Filing summary
Entity and period: The supplied filing is Second Sight Medical Products, Inc. and subsidiary’s unaudited Form 10-Q for the quarter ended September 30, 2021—not a filing under the name Vivani Medical, Inc. The filing describes a medical-device company developing visual prosthetics, with operations focused on the Orion cortical prosthesis.
Financial performance and position
| Metric | Q3 2021 | Q3 2020 | Nine months 2021 | Nine months 2020 |
|---|---|---|---|---|
| Net sales | $0 | $0 | $0 | $0 |
| Operating expenses | $2.503 million | $1.602 million | $7.642 million | $13.622 million |
| Operating loss | $2.503 million | $1.602 million | $7.642 million | $13.622 million |
| Net loss | $2.501 million | $1.603 million | $7.638 million | $13.589 million |
| Net loss per share, basic and diluted | $0.06 | $0.07 | $0.25 | $0.69 |
| Operating cash flow | Not provided for the quarter | $(6.763) million | $(15.369) million |
With no sales, gross profit and margins were zero or not meaningful. At September 30, cash and cash equivalents were $72.028 million, current assets $73.221 million, current liabilities $3.919 million, and working capital $69.3 million. Total liabilities were $4.021 million; the $2.2 million of borrowings outstanding at December 2020 had been repaid, with no current debt at quarter-end. Stockholders’ equity was $69.609 million, compared with a $0.672 million deficit at December 2020.
Changes and funding
- Q3 net loss increased from $1.603 million to $2.501 million year over year, mainly alongside higher research and development and general and administrative expenses. Nine-month net loss narrowed from $13.589 million to $7.638 million, reflecting lower expenses, including staffing reductions and no 2021 restructuring charge.
- Cash rose by $68.851 million from year-end 2020. Financing provided $75.614 million net cash in the first nine months, principally from a March private placement ($24.5 million net proceeds) and a June public offering ($53.3 million net proceeds); debt repayment used $2.2 million.
- The company reported no product revenue and had stopped marketing Argus II to focus on Orion. It said it expects no revenue until Orion is developed and receives marketing approval.
Outlook, risks and unusual items
- Management estimated that available cash would fund planned obligations for at least 18 months from the filing’s reporting date, but warned that continuing operations depend on developing profitable operations and/or raising additional capital. The company expects ongoing losses and negative operating cash flows, and expenses may rise with Orion development and future clinical trials.
- Orion remained in a six-subject early feasibility study. Management described safety and efficacy observations as encouraging, but noted that results are preliminary, no peer-reviewed data were available, and larger trials may not reproduce the results. FDA pathway discussions were ongoing; Breakthrough Devices designation is not marketing approval.
- COVID-19 had disrupted study visits and contributed to significant workforce reductions. The company identified risks including delays to clinical development, inability to raise funds, and possible operational constraints. It reported that a prior Nasdaq listing-compliance issue had been remedied.
- Legal matters include Pixium Vision’s Paris Commercial Court claim for about $6.16 million following termination of a proposed business combination; the company had paid Pixium $1.0 million in April and believes that payment fulfilled its obligations. The filing also describes an Oppenheimer invoice exceeding $1.86 million, which the company disputes, and a separate lawsuit seeking at least $2 million, which the company also disputes. Outcomes and any further exposure are uncertain.
- Six of six study participants reportedly performed better with Orion on than off in square-localization and direction-of-motion testing; the filing also reports positive or mildly positive FLORA results for six of six. One device was explanted in August 2021 so the subject could undergo an MRI for an unrelated condition.
Important facts for investors to verify
- Confirm the filing’s issuer: the supplied text identifies Second Sight Medical Products, Inc., despite the request metadata naming Vivani Medical, Inc.
- Assess cash burn, the assumptions behind management’s stated 18-month funding runway, and whether additional financing will be needed.
- Track Orion trial progress, FDA discussions, validation of the proposed efficacy endpoint, and the timing and cost of any pivotal study.
- Follow the Pixium, Oppenheimer, and Sumichrast matters for potential payments, legal costs, or operational effects; the filing does not clearly quantify any additional accrual for the disputed claims.
- Check the disclosure-controls discussion: it says management evaluated controls as of June 30, 2021, while also stating effectiveness as of September 30, 2021.