Okay, good morning. Once again, welcome everyone. Thank you to those of you here in the room and also those of you joining on the webcast this morning. My name is Brian Moore. I'm Vice President, Investor Relations at STAAR Surgical, and I'm joined by the executive management team of STAAR, and we'll have a number of surgeons as well. As you see on the agenda here, there's a QR code. We have two Q&A sessions, so all of your questions hopefully will be answered. I do want to direct your attention to our forward-looking statements and ask you to look at our SEC filings regarding forward-looking statements, as well as our disclosure on non-GAAP financial measures. And with that, I'd like to welcome to the stage Mr. Tom Frinzi, Chair of the Board and CEO of STAAR Surgical. Tom?
Thank you, Brian, and good morning, everyone. It's certainly my privilege to extend a warm welcome and thank you all for joining us today for what will be certainly an informative day as we lay out our vision for STAAR Surgical, Vision 2026. Today provides our team the opportunity to discuss not only where we are today, but more importantly, where we are going tomorrow, and to reinforce that STAAR Surgical is an exciting global growth company. Our vision is to be the first choice, the first choice for doctors and patients seeking visual freedom, and we will accomplish this growth not only here at home, but around the world.
To tell that story, I am joined by our leadership team, as well as a group of leading ophthalmologists from around the world, and I want to extend my thanks to all of them for being here this morning and providing their unique perspective. Over the next few hours, you will see STAAR's investing where our dollars will be best rewarded. We are emphasizing surgeon support and education, and we'll be introducing new products that add value to our customers. We'll be doing all of this in a corporate environment focused on high performance. The result of these efforts over the three-year horizon is expected to produce top-line sales of growth in the 15%-20% range. To the extent that the macro environment improves and our execution is outstanding, our results could be and should be at the upper end of that range.
You know, I believe the best barometer of the future is the past, and we are confident in this three-year journey because we have a history of being successful globally, whether it's the Americas, whether it's Europe, Middle East, and Africa, or whether it's the Asia Pacific region, we have demonstrated good growth. You know, if we take a step back, the need, or maybe better stated, the unmet need, is overwhelming. 2.5 billion people currently have myopia, on our way to 5 billion. That's one in three people today, soon to be one in two people. Think about that. Analysts and investors of tomorrow could be sitting in a room just like this, and they could look to their left or look to the right, and one of them will be myopic.
But, you know, we don't even have to wait that long, because in this room, we have John Young, who is not only myopic, but he's a happy EVO patient. So John, you defy the odds. Now, how is the industry dealing with this myopic pandemic? You know, you have two ways, non-surgically or surgically. Non-surgically, there are glasses, there's contact lenses, there's myopia management through procedures like Ortho-K, the use of atropine, but these all have limitations and consequences. Surgically, we have two options. One is corneal-based laser vision correction. But laser vision correction has its challenges. Geographically, in markets like Japan and the U.S., we've seen a steady decline of refractive procedures, as well as from health authorities like the FDA, who continues to scrutinize the safety of LASIK. So we believe it's time for a change. We believe it's EVO's time, as this video suggests.
You can feel the groove, can't you? You know, as previously mentioned, we will invest our dollars where they're gonna be most rewarded. And China and the U.S. represent 51% of the refractive market in 2023. But these additional 13 markets, together with China and the U.S., represent 83% of the 4.5 billion annual refractive procedures, and they deserve our attention as well. But we're not just investing in big markets, we're investing where the growth is coming from. And as this slide suggests, 75% of the refractive procedural growth over the next three years is coming from one market, China. And obviously, we are very well positioned in that market and have demonstrated our ability to be successful and to grow. And that focus will drive results. Three million EVO Implantable Collamer Lenses will be sold over the next three years.
Let's put that in some context. As of the first quarter of 2024, it'll take 25 years for STAAR to have sold the first three million, and yet, in just the next three years, we will sell three million more. Indeed, it's EVO's time. You know, ophthalmology thrives on innovation, and at STAAR, we have a robust pipeline, both near and longer term. We will enter the presbyopia market and serve patients ages 45 to 55 that are compromised at far as well as near. We will deliver our technology to the eye more efficiently with improved injectors. We will become a better partner to our customers, and we will expand our product offering in the biggest refractive market in the world by providing market and price segmentation.
And last, but certainly not least, we are working on next-generation technology, both from a material and a lens design perspective. But, you know, changing the standard of care, creating and developing the category is not easy, and it takes more than just talent. It's people plus process, and that's what our High Performance Management System is all about. It starts with our vision to be the first choice, supported by our values and then driven by the voice of the customer, both internal and external, and we make decisions based upon facts and data. That then leads to a group of vital few initiatives. that you will hear more about throughout this morning. You know, I'm blessed to be surrounded by a very strong team. This group of senior leaders that you'll hear from throughout this morning, some of the best I've worked with in my career.
I learned early on that one need not be the smartest person in the room to be an effective leader, but you do need to surround yourself with smart people, and this group bears out that reality. Dr. Magda Michna, our Chief Regulatory Medical and Clinical Affairs Officer, Warren Foust, our Chief Operating Officer, and Patrick Williams, our Chief Financial Officer. They will expand on many of the topics I've surfaced. So the field has been chalked, and now our team gets to play on it. And to that end, it's certainly my pleasure to introduce Dr. Magda Michna as our next speaker. Magda, welcome.
Thanks, Tom, and good morning, everybody. So I'm blessed to be here with you guys today and very excited to share with you why I am so excited to have joined STAAR Surgical about five months ago. I've been in ophthalmology and the eye care space for about 16 years and throughout clinical, regulatory, medical affairs, but very rarely do you come across a technology over which you become extremely excited. I trained as an optical physicist, and this technology is one that really, really is exciting to me. Just make sure that we are going forward. Okay, great. So today I'm gonna share with you, how the strength of our current technology is partly in the differentiated material. I also want to take you through how the strength of our future lies in our robust product pipeline.
And finally, we want to share with you how we're gonna continue to support our physician partners in their ICL journey through education training and providing technologies that enable ease of use. So one of the things that we are most proud of about the EVO ICL is the proprietary material. It's a biostable Collamer that has a proven track record of safety. And a lot of this work has been done by others, and a lot of our belief in EVO is based on sound scientific research. Supportive of this safety profile is a low rate of side effects. Globally, over the past year and a half, we have observed about a 1% rate of adverse events. The rate in the U.S. that we've observed is consistent with what we have seen for new tech, this technology globally.
Now, sound scientific evidence forms the basis of everything we know about our technology, and we know through that scientific research that there are a ton of benefits of the EVO ICL over lens-based refractive or corneal-based refractive procedures. Many of these benefits of EVO are very significant, both to patients and to surgeons. The predictability of outcomes with respect to vision is something that is extremely important. Now, so obviously, we understand the value of lens-based surgery, and we also understand how strongly EVO ICL is positioned in this market. Now, the road to lens-based refractive surgery has been peppered with a number of technologies, as you can see here on the slide. However, there is only one product, one phakic ICL, that has a material with a strong, proven scientific biocompatibility with over 25 years of research.
So we're confident that we understand our technology, obviously, and we have been listening to our surgeon partners. Surgeon confidence in the technology is very high, over 93% of surgeons willing to recommend STAAR. However, we believe there are always opportunities to further enhance and accelerate growth by optimizing the programs that support our surgeons in their journey with our technology. So our international experience is something we draw upon. It has demonstrated the strength of education and training in increasing surgeon confidence, and with a surgeon confidence, preoperative and postoperative management of their EVO ICL patients. So as Tom described, speaking of innovation, we're continuing to grow. Our pipeline of innovation includes advancements both in our current lens technology, as well as advancements in our delivery systems.
We're going to continue to support our customers through enhanced systems, also for product ordering, in order to help them with ease of use of our products. So speaking of enhanced products, I want to talk briefly about the VIVA, EVO, EVO Viva ICL. This technology is what we call extended depth of focus lens, provides range of vision to patients with a condition called presbyopia, which many of us have been suffering for many years, I'm sure. So we spent a time, some time last week at the European Society of Cataract and Refractive Surgeons, speaking with our physician partners about this technology and how it's how patient selection is important for its success. So we are very confident that this technology has a great space or great place in our ophthalmology offerings with EVO.
It provides, like I mentioned, for patients with myopia and presbyopia, the opportunity to see across a range of differences. So we are working currently on the global strategy in order to ensure that we can roll this product out across many different regions. So as I keep mentioning, we have been listening. Another opportunity that we have identified is with the delivery systems, with our injector systems. So we have partnered with a world class company called Medicel, in order to develop two delivery systems that will be rolled out in two phases. The first phase is going to be rolled out in the first quarter of 2024. It's a user-loaded system, will be rolled out in the first quarter of 2024. And in the second phase, we're working on a fully preloaded system that we anticipate bringing into the market in 2026.
