STAAR Surgical Company (STAA) CEO Caren Mason on Q2 2020 Results – Earnings Call Transcript

STAAR Surgical Company (NASDAQ:STAA) Q2 2020 Earnings Conference Call August 5, 2020 4:30 PM ET

Company Participants

Brian Moore – VP, Investor, Media Relations & Corporate Development

Caren Mason – President and Chief Executive Officer

Patrick Williams – Chief Financial Officer

Conference Call Participants

Christopher Cooley – Stephens Inc.

Anthony Petrone – Jefferies LLC

Ryan Zimmerman – BTIG

Andrew Brackmann – William Blair & Company

Bruce Jackson – The Benchmark Company

Cecilia Furlong – Canaccord Genuity

Operator

Good afternoon. Ladies and gentlemen, and welcome to the STAAR Surgical Second Quarter 2020 Financial Results Conference Call and Webcast. At this time, all participants are in a listen only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] And please be advised that today’s conference is being recorded.

I’d now like to hand the conference over to your speaker today, Mr. Brian Moore. Sir, you may begin.

Brian Moore

Thank you, Christie, and good afternoon, everyone. Thank you for joining us on the STAAR Surgical conference call this afternoon to discuss the company’s financial results for the second quarter ended July 3rd, 2020. On the call today are Caren Mason, President and Chief Executive Officer; and Patrick Williams, Chief Financial Officer. The press release of our second quarter results was issued just after 4:00 p.m. Eastern Time and is now available on STAAR’s website at www.staar.com.

Before we begin, let me quickly remind you that during the course of this conference call the company will make forward-looking statements. We caution you that any statement that is not a statement of historical fact is a forward-looking statement. This includes remarks about the company’s projections, expectations, plans, belief, and prospects. These statements are based on judgment and analysis as of the date of this conference call and are subject to numerous important risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

The risks and uncertainties associated with the forward-looking statements made in this conference call and webcast are described in the safe harbor statement in today’s press release as well as STAAR’s public periodic filings with the SEC. Except as required by law, STAAR assumes no obligation to update these forward-looking statements to reflect future events or actual outcomes and does not intend to do so.

In addition to supplement the GAAP numbers, we have provided non-GAAP adjusted net income and adjusted earnings per share and sales in constant currency. We believe that these non-GAAP numbers provide meaningful supplemental information and are helpful in assessing our historical and future performance. A table reconciling the GAAP information to the non-GAAP information is included in today’s press release.

Following our prepared remarks, we will open the line to questions from publishing analysts. We ask analysts limit themselves to two initial questions, and then re-queue with any follow-ups. We thank everyone in advance for their cooperation with this process.

And with that, I would now like to turn the call over to Caren Mason, President and CEO of STAAR.

Caren Mason

Thank you, Brian. Good afternoon, everyone, and thank you for joining us on today’s call. Let me start by welcoming Patrick Williams. We’re delighted to have him on board as our new Chief Financial Officer. Welcome also to our two new board members, Dr. Gil Kliman and Tom Frinzi, who joined the board on June 1st. I would also like to take this opportunity to express my sincere appreciation to the entire STAAR team for achieving strong results and demonstrating operating discipline during a pandemic.

The outlook we provided in May accurately assessed the market dynamics and STAARs ability to perform well in the midst of a prolonged shutdown of elective surgeries in most of the global markets we serve. While refractive procedures were down significantly or came to a halt in April and May in much of North America, Europe, Latin America, India and the Middle East. Continuing recovery and growth were recorded in Japan, Korea and China.

In June year-over-year ICLM plan procedures recorded strong growth, with units of 65% Japan, 24% the rest of Asia Pacific, 17%, Germany, 15% distributor markets in Europe and 11% in Korea. The positive trending continues in July, with China experiencing stronger than anticipated demand at a peak season began in earnest. While COVID-19 hotspots and government public health mandates may reoccur moving forward. We anticipate less business interruption and continued increased interest in our EVO ICL lens based refractive solutions in Q3 and Q4. Our team is squarely focused on generating significant growth by supporting our surgeon partners as they restart their practices with patient recruiting programs, training and digital marketing.

