Vivani Medical Inc (VANI) 2019 Q4 法說會逐字稿

Thank you, ladies and gentlemen, for standing by, and welcome to today's program entitled, Second Sight Medical Production's (sic) [Second Sight Medical Products] fourth quarter earnings conference call. (Operator Instructions) As a reminder, today's program may be recorded.

女士們、先生們，謝謝你們的耐心等待，並歡迎參加今天題為 Second Sight Medical Production（原文如此）[Second Sight Medical Products] 第四季度收益電話會議的節目。（操作員說明） 提醒一下，今天的節目可能會被錄製。

I would now like to introduce your host for today's program, Lisa Wilson, Investor Relations. Please go ahead.

現在我想介紹一下今天節目的主持人，投資者關係部門的麗莎威爾森 (Lisa Wilson)。請繼續。

Thank you, Jonathan. Good afternoon, and welcome to Second Sight's Fourth Quarter 2019 Results Call. This is Lisa Wilson of In-Site Communications, Investor Relations for Second Sight. With me on today's call are Will McGuire, President and Chief Executive Officer; Pat Ryan, Chief Operating Officer; and John Blake, Chief Financial Officer of Second Sight.

謝謝你，喬納森。下午好，歡迎參加 Second Sight 2019 年第四季業績電話會議。我是 Second Sight 投資者關係現場溝通部門的麗莎威爾森 (Lisa Wilson)。與我一起參加今天電話會議的有總裁兼執行長威爾麥奎爾 (Will McGuire)；派特·瑞安，營運長；約翰‧布萊克 (John Blake)，Second Sight 財務長。

At the close of market, the company issued a press release detailing financial results for the 3 and 12 months ended December 31, 2019. The press release can be accessed through the Investor Relations section of the Second Sight website at secondsight.com. You can also access the webcast of this call from there.

在收盤時，該公司發布了一份新聞稿，詳細介紹了截至 2019 年 12 月 31 日的 3 個月和 12 個月的財務表現。您可以透過 Second Sight 網站 secondarysight.com 的投資者關係部分存取該新聞稿。您也可以從那裡存取本次電話會議的網路廣播。

Before we get started, I would like to remind everyone that any statements made on today's conference call that express a belief, expectation, projection, forecast, anticipation or intent regarding future events and the company's future performance may be considered forward-looking statements as defined by the Private Securities Litigation Reform Act. These forward-looking statements are based on information available to Second Sight management as of today and involve risks and uncertainties, including those noted in this afternoon's press release and Second Sight's filings with the SEC. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from those projected in the forward-looking statements.

在我們開始之前，我想提醒大家，在今天的電話會議上發表的任何表達對未來事件和公司未來業績的信念、期望、預測、預測、期待或意圖的陳述都可能被視為前瞻性陳述。根據《私人證券訴訟改革法》。這些前瞻性陳述是基於 Second Sight 管理層截至目前為止掌握的信息，涉及風險和不確定性，包括今天下午的新聞稿和 Second Sight 向 SEC 提交的文件中指出的風險和不確定性。此類前瞻性陳述並非對未來績效的保證。實際結果可能與前瞻性陳述中的預測有重大差異。

Second Sight specifically disclaims any intent or obligation to update these forward-looking statements, except as required by law. The archived webcast of this call will be available for 1 month on the company's website, secondsight.com. For the benefit of those who may be listening to the replay or archived webcast, this call was held and recorded on March 19, 2019. Since then, Second Sight may have made announcements related to the topics discussed, so please reference the company's most recent press releases and SEC filings. And with that, I'll turn the call over to Second Sight's CEO, Will McGuire.

Second Sight 特別聲明不承擔任何更新這些前瞻性陳述的意圖或義務，除非法律要求。本次電話會議的存檔網路廣播將在公司網站 secondarysight.com 上提供 1 個月。為了那些可能正在收聽重播或存檔網路廣播的人的利益，本次電話會議於 2019 年 3 月 19 日舉行並進行了錄音。此後，Second Sight 可能發布了與所討論主題相關的公告，因此請參考該公司最新的新聞稿和 SEC 文件。接下來，我會將電話轉給 Second Sight 的執行長 Will McGuire。

Thank you, Lisa, and thank you all for joining our call this afternoon. First, I'd like to address my impending departure from Second Sight. As was stated in the press release issued last week, I have accepted a similar position with a company that is much closer to my home and family in San Diego. To be clear, I am not leaving due to any disagreement with the Board and very much look forward to remaining involved with Second Sight as a member of the Board of Directors. I'm grateful for the support the Board has shown me over the past 4-plus years, and I am honored to have led such a talented team at Second Sight. This is a company with a sense of purpose, unlike any I have been involved with in over 20 years in the medical device industry.

