FDA Approval Sends Up Shares of Second Sight

Shares of Second Sight Medical Products Inc. shot up early this month following the approval by the U.S. Food & Drug Administration for the Sylmar company’s Argus IIs retinal prosthesis system.The stock price climbed by nearly 1,000 percent from the close of market on March 4 when the price was $1.43 to close on March 9 when it was $15.48. However, since then the stock price has plummeted after the company announced a private placement of its stock. The share price closed at $8.82 on March 24, the day the private placement was announced. The ironic thing about the FDA approval of the Argus IIs is that Second Sight does not plan on supporting it anymore. The IIs is a redesigned set of dark glasses with a tiny video camera mounted on the side, together with an implant that simulates the optic nerve behind the eye to give limited sight to patients with retinitis pigmentosa, a cause of blindness.Instead, the company is focusing on its next-generation vision prosthetic, called the Orion visual cortical prosthesis system. The Argus IIs technology, however, will be incorporated into the Orion system. On top of the technology development, Second Sight is dealing with a pending merger with Pixium Vision SA, a French company that makes similar visual prosthetics. The deal was announced in early January. “A decision on when or if to begin production of the newly approved hardware is pending completion of Second Sight’s planned business combination with Pixium Vision, which currently is in progress,” the company said in its annual report filed with the Securities and Exchange Commission on March 16.Matthew Pfeffer, Second Sight’s interim chief executive, said in a previous interview with the Business Journal that the transaction will secure the future of both companies by reducing overhead costs and creating synergies. “We have a large IP portfolio in this space. They have one as well. And we often found ourselves in conflict and wasting a lot of money arguing over patents,” Pfeffer said in an interview published March 1. “Bringing the portfolios together will make everybody stronger and more efficient.”Second Sight is No. 30 on the Business Journal’s list of bioscience companies ranked by number of Valley-area employees. Pfeffer said the company has about 15 employees. That compares to the nearly 100 workers it used to have when it operated out of a larger space at the Sylmar Biomedical Park that included manufacturing. The coronavirus pandemic resulted in the company laying off nearly all its employees as it looked for ways to save money. It could not get financing to continue, and the company needed to stop spending money, said Pfeffer, who was named acting chief executive about the same time as the pandemic reached the U.S. market.To help stay in business, Second Sight sold 7.5 million shares of its common stock at $1 a share in early May. The company planned on using the net proceeds of $6.7 million for working capital and general corporate purposes.“Based on our current plans, we believe the financing provides sufficient working capital to sustain ongoing operations into June 2021,” the company said in its annual report. With the stock sale announced this month, the company expects to raise about $28 million before deducting standard expenses for the sale of 4.7 million shares at $6 each. “The net proceeds from the private placement are expected to provide working capital for the company,” Second Sight said in a statement.Second Sight was founded in 1998 by the late serial entrepreneur Alfred Mann and four partners. Second Sight began phasing out the Argus II by the end of 2019. The company will continue to provide service to the patients using the system.The Orion product relies a lot on the technology from Argus II. The only difference is that the information collected gets sent to a different part of the body – the brain as opposed to the eye. As with Argus, it starts with taking a video image from a miniature camera that is embedded into a pair of sunglasses. The image goes into a processing unit worn on a belt or around the neck on a lanyard. That translates into set of signals that is sent to an array of electrodes, which are on the occipital lobe of the brain.“The electrodes stimulate the brain in such a way that the brain interprets each of the electrodes as a dot of light,” Pfeffer explained in the March 1 story. “I think of them as being akin to pixels. … You can see relatively crude images.”