As you know, China is the largest market in the world for refractive vision correction. The China’s peak implant season is underway. And our team is pleased with the response by our surgeon partners in quickly moving to a digital platform of patient roadshows, engagement and education that is also supported by marketing and social media campaigns. In fact, one virtual EVO ICL roadshow campaign has the lofty goal of reaching 100 million visitors from 100 cities during Q3.

Refractive surgeons are increasing their hours and anticipating strong double digit growth in the summer months. We continue to believe that we will achieve a 20% share of the refractive procedure market in China by year end. We resumed production at our California manufacturing facilities on April 27th. Following a voluntary six week COVID-19 related pause. We have had a very successful restarts that exceeded our expectations and anticipate that we will be able to meet the increased level of demand for both our Spheric and Toric EVO lenses through the remainder of 2020 and beyond. We are also moving forward once again with our plans to restart manufacturing in our Nidau Switzerland system in 2021, and we are continuing our work to ready our Lake Forest California facility for manufacturing our EVO Viva presbyopia optic lenses.

With respect to our U.S. clinical trial for our EVO family of myopia lenses. All 14 of our clinical trial sites resumed patient recruiting, screening and implants in mid-May, after various periods of delay due to elective surgery mandated closures in Q2. Assuming no material change in the current operating environment, we anticipate that we will complete enrollment in the trial by the end of September. But we then consider the subsequent six month patient follow-up and time to prepare our data submission to the FDA. We believe we are on track for potential marketing approval and commercialization of EVO in the U.S. in the second half of 2021. The U.S. is the second largest market in the world for effective vision collection, and we very much look forward to bring in our game changing EVO lens to U.S. surgeons and their patients.

Turning to presbyopia, we are extremely pleased to now have CE mark approval for our extended depth of focus or EDOF presbyopia lens that is designed to correct near, intermediate and distance vision. We are branding our innovative EDOF lens as EVO Viva. EVO Viva is a new treatment option for potential future consideration by the 1.7 billion people globally with presbyopia, who wants to get rid of their reading glasses or frequent replacement contact lenses. EVO Viva will initially target the 10s of millions of eyes of opportunity for early presbyopia ages 45 to 55 in the 31 countries recognizing that CE mark through a phased rollout beginning in Spain, Belgium and Germany.

We anticipate the first implants will occur in September, following physician training and certification. Our aim with EVO Viva is to achieve high levels of patient satisfaction and true visual freedom. Commercialization of EVO Viva will be supported by consumer facing social media, supporting our See Young Again! and rewind your vision messaging. Also clinical papers have already been submitted for peer review and publication by our clinical trials search and principal investigators and medical monitor.

Looking ahead to the remainder of 2020. The impact on our sales related to COVID-19 appears to be lessening, particularly outside the U.S. We’re starting to generate more than 95% of its revenue. Globally, our accounted customers also express to us that they have no desire to pause procedures again, unless mandated to do so with many determined to work through the traditional summer holidays, where hotspots do occur, we expect any pause and refractive vision correction procedures to be brief in duration and limited in scope.

With that said, the third quarter has historically been one of our strongest revenue quarters, with China and other Asian countries leading the way. Our outlook for Q3 currently anticipates a sequential revenue increase of at least 20% from our Q2 results, which would then result in year-over-year, double digit growth for the quarter. At this point we expect fourth quarter revenue will be very similar to third quarter as high volume seasonality tapers off in China, but we see traditional seasonal increases in our other markets.

It is my pleasure now to ask Patrick to report on our financial results. Patrick?

Patrick Williams

Thank you for the warm welcome, Caren. And good afternoon, everyone. Total net sales for Q2 2020 were $35.2 million consistent with Q1 2020 net sales and down compared to the $39.7 million for Q2 2019. The year-over-year decline was associated with the various COVID related market closures as Caren mentioned earlier. In terms of product mix ICL sales represented 87% of total company net sales for the Q2 of 2020. And other products represented 13%, which is consistent with Q2 2019 results.