謝謝麗莎，也謝謝大家今天下午加入我們的電話會議。首先，我想談談我即將離開「第二視覺」的問題。正如上週發布的新聞稿中所述，我已經接受了一家距離我在聖地亞哥的家和家人更近的公司的類似職位。需要明確的是，我不會因為與董事會有任何分歧而離開，並且非常期待作為董事會成員繼續參與 Second Sight。我很感謝董事會在過去四年多的時間裡對我的支持，我很榮幸能夠在 Second Sight 領導如此才華橫溢的團隊。這是一家有使命感的公司，與我在醫療器材行業 20 多年來參與過的任何公司都不同。

We have continued to execute consistently against our goal since the last quarterly call and have made significant progress with our R&D efforts as well as our discussions with the FDA, our sixth subject in the Orion Early Feasibility Study reached the important 12-month milestone after the first subject has now been implanted for over 2 years. We also received a CE Mark Certification and conditional FDA approval for our next-generation wearables for Argus 2s and the team is now planning a limited market introduction of this key technology later this year.

自從上一季電話會議以來，我們繼續始終如一地執行我們的目標，並在我們的研發工作以及與 FDA 的討論方面取得了重大進展，我們 Orion 早期可行性研究中的第六個主題在第一每位受試者現已植入兩年多。我們的下一代穿戴式裝置 Argus 2 也獲得了 CE 標誌認證和 FDA 有條件批准，該團隊目前計劃在今年稍後將這項關鍵技術有限地引入市場。

As on past calls, you will hear today from John Blake, our CFO. John will review our reimbursement efforts as well as the 2019 financial results. In addition, you will also hear from another member of our senior leadership team, Pat Ryan, our COO. Pat is a talented leader who was a naval officer before starting a 23-plus year career in medical devices. Pat has held several C-level positions at public medical device companies, while managing organizations that approach 6,000 employees. Pat will provide a number of updates, including our R&D progress, the status of the Orion Early Feasibility Study and our discussions with the FDA.

與過去的電話會議一樣，您今天將聽到我們財務長約翰布萊克 (John Blake) 的演講。約翰將審查我們的報銷工作以及 2019 年的財務表現。此外，您還將聽到我們高階領導團隊的另一位成員、我們的營運長 Pat Ryan 的演講。Pat 是一位才華橫溢的領導者，在開始 23 年多的醫療設備職業生涯之前，他曾是一名海軍軍官。Pat 曾在公共醫療器材公司擔任多個 C 級職位，同時管理擁有近 6,000 名員工的組織。Pat 將提供許多最新信息，包括我們的研發進展、Orion 早期可行性研究的狀態以及我們與 FDA 的討論。

Before turning the call over to Pat, I want to say that I have great confidence in the entire second site team and fully expect the organization not to miss a beat under Greg Williams' strong leadership as Chairman and acting CEO. In meetings with Greg over the past few days, he has also expressed his confidence in the team and reiterated his full support for our efforts moving forward.

在將電話轉交給帕特之前，我想說，我對整個第二站點團隊充滿信心，並完全期望該組織在格雷格·威廉姆斯(Greg Williams) 作為董事長兼代理首席執行官的強有力領導下不會錯過任何一個機會。在過去幾天與格雷格的會面中，他也表達了對團隊的信心，並重申全力支持我們前進的努力。

With that, I will now turn the call over to Pat Ryan. Pat?

現在，我將把電話轉給 Pat Ryan。拍？

Thanks, Will. Today, as Will mentioned, I will share updates on our Early Feasibility Study for Orion, our ongoing discussions with the U.S. Food and Drug Administration concerning Orion's clinical regulatory path, recent approvals for the Argus 2s next-generation wearables as well as ongoing research and development initiatives.

謝謝，威爾。今天，正如Will 所提到的，我將分享Orion 早期可行性研究的最新情況、我們與美國食品和藥物管理局正在進行的有關Orion 臨床監管路徑的討論、Argus 2s 下一代可穿戴設備的最新批准以及正在進行的研究和成果。發展措施。

Let me begin with the Orion Early Feasibility Study. We completed the 12-month testing for the sixth and last subject in February 2020 and are pleased to report the results. As a reminder, this particular subject is the one who experienced a loss of perception in October 2019. Perception has returned for this individual, but not to pre October 2019 levels. Despite the lower perception level, the results from 12-month testing are positive across multiple key measures.

讓我從獵戶座早期可行性研究開始。我們在 2020 年 2 月完成了第六個也是最後一個受試者的為期 12 個月的測試，並很高興地報告結果。提醒一下，這個特定物件是在 2019 年 10 月經歷過知覺喪失的人。此人的認知已恢復，但尚未恢復到 2019 年 10 月之前的水平。儘管認知程度較低，但 12 個月的測試結果在多項關鍵指標上都是正面的。

This individual scored significantly better with the device on than off on all 3 visual function measures: Square localization, direction of motion and grading visual acuity. On the Functional Low Vision Observer Rated Assessment or FLORA, the impact of the Orion system on the patient's well-being and functional vision was rated as neutral, which is unchanged from the 6-month time point before the change in perception.