We've also heard from our customers that the ordering process sometimes can be complicated. So we're working to optimize our planning and ordering tools in order to ensure they are intuitive, and that they utilize integration with other systems for preoperative biometry measurements that are commonly available across the country. So Professor Wang is going to further discuss the market in China with you shortly, but it's important to mention that we are working on the path to introducing the EVO+ technology to the China market in 2025. So, for those of you, as a reminder, that may or maybe don't know, EVO+ utilizes a larger optical zone to uniquely serve patients with larger pupils. We know from our international experience, this provides an important benefit to these patients.
So introduction of this technology into China not only enables surgeons and patients to have access to a beneficial technology, but also enables customer segmentation to drive adoption and volume. So Tom obviously discussed the Vision 2026, so let's look at what's beyond that. Through our internal R&D efforts, listed here are some of the innovations that we are working on or contemplating with for the next, near future. This includes an additional lens size offerings, enhanced Collamer material, and we're looking to the future of ophthalmology like many other companies, which aim to provide customized lenses for each individual patient. In the meantime, like I mentioned, we have listened, we have learned, and we have developed multi-phase strategy to support our surgeons. This includes using optimized education and training programs, and that target the way that surgeons prefer to learn.
We've also taken direction from our international experience on this journey, and are focused on the goal of optimized programs that bring the most value to our customers. With that, I thank you very much, and I welcome Professor Wang to the podium to share his experience with our technology. Thank you.
Good morning, everyone. It is a very exciting experience for me to come here and to share with you some of the Chinese market. And as we know, China has the highest population of highest prevalence of myopia. And according to Market Scope, 48.5% of the Chinese population are myopia. This is even higher among young students. Although refractive surgery is very popular in China, actually, the penetration rate is relatively low compared to the Western market. Only about 0.7% procedures are done for every 1,000 patients, which is only about half of the number in Europe and one quarter of the number that's in the U.S. So there's a huge market to grow in the future, in my opinion.
Last year, we released the big data report on refractive surgery in Aier Eye Hospital Group. For those who don't know, the Aier Eye Hospital Group is a very big hospital chain, which has hundreds of eye hospitals in China, Mainland China, Hong Kong, Southeast Asia, Europe, and also we have a center in the U.S. So this data set was included 1.8 million eyes, which underwent refractive surgeries in the previous four years, from 2018 to 2021. At about including about 1.5 million from the Mainland China from over 200 cities, and 200,000 eyes from Clínica Baviera, which is the Aier Europe in Spain, Italy, Germany, and Austria. And this chart shows that the.
In the past four years, although during the pandemic, there is still substantial growth in terms of volume, not only in China, but also in the in Europe as well. But the patterns of the seasonality is very different from that in China and in Europe. In China, there is a very obvious peak to the high seasons during the summer times, where students graduating from high schools or a college they are preparing themselves for better job opportunity or go to a better school or something. And in Europe, however, these the volume distribution is even across the year, it except two valleys during Easter and summer vacations. And another difference between these two markets is that we have much younger patients.
The average patient age is 25.5 years in China, which is about 8 years younger than that in Europe. I think in U.S., this is even higher. In China, only less than 4% of our patients are over the year of 40. And this number in the U.S. and in Western countries are much higher. And actually, we are doing very hard to educate our patients that this age group, people in this age group can still get good results from refractive surgery. So we can see that this percentages is higher in the big cities than in the small cities and the rural areas. I think this is also a potential market for China to grow.
This is the gender distribution. We have many male patients in younger age groups, where in Europe, the gender distribution is even across the age. And this is the degree of refractive errors from these two markets. And in China, it's not surprising to see that we have more moderate and higher degree of myopia than in the European market. Over 80% of patients are above -3 diopters. This is the growth rate in eye care since the EVO was approved in China in 2014. You can see there is a substantial growth. And during the past four years, even with the COVID, the CAGR of ICL is 28%, which is almost double of the average laser vision correction growth.
You know, the eye care has it is a large hospital chain, so the volume accounts for about one-third of the total number in China. So I think this picture reflects pretty well the whole picture of the Chinese market. And look at this, the change during the past four years in terms of the surgery type. You can see SMILE and ICL grows faster than the LASIK in Chinese market, and especially when we look at the growth of ICL for high myopes. Now, for extreme high myope, so that is over the -10, ICL is the number one. It took the place of LASIK and SMILE to become the first choice over almost 94% of these procedures are ICL. And also, this.
The growth is faster in this group of patients. And also we can see another trend is that ICL goes not only for extreme high myopia, it's gradually become the choices for high myopia and even moderate and even low myopia. You can see this number. The ICL was accepted by both doctors and the patients as well, across the country. In the small cities, this growth was even faster because. And also, we can see that ICL for low myopia almost doubled during the past years, during the past four years. And this is the surgical outcome of our patients.
We can see that the uncorrected visual acuity on day one is in 82% of our patients, the patients have uncorrected visual acuity equal to or better than their pre-op best corrected visual acuity. And among these three kind of surgeries, ICL, although the majority of them are high myopes, the recovery is the fastest among these three categories of surgery. And the vision continues to improve with time, and it is stable over the time. And as I mentioned earlier, in the past, ICL was considered to be for high myopic only, but actually this has changed a little bit over the past years, and people are using this for low and moderate myopia.
So I'd like to share with you some of our studies, a multicenter study of ICL for low and moderate myopia, and this involves 731 consecutive eyes. Many of them are good candidates for laser surgery, but the patients want to have ICL because they don't want their corneas to be altered. And other are myopic patients whose cornea are irregular or not a good candidate for surgery or for laser surgery, so we put ICL in these eyes. Here is the efficacy and the predictability, and it's not surprising to see this is very accurate. All of these eyes are within one diopter of during the two years follow-up. And also the correction of cylinder is very accurate as well.
This is safe because there are the, the, the. This is the uncorrected visual acuity and the best corrected visual acuity after surgery. And these shows this is very safe, and this is also the same as that in the high myopic patients, that after surgery, the patient gain lines in best corrected visual acuity. So this is very a very good results compared to laser vision correction. And we also compare the visual quality with laser surgery, for example, SMILE. We can see that after SMILE, certain amount of higher order aberrations were introduced. This is very common, but after ICL, we can see that the amount of higher order aberrations is reduced.
We look at the scatter of the patients after ICL, LASIK, and SMILE. We can see the ICL patients has less scatter after surgery. So this also reflects that the visual quality after ICL is better. It's in terms of safety, long-term safety. We also check the other parameters like IOP, intraocular pressure, and the vault, and endothelium cell density, and all these are turned out to be good after one year. There are no complications observed in this cohort of patients. And of course, some patients requires exchange of ICL because of sizing. Two out of 731 is oversized. It's larger than as though we changed to a smaller one, and the four are undersized. Okay.
So in summary, I think from this report, you know that the refractive market in China is far from saturation. If we compare the penetration rate with that in the Western market, so it's a very good potential market in the future. And there are the surgical results of so all the refractive procedures are good, especially the ICL in the hospitals. So I think ICL is very promising, not only in high myopes, as we thought in the past, and now there are more and more people, more and more low and moderate high myopic patients can also benefit from this technology. Thank you very much.
Thank you, Dr. Wang. May I also invite Dr. Magda Michna to the stage, Tom Frinzi, Patrick Williams? We have about 10 minutes for Q&A. Protocol, please state your name and firm. We'll start with Ryan Zimmerman, BTIG.
Ryan, thanks for the first question. I'm honored. Ryan Zimmerman, BTIG. A couple of questions for me, guys. I appreciate the hosting today. Maybe number one, you know, you laid out long-term targets, Tom, at the start of this, kinda got that out of the way.
Mm-hmm.
I think that was helpful. Maybe talk a little bit about kind of your expectations for cadence of those targets. Are those-- You know, should we think about those equally through the next three years? Should we think about an inflection coming, you know, in the back half or the third year, et cetera? And then I'll just ask the other question up front. You know, we've been kinda watching you guys develop the European market with Viva for multiple years now. I didn't exactly see, you know, timing on Viva in terms of its contributions, but talk to us about kind of how you think that contributes to this growth of 15%-20% over the next few years.
Yeah, let me answer both of those questions with, stay tuned, because we will be talking about, you know, what revenue looks like over the next three years, during Patrick's portion of the presentation. So sit tight on that. Relative to Viva, again, we're gonna have a physician panel, and certainly, with us, from the European Theater, is Dr. Frank Kerkhoff, and, Frank has experience with Viva, and will speak to his experience relative to it. But I will tell you, as I said in those opening remarks, we wanna be in the presbyopic market. We think we understand how our, EVO Viva product works, and as we said, it's for myopic, presbyopic patients. So I think we can, you know, wait to hear from Dr. Kerkhoff, and then if you still have questions, Ryan, that have gone unanswered, we will make sure we provide you as much information as you need.
Thank you.
Yeah.
Yeah, so just real quick, just to that point. So all the financials, when it gets to my part at the end, we'll break that down a little bit more, and, I'm sure we'll field some more questions after that, so.
First, let me congratulate Dr. or Professor Wang. You know, you sometimes forget, he is in this country speaking not his native language, and walked us through a tremendous presentation. What success STAAR has had in China, really on the backs of Professor Wang, as well as the Aier Group in general. So Professor, thank you for being with us.
John, go ahead.