Gross profit for Q2 2020 was $24.4 million or 69.4% of net sales, as compared to gross profit of 24.8 or 70.4% of net sales for Q1 2020 and 29.9 million or 75.4% of net sales for Q2 2019. The sequential decrease in gross margin for the quarter is primarily due to approximately $1 million in period expenses related to a voluntary six week COVID-19 manufacturing pause that did conclude at the end of April. Period cost associated with the manufacturing expansion projects and geographic sales mix. Compared to prior results, the decrease is primarily attributable to geographic sales mix and the aforementioned manufacturing costs.

Moving into the second half of 2020, we would expect to see gross margin increase from here into the low 70% range as our production volume scale backup to support the higher anticipated sales for the second half.

Now moving down the income statement, total operating expenses for Q2 2020 were $25.5 million slightly down compared to $25.9 million for Q1 2020, and slightly up compared to Q2 2019 at $25.3 million as the company continued its cost containment measures related to non-essential variable costs, while expanding programs designed to fuel growth and clinical excellence. Taking a closer look at the components of operating expenses, G&A expands for Q2 2020 was $7.8 million, compared to the $8 million for Q1 2020 and $7.5 million for Q2 2019. The decrease from prior quarter was due to a decrease in tax consulting costs and travel related expenses offset by higher headcount and salary related expenses. The year-over-year is due to overall higher headcount and salary related expenses partially offset by a decrease in variable compensation and travel expenses.

Moving into the second half of the year, we expect G&A expense to move-up slightly going into the third quarter as we ramp-up some activities, and then remain flat moving into Q4. Sales and marketing expense was $10.3 million for Q2 2020 compared to $11 million for Q1 2020 and $11.7 million for Q2 2019. The decrease from prior quarter and prior year was due to lower tradeshow expenses and travel expenses as a result of lower activities due to COVID, offset by an increase in advertising and promotional activities and salary related expenses. As we move into our seasonally busiest quarter, and with many of our markets beginning to open-up from the COVID shutdown. We will be ramping-up our sales and marketing investments and expect to see absolute dollar expense levels very similar by quarter to what we did in Q3 and Q4 of 2019 respectively.

Research and development expense was $7.3 million in Q2 2020, compared to $6.9 million for Q1 2020 and $6.1 million for Q2 2019. The increase in research and development expense was due to increased clinical expenses associated with our EVO clinical trials in the U.S. and increased headcount in salary related expenses, partially offset by lower and variable compensation and travel expense.

As a percent of sales R&D has been running at approximately 20% of sales by quarter in the first half of 2020. And we would expect a similar percentage sale as we continue to enroll and follow up on our pivotal U.S. EVO clinical trial. The operating loss in Q2 2020 was $1.1 million compared to a $1.1 million operating loss in Q1 of 2020. And an operating profit of $4.6 million for Q2 2019.

Net loss for the second quarter of 2020 was $1.2 million or $0.03 per share compared to 134,000 or $0.00 loss per share in Q1 2020 and net income of $3.9 million or $0.08 per share for Q2 2019.

On a non-GAAP basis adjusted net income for Q2 2020 was $1.4 million or $0.03 per share, compared to adjusted net income of $1.9 million or $0.04 per share for Q1 2020 and $6.5 million or $0.14 per share for Q2 2019. A table reconciling the GAAP information to the non-GAAP information is included in today’s financial release.

Turning now to a balance sheet, our cash and cash equivalents as of July 3, 2020 total of $116.3 million, up $5.4 million compared to $110.9 million at the end of the first quarter 2020. This sequential increase is primarily attributable to proceeds from the exercise and stock options.

Before we open up the call for questions, I would like to highlight several virtual investor meetings and conferences in the coming weeks, where I look forward to re-engaging with many of you and meeting new investors. Caren and I look forward to participating in these events with you. First up, we will be conducting virtual investor meetings with BTIG next week on August 11th, first conference on August 12. In the month of September STAAR management is currently scheduled to participate in the Wells Fargo healthcare, Morgan Stanley healthcare and the William Blair West Coast virtual field trip.

This concludes our prepared remarks. Operator, we are now ready to take questions.

