efforts underway now to try to generate that data. That'll likely take some time. That takes time. What does Sight Sciences do in the meantime? The first thing I mentioned, which is getting out there right now. OMNI, again, is multi-mechanistic by nature. It's comprehensive by design, canaloplasty followed by trabeculotomy. How do you think about increasing physician education, patient education, and moving procedures forward? We're continuing to invest in all of the above. We have a very significant commercial infrastructure, very good team, educating surgeons, reminding surgeons and facilities on the benefits of OMNI, not just in combination with cataract, but also in standalone surgical glaucoma. We're entering a really interesting time in ophthalmology. I know you cover cardiovascular companies and orthopedics companies, which decades before ophthalmology, interventional approaches, minimally surgical procedures became over time. It takes time. Just like interventional cardiology, we are entering in ophthalmology and our field in particular, glaucoma. It is a very exciting time. You can feel it. We have the American Glaucoma Society meeting this weekend. We'll be flying down from here in New York down to DC this afternoon. There is a lot of talk and buzz and clinical data on interventional glaucoma. We are doing everything we can to help lead that effort. How do you think physicians are looking at interventional glaucoma? We think that the data is becoming clear enough, whether that's interventional surgery like MIGS, whether that's interventional laser like SLT as a potential first-line treatment, or if that's interventional pharmaceuticals like sustained release. I think those three modalities should continue to become viewed as early-stage interventions as opposed to daily pharmaceuticals, disease progression almost guaranteed, and then the need for an invasive procedure. What's going to be talked about at AGS this weekend? Intervening earlier with sustained-release meds, intervening earlier with a laser like SLT, intervening earlier with microinvasive glaucoma surgery like OMNI. Are these procedures financially rewarding, beneficial? Do they make money doing these procedures, the physicians? They do. Yes. Okay. That's a quick question. I thought that was the answer. What stops them from adopting the technology? I mean, I would assume they'd be motivated. Yeah. I think a lot of it just has to do with the focus and the attention and seeing that these patients need intervention. They're very busy people. They have full surgery centers. They need to really understand opportunity. Specific to OMNI, our focus, as we talked about on our last call, is really trying to target those pseudophakic glaucoma patients that obviously already had cataract procedure 3+ years ago. They have increasing medication use, 2+ medications. Their IOP is increasing. These are patients that right now aren't treated. They don't have a treatment option outside of just adding another med. They're waiting for needing an advanced glaucoma surgery. This is an area that we're really trying to target. Instead of saying, glaucoma surgeon, you should treat everybody on a standalone basis, that's a really hard sales pitch to make. They're very busy. It's instead, let's take a really targeted approach and address a patient population that clearly needs treatment, needs a MIGS intervention, doesn't have another option, isn't the right candidate for these other treatment modalities, and start there in terms of standalone MIGS penetration. That is what we're focused on, is really trying to get that message out through peer-to-peer education, us educating them, the clinical data. We just had the 36-month IRIS Registry published in January showing sustained benefits of OMNI. Those things are really important as we look to drive this standalone market adoption. Changing practice patterns and treatment paradigms takes time. It takes, as Ali mentioned, a lot of clinical data. We have more and more compelling clinical data that suggests intervening earlier is better for the patient. Getting beyond educating the surgeon community and patients and referring community on the benefits of intervening earlier, really getting them to act. I think that's sort of where we're at now. There is another talk at AGS about moving from the clinical evidence is pretty clear. These interventions, whether it's laser, sustained release, or MIGS, sooner is better for the patient long-term. Now we're at the point where we need to figure out how do you act? How do we activate them? How do we get the cases done? That's working with our customers, surgeons and facilities. The ASCs are busy. Cataract surgery is the number one surgery in all of medicine. ASCs are busy around the clock with cataract surgery. How do we work the interventional glaucoma procedures into the busy schedules of both surgeons and ASCs? That is all happening now. It will grow. The question is, how much can we all affect that growth? How much can we steepen the curve of adoption? We have been talking for some time, not just today, over time. How is physician training built over years, over the past couple of years? How do you see that going forward? Is it a matter of training more docs, or is it a matter of taking the docs that are trained and having them do more procedures, or some combination? Yeah. I think it's both. Yeah, Joanne, we've obviously been discussing interventional glaucoma for years. We've been training a lot of surgeons on MIGS. I think we're at about half, maybe just under half of all the MIGS-trained surgeons have now been trained on OMNI. That's exciting in that we have a very sticky customer base, loves OMNI and the clinical results it delivers. We also have a lot of runway in terms of training new surgeons. Both going deeper in our existing base and driving that pseudophakic market development and case volume, that's one area of focus for us. Continuing to train new surgeons. Is the interest from new surgeons as high today as it was 12 months ago? I think now that we have LCD clarity, that helps a lot. During the LCD uncertainty period, we absolutely did see a drop in new surgeon training. As you would expect, surgeons do not want to train on something if they are not sure that there is going to be long-term durable reimbursement for those procedures. We