Okay, great. John Young from Canaccord. Just, you know, talking about the product pipeline. First, on the injectors, will that be a U.S. rollout starting in 2024? Is that gonna be a global rollout? What's the technology being currently used in China for the injectors? And then finally, thoughts on partnering with other companies out there on preoperative testing in terms of getting better lens sizing and just, maybe going a little bit more in-depth on the thoughts on surgeon training on lens sizing. Thank you.
Sure. Do you want to take some of that, or you want me to? We've certainly from, as we mentioned, we're open to strategic partnerships, and we'll continue to keep an open mind relative to that. I think in terms of the injectors, it will be a global rollout, but U.S. will be the first, as we're working through that process right now as we speak with the FDA. But it is gonna be a global rollout, and as Magda mentioned, you know, it's in partnership with Medicel, certainly a well-respected manufacturer of injectors around the world.
David Saxon?
Great, thanks. David Saxon from Needham. Maybe just on the 26 targets, can you talk about the geographic breakdown? It sounds like China's, you know, remains a priority. So is that still gonna be, you know, 50%+ of revenue? How much is the U.S. gonna be? And then on the next-gen lens, it sounds like it's gonna be personalized. Is that kind of like an RxSight type lens, where you can, you know, adjust post-op or any color on that and timing there?
Yeah, I think the latter part of your question, I think it's just too early to tell. We're working in the labs. We're playing with a lot of different options, but we think the ability to be able to customize an ICL is certainly something that we wanna pursue, and we think we have the capabilities of bringing that to the market. I think, again, relative to the financial numbers, I think it'll be a little bit clearer as Patrick works through his part of the presentation relative to where we see the growth. But again, as I said in my opening remarks, we continue to be a global growth company around the world.
We believe the Americas will continue to grow. Growth opportunities in the EMEA region, as well as continued growth in Asia Pacific, not only in China, but markets like India, Indonesia, et cetera. Wonderful opportunities outside the United States.
I think we'll come back to your question, John, during the surgeon panel in some of those areas and let them speak a little bit more about some of the things that they're doing with measurements and sizing and other such stuff.
Anthony, go ahead.
Thanks, Anthony from Mizuho. A couple for Professor Wang, just on the Chinese market dynamics a bit. Maybe can you talk a little bit about over 2026, between now and 2026, where do you think refractive penetration can go? Again, 0.7% per thousand is quite low. So where does overall refractive go over the next three years? And within that, where can ICL penetration go, let's say, within the high-end practice? And then I'll have a follow-up. Thanks.
Okay, yeah. If you look at the numbers in the past four years or five years, the growth is substantial. So this is a sustainable growth in the overall refractive surgery market. The growth of ICL is even faster because a lot of work have been done together with STAAR and the local ophthalmologist societies. We have many programs to educate our both the doctors and the patients. So the awareness of this product is very high.
So, there is a shift of mindsets, from the ICL is only for extremely high myopia, which are not good candidate for laser vision correction, to the current mindset is that our current the ICL is because the long-term safety record is very good, and also the quality of vision is good, and also people want to spare their cornea. They want the intact cornea for future. All these come together, that the more and more patients want ICL, even they are good candidates for laser vision correction. So this change, I think, the growth of ICL will continue in the coming years.
I'm not good experts for predicting the market or something, but I think it's the growth is currently about twice as much of the laser vision correction. I think this will continue, at least in the coming years.
Thank you.
Thank you.
The follow-up would be just maybe a two-part one, which would be on the R&D portfolio, but also competition within China. You mentioned the new Collamer material will be launched over the next few years. What will that material bring, you know, for surgeons and patients? We have been hearing a lot about a competitive lens in China. Will this Collamer material potentially leapfrog another material that may come in the next three years from competition?
Well, again, I think as you've heard me say in the past, Anthony, competition is the highest form of flattery. It validates the market. You know, build it, and they will come, and we're building the market, and people want to be a part of it. That's one side of that answer. I think, you know, look at with 2.5 million implants sold, certainly on our way to another three million being sold, we have a lot of experience in this area, and I think Collamer material, first generation, next generation, will continue to keep us, I think, ahead of the curve, if you will. The next generation material will probably focus more on quality of vision, minimizing dysphotopsias that can occur postoperatively, minimizing glare, halos, et cetera, et cetera.
But, you know, we think we're very well positioned with competition coming, not only near term, but long term.
Hey, thanks for taking the question, George Sellers from Stephens.
Hey, George, how are you?
Doing well. I was wondering if we could revisit the injector, and if you could give a little more context on the partnership with Medicel, and what that rollout potentially looks like. And then also, as it relates to physicians in the U.S., you know, how many of the physicians that you work with have mentioned that as an area for improvement, and how do you ultimately see that impacting adoption and utilization?
Yeah. So just to start with the last question, you know, we've done a lot of, obviously, you know, internal surveys to look at where the opportunities are. So globally, the discussion around injector systems resonates. We obviously have an internally developed injector system that we've been using for a number of years, and we're just hoping to, of course, support our surgeons with ease of use. Medicel, as Tom mentioned, very well-respected company in this space. And they have an injector system, the AccuJect, that has been actually available globally. There are minor changes that need to happen to a device like that in order to just accept the size of the cartridge for our particular product, but that technology has been around a long time. It's been very well accepted by surgeons. It has a lot of ease of use.
So in terms of rollout, as Tom mentioned, our first rollout is planned for the United States, and we're looking at how that partnership looks globally.
Tom?
Hi, Tom Stephan with Stifel. Going back to China competition, Professor Wang, maybe for you, could you just talk about the market's willingness to add another Phakic IOL, notably a domestic lens? And then, Tom, how's China competition maybe contemplated in your outlook and, and guidance?
Sure. You want to take it?
Okay. We do have some. Yeah, because of the successes of STAAR in China, so we have some domestic brand copycats? No, I don't know. Competitors, the potential competitors, their products, they have their products, similar products. No, not similar, but Phakic IOL products coming for asking us to actually what we did, clinical trials for one of the product. But my feeling is that because Collamer is so unique, so I not sure, in the long run, these competitors can have the same performance as ICL does. I don't know, but. But this market is good.
The phakic or intraocular refractive surgery, the idea, I think this concept is will be growing in the future, directly competing with laser vision correction. So that's the idea. Thank you.
Thanks, Professor. I think two other things I'll add. In addition to our secret weapon of Collamer, we have a second secret weapon in China, and that's Miss Lena Fu and her organization.
Mm-hmm.
You know, we have a hybrid approach in China. We're about 70-75 people strong under Lena's directorship. Lena, a former employee of Aier, as an ophthalmologist, she's built a tremendous team. They're close to the customer base, and I don't care what competition brings, I think we're better suited at the street level, we're better suited with technology, and we're better suited with material.
Thank you. We have time for maybe one or two additional questions. So if you have a question, please raise your hand. We'll take three more questions. Ryan Zimmerman, BTIG.
Just a quick one for Magda. One of the dynamics that we've heard about in the U.S. is around vault sizing, and we'll talk to the surgeons around vault sizing of ICLs, you know, later today. But you are coming out with an ordering program that also includes some biometry, preoperative biometry. I didn't see timing on that. Can you talk about the timing for that rollout and how, what that will look like?
Yeah, so it's a great question. So on the actual timing of any changes to the calculation with respect to what you're referring to, vault, that's a TBD, so stay tuned for that. But, the initial rollout is really around ease of use. We have had feedback through our internal surveys that the ordering process through OCOS, which is the system we use, can be a little bit cumbersome. So that's really what is phase one. You know, phase two around sizing and vault and that kind of thing. We'll talk a little bit about later on during the surgeon panels, but, you know, we're looking to that and, you know, trying to ensure that we understand where the surgeons really wanna see our technology develop. So stay tuned.
Young Li with Jefferies.
Very great. Thanks. Young Li, Jefferies. Maybe a question for Professor Wang. Just curious, you know, you share some data about moving down the diopter curve in China. You know, I think it's still in the high 8s globally and in China as well. Can you maybe talk about, you know, your outlook over the next few years? You know, how do you expect the diopter curve trend down to work? And, you know, is that more of a customer-driven move, or is that more surgeon-driven?
Actually, all this change happens very naturally during the past years, because they, from the doctor's perspective, that they, the most concern for phakic IOLs is the long-term safety. So we've seen many reports coming out that they of long-term study that's showing the safety is very good. So, the rationale behind this is, if a product can perform very good for high myopia, extreme high myopia, it should be performing as well, as good as, or even better for low and moderate myopia. So, this is the reason number one.
The other is that more and more people accept the idea that we don't want our cornea to be altered, because this will induce a little issues for the future cataract surgery, for example, or dry eye or something. And number three is the visual quality. Our patients are become more and more demanding in terms of visual performance after surgery. For all laser vision correction, certain amount of higher order aberrations are induced, no matter SMILE or LASIK, because the very complicated biomechanical things of epithelium remodeling or something like that, which cannot be avoided at this moment. So ICL is the or any phakic IOLs is good in terms in this point in terms of visual quality.