Question-and-Answer Session

Operator

[Operator Instructions]

Okay, our first question comes on line of Christopher Cooley.

ChristopherCooley

Thank you. Good afternoon, and thank you for taking the call and Patrick, welcome to STAAR, it’s good to work with you again. I guess from my to — just hoping if you can maybe just provide us a little bit more detail about what gives you confidence in the expected sequential, essentially 20 plus percent growth step-up in growth and we think about the third quarter versus second quarter, so you can get to, I’m sorry, 20% increase in sales, we’re getting close to that double digit growth rate, in particular with, China and showing kind of a 24% growth, I believe there in terms of units. When I look at the prepared remarks, and you mentioned it, obviously, much stronger as you came into July, but maybe just put some additional color around that, what gives you that confidence in 3Q to step-up? And then I’ve got one follow-up.

CarenMason

Sure, Thanks, Chris. The confidence and the sequential growth is really built on multiple markets that either did not suffer greatly under COVID in terms of shutdown and or have recovered very effectively, since I would say, early to mid June. So as we’ve been looking at our July results, we’re very excited about what’s going on in Japan, in China, in Korea, in most of Europe, a lot of the rest of Asia Pacific. There are continued challenges with Middle East and Latin America. And we expect them of course to come into recovery mode sometime. But in the near-term, we’re feeling very good about the real resurgence in July. And the peak season in China has on several days and implantation records. So, as a result of that, we feel that sequential growth of 20% which we will double digit growth over the prior year, which was record breaking for the company, is looking very good.

ChristopherCooley

Okay, thank you for that. And just for my follow-up, as you talk to a little bit about in your prepared remarks. With Evo Viva now, launching in Spain, Belgium and Germany first, but obviously marketable to all the countries except to CE Mark. Can you maybe just talk directionally about the margin structure there as those lenses will be manufactured of course in Lake Forest and Nidau coming back up in early ’21 for traditional EVO ICL, I remember right that facility used to have higher margins in Monrovia. So, help us think about kind of the puts intakes there on the gross margin line as you ramp up for Viva and then get ready to start on the Nidau and, of course, Monrovia goes back to normal production levels? Thanks again.

CarenMason

Sure. Chris. Thank you for calling-in. With regard to our EVO Viva initial production will be out of Monrovia. Our cost per units will blend well with our current EVO lenses, and so we would expect our gross margins to be in line. In terms of the rollout, the staggered rollout is designed to provide us the opportunity not only to very effectively work with our surgeon partners, to create excellent experience for patients and to manage patients expectations expertly, but also at the same time to also put out a pricing strategy that we believe with strong gross margins, we will give us a very nice profitability profile, even ahead of the opening of Lake Forest in 2021.

Operator

Our next question comes from Anthony Petrone from Jefferies LLC.

AnthonyPetrone

I apologize for that. I was on mute. Thank you for taking my questions. And good afternoon. Caren, maybe a question on the trends in China, you mentioned into the year, maybe just a level set where you ended the quarter in terms of sharing that market. And then maybe more specifically where you’re seeing gains on the patient and is it still mostly high myopes? Or are you seeing, a fair amount of share gains also from moderate myopes?

CarenMason

I’m going to say share gains from moderate myopes. In order to get to 20% you really have to be going down the diet — high myopes is about 10% and we are somewhere depending upon, we don’t have a really good grasp on what the total refractive procedure market is in shadow right now, only because of the fact that we know there was a reduction for several weeks. So we have a pretty good idea, but we know we’re somewhere in the 18% range. So we know we can get to 20% by year end, the trailing 12-months, we’re probably there.

AnthonyPetrone

Right. That’s helpful. And my follow up would be and I’ll get back to queue, is just as we look at the U.S. progression, you mentioned second half of ’21 potential launch. How do you see that that rollout progressing within the first three years? Should we be thinking a similar ramp as China post-Aier or more moderate ramps, just consider that it’s a bit more fragmented? Thanks.

