Second Sight Medical Products, Inc., based in Sylmar, California, has announced a successful completion of its IPO raising over $36M in fresh capital from the sale of 3,500,000 shares. The company manufactures the Argus II prosthetic retinal implant, designed to restore some functional vision to blind patients. It is the only retinal prosthesis approved in the United States by the FDA and it is understood to be the first approved retinal prosthesis worldwide. Total gross proceeds from the IPO, including an over-allotment, were $36,225,000, which the company intends to use for commercialization of the retinal prosthesis, further R&D and clinical research to expand the Argus II indication.
Approximately 90 people worldwide have received the Argus II implant, with reasonably encouraging results to date, especially given the baseline of vision present in many patients before implantation of the retinal chip. The device was originally approved by the FDA in 2013 for severe retinitis pigmentosa however, the company believes that the technology may be applicable to a far broader range of patients with severe blinding conditions. The Argus II consists of a miniaturised camera set on top of a pair of glasses which send video data to a portable computer worn by the patient. Processed signals are transmitted via a cable to the glasses which are then wirelessly sent to a receiver, also mounted on the glasses frame; the receiver sends the processed signals to a chip surgically inserted on top of the retina genrating electrical impulses that stimulate the remaining cells of the retina. The cost of the device is reported to be $144,000 however, the Argus II does not restore normal vision but rather provides a low level of vision to those who were previously blind or all but blind.
Second Sight is aiming to test the Argus II in patients with age-related macular degeneration in the coming months, a significant and growing market in western countries. The company’s IPO debut saw shares jump over 70% in value from the $9.00/share offer price to a $15.41/share price which, at time of writing, indicates a market cap for the company of over $500M ($533,753,208 on Dec 2, 2014). To encourage participation of long term investors an IPO “sweetener” was included such that investors holding Second Sight’s stock for two years would receive one additional share for free if the share price trades at $9 or less. The long-term incentive right decreases to zero as the share price approaches $18 at the 2-year mark, ensuring an each-way bet for savvy shareholders.