So I think all these three reasons drive people's thinking or acceptance of phakic IOL, even for low and moderate myopia. Thank you.
Thanks, Professor.
Thanks. Steve Lichtman, Oppenheimer. I'll keep it to one. Dr. Michna, yeah, based on your interactions with customers and potential customers in the U.S., since you've joined STAAR, looking at your perspective, if there are any of the initiatives that you highlighted, among the ones you highlighted, that you think are most important, in terms of driving accelerated penetration in the U.S.?
Great question. I absolutely do, and I think education and training is actually one area of large focus for the medical affairs organization, which I'm responsible. Now, what we've seen throughout our extensive international experience, especially in China, there is such strength in the team that is led by Lena on that medical education and that surgeon training side. The surgeons really love the technology, the patients love the technology. It's very similar to a lot of the techniques that they do in the United States and in China. However, you know, we typically get a lot of questions, sort of what maybe Ryan alluded to, is around, you know, ensuring that the patient preoperative screening and assessments are well understood. And so really, it's not about the surgeon confidence is really around having access to other surgeons.
So peer-to-peer education is one of the areas of focus. For what we can do in the United States, is to take some of that learning, take some of those experiences that we've had in China and internationally, and bring those into what we're doing in the United States. We are expanding out our training and education programs. We're doing a lot of independent medical education type work that is being sort of rolled out at the ESCRS and coming up at Academy of Ophthalmology. We're seeing a lot of surgeons independently publishing on topics in order to help to build that surgeon confidence. But education and training, I think, is one of the areas that STAAR is really focused on.
I would just add, Steve, that I think we're a lot smarter today than we were even yesterday, and I think you will hear when Warren speaks as well. We have many initiatives geared towards increasing adoption and overcoming those obstacles.
Thank you, Tom. Thank you, Dr. Wang, Dr. Michna, and Patrick. We'll take a break now. We'll resume at 9:45 A.M. Eastern Time. All right. Once again, Mr. Tom Frinzi.
Well, certainly it was good to interact with many of you during the break, and as I've mentioned to some, you know, being a Southern California-based company, we certainly appreciate New York giving us Southern California weather today. It's just. It feels like home, so, thank you for that. Our next presenter, certainly within ophthalmic circles, really needs no introduction. Dr. Stephen Slade is in private practice in Houston, Texas. He's world-renowned as one of the most comprehensive refractive surgeons. He's taught thousands of surgeons how to do laser vision correction. He's been a personal friend for a number of years, and we're just thrilled to have him here with us today to tell you his unique perspective on LASIK to lens-based surgery. So without further ado, it's an honor to introduce Dr. Stephen Slade.
Thanks, so much, Tom, and for the opportunity to be here this morning. It's really my pleasure. You know, in ophthalmology, I've had the opportunity to do a few investor meetings, national sales meetings, and interact with companies. We're always required to list the companies that we work with, on our first slide, so I'll make those disclaimers right off. And I'm actually a bit of a New Yorker. We have a place here, my wife and I. Our daughter went to school here, and we have not been able to get her back yet. I mean, like, not even to Austin, which isn't really Texas, you know? But. Anyway, so, yeah, we live here a bit, and the weather is lovely.
So I have had the good luck—I'm extremely grateful that I have been involved with a lot of technologies from early on. First LASIK, I presented LASIK to the FDA for approval. That was back in the last century. And also the ICL for approval, along with other technologies, the adjustable IOL. I did the first commercial of that and all laser LASIK and accommodating IOLs and so on and so forth, but and taught the courses for LASIK and for the ICL. And that was, you know, sort of being in the right place at the right time, and also through the good graces of people, icons in the industry like Tom Frinzi.
Now, I've also managed to stay away from some things that didn't turn out too well, and I've developed over the years, some general guidelines for myself to sort of pick the winners. And, you know, this is not an—The first one isn't really an ophthalmic criteria. Is it unique, and is it elegant? I mean, use your senses. You don't need to be a doctor for that. Does it look elegant, elegant to you? Is it unique? Do you believe in it? More importantly, do you believe in it for your patients? I mean, the patients are everything, right? And it really has to work. I cannot do something that does not work or would harm patients. Just can't do it. Does it meet an unmet need, and does it, of course, have commercial viability?
There, I would turn that over to you, for your decisions. I want to cover, with my time with you today, sort of three things: the technology, a little bit, the surgeon's perspective, and then the patient's perspective. Now, the technology, I'm not gonna shower you with a lot of slides, but this is a really important slide if you are in this space in your position. This is satisfaction linked to uncorrected visual acuity. Steve Schallhorn, over 10,000 people. Look at the blue bars. The first blue bar on your left is 20/12, which, of course, is better than 20/20.
You're tired of seeing me. Okay, the point is that the better the uncorrected vision, no glasses, no contacts, the happier they are by a lot. So just, you know, keep that in mind while you look at this slide. Now, this slide is the percentage of people with the ICL that actually see better after surgery with nothing, no glasses, than they did before surgery with the very best glasses or so that they could wear. It's sort of super vision. Now, you can make a patient happy if they see as well after surgery, but if you make them see better with nothing than they did before with something, that's like super vision. They really like that. This is the last data slide, I promise, and it's stability. You don't even really need to know what these three charts are, but look how stable.
It's out to 36 months in each chart. It's the FDA trial. Look how flat and stable those charts are. Why is that? Because it's an additive technique. It's lens-based. In refractive surgery, we can, there's three ways to do it. You can bend the cornea, like old RK did, and that's not very. You can't bend a part of the body and expect it to stay there. You can subtract things. You can carve stuff away, which is what LASIK does with an excimer laser. The third way is lens-based, additive. It's what we do with cataract surgery, the most common surgery in Medicare today. We put a lens in. Well, of course, that piece of Collamer is not going to change, so it is phenomenally stable. Surgeon's perspective. Let me show you this video of a procedure. Do you want to see that again? No?
Yeah, I'm kidding, but this is the only procedure I know where one slide is as good as the video of the procedure. I mean, that's really it, right? You have an incision, you inject this lens, it goes behind the pupil, in front of the human lens, and that's it. There's really nothing else to that. It's cataract surgery without all of the messy steps of taking the cataract out. It's very fast. It's not dose-dependent, and maybe that's the most important message on this slide. It's lens-based. The amount of myopia I correct is not dependent upon how much tissue I take off or how much work I do. It's all in the lens, just like cataract surgery. It plays and works very well with others because it leaves the cornea pristine.
In other words, I can come back in 5, 10, 15, 20 years and touch up the eye. I can do cataract surgery. They're removable, which patients get. A lot of times, the patients get something before we do, and a lot of people - there's a movement now in ophthalmology to have ORs in your office. Well, of course, this is the best procedure you can imagine for that. Okay? Last slide, the patient's perspective. I've had good luck in my career, sitting down with myself often and thinking, "What are the patients thinking about this?" This has that wow factor. The wow factor, if you. Well, maybe you don't remember, but that's what built LASIK. When we were doing 1.5 million LASIK in around 2000, it was because they had the wow factor.
They would sit up, see pretty well, take a nap, and then they would see close to 20/20. Those are the patients that become your ambassadors. They're excited about it. The average one-hour post-op result with the ICL in my clinic is 20/30. That's not bad. I mean, that's one line from perfect. These, you know, these people are happy. Of course, it's not visible, and of course, it's removable. It's a lens-based procedure. There's no big incision. You leave the cornea intact. And finally, this is the kicker, it's all elective surgery, right? They vote. They get to choose. There are sort of three things, three things that patients want. They want to see 20/20 with no glasses or whatever. They want that right now, and then they want that to be free. I'm just telling you what they want, okay? Many thanks for your time.
I appreciate it, and, hope you enjoyed this as much as I have. Thank you.
All right. Thank you, Dr. Slade, very well done. Interestingly, our customers, our surgeon customers, they want 3 things. They want for their patients to be glasses-free. They want to be able to see without any corrective modality, and the surgeons want it to be free also. So, my name is Warren Foust. I have the privilege of being STAAR's Chief Operating Officer, having joined STAAR about five months ago or so. Prior to that, I had led Johnson & Johnson Surgical Vision for about four years, and I spent 25 years in the medical device industry. I can tell you, after that amount of time, I am so grateful to be with STAAR Surgical. I'm happy to be here with you.
So it's nice to meet many of you, looking forward to a really important discussion today. Should be one, and we're going to try and hit on many of the points that some of you wrote notes about. So hopefully, we'll cover that, and if not, we'll do it through the Q&A session. Today, we're going to talk about the global EVO ICL growth. We're going to talk about how we continue to drive awareness. But importantly, we need to talk about how do we convert that awareness into actual ICL implants. That's really important. And then how do we keep pace from a service standpoint and a manufacturing and capacity standpoint to be able to deliver on the promise of millions of lenses for EVO ICL patients?
.What better way to start talking about our global performance than to take a little trip around the world and to see some of the EVO ICLs and the marketing in the local markets, and the excitement on a patient's face when they experience vision through EVO ICLs? So first, let's talk about Asia Pacific, our largest market, and it's one that, of course, is the most clinical need, because as Professor Wong had indicated, it has the most number of myopes and high myopes at that. China, Japan, South Korea, these are the countries that have led the growth for us, impressive growth, but we have distributor markets broadly across Asia, Asia Pacific as well.