CarenMason

Right. So you’ve pointed out the difference in that in the U.S. market, we have mostly smaller clinical practices or chains, rather than the very large practices like Aier and hospitals like Aier both public and private in China. However, we’ve been doing a lot of work. In these last several weeks, we actually implemented a program called refractive restart, which I’ll report on next quarter. As we finished this program over the next couple of months. This program in the United States offered to many surgeon practices, who would become strategic partners or already were. The opportunity to benefit their patients with a lens that is sold to them at no cost, so that the surgeons could then provide their patients with an opportunity to get visual freedom at an important discount. Some researchers were also able to improve their business results. And we’re up. When you add lenses, we sold two lenses given away we’re at 65% through this promotion up till now.

So we believe that this excellence, especially when we add a feature of EVO, without peripheral iridotomy required we believe that we will have a very quick ramp up in the United States maybe not at the extraordinary levels. When you have such a big provider like Aier as a major initiator, then I believe that many of the key KOLs in the United States are going to aggressively promote and aggressively and happily implant these lenses in many more patients.

Operator

Our next question comes from Ryan Zimmerman.

RyanZimmerman

Thank you. Can you hear me? Okay. Hi. Thank you, Caren. Patrick, welcome. A couple questions for me. Just to follow up on the China commentary. Caren, I’m just trying to reconcile some of the comments. I think in the early part of your script, you called out that China was continuing to recover, its recovery and growth. But just based on the filings, I think it was down about 4% in terms of revenue for the quarter, so can you just helped me understand kind of when that inflection occurred, late in the quarter, it seems like. And then, just backing into the — doing the maths, your ASPs is down a little bit on the units. And so I’m just curious if you could comment on the trends for ASP expectations over the balance of the rest of the year as you move into more moderate and low myopes that may compete with lens? And then I will follow up. Thank you.

CarenMason

Okay, so we actually were up 6% in units in Q2 in China. But we definitely had way more lower diopters competing with laser vision correction procedures. We actually had to make for the first time minus one for China, there’s so much interest in getting rid of glasses and contact lenses, literally, the meeting rooms, and the lines in the hospitals go outside and around the building. So there’s tremendous interest. And in comparison, though, to last year, you may remember that we had another big spike in demand last year in China. And as a result, we did sell more inventories in Q2 to prepare for Q3. So even though China picked up very, very well in the back half of Q2, we still have a competitor to prior year where Q2 which very large.

And so as a result of that the good news is this year in Q3, made a record in July in terms of the quarter. And what we see going forward is that will continue in through August. And so our confidence in China is strong. We do see mix being an important actual predictor of ASPs, but we see ASP impact of less than 4% for our entire product line, even though we’re moving down quite aggressively to diopter to lower spherical price points.

RyanZimmerman

Okay, that’s very helpful. And then I want to ask a question on the trial in the U.S. Enrollment wrapping up by the September, six months or so get everything together. Why it seems like a very rapid turnaround with the agency. And I guess what’s your confidence there that you can hit that the back end of 2021 in terms of getting that product not only approved but then as you said commercially available again in 2021? Thank you for taking the questions.

CarenMason

You’re welcome. So we had exceptional meetings with the FDA. When we got the IDE approved, we clearly understand what the primary endpoints are that we need to achieve. We are in a safety study not in efficacy study, and we need to be these safely, our priority points for surgeons. And if we do that we believe that’s what, what is left for discussion if we have a clean outcome would be on a relative basis quick. In terms of which would normally have, if you were, for example, trying to bring a product into the U.S. market, maybe you have 100 implants, you don’t have an effectiveness record to speak of, and you have a lot that has to be proven.

On a relative basis. One of the reasons that we’re grateful to the FDA that we have a shortened timeframe is because, immediately rather we’re meeting these safety endpoints. So that gives us confidence with all the excellent discussion we’ve had that we should have a two standard meeting, a 100 day meeting and then hopefully, really good follow up and approval thereafter.

Operator

Our next question comes from the line of Brian Weinstein.

AndrewBrackmann

Hi, Caren. Hi, Patrick. Hi, Brian. This is Andrew on for Brian. Maybe if I could start as a question on sort of the funnel of you’re signing of new partners, and how if at all those conversations may have been impacted by the current COVID environment. Have you seen any sort of acceleration of activity with those partnerships, given your growing share here?