在所有 3 項視覺功能測量中，該人在設備開啟時的得分明顯高於設備關閉時的得分：方形定位、運動方向和視力分級。在功能性低視力觀察者評級評估（FLORA）中，Orion 系統對患者健康和功能性視力的影響被評為中性，與感知變化之前的 6 個月時間點相比沒有變化。

Now that the sixth subject has crossed the 12-month milestone, we can share overall results for the group. On square localization, 83% for 5 of 6 individuals scored significantly better with the device on than off. On direction of motion, 100% or 6 of 6 individuals, scored significantly better with the device on than off. On grading visual acuity, 50%, or 3 of 6 individuals scored on scale at 2.9 LogMAR or better vision. On FLORA, 83%, or 5 of 6 individuals were rated as receiving a positive or mild positive benefit of the Orion system on well-being and functional vision.

現在第六個課題已經跨越了 12 個月的里程碑，我們可以分享小組的整體成果。在方形定位方面，6 人中有 5 人的 83% 在設備開啟時得分明顯高於設備關閉時的得分。在運動方向上，100%（即 6 人中的 6 人）在設備開啟時的得分明顯高於設備關閉時的得分。在視力分級方面，50% 的人（即 6 人中有 3 人）的視力得分為 2.9 LogMAR 或更好。在 FLORA 上，83% 的人（即 6 人中有 5 人）被評為 Orion 系統對健康和功能性視力產生積極或輕微積極的益處。

From a safety perspective, as previously shared, there was one serious adverse event in 7 nonserious adverse events over the same time period. These results are extremely encouraging and we believe sufficient to support moving forward with a pivotal study in the U.S. As noted last quarter, we have agreement with the FDA regarding the primary efficacy endpoint for the pivotal trial, which will be FLORA 20, an update to the original FLORA used in the Argus II clinical trial.

從安全角度來看，如同先前所分享的，同一時期內 7 起非嚴重不良事件中有 1 起嚴重不良事件。這些結果非常令人鼓舞，我們相信足以支持在美國推進一項關鍵研究。正如上季度所指出的，我們與FDA 就關鍵試驗的主要療效終點達成了一致，該終點將是FLORA 20，這是對FLORA 20 的更新。Argus II 臨床試驗中使用的原始 FLORA。

As a reminder, FLORA is an assessment performed by an independent third-party, low vision orientation and mobility specialists, who spends time with each subject in their home after the procedure. The specialists asks each subject a series of questions and observes in performing daily living tasks, such as finding light sources following the sidewalk or sorting laundry. The specialist then determines if the system is providing a benefit, if it is neutral or if it actually is hurting their ability to perform these tasks.

需要提醒的是，FLORA 是由獨立第三方、低視力導向和行動能力專家進行的評估，他們在手術後會花時間在家中與每位受試者進行溝通。專家向每位受試者提出一系列問題，並觀察他們執行日常生活任務的情況，例如沿著人行道尋找光源或對衣物進行分類。然後，專家確定係統是否提供了好處，是否是中性的，或者是否實際上損害了他們執行這些任務的能力。

Validation for FLORA 20 is underway. As part of the process, we are taking all the learning that we've accumulated over the years in focusing on the observer-related functional vision task section. This entails a certain number of tasks that the Orion user would be required to perform. The independent observer will then observe them performing these tasks and provide a rating as to how difficult the task was performed with and without the system. The difference in score with the system on versus off reflects the level of benefit the system provides on these functional vision tests.

FLORA 20 的驗證正在進行中。作為這個過程的一部分，我們將多年來累積的所有知識集中在與觀察者相關的功能性視覺任務部分。這需要 Orion 使用者需要執行一定數量的任務。然後，獨立觀察員將觀察他們執行這些任務，並提供有關使用和不使用系統執行任務的難度的評級。系統開啟與關閉時的分數差異反映了系統在這些功能性視力測試中提供的益處等級。

We believe FLORA 20 is the most appropriate way to measure the impact of our technology on how someone functions in their daily life. The validation is very important to the FDA because, among other things, it ensures that multiple independent experts can administer the tool and then provide consistent measurement of Orion's impact. Through the validation process, we believe that we can prove that multiple observers to perform this assessment with consistent results and the FLORA 20 is the appropriate tool for demonstrating the real-world impact of the Orion technology.

我們相信 FLORA 20 是衡量我們的科技對人們日常生活方式影響的最合適方法。驗證對於 FDA 來說非常重要，因為除其他外，它確保多個獨立專家可以管理該工具，然後提供對 Orion 影響的一致衡量。透過驗證過程，我們相信我們可以證明多個觀察者執行此評估具有一致的結果，而 FLORA 20 是展示 Orion 技術對現實世界影響的適當工具。

To date, 3 of 15 subjects have begun participation in the FLORA 20 validation. However, due to COVID-19 social distancing protocols, we have suspended validation efforts until further notice. We continue to actively engage with FDA about the primary safety endpoint for the pivotal trial. While we had hoped to resolve the safety endpoint by the end of last year, our discussions with the agency are ongoing. I want to emphasize here that this delay does not reflect any concerns relative to the Early Feasibility Study safety data. Rather, the issue we are working through is determining the parameters around what an acceptable serious adverse event break should be for a first-in-class technology like Orion. We now expect to have alignment on this by the end of the third quarter of this year.