In particular, India, one of the markets, 1.4 billion patients in India, similar to China, and it's a market that we look to into the future as we know is going to bring more and more opportunity similar to the markets we've had the success in. Impressive market share. When you think about 50% market share in Japan, 20% in China, and 15% in South Korea, and this is a market that we have invested heavily in. And you heard Tom this morning talk about, we're going to invest in markets that are going to pay back and reward us for those investments. And no doubt, China and Asia Pacific broadly have done that, and so we will continue to invest.
Another thing that's really important, and a few of your questions were in that direction, training and clinical proctoring in China and in Asia Pacific, best in class. A bit new for 2023 as we go beyond and into 2024, taking those learnings, which is really, really critical, and applying those to markets, particularly the U.S., but others, is high focus for us to be able to do, so more to come on that. But we've learned a lot from our experience and our success in Asia Pacific. So turning to EMEA, where we've achieved solid growth, so almost 10% growth, despite recent macroeconomic and geopolitical challenges. We just came back from the ESCRS.
Many of us were there, and some of you were there, and I can tell you that customers demonstrated incredible buzz around EVO ICL, around EVO Viva, the EDOF lens, and about STAAR in general, as a company. Our booth was buzzing with activity. Our nightly events were buzzing and full, standing room only in a couple of the events, which we were really excited about. And so we're pleased with the event, but we're also pleased with the opportunity that we have in EMEA. That's a market we've not invested as much in relative to Asia Pacific, and even as we begin to grow the U.S., partially because of the fragmented nature of a market like EMEA. Many distributors, many different countries, many different languages, but it's one that we see as we've had success.
Spain stands out as a shining star, 15% market share and high growth for us. Germany is another, but the U.K. represents big opportunity. Places like Italy, France, Benelux, even in the last few years, in the face of some of the challenges that have been in the market, we've begun to invest by going hybrid in those markets. We will come with another hybrid market in the Nordics sometime late this year or in the 2024 timeframe. We're looking forward to that. You notice a dip in the sales, but you also notice a corresponding spike the prior year.
So 2021 was an intense year for refractive surgery in EMEA, largely because of all of the money that was out in the system and in the ecosystem for patients to be able to take advantage of, some of which that were staying at home, not traveling. It's a global story, but it really came to life in EMEA. And then you see this downstream consequence of patients that were cataract patients that were in the public sector, that ended up not being able to have surgery in the public sector, so they started clogging up the elective procedures out in the private market.
You see some of those dynamics playing out, but all of the puts and takes aside, inclusive of a market that's probably down 5%-7% at any given time on the laser portion, is being offset by higher growth in EVO ICLs. And so that's one we're really proud of, and then EVO Viva, in smaller scale, we're going to begin to roll that product out. That's going to be, as Tom mentioned, for targeting myopes with presbyopia, -4 and above. So we're gonna learn a lot about EVO Viva, and we'll talk about that a bit in the panel later. But EMEA is the market I'm really positive about. And then the Americas.
Opportunity abounds, and it's not just the U.S., Brazil, and Mexico, markets where we've invested recently, those we look to pay dividends, but we recognize the Americas is all about the U.S., and we're gonna talk a lot about that. There's good growth, 20%+ already, but we know we have to accelerate. And I can tell you that in every market around the world, there are barriers to adoption that must be overcome, and the U.S. has barriers as well, and we will overcome those barriers. This is important. We know what the obstacles are. We know them, and we have detailed plans to address every one of those obstacles, and we'll talk about that a little more later. That's a, that's a bit of a teaser. But right now, what I want to talk about is driving awareness.
We spend a lot of time and money on focusing, marketing, and I'm happy to say our marketing works. It's designed to do two things: It's designed to drive brand awareness, and it's designed to drive consideration by a potential customer. So consumer consideration is important.
Always had vision, but not the best eyesight, and to make it this far, you need both. 3.02 seconds, that's the average time from snap to throw for a pass over 10 yards in the NFL. In those 3 seconds, I've got a lot to do.
Three eighteen!
In the pocket, every second counts, and my vision is everything. But my eyesight was slowing me down. I've dealt with all the issues that come with contacts, the dry eyes and uncomfortable fits. I even had them knocked out mid-game. I looked at other options to correct my vision, but after hearing about EVO ICL and doing my research, the other procedures just didn't look as good to me. EVO is a revolutionary new vision correction procedure that doesn't use lasers. Recovery was fast and easy. It's an implantable Collamer lens that works in harmony with your natural eye and improved my eyesight to better than 20/20. For me, EVO ICL changed everything.
That's a professional quarterback. EVO is amazing. I don't know that EVO is amazing enough to help the Tennessee Titans, if I'm honest. I didn't know how that was gonna go, so thank you, thanks for the help. Look, clearly, when celebrities adopt a technology, it communicates something. It communicates safety and efficacy. It communicates that someone who's, imagine Will Levis getting ready to go to the NFL draft before having surgery and to go start his rookie season in the NFL. So that communicates something, and particularly when the athlete is logically someone who is reliant upon their eyesight, it's important. But it's not just NFL athletes. It's not just professional athletes. So you're familiar with Joe and Kevin Jonas. A couple of the Jonas Brothers have taken EVO ICLs. They have them in their eyes.
We've sponsored the Jonas Brothers tour, The Tour, and that's given us access to the tens of millions of followers that each one of them have. So our campaigns are getting a lot of intense opportunities for us, so we're taking advantage of that. We kicked off the tour in August, and the followers. We're even starting to hear from some of our customers anecdotally, that people are coming in and having seen the advertising at the concerts. Before the concert, imagine a static audience of a bunch of people with cocktails in hands, standing there waiting for the Jonas Brothers to come out, and then they get to see one of our videos. And just like you, they're sort of forced to watch it before the.
So it's pretty exciting, and we're taking advantage. Every one of the concerts is laced with that type of content. Exist.
The EVO ICL lens changed more than just my vision. It changed everything. Oh, hey! Our family life. Sometimes, the nightlife. Hey! Especially the tour life and seeing what it's done for my brothers. It's clearly made life better. That's why when Joe chose to get the EVO ICL procedure, I obviously had to get it, too. Other vision correction options just never looked as good to me. EVO implantable lenses are a new evolved solution for long-term vision correction. Now that I've upgraded my vision, I don't need contacts. I don't have to deal with this every day, and my eyes don't get dry from them anymore. Plus, it's comforting to know my doctor can safely remove my EVO lenses if I ever need it to.
All right, showtime, boys.
Ready?
Let's have some fun.
Let's do it.
Let's get it.
But the thing that's changed the most, seeing our fans like never before.
So remember, it's about driving brand awareness, and it's about driving customers to consideration. And so, so what? You spend all this money on marketing, you have all these advertisements. What is it doing? Over 1 billion impressions of EVO across TikTok, YouTube, Instagram, display ads through all of our celebrity endorsements. But it's important to put some numbers behind the efforts to get a sense of how effective it's been. And so DocFinder visits in the U.S. exploded when we launched the Jonas-- the Joe Jonas campaign back in October of 2022. And really, it growed continuously, only limited by our investments. And so you'll see a bit of a drop-down in Q2 2023 because we pulled back in investments. But it's not DocFinder visits that actually matter.
Of course, someone has to go to DocFinder to, to peruse our assets, but when they do, it's what is their behavior? And so this, to me, is much more important. Visitors that search for doc, doc, for doctors and spend time, obviously, are considering consultation. And those are the ones that we wanna-- that we're proud, that even when we pull back investments. And this, this tells you that we're getting better at it. It tells you that we're getting better at understanding who to target and who might be able to go or, or be interested to go see a surgeon. So, importantly, and this is new for 2023 also, so listen up.
The patient journey really matters because these patients that are coming into our assets, you see that we get them a whole bunch of ways: digital marketing, social media, YouTube, paid search, you name it, out there in the environment, Jonas Brothers concert. But what happens, then they go to our EVO website, and a portion of them are in DocFinder, and a portion of those go searching for a surgeon. And then what? I don't know. They go to a doctor, hopefully, and then what happens? And you can kinda see graphically on the right-hand side, it's not to scale, but some of them aren't even candidates. Some of them, no chance they're gonna spend the money, not even, not for ICL, maybe not even for LASIK. Some of those patients are. They're not minus three or above.
They're in between the -0.5 to -3. So they're not even a candidate for EVO ICL. We don't necessarily know what's gonna happen, but then some logically do get, end up getting EVO ICLs. So I can tell you that this is a problem that we spend a lot of time trying to solve, and Tom talked eloquently about our HPMS system, and we wanted to go and really dig into this and understand what's happening with the patient journey and how might we impact that and create some sort of closed-loop system to control our destiny in a better way. So this will fall under the category of process improvements and commercial initiatives. I'll go through a few of them, but this is one, diagnosing this patient journey. So we're preparing a pilot now. We're hiring the people, we're training them.
