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Edited Transcript of EYES earnings conference call or presentation 14-Nov-19 9:30pm GMT

Q3 2019 Second Sight Medical Products Inc Earnings Call

Sylmar Dec 4, 2019 (Thomson StreetEvents) -- Edited Transcript of Second Sight Medical Products Inc earnings conference call or presentation Thursday, November 14, 2019 at 9:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* John T. Blake

Second Sight Medical Products, Inc. - CFO & Corporate Secretary

* Jonathan Will McGuire

Second Sight Medical Products, Inc. - CEO, President & Director

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Conference Call Participants

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* Amit Dayal

H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Technology Analyst

* Kyle Royal Bauser

Dougherty & Company LLC, Research Division - Senior Research Analyst

* Lisa M. Wilson

Second Sight Medical Products, Inc. - Founder & President of In-Site Communications and IR for Second Sight

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Presentation

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Operator [1]

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Greetings, and welcome to the Second Sight Third Quarter 2019 Results Call. (Operator Instructions) As a reminder, this conference is being recorded, Thursday, November 14, 2019.

Now I'd like to turn the conference over to Lisa Wilson, Investor Relations for Second Sight. Please go ahead.

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Lisa M. Wilson, Second Sight Medical Products, Inc. - Founder & President of In-Site Communications and IR for Second Sight [2]

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Thank you, Eric. Good afternoon, and welcome to Second Sight's Third Quarter 2019 Results Call. This is Lisa Wilson of In-Site Communications, Investor Relations for Second Sight. With me on today's call are will McGuire, President and Chief Executive Officer; and John Blake, Chief Financial Officer of Second Sight.

At the close of market, the company issued a press release detailing financial results for the 3 months ended September 30, 2019. The press release can be accessed through the Investor Relations section of the Second Sight website at secondsight.com. You can also access the webcast of this call from there.

Before we get started, I would like to remind everyone that any statements made on today's conference call that express a belief, expectation, projection, forecast, anticipation or intent regarding future events and the company's future performance may be considered forward-looking statements as defined by the Private Securities Litigation Reform Act. These forward-looking statements are based on information available to Second Sight management as of today and involve risks and uncertainties, including those noted in this afternoon's press release and Second Sight's filings with the SEC. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from those projected in the forward-looking statements. Second Sight specifically disclaims any intent or obligation to update these forward-looking statements, except as required by law.

A telephone replay of the call will be available shortly after completion of this call for the next 2 weeks. You'll find the dial-in information in today's press release. The archived webcast will be available for 1 month on the company's website, secondsight.com. For the benefit of those who may be listening to the replay or archived webcast, this call is held and recorded on November 14, 2019. Since then, Second Sight may have made announcements related to the topics discussed, so please reference the company's most recent press releases and SEC filings.

And with that, I'll turn the call over to second Sight's CEO, Will McGuire.

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Jonathan Will McGuire, Second Sight Medical Products, Inc. - CEO, President & Director [3]

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Thank you, Lisa. Good afternoon, everyone, and thank you for joining our call today. Today, I will share updates on the current status of the patients in our early feasibility study, our engagement with the FDA as we progress toward a pivotal trial, the various research and development programs underway for future enhancements to the Orion user experience and the reimbursement landscape for Orion.

We continue to make good progress building out our Orion platform on all fronts and remain focused on advancing our clinical and research and development programs. During this quarter, we completed another pre-submission to the FDA as part of the Breakthrough Devices Program, and we have had ongoing discussions with the agency to reach consensus on the design of the pivotal trial for Orion.

Let me begin with a brief update on our early feasibility study, which, as many of you know, is being conducted in the U.S. at the Ronald Reagan UCLA Medical Center in Los Angeles and at the Baylor College of Medicine in Houston. In October, we shared additional positive data from the early feasibility study at a number of important conferences and scientific forums, including the American Academy of Ophthalmology, the Congress of Neurological Surgeons and the Society for Neuroscience. These presentations have been very well received, and there is growing interest by key opinion leaders and the scientific community in Orion's ability to provide useful artificial vision to profoundly blind individuals, including those blind from retinitis pigmentosa, diabetic retinopathy, glaucoma, optic nerve disease and eye injury. Let me share just a few of the top line results in the study to date that include 12-month results for 5 of the 6 subjects and 6-month results for the sixth subject.

First, we have a good safety profile. Two subjects experienced a total of 6 adverse events or AEs related to the device or to the surgery over this time period. One was considered a serious adverse event or SAE, and all of the adverse events were in the expected category. The one SAE was resolved quickly and did not require hospital stay. And let me note that the greatest concern from this subject was that he wanted to remain in the study, and he has.