CarenMason

Which really been heartening, and I think a great testament to the partnerships is that we have not been asked to modify agreements. I mean, there have been a few situations here and there where we’ve made adjustments along the way. But just about everything we’re doing is on track on schedule, renegotiations that are built on growth, not built on lack thereof. And so overall, the funnel of partnerships goes up as we build more and more new partners around the world and really from COVID-19, we have not seen reticence to hedge, or to be fearful about volume commitments.

It’s clear that based on the constant and open dialogue with our business partners, of course, surgeons themselves that we would work with them effectively. And we have in certain markets, like I mentioned, the U.S. and in Spain where we have a program for first line workers in markets around the world, we also support in other ways. And so those partnerships continue on with that kind of strong emphasis.

AndrewBrackmann

That’s great. Thanks for that color. And then I guess, Patrick, maybe one for you recognizing that you’re still pretty fresh in the chair. But, I mean, obviously, Caren, Deborah, and sort of the whole team there put together a really nice strategy over the last several years. But I guess maybe from your perspective, can you talk about some of the areas of investment that you might have identified early on is areas where you could really accelerate growth or press down more fully on that strategy?

PatrickWilliams

Yes. I think it’s probably a little early for me to put my neck out there too far at this point. But I would say that what’s really exciting to me is the overall size of this market and our best in class product and procedure that I believe has a real good opportunity. So I think anything that we can do to help commercialize this product as we move forward, both with EVO Viva in Europe, and then certainly with the clinical trial with EVO USA, I think you could, those are kind of the areas that we would certainly focus on as a company, which is very consistent to where the company has been talking about with you guys on Wall Street for some time, but I’m super excited to be here.

Operator

Our next question comes from the line of Bruce Jackson.

BruceJackson

Hi, good afternoon. So, I’m looking at the EVO Viva rollout in Europe. So you spoke about focusing on patient satisfaction and having a controlled rollout? Maybe if you could give us a little bit more perspective on how that might look in terms of the trajectory over the next couple of quarters. And what are some of the things that we’re doing specifically with the practices in terms of training, patient selection, things like that? And at what point do you think you can throw the gates open to the entire market?

CarenMason

So, at this point in time, we’re finalizing all of the criteria, the marketing materials, the patient questionnaires, both pre and post implantation. We are building on the success of the two clinical trials that we’ve had the results of both of those trials in the next 30-days. And taking what we’ve learned and then adding with the initial surgeons their experience, we will build what we believe will be a very strong playbook for 45 to 55 year old patients seeking visual freedom with our EVO Viva lab. So I would say the end of first quarter of 2021. So that we would most likely be opening this market completely by mid year, next year. So that’s our goal. It’s very prudent with his extraordinary lens to do this very effectively. No one can tell us better than the surgeons to the patients on a much bigger scale over the next several months. How this lens best plays the neuro adaptation and the opportunities over time. So we are very excited and we’re very ready to go but we’re going to do this the right way and then open the doors.

BruceJackson

Okay, that’s great. And then longer term, could you potentially then get in a situation where you would add-in. For example, direct consumer advertising on top of your standard marketing campaigns?

CarenMason

We actually are doing direct to consumer advertising in many markets around the world, we’re actually have been asked so often because it’s hard to do channel checks what we’re really doing around the world, that we are preparing a streaming video that we will be releasing in the coming months that will show everyone what we’re doing in markets around the world with regards to consumer marketing. This is everything from some exciting testimonials from celebrities, in multiple markets, to extraordinary campaigns on very large outdoor venues, whether they be transportation venues or sporting venues, et cetera.

So we’re doing quite a lot of that right now. And we’ll be expanding that over time. And I think of course, when we bring EVO to the U.S., then you’ll be able to see it front and center here in the United States. And frankly, we can’t wait.

Operator

Our last question comes from the line of Cecilia Furlong.