Our folks are sitting with them, making sure that they are prepared and capable to do what's going to be necessary of them. But late this year, we will roll out a pilot that has a call center, where an EVO concierge will be able to help create this closed-loop system. This is gonna allow that same patient, that same journey, we'll find them the same way. They'll peruse our assets, they'll go to a concert, they're gonna show up, they'll go to our website, but when they start evaluating their options for surgeons. Instead of calling the surgeon, they'll actually be calling our EVO concierge, our EVO advisor, and that EVO advisor is going to be able to vet those individuals. Do they qualify? Do they have the financial resources? Are they prepared to have the financial discussion at the practice level?
Are they a non-qual for any other number of reasons? And when all of that is settled, do you have any other questions? Do you feel comfortable? Then we, our EVO advisors, will make the call and connect that patient, while they stay on the line, to the practice to help facilitate the evaluation. Does it mean they're always gonna get EVO? No. Those patients may also get LASIK and PRK or SMILE. Those are good procedures also. It just means we wanna create a closed-loop system that gives us a better opportunity to ensure that we're giving high value, high opportunity patients to these practices. Okay, so that's one. The other one that I wanted to talk about, and this is, to me, this may be kind of that moment you've all been waiting for, in my opinion.
This is—we, we as a management team and we as an organization, and Tom said this earlier, we know our customers really well. We have personal relationships with many of our customers, but as an organization, we know our customers well. And we've done a lot of work in the last three or four months to understand this. So this is our Rolodex. You're looking at it. 400 practices, 600+ surgeons. They represent about 300,000 of the annual U.S. refractive procedures, which makes up about $450 million in revenue. A large portion of the rest of it is owned by the corporate laser centers, and those different targeting, different opportunity, different discussion. But this is our customer base and our real opportunity, and we know a lot about them, as I said. We understand their profit margin.
We understand the profit model. We get that EVO incremental profit, when done appropriately in the right setting of care, is anywhere from $1,800 to almost $3,000 incremental profit to that customer. But we also know that oftentimes it requires almost double a 90% premium for EVO ICL versus LASIK or SMILE. Really LASIK. The surgical setting there in the middle on the right-hand side is critically important. About 20% of our customers have office-based surgery centers in their practice. That gives them total control of their economics. That gives them total control of the flow and the throughput of the surgical setting. And then 47% of the practices have some version of ownership of the ambulatory surgery center setting. That may mean they own it entirely. That may mean they're a 5, 7, 10% investor in it.
And you can imagine the scale of influence on the surgical fee is directly correlated to the ownership. And then, of course, there's something not represented here, which are the customers that just go down the street and operate at a multi-center, multi-specialty center, ASC, and they have to pay a much higher fee out of pocket. When you understand those three sites of care, you understand that all customers' opportunity with EVO ICL is not created equally. And I can stand here and tell you that we are going to take a new offense and put it on the field. Tom said we chalked the lines. We're putting the new offense on in Chicago next week, and that's essentially taking our, call it 30 personnel that are out there in the field, leadership and reps, and we're going to target them.
We're gonna segment out these customers as we've done with this information, and we know a lot about them, as I mentioned, the qualitative pieces. We know some of the surgeons are super competent and super comfortable because they have experience operating with ICLs, just not higher volume. Or we know that they've done a ton of work inside the eye through doing cataract surgery, and they're not just someone who's been shooting lasers for many years, and they may be a little less comfortable to actually go inside the eye. We know they may have high closure rates for things like premium cataract lenses. Therefore, their practice is tooled and experienced at being able to execute that. We know other things about them.
Maybe they need inventory, maybe they will do. They’re already philosophically aligned to what you can feel is a wave of surgeons talking about LASIK and SMILE are good procedures, so is EVO ICL. I'll remind you that a third of the patients in our trials were between -3 and -6. But at some level of diopter, and it's probably -5, let's say -6 and above, there becomes real clinical separation, and it gets better and better and better the higher you go. And it's important that a customer understand and in some ways acknowledge that, and that puts them in a bucket that we want to classify all of these things and then segment the customers and take our 30 folks and drive them in a targeted approach to those, let's say, 70-100 customers based on data.
We've been going after 600 customers strong and doing everything for everybody, and we will continue to service everyone. Don't get me wrong, but we're going to focus our time, effort, energy, and the compensation of our people to make sure that we are going deep. So what does that mean? And some questions were asked around this. The best in practice model that Lena Fu and her team have put in place in China, that surround sound training, white glove service that gets a surgeon comfortable in the United States, pre-op, intra-op, post-op, ensuring they're comfortable with sizing, ensuring they feel educated and trained, ensuring that they feel like if they haven't had a conversation with Dr. Scott Barnes or someone who can help them, to make sure that that's happening.
Ensuring if there's discomfort after the case, that they're following up and our team is following up to make sure they get the clinical support that they need. So a territory manager combined with a practice development specialist, which will help tool those smaller number of practices to be ready for that patient that's gonna show up, or that phone call that's gonna come from someone that we're helping guide. And that closed-loop system, combined with a hyper-focus of the team to support that smaller number of customers, I believe will take our execution to the level that you expect of us. And so you can probably tell I'm pretty excited about it. Now, a couple of other things, and these are, I would say, additive. You've challenged us in many ways, and we've challenged ourselves.
We want to learn and understand a lot around the economics and a lot around the different sites of care. So these are a few new ways to partner with our customers, but rest assured, they live inside of that segmentation structure. These are market share for qualified patients, things like an OBS construction or equipment that might be necessary in an ophthalmologist practice to be able to be effective or successful with EVO ICLs. We can partner with that practice to get those things in exchange for a relationship for better, better, commitment. So this is just something that we're working on. We have a few already underway. Excited about them.
I won't steal anyone's thunder, but, Dr. Blake Williamson, who's here from Baton Rouge, Louisiana, who's an amazing surgeon, he'll tell you about offering EVO ICL and LASIK surgery to every patient that qualifies, that's -3 and above, equally with almost similar pricing. And part of the way that works is a market share arrangement that you're going to freely offer this, and you're going to make the price somewhat similar, not necessarily that 90% premium. And so, these are under construction, but we're pretty excited for them. And then, we're going to drive execution. I've mentioned that a few times. We're going to hold our folks accountable to having success, and that's going to require us to have the scale and the capacity necessary. And you should feel confident that we've been doing that because we need to be delighting our customers.
We've made a lot of progress here. So you see service levels of spheric and toric. Spheric lenses, service level, what I mean here is, at the time that a customer orders the lens, the lens is available in an inventory. Spheric, we're now at 100%. We have inventory. We're able to provide those. Our surgeon friends would tell you there's a bit of a golden moment that happens in their practice, whether it's with them or whether it's with their patient counselor. Imagine when a patient who's considering their options, when she sits across the table from the practice coordinator or counselor and says, "Yes, I'll do it." What's the next thing that patient says? "When can I do it? Can we do it today? Can we do it tomorrow?
I want to do it Wednesday." And if the surgeon does not have confidence or the practice doesn't have confidence that they have access to EVO ICL on that day, they are at risk of losing that patient. Imagine if they say, "Let me see if I can get the lens. Oh, gosh, I want to do it on Wednesday. Don't know if I can get it. I, I could do LASIK. Okay, should I do that? Would you do that?" Now we're in a conversation that - they're in a conversation we don't want. So service level is critical. On the made-to-order piece, toric lenses, 81% of the time now, that lens is in inventory, and that's actually growing. And I can tell you that at one week, it's 85%, and at three weeks, it's above 90%.
So we're doing a better job now of being able to not just get access to the lens faster, but even to manufacture the lens faster. So there's a lot that's going on inside of the manufacturing shops. Okay, capacity expansion is, of course, a piece of that. We want to be able to keep pace with the units that are going to come. We just did a capacity expansion in Monrovia, California, expanding, I think 20 lathes was the number, and that really puts our capacity, once it's fully up and running at a rate of 1.6 million lenses, we'd be able to support $840 million-$850 million in revenue. So rest assured, we can build enough, and rest assured, we are going to make happy EVO ICL patients.
What we know is happy EVO ICL patients grow refractive surgeons' practices, not just with EVO, but with their overall refractive practice. They give us a lot of grace about the way we're investing in the market. So I'm happy. I'm excited about what's happening. I hope you are, too, and I look forward to the Q&A here. So with that, I'd like to invite up our Chief Medical Officer, Dr. Scott Barnes, and our surgeon panel.
Thank you, Warren. So we're going to do a little bit of shift with getting some chairs up here. My name is Scott Barnes. I have the privilege of being the Chief Medical Officer for STAAR Surgical now. Just finished my sixth year of doing this. Prior to that, I spent 30 years in the U.S. Army, 23 of those as an ophthalmologist, and I've implanted about almost 4,000 ICLs. I do have a practice. Once a month, I do come up here to New York. I used to be working in China, prior to COVID, where I was implanting lenses over there, but COVID changed all of our worlds. But fortunately, I have a surgeon here that I work with in New York.