Second, the efficacy data is also quite encouraging. Here, we look at 3 measures of visual function. The first is square localization where Orion subjects sit in front of a touch screen and are asked to touch within the boundaries of a square when it appears. The second is direction of motion where subjects are asked to identify the direction of motion -- the direction and motion of lines on a screen. The third is grading visual acuity, a measure of visual acuity that is adapted for very low vision.

On square utilization, 5 of the 6 subjects in our feasibility study performed significantly better with the system on than off. On direction of motion, all 6 performed better on than off. And on grading visual acuity, 3 had measurable visual acuity on the scale of this test with the device on versus none who can do it with the device off.

The final efficacy measurement and perhaps the most important is one we call FLORA, which stands for Functional Low-Vision Observer Rated Assessment. This is an assessment performed by an independent third-party low-vision orientation and mobility specialist who spends time with each subject in their home. The specialist asks each subject a series of questions and also observes them performing 15 or more daily living tasks, such as finding light sources, following a sidewalk or sorting laundry. The specialist then determines if the system is providing a benefit, if it is neutral or if it is actually hurting the ability to perform these tasks. We're thrilled to report that all 5 subjects who have reached the 12-month mark are receiving measurable benefit per the FLORA assessment.

Before discussing our FDA conversations, I would like to note that in October 2019, we observed a loss of most perception from the device with the sixth subject, though there is no indication of a medical adverse event or a device defect. The most recent testing session with this subject showed improved perception. We are currently investigating the possible root causes for these changes, which may or may not be device-related and may or may not be permanent. We plan to keep everyone updated as to the status of this subject in future calls and updates.

We continue to be actively engaged in discussions with the FDA regarding the clinical and regulatory path. As I mentioned last quarter, we are considering 2 potential paths for Orion. The first track is PMA or premarket approval. The second option under consideration would involve first obtaining a humanitarian device exemption approval followed by a PMA approval. To date, our efforts with the FDA remain focused on PMA, which is our preferred track. I'm pleased to inform you that we have reached agreement with the FDA regarding the primary efficacy end point for the pivotal trial. Efficacy will be assessed with an instrument we have developed for this purpose, pending successful validation of the instrument in early 2020. We believe the new end point, a revised version of the FLORA, is appropriate for demonstrating the real-world impact of the Orion technology. We are now focusing our attention on the primary safety end point and hope to reach agreement with the FDA by the end of the year.

Turning now to R&D. Our current work on Orion is focused on iterations to the current design required for a pivotal trial and ultimately for commercialization. Improvements to the implant include reducing the thickness of the electronics case and improving impact resistance. Improvements to the externals include ergonomics, aesthetics and robustness. None of the proposed changes to the implant or externals impact functionality. We expect this R&D work to be completed in the second half of 2020. Our expectation is that the majority of the pivotal trial patients, if not all, would be implanted with the improved Orion implant and externals.

We have other exciting research projects underway that are aiming -- that are aimed at enhancing the user experience. In each case, we are working with a partner to evaluate the technology and ultimately integrate it within our system so that the patients can use their artificial vision optimally. These technologies, which have been discussed in past calls, include image processing filters that would selectively isolate human faces or specific objects; thermal imaging that would only stimulate the array when a warm object is in the view of the sensor, depth-based decluttering that would only focus on images that are within a certain distance; and eye tracking, which could allow users to scan the visual space with their eyes rather than by moving their heads.

Additionally, on October 1, we announced that we received a $2.4 million 4-year grant from the NIH for National Institutes of Health to develop spatial localization and mapping technology, known as SLAM. This exciting initiative is a joint collaboration with the Johns Hopkins University Applied Physics Laboratory or APL, and it is intended to speed the integration of SLAM into future generations of Orion. The goal is to give Orion users the ability to localize objects and navigate landmarks and unfamiliar surroundings in real time. One day, users may have the ability to save and load maps of different environments, like the grocery store, fitness center or a doctor's office, on demand to help them navigate through daily life. Such advancements could be a real game changer for blind individuals who seek to gain independence and reconnect to the world using our technology.