迄今為止，15 名受試者中有 3 名已開始參與 FLORA 20 驗證。然而，由於 COVID-19 社交距離協議，我們已暫停驗證工作，直至另行通知。我們繼續積極與 FDA 就關鍵試驗的主要安全終點進行接觸。雖然我們曾希望在去年年底前解決安全終點問題，但我們與該機構的討論仍在繼續。我想在此強調，這種延遲並不反映與早期可行性研究安全資料相關的任何擔憂。相反，我們正在解決的問題是確定像 Orion 這樣的一流技術可接受的嚴重不良事件中斷的參數。我們現在預計將在今年第三季末就此達成一致。

Turning now to research and development for Orion. We are continuing to work on the next-generation Orion implant and wearables. Our schedule has shifted out somewhat, reflecting additional work that we have identified as necessary. It's not the result of any technical issues. Based on our current internal project schedules, we now expect an IDE filing to occur in the first half of 2021 versus our previous target at year-end 2020. We will continue to update you as we progress through the year. As a reminder, the improvements to the implant include reducing the thickness of the electronics case and improving impact resistance. For the wearables, improvements include ergonomics, aesthetics and robustness. None of the proposed changes to the implant or wearables affect functionality.

現在轉向 Orion 的研發。我們正在繼續開發下一代 Orion 植入物和穿戴式裝置。我們的日程安排有所調整，反映出我們認為必要的額外工作。這不是任何技術問題的結果。根據我們目前的內部專案時間表，我們現在預計 IDE 備案將在 2021 年上半年進行，而我們先前的目標是 2020 年底。隨著這一年的進展，我們將繼續向您通報最新情況。提醒一下，植入物的改進包括減少電子設備外殼的厚度和提高抗衝擊性。對於穿戴式設備，改進包括人體工學、美觀性和堅固性。對植入物或穿戴式裝置的建議變更均不會影響功能。

Turning to Argus 2s. I'm pleased to share that, as announced earlier this week, we have received conditional approval from FDA for our next-generation of what we are now calling wearables. The conditional approval requires us to make some relatively straightforward changes to the product labeling and submit these to FDA before we can receive a full approval and start marketing the product. We also received a CE mark for the Argus 2s. This means that the new wearables conform with health, safety and environmental protection standards for products sold within the European Union and can, therefore, be marketed freely in that part of the world. These new wearables include a significantly more powerful video processing unit, or VPU, an improved camera and new glasses. The entire system is both more ergonomically and aesthetically pleasing. This new and improved technology will be introduced at a controlled pace and will serve as an important base technology for the next-generation Orion system that will be used in the U.S. pivotal study. With that, I will turn the call over to John, who will discuss our efforts to secure reimbursement for Orion as well as our fourth quarter 2019 financial results. John?

轉向阿古斯 2。我很高興地告訴大家，正如本週早些時候宣布的那樣，我們的下一代穿戴式裝置已獲得 FDA 有條件批准。有條件批准要求我們對產品標籤進行一些相對簡單的更改，並將這些更改提交給 FDA，然後才能獲得完全批准並開始行銷產品。我們也為 Argus 2 獲得了 CE 標誌。這意味著新型穿戴裝置符合在歐盟境內銷售的產品的健康、安全和環保標準，因此可以在世界該地區自由銷售。這些新的可穿戴設備包括更強大的視訊處理單元（VPU）、改進的攝影機和新型眼鏡。整個系統更符合人體工學和美觀。這項改進的新技術將以可控的速度推出，並將作為下一代獵戶座系統的重要基礎技術，該系統將用於美國的關鍵研究。接下來，我將把電話轉給約翰，他將討論我們為確保 Orion 報銷所做的努力以及我們 2019 年第四季的財務表現。約翰？

Thank you, Pat. Before turning to the financials, I have a few more business updates to share regarding our reimbursement activities. We have continued our ongoing dialogue with the Centers for Medicare and Medicaid Services, or CMS. A few weeks ago, we went to Baltimore and had another productive meeting with the CMS national coverage team. We took the opportunity to update this group on our progress with Orion, including the full 12-month Early Feasibility Study results, potential clinical endpoints for the pivotal study and even introduce CMS representatives to one of our Orion EFS subjects. This was an excellent opportunity for CMS to hear firsthand about the life-changing impact of Orion. Our main focus of CMS discussions moving forward will be determining the appropriate pathway for gaining national or widespread reimbursement coverage for the Medicare population upon Orion regulatory approval.

謝謝你，帕特。在討論財務數據之前，我還有一些有關我們報銷活動的業務更新要分享。我們繼續與醫療保險和醫療補助服務中心 (CMS) 進行持續對話。幾週前，我們前往巴爾的摩，與 CMS 全國覆蓋團隊舉行了另一次富有成效的會議。我們藉此機會向該小組介紹 Orion 的最新進展，包括完整的 12 個月早期可行性研究結果、關鍵研究的潛在臨床終點，甚至向我們的 Orion EFS 受試者之一介紹 CMS 代表。這是 CMS 親身了解 Orion 改變生活的影響的絕佳機會。我們未來 CMS 討論的主要焦點將是確定在 Orion 監管部門批准後為 Medicare 人群獲得全國或廣泛報銷覆蓋的適當途徑。

We also approached private payers to understand their requirements and expectations for data supporting the reimbursement of Orion. Given the younger average age of Orion patient candidates, we expect that a sizable portion of the Orion population will have private insurance coverage. Preparing for private payers is an important aspect of how we will plan for commercialization.