do expect to continue to see progress in reengaging on new surgeons' training as we move forward from here now with clarity behind us. Okay. I'm going to shift gears just a wee bit here. I want to talk a little bit bigger picture. I'm asking everybody this question in no particular order today. There's a lot coming out of Washington. How do you think about things such as tariffs, NIH funding, FDA cuts, and those types of factors when you think about your business? It's a very big question. It's a dynamic environment. Just saw right before the start of this session that there were additional commentary from the president on proposed additional China tariffs. For us, the largest exposure is the China tariffs. We do have our contract manufacturing based in China for our OMNI, SION, and a portion of our TearCare production as well. That is the largest exposure for us. We do have some U.S. based facilities as well. That is an impact for us. The 10% is kind of an incremental impact on our overall business in terms of results. Of course, this is an environment where these things are changing on a daily basis on the tariff front. Supply chains are global. There are interconnections as we look and evaluate our strategy here. In terms of the other impacts, NIH funding or those types of things really do not have a material impact on our business. Of course, that does have an impact on just the general medical community. That impacts our customers. That is important to us. We hope that there is continued investment in those. On the FDA front, I think it is still very early to say what that potential impact would be. We do have products in development and communications ongoing with the FDA around those products. Cuts there could delay R&D projects depending on what happens with those specific cuts and how it impacts our industry. At this point, we are just kind of working through those. I would not say anything is a large material impact at this point from those changes. We all know that there's a lot of uncertainty around those potential outcomes. Okay. I want to spend a little bit of time now talking about TearCare. And dry eye disease is getting just a lot more interest just generally across the ophthalmology space of manufacturers. How do you think this is a multi-part question. How do you think about adoption of new dry eye techniques? And how do you think about the positioning of TearCare? Sure. Dry eye, another massive problem in eye care. One of the top reasons for a visit to an eye care provider, and probably increasingly so given all of our society's obsession with screens, staring, not blinking. There are other factors that contribute to it. It is a growing problem. We've seen the adoption of new pharmaceuticals, new eye drops that have different mechanisms of action. They've performed quite well. I think, for example, there are some MGD-specific targeted eye drops that are in particular doing very well, which I think is a good leading indicator for the type of dry eye that TearCare addresses. That meibomian gland disease or evaporative dry eye disease is the number one type of dry eye disease. That disease originates within the eyelids and the oil-producing glands in the eyelids and meibomian glands. I believe we're a first mover in a market access-focused strategy to develop this market. Today, interventional procedures for dry eye, interventional procedures for meibomian gland disease are cash pay. Patients deserve and need to have reimbursed access to highly effective treatments. We set out on this strategy many years ago. Joanne, to your point, if there was a year to start paying attention to TearCare, that year is 2025. We've been executing this strategy in terms of developing and iterating on best-in-class technology that offers the patient and doctor the best safety, efficacy, and usability possible. We've been working on driving up all of those criteria for our technology, but then also generating the clinical data in a form that payers could be motivated by. We talked to insurance companies before designing our pivotal RCT, SAHARA, which we'll share where we're at on that in a moment. They wanted to see, payers wanted to see two things. If we could deliver these two things, they suggested they would support coverage and payment for TearCare. One, they wanted to see how does TearCare compare to the gold standard, the standard of care, which is cyclosporine, daily cyclosporine eye drops, Allergan's Restasis. Two, ideally, if we could show superiority to Restasis, then the second endpoint is, how long does the TearCare procedure last? Meaning, if we decide to cover this procedure, is it one treatment per year? Is it two treatments per year? Is it more than that? We have done commercially 65,000+ cash pay cases. That's allowed us to really perfect the TearCare technology as well as understand how it's performing clinically. This SAHARA RCT is a reflection of what we've been seeing in the market to date. TearCare has a very strong reputation for its safety, efficacy, and usability. We've just completed the two-year last patient last visit, I think was in October of last year, recently submitted for our two-year publication. Hopefully, that's going to be published this year. The goal is to take that package of clinical data, phase I and phase II, six month and 12 month have been published. The 24 month will be published soon, again, 2025, along with a budget impact model, which was published late last year, a cost utility analysis, which will also be published this year, and our RVU analysis. Those six deliverables serve as the foundation for highly productive payer conversations. Our market access team, our commercial team, doing a great job right now, 2025, working with our customers, ensuring that high-quality TearCare claims are being submitted to payers. In parallel with payers understanding how TearCare is performing clinically in the market, our market access team is having policy conversations with payers. We have stated that we believe we are going to see coverage policy decisions, successful coverage, and payment decisions this year. That is what we are actively working on. It is a very, very exciting time. Just like we talked earlier about interventional glaucoma, we are working to create and pioneer a category of interventional dry eye, interventional ocular