Let me turn now to reimbursement. In its fiscal year 2020 Inpatient Prospective Payment System or IPPS final rule, CMS finalized its proposal to create an alternate payment pathway for innovative technologies with an FDA Breakthrough Device designation, such as Orion. This is a significant step in improving patient access to transformative devices and could shorten the path to reimbursement for Orion and improve our ability to commercialize once approved. While CMS has certainly made great progress on refining coding and payment pathways for innovative technologies, the coverage process is still not fully addressed. Fortunately, there are currently 2 pieces of legislation being proposed, HR 5997 and S 2326, that would address coverage for breakthrough devices.

In our efforts to advocate for reimbursement of breakthrough devices, we recently spent a day on Capitol Hill with the AdvaMed team and an Orion study participant discussing the importance of reimbursement certainty through the development of innovative medical technologies such as Orion. Additionally, we recently had the first in what will likely be a series of meetings with CMS to discuss the possible future reimbursement pathway with a critically important post-surgical training for Orion users. This artificial vision rehabilitation and training is instrumental in allowing users to achieve the greatest benefit by thoroughly understanding how to interpret the pixelated light that they perceive. Through on-site training, we move patients to greater independence while enhancing their visual interactivity with people, places and important daily activities. We are therefore advocating with CMS the potential to have a clear reimbursement path for the surgical procedure, the programming of the device and the follow-up training or rehab.

In addition to our engagement with CMS on reimbursement, we are also in discussions with private payers to understand their requirements and expectations for data supporting the reimbursement of Orion. We expect a larger portion of the Orion population will have private insurance coverage given the younger average age of Orion patient candidates. Our readiness for private payers will be a critical component as we commercialize in a significantly larger market.

Turning now to Argus II. As previously stated, our Argus implanting centers have been notified of our intent to stop manufacturing the product over the course of the year. In the most recent quarter, we implanted 4 Argus II devices at 2 centers. In the fourth quarter of this year, we plan to submit Argus 2s, our next-generation externals, to the FDA for U.S. regulatory approval. These upgrades -- I mean this includes upgrades to the glasses, camera and the VPU and will render Argus a more powerful device and a better platform to do testing on some of the other technologies mentioned earlier.

All of us at Second Sight are thrilled with the progress we are making on the powerful Orion technology as we pursue a billion-dollar-plus market opportunity to help almost all profoundly blind individuals. I'm also pleased that our efforts are starting to garner widespread interest in the scientific community as well as media coverage, including a segment on CBS This Morning that aired on September 18.

Finally, I'd like to thank my teammates at Second Sight for their unwavering dedication and our investors for their continued support.

With that, John will now review our third quarter 2019 financial results. John?

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John T. Blake, Second Sight Medical Products, Inc. - CFO & Corporate Secretary [4]

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Thanks, Will. Our financial results for the third quarter are in line with expectations and our organizational focus to Orion. Net sales were $0.5 million in the third quarter of 2019 compared to $2.2 million in the same period in 2018. Revenue was recognized for 4 implants on a GAAP basis with an average selling price or ASP of $118,000 in the third quarter of 2019 compared with 22 devices with an ASP of $102,000 in the same period of 2018. We expect our net sales to decline as we sell through our existing inventory of Argus II.

Research and development expense was $3.4 million in the third quarter of 2019 compared to $2.7 million in the third quarter of 2018. The increase primarily reflects costs to make Orion prototypes. We expect our research and development expenses to increase as we accelerate our transition to the Orion platform, including costs previously related to production activities, such as facilities and personnel that will be transitioning to the Orion development activities.

Clinical and regulatory expense decreased slightly from $1 million in the third quarter of 2018 to $0.9 million in the third quarter of 2019. This decrease is attributable to decreased costs associated with the Orion early feasibility study. We expect clinical and regulatory costs to increase in the future as we conduct additional clinical trials for Orion and related enhancements to our user experience.

Selling and marketing expense was $1.3 million in the third quarter of 2019 compared to $3 million in the third quarter of 2018, a 57% reduction year-over-year due to our commercial restructuring efforts that remain on track. We continue to expect selling and marketing expense to decrease as we reduce our Argus II commercial activities and sell through our existing inventory.

General and administrative expense was $2.2 million in the third quarter of 2019 compared to $2.3 million in the third quarter of 2018 and is expected to remain consistent for the remainder of 2019.

As of September 30, 2019, we had cash and cash equivalents of $18.5 million. Our cash burn for the third quarter of 2019 was $6.7 million, and we continue to expect our cash on hand to fund operations into the second quarter of 2020.

With respect to our $1 bid price compliance with NASDAQ, our deadline to comply is January 20, 2020. In order to maintain our NASDAQ listing, we must attain a closing price of $1 per share or higher for 10 consecutive days or implement a reverse split of our common stock. Our board has not made an affirmative decision with respect to our plans to regain compliance, and we will provide an update once the decision has been made.