我們也聯繫了私人付款人，以了解他們對支援 Orion 報銷的資料的要求和期望。鑑於 Orion 患者候選者的平均年齡較小，我們預計相當一部分 Orion 族群將擁有私人保險。為私人付款人做好準備是我們如何規劃商業化的一個重要面向。

Finally, before moving on to the financials, as Will mentioned before, there are currently 2 pieces of legislation being proposed that would address coverage for breakthrough devices such as Orion. The house bill is H.R. 5333, ensuring patient access to critical breakthrough products act of 2019, and the Senate bill is S.2326, new opportunities for value that Extend Lives Act of 2019. We were scheduled to return to Capitol Hill early next month with one of our Orion subjects to meet with various elected officials and -- or their staff to discuss the importance of reimbursement certainty when it comes to innovative breakthrough technologies such as Orion. However, due to the Coronavirus, our trip will be rescheduled to a later date.

最後，在討論財務問題之前，正如威爾之前提到的，目前正在提議兩項立法，以解決 Orion 等突破性設備的覆蓋問題。眾議院法案是 H.R. 5333，確保患者獲得 2019 年關鍵突破性產品法案；參議院法案是 S.2326，這是 2019 年延長生命法案的新價值機會。我們計劃於下個月初返回國會山，與我們的獵戶座受試者之一會面，與各民選官員和他們的工作人員會面，討論在涉及獵戶座等創新突破性技術時報銷確定性的重要性。然而，由於冠狀病毒的影響，我們的行程將被推遲。

Turning now to the financials. In January, we executed a 1:8 reverse stock split to remain compliant with NASDAQ listing requirements. Our financial results for the fourth quarter and full year are in line with our expectations. Net sales were $0.5 million in the fourth quarter of 2019 compared to $1.8 million in the same period in 2018. Revenue was recognized for 3 implants on a GAAP basis, with an average selling price of $166,000 in the fourth quarter of 2019 compared with 16 devices with an ASP of $110,000 in the same period of 2018, reflecting an average higher reimbursement rate set by CMS in 2019 in the U.S.

現在轉向財務狀況。一月份，我們執行了 1:8 的反向股票分割，以保持符合納斯達克上市要求。我們第四季和全年的財務表現符合我們的預期。2019 年第四季的淨銷售額為 50 萬美元，而 2018 年同期為 180 萬美元。根據GAAP 基礎，確認了3 種植入物的收入，2019 年第四季的平均售價為166,000 美元，而2018 年同期的16 種設備的平均售價為110,000 美元，反映出CMS 在2019 年設定的平均報銷率較高。2019 年在美國

Research and development expense, net of funding from grants, was $4.1 million in the fourth quarter of 2019 compared to $2.4 million in the fourth quarter of 2018. The increase primarily reflects cost to produce Orion prototypes. We expect research and development expenses to increase in future periods, reflecting additional personnel and verification and validation of Orion prototypes, including costs previously related to production activities such as facilities and personnel that have transitioned to Orion development activities.

2019 年第四季的研發費用（扣除補助金）為 410 萬美元，而 2018 年第四季為 240 萬美元。這一成長主要反映了獵戶座原型機的生產成本。我們預計未來的研發費用將會增加，反映出獵戶座原型的額外人員以及驗證和確認，包括先前與生產活動相關的成本，例如已過渡到獵戶座開發活動的設施和人員。

Clinical and regulatory expense, net of funding from grants, decreased slightly from $1.2 million in the fourth quarter of 2018 to $1 million in the fourth quarter of 2019. The decrease is attributable to lower costs from the Orion Early Feasibility Study. We expect clinical and regulatory costs to increase in the future as we conduct additional clinical trials to assess Orion and related enhancements to the user experience.

扣除補助金後，臨床和監管費用從 2018 年第四季的 120 萬美元小幅下降至 2019 年第四季的 100 萬美元。減少的原因是獵戶座早期可行性研究的成本降低。我們預計，隨著我們進行額外的臨床試驗來評估 Orion 和使用者體驗的相關增強功能，未來臨床和監管成本將會增加。

Selling and marketing expense was $1 million in the fourth quarter of 2019 compared to $2.4 million in the fourth quarter of 2018. The decrease of $1.4 million as a result of deemphasizing commercial activities for Argus 2.

2019 年第四季的銷售和行銷費用為 100 萬美元，而 2018 年第四季為 240 萬美元。由於不再強調 Argus 2 的商業活動，因此減少了 140 萬美元。

General and administrative expense was $2.3 million in the fourth quarter of 2019 compared to $2.5 million in the fourth quarter of 2018. The decrease of $0.2 million is primarily due to lower noncash stock compensation costs from executive transition and our G&A expense is expected to remain flat going forward.

