Filing summary
Issuer and period: The supplied filing is Second Sight Medical Products, Inc.’s unaudited Form 10-Q for the quarter ended June 30, 2021—not a filing in the name of Vivani Medical, Inc. The filing describes a medical-device company developing visual prosthetics, principally the Orion cortical prosthesis; it had discontinued marketing Argus II and reported no sales.
Financial results and position
| Metric | Three months ended June 30, 2021 | Three months ended June 30, 2020 | Six months ended June 30, 2021 | Six months ended June 30, 2020 |
|---|---|---|---|---|
| Net sales | $0 | $0 | $0 | $0 |
| Operating expenses | $2.296 million | $3.116 million | $5.139 million | $12.020 million |
| Operating loss | $2.296 million | $3.116 million | $5.139 million | $12.020 million |
| Net loss | $2.294 million | $3.100 million | $5.137 million | $11.986 million |
| Basic and diluted loss per share | $0.08 | $0.15 | $0.20 | $0.67 |
Amounts above are presented in U.S. dollars. Gross margin is not meaningful because the company reported no sales or cost of sales.
- Cash and liquidity: Cash and cash equivalents were $73.845 million at June 30, 2021, compared with $3.177 million at December 31, 2020. Working capital was $71.8 million, versus a $0.9 million deficit at year-end.
- Cash flow: Operating activities used $4.963 million in the first half of 2021, versus $13.891 million in the first half of 2020. Investing activities used no cash in the first half of 2021. Financing activities provided $75.614 million, including equity proceeds and repayment of $2.2 million of debt.
- Debt and liabilities: The $2.2 million of shareholder loans was repaid in the second quarter, along with $135,000 of accrued interest. Total liabilities were $3.812 million at June 30, 2021; there was no current debt reported.
- Equity financing: A March private placement generated approximately $24.5 million net, and a June underwritten offering generated approximately $53.3 million net. Shares outstanding rose from 23.214 million at December 31, 2020 to 39.409 million at June 30, 2021.
Changes versus the prior comparable periods
- Second-quarter net loss narrowed to $2.294 million from $3.100 million, while first-half net loss fell to $5.137 million from $11.986 million. The year-over-year first-half comparison includes substantially lower expenses following 2020 staff reductions and Argus II wind-down charges.
- Second-quarter R&D expense increased to $695,000 from $323,000 as activity restarted. First-half R&D fell to $1.029 million from $4.210 million, primarily reflecting staffing reductions.
- First-half clinical and regulatory expense declined to $300,000 from $1.343 million, partly due to lower study costs and grant offsets. Selling and marketing expense was zero, compared with $701,000 a year earlier.
- First-half G&A increased to $3.810 million from $3.537 million, reflecting higher legal costs and a $1 million Pixium termination payment, partly offset by lower staffing costs. The prior-year period included $2.229 million of restructuring charges; none were reported in first-half 2021.
Outlook, commentary and risks
- Management estimated available cash would fund planned obligations for at least 18 months from the filing’s reporting context. The company expects continued operating losses and negative operating cash flow, and does not expect revenue until Orion development is completed and marketing approval is obtained. Management cautioned that further capital may be needed and may not be available on acceptable terms.
- Orion remained in a six-subject Early Feasibility Study. Management reported favorable preliminary measures, but no peer-reviewed Orion data were available; results from the small study may not predict larger trials. A pivotal-trial path was still being discussed with the FDA, and the revised FLORA endpoint remained subject to successful validation.
- COVID-19 had disrupted clinical visits and contributed to prior workforce reductions. The filing describes risks including delayed trials, difficulty retaining staff or raising funds, and potential development or commercialization delays. The company said it had remedied a previously identified Nasdaq listing-compliance issue.
- The FDA had approved Argus 2s external hardware for use with previously implanted Argus II systems. Whether to begin producing it was still under evaluation; the company expected it could be adapted for Orion.
- Legal matters: Pixium sued in Paris seeking approximately $6.16 million after the terminated proposed business combination; Second Sight said it believed the $1 million termination payment fulfilled its obligations. The company disputed an Oppenheimer invoice exceeding $1.86 million and disputed a separate California claim seeking at least $2 million. Four European patent oppositions were also pending. Outcomes and any resulting exposure were uncertain.
- A subsequent event disclosed that one Orion study subject’s device was explanted on August 9, 2021 to permit an MRI for an unrelated condition. The filing also reported a $155,964 NIH grant for a patient-preference study, awarded after quarter-end.
Important facts for investors to verify
- Confirm issuer identity: the filing identifies Second Sight Medical Products, Inc., despite the request metadata naming Vivani Medical, Inc.
- Assess whether the reported cash and estimated 18-month runway remain adequate against actual spending, trial plans, and future financing needs.
- Track Orion trial progress, FDA discussions, endpoint validation, and whether preliminary results are replicated in larger studies.
- Monitor the Pixium, Oppenheimer, and Sumichrast disputes, including potential costs, outcomes, and any updates to recorded liabilities.
- Evaluate the dilution from the 2021 equity offerings and the company’s ability to advance development without recurring product revenue.