CeciliaFurlong

Thanks for taking our questions. Caren, I wanted to ask, just hear your perspective on your consumer outreach and marketing campaign in China just over the past few months impact that’s been able to have just given COVID and being able to perhaps target patients more direct, more directly, but then also, just as we’re thinking about China, through Q3 and Q4, but just the potential impact of COVID on your busy season in any kind of year-over-year changes, either due to backlog of patients or different situations for patients, I guess I just like your thoughts on that?

CarenMason

Sure. So, in China we’re in this very enviable position that our strategic partnerships, the agreements that we’ve signed, and the work that we’re doing together with everything from small clinics to our very largest hospitals, both public and private Aier as well, is in partnership. And so as a result of that, that 100 million participants in social out, social consumer outreach in 100 cities, that is one of our partners doing extraordinary work, because they have a very high desire to increase the number of refractive procedures with ICL and EVO. That is mirrored in a number of facilities and a number of clinics.

But what is really interesting is that the majority of what we’re seeing is being done and produced by the doctors. The marketing departments themselves, always in coordination, but they’re doing more than themselves. We have in our video library here at STAAR over 100 videos of doctors, who have done outreach about the enthusiasm of EVO. We have one very famous hospital, I don’t want to embarrass, where all the doctors did a music video playing instruments and dancing to their enthusiasm about EVO to appeal to their patients. And we also have our retail clinic partner, who now has standing remotely in a very large Shanghai mall and in multiple other locations. And so there’s a lot of consumer outreach, that social media that’s kiosk related, special events related, but we’re talking about millions of touches each and every week. So, it’s quite expansive.

With regard to COVID-19 and China. What we’re seeing right now is China’s very well controlled, if there are any outbreaks in certain areas, they’re quickly gotten to and there has been at this point in time since busy season began, no disruption in our business and the amount of interest literally, waiting rooms, full lines outside the door. There’s just a tremendous enthusiasm for getting visual freedom in light of a pandemic, there is no doubt that there is more interest as a result of the challenges of contact lenses, sunglasses, with masks, et cetera. So, in China, we’re seeing, I think some very excellent numbers at the beginning of busy season.

CeciliaFurlong

Thank you, Caren. And I guess to, if I could just ask, in Europe, following EVOs approval, could you speak to the initial interest generated off of the approval and just as you look going forward, the impact you think it can have on your broad business and in the potential to really accelerate EVO adoption overall?

CarenMason

Well, yes, I think having an EVO family of lenses definitely gives our surgeons the opportunity to expand from our typical 21 to 40 year old setting all the way to 55 to 60 year olds should they choose to. It also gives our surgeons the opportunity, if someone would come in prior to EVO Viva and really want to get rid of the reading glasses, they might have to give up their natural crystal and lens earlier than necessary through a refractive lens exchange. So there’s a lot of enthusiasm about not having to make that suggestion by our initial surgeons. So we see an uptick in individuals, regardless of age, who are really interested in having full visual freedom. And we also believe that in the early months, it’s going to be more about the quality of the experience and the number of lenses that are placed. It’s really being able to track multiple different types of situations with individual’s needs and lifestyles and desires and then being able to package all of that very easily for the surgeons. So the way we market, let’s say in the second quarter of next year, we’ll probably be very similar, but it will be much more specific in terms of recommendation.

So, I think overall, you’re going to see a lot more volume, a lot more specificity aimed at the patient with much more confidence about what that outcome would look like. So, all-in-all, we see volume going up. And we also may have situations where patients may end up having in an EVO lens in one eye, that would be their dominant eye for distance, and potentially a myopia lens in the other eye for reading. So there’s also that combo that could potentially also occur in certain patients. So at the end of the day, I think overall, the EVO family lens has become a much bigger part of the business model for refractive surgery.

Operator

There are no more further questions.

Caren Mason

So thank you for your participation on our call today. We look forward to speaking with many of you in the days and weeks ahead. We appreciate your interest and investment in STAAR Surgical. Please take good care. All the best to all of you. Thank you.

Operator

Ladies and gentlemen, this concludes today’s conference call. Thank you for participating. And you may now disconnect.

Source: Seeking Alpha

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