surface disease. I think we are way ahead with our TearCare long-term strategy. This is the year where hopefully we can deliver some very meaningful catalyst, not just for Sight Sciences, obviously, but for patients who need access to these treatments, to doctors who need reimbursed options to take care of these patients that do not really have great options, and also to payers. Payers benefit as well. That is what the budget impact model says. It is what the cost utility analysis will say also. We are trying to bring value to all stakeholders in TearCare. It is a unique opportunity where you have got millions and millions of patients who are suffering from a disease that today does not have a reimbursed procedure. We are on the cusp, we believe, of unlocking that opportunity. Let's unpack some of that because you just said a lot. You're collecting the economic aspect of it. You're collecting the clinical data, multiple clinical trials. You're presenting it to commercial payers. You're presenting it. All the commercial payers. Yeah. National commercial, regional commercial, as well as MACs. As well as MAC. You are going to have to go MAC by MAC or private insurer by private insurer. Is this one of those situations like somebody says, yes, we are going to reimburse for this, and everyone's like, okay? There's a strategy to it. It's targeted. There are a number of considerations. Payers who may adopt technology sooner, payers where we may feel like we have stronger, well-established relationships with. There's strategy embedded in who we're talking to and how we're going about 2025, 2026, 2027 coverage. Right now, I'll say that we are talking to a variety of smaller commercial, some national commercial, as well as a handful of MACs. Alison do that one. Yeah. This is a large market opportunity. It will take multiple years for us to get full coverage across all of the payers. In the interim, each market, there are huge opportunities here. There's 19 million patients with dry eye disease across the United States. As we work through these challenges with the payers, what's great is we can leverage the infrastructure. Say we get a win in a specific region, we already have some level of commercial capacity within those regions based on the cash pay business that we created previously. There's about 1,500 customers that have TearCare hubs that are trained on procedures that know how to use the device. As Paul said, we've done 65,000 cash pay procedures over the last few years. There is already an existing base of commercial activity that is waiting for some of these wins to happen. As we get these wins in specific markets, we'll be able to activate that infrastructure and have a targeted approach to it as we add more covered eyes. Do you think that there's a waitlist that's starting to form? I mean, are doctors aware, okay, there's reimbursement that's kind of coming, Mr. Smith, I'm going to put you on this waitlist. Are you starting to see that yet? Or maybe not. No. I don't think that it's necessarily a waitlist of individual patients. I think that there is more doctor demand for this type of procedure and waiting to see us get some wins here. Now, what we are seeing is that we are actively engaged with the community, the eye care professionals, to try and establish coverage. In each of these discussions, there is a doctor who's performed a procedure, submitted a claim, and we're working with them to try and get attention from the payer. There is a baseline of work with the KOLs to get these claims submitted and get some level of interest from the commercial payer in particular and the MACs to establish that there is a need. There is a demand for these procedures. That work has been ongoing over the last year. We've made good progress on that front. To tie it all together, this strategy from day one, we've been working to get to 2025. Our commercialization, we have a really, really strong TearCare commercial team, small but lean and mean and very effective. The goal of commercialization was less around in the cash pay environment, was less around how fast can we grow revenue, more around how do we perfect the technology, how do we ensure that we're able to deliver reimbursement-worthy clinical data in the form of the SAHARA RCT. Lastly, and very importantly, how do we develop really, really strong relationships with highly reputable dry eye KOLs who really, really understand the power of TearCare in this procedure, patients and patient care, so that they can help us in those conversations with payers, as Ali mentioned. We have a network of reputable KOLs, ophthalmologists, as well as optometrists across the country. We are equipped right now because of that cash pay commercial experience over the last few years to have high-quality, trusted conversations with any payer wherever they might be. Okay. What are the economics? Because I run financial models full day. What are the economics of TearCare? Yeah. That's something that we'll have to wait to see what the payers end up assigning as a reimbursement for this. As you know, we established new pricing effective in October of last year based on the clinical data from the SAHARA study as well as the budget impact analysis to reflect the value of the TearCare procedure. We're seeing that pricing. The list price was $1,200 ASPs, around $1,000 for providers buying the products. We'll see where reimbursement is established long term. We think that this is, and what we showed in the budget impact analysis, is that this can save payers significant money versus the standard of care, which is the Restasis product. That's something that is very interesting to payers. I think that this opportunity is something that when you step back and you look at it, it's a huge market potential. It is a market that is underserved with the existing solution where patients are not happy doing twice daily eye drops that may or may not actually be addressing the underlying cause of their dry eye disease. You have a circumstance where right now, the eye care professionals, they're not participating in the economics of prescribing a prescription. If they do a procedure, they will get a portion of the economic picture as well. On top of that, you have payers that are looking to save money. If you can provide a solution that also saves the payer money, it's really a win