2019 年第四季的一般及管理費用為 230 萬美元，而 2018 年第四季為 250 萬美元。減少 20 萬美元主要是由於高階主管過渡導致的非現金股票薪酬成本降低，而且我們的一般管理費用預計未來將保持穩定。

As of December 31, 2019, we had cash and cash equivalents of $11.3 million. Our cash burn for the fourth quarter was $7.1 million, and we have a cash runway into the second quarter of 2020. We are currently in discussions around our financing strategy and expect to provide updates on that in the very near future. With that, I'll open the call to questions. Operator, please go ahead with the instruction.

截至 2019 年 12 月 31 日，我們擁有現金及現金等價物 1,130 萬美元。我們第四季的現金消耗為 710 萬美元，我們也有進入 2020 年第二季的現金跑道。我們目前正在討論我們的融資策略，並希望在不久的將來提供相關最新資訊。接下來，我將開始提問。操作員，請按照指示繼續操作。

(Operator Instructions) Our first question comes from the line of Amit Dayal from H.C. Wainwright.

（操作員說明）我們的第一個問題來自 H.C. 的 Amit Dayal。溫賴特。

Will, I guess, see you in a different role, I guess, with the different company. But with respect to new CEO coming in at what stage of the search are you guys in? And do you think this will be filled sooner rather than later, the position?

我想，你會在不同的公司扮演不同的角色。但對於新任執行長的上任，你們處於哪個階段？您認為這個職位遲早會被填補嗎？

I'd say we're -- Board is taking point on this -- on our committee within the Board. And it's in the early stages right now. So it'd be hard for me to say exactly when we would expect to have someone in the position. But as I said in the earlier comments, I feel really good about where we are with Greg taking over on the interim CEO position, but also with the entire team that's there and especially with Pat and John in their roles. So I'm sure the next call, we'll have an update, if not before. But right now, it would be hard for me to predict. But I do honestly believe the company is in really good hands right now.

我想說的是，董事會正在董事會內的委員會中就此事發表意見。現在還處於早期階段。因此，我很難確切地說出我們預計何時會有人擔任這個職位。但正如我在之前的評論中所說，我對格雷格接任臨時執行長一職以及整個團隊的狀況感到非常滿意，尤其是帕特和約翰擔任他們的角色。所以我確信下次通話時，我們會得到更新（如果不是之前的話）。但現在，我很難預測。但老實說，我確實相信該公司目前處於非常好的管理之下。

Understood. And then with respect to the safety endpoints, this -- I guess, the discussions with the FDA, et cetera, have been pushed out. What aspects of these safety endpoints remain to be cleared? Could you provide any color on that?

明白了。然後就安全終點而言，我想，與 FDA 等的討論已經被推遲了。這些安全終點的哪些方面仍有待明確？你能提供任何顏色嗎？

This is Pat. I'll take that one. So shortlist, you were trying to figure out the overall number of subjects that are going to be in the pivotal trial. The duration of follow-up, some of the secondary endpoints, confirmation at bench testing and other preclinical testing plans that we've developed are adequate and then some post-market study requirements, including, again, a number of subjects, endpoints and follow-up.

這是帕特。我會接受那個。因此，在入圍名單中，您試圖計算將參與關鍵試驗的受試者總數。追蹤時間、一些次要終點、實驗室測試確認和我們制定的其他臨床前測試計劃是足夠的，然後是一些上市後研究要求，再次包括一些受試者、終點和後續研究-向上。

Amit, this is Will. I would just add to that, that from a safety endpoint perspective, I think we talked about this a little bit in the last call. We're focused on serious adverse event rates -- or the serious adverse event rate. So we think the safety endpoint will be some form of serious adverse events. The real thing that we're trying to work through now is what the -- what is an acceptable rate for this type of procedure and what type of rate would prospective patient's view as being acceptable. The issue we face and the issue that other people would face with any breakthrough technology like this is there's no comparative technology out there that we could look at their rate and view that as acceptable. So it's really kind of working through to kind of get consensus with the agency on what is actually acceptable. So again, we think we'll get there. It's just taking a little more time than we had thought. But again, we think we'll get there and be able to move forward.

阿米特，這是威爾。我想補充一點，從安全端點的角度來看，我想我們在上次通話中對此進行了一些討論。我們關注的是嚴重不良事件發生率──或者說是嚴重不良事件發生率。因此，我們認為安全終點將是某種形式的嚴重不良事件。我們現在正在努力解決的真正問題是，這種類型的手術可接受的比率是多少，以及潛在患者認為可接受的比率是多少。我們面臨的問題以及其他人在使用此類突破性技術時將面臨的問題是，沒有可比較的技術可供我們查看他們的速率並認為這是可以接受的。因此，這確實是一種努力，與該機構就實際上可以接受的內容達成共識。所以，我們再次認為我們會實現這一目標。只是比我們想像的要多花一點時間。但我們再次認為我們會實現這一目標並能夠繼續前進。

Understood. Just one final one. In terms of your total cash operating expenses for the year, how much do you think you will need for 2020 and then getting into maybe early 2021?

