IPO plans for cataract-treating lens maker RxSight

DEVICES: VC heavyweight Bill Link on board, IntraLase ties

RxSight Inc. has its sights set on becoming Orange County’s next big public company in the ophthalmology sector.

The Aliso Viejo firm, maker of what it says is the first artificial lens that can be adjusted after cataract surgery to customize and optimize a patient’s vision, this month filed plans to go public via an initial public offering.

Terms of the offering haven’t been specified yet;

a placeholder $100 million figure was listed as the offering amount in the July 9 registration statement for the company, which will list its shares on the Nasdaq under the “RXST” ticker.

RxSight, founded in 1997 as Calhoun Vision, began sales a few years ago after getting FDA clearance in 2017. In 2020, it reported $14.7 million in sales, up from $2.2 million in 2019. In the first quarter of 2021, it posted $3.5 million in sales, up 17% from year-ago levels.

Proceeds from the IPO will be used to support commercial expansion, including hiring additional commercial personnel, and for product development, research activities and clinical development, regulatory filings indicate.

The company has yet to approach profitability, and counted an accumulated deficit of $437 million as of March 31.

Premium Offering

RxSight sees opportunity in what it calls the “premium” market for intraocular lens technology used in cataract surgery.

There are about 3.7 million cataract procedures—surgeries to improve the transparency in a normally clear lens of the eye— in the U.S. annually. In the surgery, a patient’s cloudy natural lens is replaced with a clear artificial lens called an intraocular lens, or IOL.

RxSight is the maker of both a “Light Adjustable Lens,” or LAL, which is made of a photosensitive material that changes shape in response to specific patterns of ultraviolet light generated by the company’s “Light Delivery Device,” or LDD.

With the RxSight system, the surgeon “performs a standard cataract procedure to implant the LAL, determines refractive error with patient input after healing is complete, and then uses the LDD to modify the lens with the exact amount of visual correction needed to achieve the patient’s desired vision outcomes,” the company’s registration statement says.

Alternative IOL technologies, in contrast, “are not adjustable following the surgery and therefore require patients to make pre-operative choices about their visual preferences, which can often result in patient dissatisfaction when visual outcomes fail to meet expectations.”

Studies of its technology show that patients reporting 20/20 or better uncorrected distance visual acuity post-procedure was 70%, above the rates of other cataract-focused competitors in the premium IOL space, it says.

The company’s marketing materials say the procedure provides “LASIK-like” results for a procedure where traditionally patients have often still required eyeglasses post-surgery.

Premium cataract procedures are between 10 and 15 times more profitable for doctors and ophthalmology practices than conventional cataract procedures, it says. Most customers pay out of pocket.

As of March, the company had installed a base of 105 LDDs in ophthalmology practices, and surgeons have performed over 10,000 surgeries with the RxSight system, the company reported in SEC filings.

Local practices using the company’s technology include Coastal Vision Medical Group and Harvard Eye Associates, according to the company’s website.

Stacked Roster

The company’s largest investor is a fund managed by Bill Link, one of OC’s top medtech investors.

Link, whose fund counts a 10.7% stake in the company, leads the Newport Beach-based outpost of venture capital firm Flying L Partners, and serves as managing director of San Francisco-based Versant Ventures.

He also serves on the boards of locally based Edwards Lifesciences Corp. (NYSE: EW), Glaukos Inc. (NYSE: GKOS), and Tarsus Pharmaceuticals Inc. (Nasdaq: TARS).

Link was the founder of American Medical Optics, which in 1986 was bought by then-Irvine based Allergan.

Allergan would later spin AMO out as its own public company in 2002, and was run by well-known area exec Jim Mazzo who engineered its $2.8 billion sale to Abbott Laboratories in 2009.

The CEO and President of RxSight is Ron Kurtz, founder of another ophthalmic company, Irvine’s IntraLase Corp.

IntraLase in 2007 was bought by AMO for $808 million.

The company’s CFO is Shelley Thunen, whose résumé includes a CFO role at locally based Endologix, and who also worked for IntraLase.

Other RxSight board members include former SEC commissioner and local Congressman Christopher Cox.

Local Base

RxSight operates out of a trio of buildings in Aliso Viejo totaling 110,000 square feet. Manufacturing is done at the local buildings, according to regulatory filings.

As of March, the company employed 171 full-time employees, including 55 employees in sales & marketing, 29 in general and administrative functions, 50 in research and development and 37 in manufacturing.

San Diego’s Wilson Sonsini Goodrich & Rosati, Professional Corp. is acting as legal counsel for the firm in the IPO, while Menlo Park’s Davis Polk & Wardwell LLP is acting as counsel for the underwriters, whose team includes J.P. Morgan, BofA Securities, SVB Leerink, Wells Fargo Securities, and BTIG.

RxSight Inc.

■ FOUNDED: 1997 (as Calhoun Vision)

■ CEO: Ron Kurtz

■ I HEADQUARTERS: Aliso Viejo

■ BUSINESS: cataract-treating lenses

■ 2020 REVENUE: $14.7M

■ EMPLOYEES: 171

■ NOTABLE: IPO in works