I see a smiling patient out there that because of HIPAA rules, I can't tell you who he is, but it's the person smiling most who can actually see me well here. So we have really what we wanted to do for you is to have some U.S. surgeon input, but really some international input, because obviously, as you've seen, this is an international lens. It's used very well, and many of our international colleagues have been using this much longer than we have in the U.S. That has some impact on comfort, confidence, different things like that. So we learn from these people. So what we're going to do is we'll go through several questions, and the first one, we're going to start with Blake Williamson. Blake Williamson is from Baton Rouge, Louisiana, Williamson Eye Center.
Can you tell us just very briefly, a little bit, what kind of practice are you in? Comprehensive, refractive only? Just a little.
So Williamson Eye Center, we're a large, multigenerational practice. We're the largest platform practice in the state of Louisiana. We, it was started by my grandfather, actually, 75 years ago. He had four sons. They all went in ophthalmology, now I'm a third generation. So very non-creative family. We just keep doing the same thing over and over again, but, you know, we enjoy it. We now have eight clinics. We have 15 doctors, 192 employees. We do about 120,000 patient visits annually and over 6,000 surgeries.
As the second youngest person on the panel here, you represent sort of a growing group of younger surgeons who really embrace technology, excited about technology, and anything new comes along, they like to kind of incorporate that in their practice. So the EVO ICL kind of fits in that, at least perceived and viewed as fairly new. A little bit concerning for some of the older surgeons who are not as familiar with it, but how is this? Why is it helping to grow your practice? How do you see it continuing to grow your practice? What about it is unique to you that rather than the standard laser that we've been doing for so long and is still good?
Yeah, Scott, I agree. You know, the younger surgeons, we grew up in a generation where things worked, right? So the older generation, they had to go through a lot of difficult, you know, technologies, early generation, like cataract lenses, early generation lasers and things. There were some struggles with that. Now, we have such great technology that whenever we were in training, frankly, a lot of these lenses and lasers are doing a wonderful job. So younger surgeons are just, you know, naturally, you know, more willing to adopt different refractive technologies I've found. Colleagues of mine are much more on the uptake than some of the older surgeons who are maybe set in their ways.
You know, I would say that, what I've seen is amongst my younger colleagues is just the vision of the patients, right? The patient experience. You know, Dr. Slade was talking about, you know, patients being 20/20 or better than, and the closer they are to that, the happier they are. There's a real difference between 20/20 happy and 20/20 ecstatic. It's completely different. You know, 20/20 ecstatic will be your ambassador. That's the patient that is gonna go drive your practice growth, and so. And that's what we're seeing in our market, is our patients just see better, with the ICL than other procedures.
So did it take you some time to feel comfortable offering this, too? Because most of us start off with just only those that can't have laser, and some stay there. What made the difference to you?
Well, I mean, a couple things. More and more patients just kept coming in the practice, asking for it, you know? I mean, it's the marketing alone that you just saw. I mean, look at the pens that they give you. They have an implant in the pen. I mean, who else is doing that? You know, a lot of the other strategics that are in vision technologies, in this country also sell contact lenses. There's a bit of a conflict there. Well, STAAR doesn't have that issue, right? So they're completely, you know, set on this, and as a result, more and more patients were coming and asking for it. So I said: You know, I need to be doing this, not just in patients who aren't a candidate, for LASIK.
And so I started off with, you know, like everybody else, a -8 or -9, and then I went down to a -6. And now, at this point, I just did our refractive counselor who sells vision technologies, and she was a -3, and she chose this. So now we offer it to anybody who's a candidate. They may still choose another technology, and that's fine, but we at least offer it. And it really has just been surgeon confidence of not. You know, it's patients coming in, but it's also my confidence with doing it. The more I did, the more confident I felt, you know. So I went from 0 to 100 really, really quickly, and I think I'm seeing that amongst my other young colleagues.
Well, so if we move on to one of the more seasoned surgeons that shares white hair with me, Steve Slade, although I think he said something about us older people set in our ways. But I think we're both pretty progressive. You've done the first of so many things, been teaching so many things. But the interesting thing about laser refractive surgery, particularly LASIK, we just got back from an ESCRS meeting, large meeting in Vienna, where there was a topic much like this, a discussion panel on saying, "Has cornea refractive surgery, meaning LASIK, reached its peak?" The front cover of Ophthalmology Times in Europe has a big picture of an eye and said, "Is this the end of LASIK?" What do you? Do you think there is a truth to that, and now we're asking ourselves that? Why is it that people are asking that about laser?
Well, I mean, it has LASIK. Wonderful procedure, but, you know, 1.5 million cases at its peak, and now it's about 600,000. So, yeah, no doubt. Now, what will happen in the future? We don't know. But I do know that the more good choices that I have to offer the patients, the more of those patients will have something done, and they'll probably, with my help, hopefully, pick the best for them. And, you know, that, that's a win all the way around.
Sure.
Yeah.
Do you think the EVO ICL could be a tool that's useful for either re-energizing and helping to grow the market? It was 1.5 million. It's now 600,000. Where does the EVO ICL fit, or where do you think it could fit?
I'm very— Oh, God, I hate to use the overused word "excited," but I'm thrilled to have the advent of this product and to see it gain traction over time, which is typical in ophthalmology. Phacoemulsification took 30 years, 25 years. LASIK, it took LASIK, like, three years to get to 1,000 cases. So it goes slowly, but yes, something new, something better, something that has a broader offering and perhaps something that appeals to patients more, which is the ICL, I think has tremendous potential to ramp us back up. We love refractive surgery, ophthalmologists do. Ophthalmologists who were doing— the leading ophthalmologists, the Marguerite McDonalds, the Dan Durries, the George Warings, the professors, literally stopped doing everything that they were doing to do nothing but LASIK.
I never could really understand that, but their ICLs now is so good, that in China, there are doctors who do just ICL. Correct? That's impressive that the ICL could do that, so absolutely, I'm a fan.
That's great. Thank you. Zheng Wang, Dr. Wang, we've had the opportunity to meet him, and actually, you stole almost all of my questions that I was gonna be asking him. So you're right along the lines of what we thought was information that we wanted to share. Just again, to emphasize, you really feel that there is still potential for at least 20% growth every year for the next several years. Is that correct? And why do you really think that, in China?
Yes. Yes, I personally think is that the growth will continue to be very fast in terms of ICL because the people's awareness of this technology is growing very fast. That's what I see in my clinic, is that more and more patients coming in directly asking for ICL. So, the reasons I have mentioned earlier is the visual quality after surgery is good, and also the more and more people want to have their cornea, intact cornea for the future. So this idea is very much enforced by many doctors, ophthalmologists. So, I think that that is why I think that the growth will continue to be very fast.
You face a bit of a unique challenge that maybe not everyone knows, in that many surgeons around the world, during their ophthalmology training, do a lot of cataract surgery. They operate inside the eye, so it's not such an unusual environment for them. It's a little different in China. Is that. Can you tell us a little bit about that?
Yes.
and how you've taken on that challenge?
Yes, correctly. China is very different in this aspect, in that most refractive surgeons do laser surgeries only. They are not used to go inside the eye, so they need special training. Actually, we have developed, at least in our group, a very successful comprehensive training courses for refractive surgeons as well as experienced cataract surgeons. Even the doctors are very experienced cataract surgeons, they did this ICL surgery, although not complicated, but it's still a new surgery for them to learn. So we have developed comprehensive training courses, and that's been very successful. We have trained many surgeons who have never done cataract surgeries before to become a very experienced ICL surgeon.
So, not only that, actually together with the STAAR, and we have programs for training of all the personnel, not only the surgeon, but also nurses, technicians, and, yeah, the whole team.
The whole team.
Yes.
Which is great. I, I do remember one of the things that Stephen Slade has taught us is that this surgery is not difficult, but it's delicate, and I think that's really true. Probably all of you may agree. It's not difficult, especially if you've been working inside the eye, but it's just delicate. It's a little bit different and can be easily done through a proper training. We're gonna move across over to Europe now. Frank Kerkhoff is coming to us from Amsterdam, the FYEO Clinic, where he's working at. He's the unique distinction of being a retina surgeon primarily, and most retina surgeons never are at meetings like this, don't understand or care about refractive surgery, and have nothing to do with it, except for complication management, if there ever is anything with cataracts and other things. How did you start working in refractive surgery?
Why did you change from purely refractive, pardon me, purely retina surgery to adding refractive surgery, particularly EVO?
I got the opportunity to start working at FYEO. We are a refractive-only clinic. We are mainly an implant clinic. We do a lot of refractive lens exchange. We do a lot of ICLs from the beginning and less laser treatments. One of the things is an ICL implant doesn't change your retinal detachment risk, and that's one of the main issues in myopic patients, and that's one of the advantages of an ICL and also for the presbyopic treatments. Since 1.5 years ago, we started with the Viva ICL, and it's now incorporated in our practice, and it's filling a gap of patients we couldn't treat. Myopic patients who are starting to get presbyopic.
In many cases, you don't like to do refractive lens exchange because it increases the retinal detachment risk, and yeah, the Viva is something that doesn't do that.