明白了。只剩最後一張了就您今年的現金營運支出總額而言，您認為 2020 年以及 2021 年初可能需要多少？

Yes. Amit, this is John. I'll answer that. So our cash burn -- our operating cash burn in 2019 was $27.6 million, and we're on pace to go a little higher than that for 2020, given some of the heavier R&D development work and clinical work that we'll be engaging in this year. And then on the financing side, we'll be discussing those plans in the very near future, so I can't comment on that at this time.

是的。阿米特，這是約翰。我會回答這個問題。因此，我們的現金消耗——2019 年的營運現金消耗為 2,760 萬美元，考慮到我們將從事一些更繁重的研發開發工作和臨床工作，我們的現金消耗速度將比 2020 年略高一些今年。然後在融資方面，我們將在不久的將來討論這些計劃，所以我現在無法對此發表評論。

(Operator Instructions) Our next question comes from the line of Kyle Bauser from Dougherty & Company.

（操作員說明）我們的下一個問題來自 Dougherty & Company 的 Kyle Bauser。

Sorry to see you leave as CEO, Will, but congratulations on the new role. Just maybe first, I want to be clear, and correct me if I'm wrong, but I believe you're still contemplating 1 of 2 pathways to either the PMA approval or the HDE pathway, which is followed up by the PMA process, but since the HDE trials are typically focused on safety and it seems like the trial design for Orion will largely be driven by the safety endpoint anyways, it seems like, in theory, you should be able to just go straight to the pivotal PMA trial with that breakthrough designation. First, is that fair? And any thoughts there would be great.

威爾，很遺憾看到你辭去執行長職務，但祝賀你擔任新職務。也許首先，我想澄清一下，如果我錯了，請糾正我，但我相信您仍在考慮獲得 PMA 批准或 HDE 途徑（隨後是 PMA 流程）的 2 種途徑之一，但由於HDE 試驗通常側重於安全性，而且Orion 的試驗設計似乎很大程度上將由安全終點驅動，理論上，您應該能夠直接進入關鍵的PMA 試驗那個突破性的頭銜。首先，這公平嗎？任何想法都會很棒。

Yes, I mean -- I can take that first. I think that's a very accurate way of stating the way we view it, Kyle, given our continuing discussions on safety. We do think the overall trial size, and shall we say, will be driven by the safety endpoint, not the efficacy endpoint. And so by remaining on a PMA track and realizing the advantages of the breakthrough devices program, we don't -- we see that is the best track for us. And it kind of eliminates any of the potential advantages, time advantages or other advantages we would have had by deciding to go down to HDE track. So for us, we think breakthrough PMA makes all the sense in the world right now.

是的，我的意思是──我可以先接受。凱爾，鑑於我們對安全問題的持續討論，我認為這是一種非常準確的方式來表達我們的看法。我們確實認為整體試驗規模，應該說，將由安全性終點驅動，而不是療效終點。因此，透過留在 PMA 軌道上並認識到突破性設備計劃的優勢，我們不會——我們認為這對我們來說是最好的軌道。這在某種程度上消除了我們決定進入 HDE 軌道所擁有的任何潛在優勢、時間優勢或其他優勢。因此，對我們來說，我們認為 PMA 的突破目前在世界上都有意義。

Got it. Okay. And as you mentioned, you've reached the agreement on the efficacy endpoint and negotiating on the safety here, but also you'll need to work through the trial size and the post-market, kind of, endpoints and secondary endpoints. But once you agree on the safety endpoint, do you think the remaining items that I just mentioned should be able to fall rather quickly?

知道了。好的。正如您所提到的，您已經就療效終點達成了協議，並就安全性進行了談判，但您還需要確定試驗規模和上市後終點類型和次要終點。但是，一旦您就安全終點達成一致，您認為我剛才提到的其餘項目應該能夠很快下降嗎？

Yes. Because once we lock in on kind of a safety endpoint, which will be some sort of -- most likely some sort of serious adverse event rate, then the statistics will or kind of guide what the overall trial size needs to be. And then also, it will be -- there will be a negotiation with the FDA about what portion of the total number is premarket and which portion is post-market. But our belief is that the majority of the patients enrolled would be post-market and we would have some sort of performance goal for the premarket that kind of assures us of meeting the overall goal from a serious adverse event rate. So yes, once we, kind of, decide that rate, everything will fall into place after that. We should be able to move things forward quite quickly.

是的。因為一旦我們鎖定某種安全終點，這將是某種——很可能是某種嚴重不良事件發生率，那麼統計數據將或某種程度指導總體試驗規模需要是多少。然後，也將與 FDA 就總數中的哪一部分是上市前、哪一部分是上市後進行談判。但我們相信，大多數入組患者將是上市後患者，我們將為上市前製定某種績效目標，以確保我們能夠實現嚴重不良事件發生率的總體目標。所以，是的，一旦我們決定了這個利率，一切都會水到渠成。我們應該能夠很快地推動事情向前發展。

Okay. And Pat, you mentioned in the prepared remarks that you'll be able to submit that IDE application in the first half of next year. Is it safe to say that the change in time line, the slight push out is purely just a function of COVID-19 kind of slowing things down across the board?