With that, I'll open the call to questions. Operator, please go ahead with the instructions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) And our first question comes from the line of Amit Dayal with H.C. Wainwright.

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Amit Dayal, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Technology Analyst [2]

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Can you talk a little bit about these new FLORA criteria versus what the old FLORA was?

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Jonathan Will McGuire, Second Sight Medical Products, Inc. - CEO, President & Director [3]

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This is Will. Yes. Thanks for the question. I'll be glad to address that.

So the original FLORA was used for the Argus. It was in the Argus clinical trial. It's also been used as an end point in some post-market studies, specifically in France for a reimbursement study there. And it had 3 parts. So it had an in-depth interview, it had an observer-rated task, and then it had a case study narrative. And all 3 of these were completed by this independent third-party observer or low-vision specialist.

And what we've done with the revised FLORA is we've taken all the learning over the years, and now we've really just focused in on the observer-related functional vision task section. So what it will entail is a certain number of tasks that the Orion user would be required to do. And this independent observer would observe them performing these tasks and then give a rating as to how well they perform the task with and without the system and then give a rating on the benefit. Either it provides benefit, it's neutral or it actually makes it more difficult.

And so again, we chose this because we think this is the most important measure because it's really measuring the impact of our technology on how someone goes about their daily life. And then also, this section of it is important because it's possible to actually validate the instrument. And the validation is also very important to the FDA because, among other things, it ensures that multiple independent experts can administer the tool and then provide consistent measurements of the technology's impact.

So again, it's taken one out of the 3 sections of the original FLORA. It kind of expands on that section, and then we go through a validation process with that section. And in the end, we think we're going to be able to accurately measure the impact of our technology on the users, how they go about their daily life. And we also think that by validating it, we can prove that multiple people can perform this assessment and come up with the same answer. Hopefully, that helps, Amit.

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Amit Dayal, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Technology Analyst [4]

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Yes, that was actually very helpful. So this was, just to clarify, designed in consultation with the FDA, right?

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Jonathan Will McGuire, Second Sight Medical Products, Inc. - CEO, President & Director [5]

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Yes. So we designed it -- the original FLORA was designed, I think, in consultation with the FDA as well. So it was something that they requested early on with -- or at some point with Argus to demonstrate the benefit to patients as they go about their daily life. And then in this case, it's something that we developed. And we went through a series of discussions with the FDA to refine the tool, answer their questions and also to kind of refine what the validation would look like, so that they are comfortable not only with the measurement and the tool but then how we're going to proceed with the validation to show that we can get consistent results from different observers.

So what -- and specifically, what happened is we went through this process with the FDA and basically got written agreement with the FDA that we can use this as a primary end point and that we'll go through a certain validation to use it. And then also, as we mentioned in the prepared remarks, what we're doing is, I mean, is we kind of go in serial. So we've got the efficacy end point now resolved. We feel very good about it. We feel very good about this tool accurately reflecting the benefit we provide. And now we're going through a similar process on the safety end point. And so we'll be going back and forth with the FDA. And hopefully before the end of this year, we have a similar resolution where we jointly agree on what the safety end point would be. And at that point, we can also communicate that to you and others.

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Amit Dayal, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Technology Analyst [6]

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Got it. And then just based on sort of the subjects that are already undergoing all of this, I mean with this set of criteria, are they performing in line with your expectation under the sort of the new FLORA criteria?

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Jonathan Will McGuire, Second Sight Medical Products, Inc. - CEO, President & Director [7]

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They are. We haven't assessed them directly against the new FLORA. But as we've talked, we have assessed the first 5 subjects at the 12-month mark versus the current FLORA, and they have all compared -- they all have performed very well. I think we had one that rated a mild positive as far as the impact of the technology on their ability to go about their daily life. And the other 4 were a strong positive, so -- or just a positive.

So all 5 at the 12-month mark look really good using the current Florida tool. And our expectation is that all 5 would look good with the new FLORA as well. But again, we haven't performed that study yet or the test.

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Amit Dayal, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Technology Analyst [8]

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Understood. So now you're expecting the safety end point to be finalized by the end of the year. And once that is done, do you start enrolling or recruiting patients. And then how many patients -- can you remind us how big this trial would be?