across the board for patients, for providers, for payers. That is something that we think is really compelling about this unique opportunity. It is also a recurring business here where this is a procedure where you would need a treatment once a year, maybe twice a year if you are a severe patient. That type of recurring business model is really attractive to optometrists and other eye care professionals as well as just that predictability for revenue. Type of question for [glaucoma. They get paid for this. Right. That is important. Obviously, it is a procedure. It is an in-office procedure. As Ali mentioned, I think what differentiates this model, Joanne, when you are modeling OMNI and you are modeling TearCare, the difference is because OMNI, while it is minimally invasive, it is surgery, we are trying to push the results and make OMNI as long-term effective as possible. In glaucoma, if you can be effective for, say, five years, that is a huge win. In dry eye with these procedures, while some patients might benefit for the very long term, like well beyond a year, it is a chronic disease. The nature of meibomian gland disease in particular, and what we have seen in the 65,000 cash pay cases, the typical patient is going to need one or two treatments per year. One patient might be fine with a single treatment per year. A more advanced patient or more problematic for whatever reason might need more than one treatment, but not five treatments, maybe two treatments per year. When you're building the model, the difference between the OMNI model and the TearCare model is these patients stay within the model. It is obviously very interesting from a modeling perspective. There are tens of thousands of optometrists who can all be customers. Ophthalmologists also will use TearCare. It is the number one reason people go to their optometrist is for dry eye disease. The average optometrist sees 70 dry eye patients a month. It is an incredible opportunity to really solve a critical issue. People think dry eye is just, oh, that is an irritant or an aggravation. It actually makes a huge difference in people's quality of life, their reading speed. We have done some studies on that. These things really make a difference when you can see effectively without pain. Yeah. There's vision considerations, corneal considerations. It's a real disease. What also is another interesting factor when the sell side is thinking about models and those types of things is that there are also inherent synergies between the business on the glaucoma side of the business. Cataract patients in general tend to also have dry eye. There is a lot of patient overlap as well, even though, of course, the dry eye population is much larger than the surgical glaucoma population. Strategically, this is a little further out. Just imagine a world where we have broad coverage and we have sales reps in many, many optometric practices. Those optometrists are also the same ECPs who are seeing glaucoma patients who need standalone OMNI glaucoma surgery. Over time, where we're going to build towards is we talk about how do you accelerate the development of the pseudophakic standalone glaucoma segment. One of the key pillars of that is really staying top of mind, educating and staying top of mind with the referring community. That referring community are the optometrists that we are going to be selling reimbursed TearCare to in due course. Got it. In our time remaining, I want to hit on two things. One is ASCRS is coming up in April. What should we expect? Before ASCRS, we got AGS this weekend. Oh, sorry. I felt like we just got some. Yeah, yeah. Just look for some very compelling surgical glaucoma data at AGS. All right. We will continue to have new data available at ASCRS. We will continue to have compelling sessions there talking about pseudophakic standalone development and really focused on that peer-to-peer education and how we really just collaborate with industry around the needs here. I think that will be the main focus of that conference. I haven't hit numbers. I know you've pre-announced first quarter. Not first quarter. Feel free to pronounce first quarter too. Fourth quarter. And we're waiting for next Wednesday night for 2025 guidance. I don't want to front-run that. I would love to say, given all the bits and pieces that you have here, is there a philosophy to how you think about putting that all together? Yeah. I mean, as Paul said, we have an incredible opportunity in front of us both in surgical glaucoma and dry eye. 2025, when we look at it and we think about the business and the puts and takes, obviously, the critical area on dry eye will be when do we establish that reimbursement for when do we start getting any of those coverage, either payment decisions or coverage policy decisions. That will be critical in thinking about 2025 growth on the dry eye side of the business. On the surgical glaucoma side, of course, the main dynamic will be the impacts of the multiple MIGS restrictions. Of course, what can we do in terms of competitive selling, growth of the overall patient population, and of course, the pseudophakic standalone market development. Those are the things that we'll be thinking about and we'll be providing more details on next week during our earnings call. Perfect. Now my favorite question. When we're together a year from now, what do you think we're going to be talking about? I think we're going to be heavily focused on the dry eye side of the business and really what that model could look like over time. Right now, it seems very conceptual to people. Until we start actually getting those wins, I don't think people have appreciated the power of that model and the recurring nature and the size of the market potential here and what that really could be for a business opportunity. I think next year, once we actually have some hopefully wins under our belt there and we're starting to grow that business, I would expect us to spend more time on that. I would also expect us to have some interventional glaucoma. How is that going on the standalone side? I would also say pipeline will be a focus at that point. We will have met some nice milestones on the pipeline side that I think we will start wanting to communicate about. Excellent. Paul and Ali, thank you so much. Thank you, Joanne. Thank you, Joanne. Yep, you too.