好的。Pat，您在準備好的發言中提到您將能夠在明年上半年提交 IDE 申請。是否可以肯定地說，時間線的改變、輕微的推遲純粹只是 COVID-19 的一種功能，導致全面放慢速度？

No, COVID-19 isn't really impacting it yet. This is just due to the ongoing negotiations with the agency over what their requirements are going to be. So we are still working those technicalities out. And as each day goes by, it's just costing us a little more time. So we're just trying to be conservative in our estimate.

不，COVID-19 尚未真正對其產生影響。這只是由於與該機構正在進行的關於其要求的談判。所以我們仍在研究這些技術細節。隨著時間的推移，我們的時間一天比一天多。所以我們只是試著保守估計。

Sure. Yes. And it sounds like, I mean, even if it was ready to go, there'd be a delay in anyways for COVID-19, so it'd be pushed out inevitably.

當然。是的。聽起來，我的意思是，即使它已經準備好，但由於 COVID-19，無論如何都會有延遲，所以它不可避免地會被推遲。

Yes, I think so.

是的，我想是這樣。

Got it. And then just lastly, some nice updates on externals, the CE mark and conditional FDA approval, which is great since they'll be used in the Orion trial. Will you -- you kind of mentioned it, but will you be rolling Argus 2s out to the current installed base in Europe and the U.S.? Or is the key takeaway here that now you have approval of 2s and can kind of move forward in discussions with the FDA on the trial design for Orion, which includes 2s?

知道了。最後，對外部、CE 標誌和有條件 FDA 批准進行了一些不錯的更新，這很棒，因為它們將在 Orion 試驗中使用。您是否會——您提到過這一點，但您會將 Argus 2 推廣到歐洲和美國目前的安裝基礎嗎？或者這裡的關鍵要點是，現在您已經批准了 2s，並且可以與 FDA 就 Orion（其中包括 2s）的試驗設計進行討論？

Yes, this is Will. I can take part of that. I think one of the most important things is that we've got it completed. We've got an approval. It won't be exactly the wearables that we use for Orion, but it's the base technology. So it will certainly make -- I think it would make the FDA review of our submission, at least that portion of the submission for Orion should give us more confidence and that being positive. And a lot of what they see on the wearables will be familiar with them. So it's great from that point. As far as how we roll it out, it's going to be a pretty limited release here in the beginning. And I think one, just probably from a supply perspective, but also, it's a pretty complex product. We feel very good about all the work and all the testing, but my experience is usually you want to go pretty slow with something like this, get it into some users' hands and then get some feedback on it before you go wide with it or deep with it. So yes, I would expect it to be fairly limited, but we will be doing it to get some feedback and identifying the areas that need to be improved or addressed.

是的，這是威爾。我可以參與其中。我認為最重要的事情之一是我們已經完成了它。我們已經得到批准了。它不會完全是我們用於 Orion 的可穿戴設備，但它是基礎技術。所以它肯定會讓——我認為這會讓 FDA 對我們提交的材料進行審查，至少 Orion 提交的那部分應該給我們更多的信心，而且是積極的。他們在穿戴式裝置上看到的很多東西都會很熟悉。所以從那時起它就很棒了。至於我們如何推出它，一開始它將是一個非常有限的版本。我認為，可能只是從供應的角度來看，而且，這是一個非常複雜的產品。我們對所有的工作和所有的測試都感覺非常好，但我的經驗是，通常你想要慢慢地做這樣的事情，把它交到一些用戶手中，然後在你廣泛使用它之前獲得一些反饋，或者深感其中。所以，是的，我預計它將相當有限，但我們將這樣做是為了獲得一些反饋並確定需要改進或解決的領域。

This does conclude your question-and-answer session of today's program. I'd like to hand the program back to Will McGuire for any further remarks.

今天節目的問答環節到此結束。我想將程序交還給威爾·麥奎爾以供進一步評論。

Yes. Thank you all for joining our call today. Let me close by thanking all investors for their support and the team at Second Sight for their continued hard work and dedication. I also want to reiterate our commitment as a company for bringing this breakthrough technology to the large patient population of profoundly blind individuals. We derive great satisfaction from witnessing subjects gained independence and confidence when using the Orion device. Finally, our thoughts and prayers are with everyone around the globe as we navigate these uncertain times.

是的。感謝大家今天加入我們的電話會議。最後，我要感謝所有投資者的支持以及 Second Sight 團隊的持續辛勤工作和奉獻精神。我還想重申，作為一家公司，我們致力於將這項突破性技術帶給廣大的重度失明患者群體。看到受試者在使用 Orion 裝置時獲得獨立和自信，我們感到非常滿意。最後，在我們度過這個不確定的時期時，我們的想法和祈禱與全球各地的每個人同在。

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

女士們、先生們，感謝你們參加今天的會議。這確實結束了該程式。您現在可以斷開連線。再會。