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Jonathan Will McGuire, Second Sight Medical Products, Inc. - CEO, President & Director [9]

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Yes, good question. So once we get the safety end point resolved, the next step for us then would be to -- well, I think once we get efficacy and safety, those are the 2 biggest items that we hope to resolve with the FDA or we want to resolve first with the FDA. And again, we would want to communicate that at some point, so that everyone understands both efficacy and safety.

The other things then would be to get agreement on the overall number of subjects in the pivotal. As -- we've said in the past that you should expect 30, at least 30. I think that's still fair to say. We don't think it's going to be 100 or anything like that, but 30 is what we did with Argus. And it's probably a good starting point for your expectations here, although we need to be really clear, we cannot say what that end is going to be until we decide and agree with the FDA on what the safety end point is because it'll drive that number.

Then we have to finalize what is the duration of follow-up. Are there any secondary efficacy or safety end points that we would want to collect? We need to confirm that the bench testing and other preclinical testing plans that we have in place are sufficient and that there's not anything else there that would be required before we could start the pivotal. We'll also work through, before we start the pivotal, what are the post-market study requirements. So what would we collect upon regulatory approval to give further data and further comfort to the FDA and most likely to use for reimbursement as well. And then finally, we do want to have further discussion with the FDA about if we collect additional data with the current iteration of Orion, so not the improved versions, could we leverage some of that data for the ultimate regulatory approval of the newer-generation Orion.

So those are the things that have to be done. And if you look ahead, I mean the one thing that we've said is that we don't exactly know yet when we would start the pivotal trial design. But one thing that we do need to do is complete the work on the improved version of the Orion, as we mentioned in the remarks. And that won't be complete until sometime in the second half of 2020, which means we could not enroll patients in a pivotal trial with this improved version until, at the best, late 2020. We also as mentioned would have to spend the first half of 2020 doing the validation of this tool for -- this new FLORA tool for efficacy.

And the one thing that we could do, and we haven't made a decision on this, Amit, and we have not discussed with the FDA, but we could make the decision to expand the early feasibility study sometime in 2020 and collect additional data there that would potentially support the pivotal study data that we would collect. And it would also, I think, reduce some risk with the pivotal trial either, just having additional patients. So we think it would be a good thing. But again, we haven't worked through that, and we haven't gone to the FDA to seek approval for that yet. Okay?

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Amit Dayal, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Technology Analyst [10]

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Understood.

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Operator [11]

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(Operator Instructions) Our next question comes from the line of Kyle Bauser with Dougherty & Company.

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Kyle Royal Bauser, Dougherty & Company LLC, Research Division - Senior Research Analyst [12]

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Thanks for all the updates. You talked -- just a little bit about the reimbursement strategy down the road for Orion. Obviously, you have the breakthrough designation, and you talked about being able to potentially have reimbursement for each part, so the implant, programming and follow-up and rehab. How did this work with Argus II? I'm guessing it was just the implant, but how did you get around that? And what was the gating factor not to have the separate reimbursements for the rehab and programming part?

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Jonathan Will McGuire, Second Sight Medical Products, Inc. - CEO, President & Director [13]

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This is Will. I'll take that. Short answer, yes, it was a problem. When we got Argus approval, we had a payment and we had codes established early on. We did not have coverage. And what we had to do is we had to start going MAC by MAC, so Medicare Administrative Contractor by contractor. There's 12 regions and, I think, maybe 8 contractors now. And we had to go MAC by MAC to get a coverage decision, a positive coverage decision. And 4 years -- about 3 or 4 years into it, we still had 4 regions where we did not have coverage. And so it's a bit like a groundwork trying to get this coverage MAC by MAC. So it definitely slows down your commercialization. It interjects a lot of uncertainty into the reimbursement equation. And many centers are very hesitant to proceed with a program with the uncertainty around reimbursement. And the ones that did proceed would proceed with caution in that they may only do one case, at the most maybe 2 cases. And then they would wait, and sometimes they would wait 6 months or 9 months or even 12 months to get reimbursement before they would continue. So it was a -- it did slow us down and was something we had to dedicate quite a bit of resources to.

Now with Orion, the way we're approaching Orion and kind of the landscape out there -- and just one other thing. When we first launched -- or when we did get a coverage decision, to your point, the actual device and related surgical procedure were covered. We did not have coverage for the programming nor did we have coverage for the artificial vision training or rehab. And those 2 proved to be issues as well. Anything that has to be done that requires resources that's not reimbursed can be an issue for you. Now over time, we did get coverage for the programming and reprogramming procedures. As of today, there's still no coverage for the artificial vision training.

So what we're doing now is a couple of things. Number one, as you know, there's some -- as we stated, CMS has put things in place that would give automatic payment and coding to FDA-designated devices upon approval. So that's a good head start right there. What's not included right now in the CMS regulations would be the coverage piece. And so as we mentioned, we have been advocating for the coverage piece via visits to Capitol Hill, meeting with -- sometimes with representatives, sometimes with senators, most of the time with their staffers, and talking about the importance of having the coverage piece in place as well and how it allows us to move forward with innovative technologies like Orion.

So we cannot say with certainly what will happen. We do think there's some momentum on Capitol Hill. And as I said, there's a couple of bills that would plug the coverage gap and provide for coverage as well. One of the bills would provide coverage for 3 years. And during that 3-year period, you would get additional data to support a permanent decision. And I think the other bill would provide coverage for 4 years. So either one would give a time period in which you would collect additional data.

Now we are also -- as we mentioned, we're also looking forward and saying, yes, we need the procedure and the device covered. Yes, we need the actual programming and reprogramming covered. But also, we're going to really need to have in place reimbursement for the artificial vision training and rehab. And so that's what our specific reason for our last visit to CMS was. I'd say they understood why we were there. And we're starting a process to figure out what path we follow within CMS and within the government to try to get this reimbursement for the artificial vision training in place by the time we launch Orion.

So we expect it to be multiple meetings that could -- it could take place over all of next year. It's hard to say. But I would say, on the positive side, people understand it. We've even had a few conversations with private payers about this. And one private payer even stated, "Why would I reimburse the procedure and the device if I'm not going to reimburse the training? Seems like a waste of time and money." So people get it. It's just going to take us a little bit of time to work through it, Kyle.

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Kyle Royal Bauser, Dougherty & Company LLC, Research Division - Senior Research Analyst [14]

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Got it. No, it's -- certainly some economies of scale that you'd be able to work through both of these, the reimbursement and regulatory pathways in parallel. Sorry if I missed this, but can you talk a bit more about -- you talked a little bit about -- can you talk a little bit more about the new features of the next-gen externals, Argus 2s? And maybe more importantly, is there demand out there from the existing installed base or users for these externals?

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Jonathan Will McGuire, Second Sight Medical Products, Inc. - CEO, President & Director [15]

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Yes, good question. The -- I would say, yes, the installed base very much is looking forward to seeing some new externals be introduced. Because I mean for them, it's going to give them -- the glasses are more aesthetically pleasing. They look kind of more like modern Ray-Bans or something like that versus 15-year-old Oakley designs. So we think more aesthetically pleasing, but also, we think they would be more comfortable and ultimately more powerful, which would allow additional and more advanced software and algorithms to be run on it. So yes, there is some anticipation for these out there, and we have a lot of users that are looking forward to getting a chance to use them.

The other, I'd say that's -- if you look at the -- what's different, new versus old, other than aesthetics, ergonomics and comfort, I'm missing it, but the VPU is many times more powerful, so much more processing power and the ability to do more complex software and more complex algorithms. I mean what we have right now is a bit like a 7-, 8-, 9- or 10-year-old laptop with very little processing power that makes it really difficult to do all the kind of the modern software and the updated algorithms that we would like to do. So it just gives us a lot more power and a lot more flexibility.

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Kyle Royal Bauser, Dougherty & Company LLC, Research Division - Senior Research Analyst [16]

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Okay. That's helpful. And just lastly here, as you're ramping up efforts to move forward with clinicals on Orion and other initiatives, can you talk a bit more about what your financing strategy is over the next 12 to 24 months?

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John T. Blake, Second Sight Medical Products, Inc. - CFO & Corporate Secretary [17]

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Kyle, I'll take that one. This is John. So just as a reminder, in our prepared remarks, we affirmed our cash runway into Q2 2020. And we continue to evaluate all of the options with our Board for form of financing, although no decision has been made yet. But I can point to historically, we've raised capital to -- via rights offerings, private placements, our ATM. And we've also received non-dilutive funding through grants, including the 2 NIH grants that we have active today. So we'll continue to evaluate the propriety of the different forms of financing with our Board, and we'll update you in the future.

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Operator [18]

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All right. And we have no further questions from the phones at this time. I'll turn the call back to Will McGuire.

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Jonathan Will McGuire, Second Sight Medical Products, Inc. - CEO, President & Director [19]

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Thanks again for joining us today. And before signing off, we'd like to express our sadness at the school shooting in our community this morning. Our thoughts and prayers are with the victims, their families and their friends. Talk to you later.

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Operator [20]

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That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.