You've had some very good success. In fact, I think you and also Roger were on a panel last week, it seems a couple of days ago, over in Vienna.
Yeah.
Where you were helping, based on your experience, to kind of teach the newer doctors interested how to start their first initial patients. It's not necessarily for everybody, but can you comment a little bit on that? Did you feel like that was a good reception? There were a lot of excited doctors. They were saying they really want to start doing this.
. We looked at the elderly patients to start with, Viva ICL. And if we look at our practice, mainly a phakic implant clinic, we see that almost 2% of cases are now done or have presbyopic implants are done with the Viva ICL, but it's still a non-toric lens, and we saw that many of the ICLs we implant are toric ICLs. So the growth potential for the Viva is still 3x-4x as now.
Right, when we have the-
Yeah
toric to correct the astigmatism, answer.
Yeah.
This is great. A last question for you is that when we were talking a little bit, you asked me a question over in Vienna. You said, "Scott, is there something uniquely different about a U.S. refractive surgeon? Why, why are they concerned, or why do they have any concerns about the EVO ICL? It's so wonderful." What was the reason for your surprise over that?
The idea is that in Europe, all patients above -6, we are thinking about ICLs, and in the U.S., they are still doing a lot of LASIK in high myopic patients. If we see how in our practice doctors incorporate ICL treatments, and it's so easily done, I'm still wondering why in the LASIK range we grow with ICLs. In the LASIK range, we do about 85% of ICLs and-
-6 and-
Yeah.
Higher 6, 7, 8.
Yeah, and—
Eighty-five percent.
40% below -6.
40%?
40%. So we grow in ICLs because we like, as they do in China, to preserve the cornea and give patients the possibility for a lifelong spectacle independence.
This is, I think that's one of the highest percentages, 40% below -6. In our U.S. study, as Warren had mentioned, between -3 and -6, the area was almost always reserved for laser surgery. One-third of the patients in the study were in that range. So the surgeons, at least, that believe in it, as you are-
Mm-hmm
- are saying, "Why not do this?" As you've said, it works great in high myopes, it works great in moderate myopes, it works great in low myopes. Why should we keep this away? I mean, in a sense, if you have Corvettes, which laser surgery is kind of that, it's wonderful. There's nothing wrong with laser surgery. But if you have a Ferrari, why would you say you can't even offer the Ferrari until you fail being considered for the Corvette? Why not? Why not show them, and this is what you said, Blake. You were saying exactly that. Why not offer it to, you know, to both procedures and let them kind of decide the pros and cons of the Corvette versus the Ferrari?
Yeah, and also remember, you know, our patients, you know, they want the surgery, they want it now, and they, you know. But also they want a vision plan for life. So if you live in a small market like I do, you know, if I operate on a 20, 25-year-old, and 10 years later, they come back and need glasses and contacts again, what do you think that does? It's not great, right? So if I could do a primary LASIK flap on that patient at age 30, 35, right, and buy them another 10, 15+ years, that's great, versus doing LASIK early on and then have to do a PRK on top of that. Not to get too technical, but it's less predictable, right? Versus having an ICL, we can come back years later.
If there's some drift and their vision changes, we could do a LASIK procedure later. So having that vision plan for life is big.
One more important point here is that only in U.S., you have 6 million people abandoning contact lenses. So the guys that are abandoning contact lenses are not ideal for a corneal procedure. So that's very important. This is the recovery process is extremely fast. The wow effect, they don't get anything. Next day, two days, they are working with their computer. That's that shift that we are seeing with computer necessity in all the population, and that trend is very important. It's completely aligned with what we are doing.
Dr. Zaldivar from Instituto Zaldivar in Mendoza, Argentina, and also a clinic in Buenos Aires. Can you tell us just a little bit how you got involved with the EVO ICL?
Well, I'm also a third generation ophthalmologist in my family, so it happened that my father was the first surgeon in the world to implant an ICL in 1993. Actually, it was. Listen to this one, 21st September 1993.
Wow!
We are 9 days for a 30-year anniversary with this technology, which is not a minor detail. 30 years.
That's fantastic.
So having said this, I have seen many, many patients, and we see every, every, every day, someone coming with 25, 26, 27 years of follow-up. And if you ask me what really impressed me more about this, is that you see the lens through the slit lamp, and it's crystal clear. Crystal clear. You cannot tell when that surgery was done. So that, that's something that's quite unique. And regarding my involvement, of course, I jumped in as soon as I started practicing ophthalmology, and today I'm doing most of the surgeries in my clinic related to this technology.
You know, there's a very interesting situation that maybe all of you don't know, but when we start doing laser refractive surgery, whether it's PRK or LASIK or SMILE, when we start doing cataract surgery, whichever type we use, the surgeons are a little uncomfortable at first, and they start to learn a little bit as to what to do, and we all use something we call nomograms. If you look, none. If we asked here, does anyone use the Alcon nomogram? They'll say, "What is that?" Does anyone use the Johnson & Johnson nomogram? "What is that?" Because they all typically, there's an Alcon laser that was released. Great laser. The company said it's fantastic. The surgeon said, "Eh, it's good, but it's not amazing like I've been told." So one surgeon up in Minneapolis said, "I can figure this out.
I'm gonna come up with a nomogram to make this work for surgeons." It wasn't the company that did it. The company helped to support it, but the surgeon, like, with every laser, with every cataract procedure, came up with sort of develop their own nomogram and then started talking to other surgeons. Does this resonate with you at all with the EVO ICL?
I couldn't agree more with you. So there is a product cycle where there is something that is launched. It with safe conditions and efficient conditions and everything, and then there is the learning curve of doctors that are starting to learn more and more and start finding details and details, start evolving. And I think now the ball is in our court, definitely. I think you have done a tremendous job, and you are still doing it, putting together putting us over the table, the best technology available, safe, effective, with proven track record and everything. But now I think, I'm sorry if I say this, the revolution is on our side. I think we are all experiencing crazy things happening with AI, and there are, like, 16 different projects abroad.
I'm saying it here because we have one of the important projects that's being done, and we are fine-tuning everything. So just a quick example, we. Yesterday, I spent the entire day reviewing our data. From the last 162 cases that we have performed, I promise that we had zero outlier, zero outlier, because we are working with AI, working with tons of tons of data, improving everything, so the reason why I brought this is because we want to speed up the learning curve of many new adopters. We are doing most of the procedures. It's Pareto, Pareto. 20% of the doctors are doing 80% of the procedures. Okay. We are convinced that with the AI revolution that's happening now, we are going to drive a huge revolution in new adopters.
We are going to speed up the process, and they're going to be doing same as Dr. Zaldivar, my father, that has done 24,000 procedures. So all that knowledge is now available, and it's not depending on the company. We are going to make it available, different isolated projects, and they are being very, very generous enough to support different initiatives because they understand that this is the virtuous way to do it. But I'm not sure if I answered your question.
No, you answered the question perfectly. No, truly, it's education, and it's just like what happened when lasers came about, just like what happened with phaco and new lenses. It's the doctors that figure out. The company gives amazing technology, and the doctors figure out how to use it uniquely, what are the parameters. And it may be different in different regions or different clinic or different surgeons, like it is with lasers and cataracts. So we've got great plans for that. STAAR is working to support that, but it's mostly getting doctors like the ones up here to communicate with their peers. I know it's surprising, they don't like listening to us from industry as much as they like listening to their peers from the operating world. So we're trying to really make that meeting happen and arrange that, and we're working on webinars.
Every week, we'll be running a webinar where we'll have a different surgeon on that will kind of say: "Hey, ask your questions. Come and talk to them. What are you having issues with or difficulty? How have they solved things, and how can they help your learning curve?" One last question before I think we turn to a Q&A is just: Has there been anything unique that any of you have seen with STAAR that maybe we've listened to you and said: "We want to partner with you in a different way." Have we brought value to your practice that maybe is perhaps a little different than every other company? Because we sort of have a different feel of what we want to do for all of you.
Yeah, I'll take that one. I mean, it's rare, I guess, never have I seen a company come to you and actually give you marketing dollars, right? So to use, to spend, to drive growth in your practice. So, you know, I probably spent $1 million on new lasers last year, and they kind of drop it off, and that's it. You know, I don't—I haven't even seen the rep. In our practice, it truly has been white glove, but they've actually come in, worked with my marketing director, and actually given us money back in order to do marketing in the practice, which has been fantastic. You don't see that with any other company.
It's, it's really been part of our DNA, where we want to kind of partner with you and, and partner with your optometrists, with your refractor coordinators, and build a practice with you as part of the family. I think we're now gonna turn to Q&A?
Q&A. So yeah, we're gonna do a little bit of Q&A, just a little bit of housekeeping. So we'll do a little Q&A. We'll get the mics passed around. Probably about 10 minutes. We know Dr. Williamson might need to bail here pretty soon, but we're gonna try to get him out on time. And then we'll take a little break, and then we'll save the best for last, which is Tom and myself.
Hey, guys. Ryan Zimmerman, BTIG. I'll ask two quick questions here because I know, Dr. Williamson, we gotta probably run. But the first is on the ICL in the U.S. And, you know, one of the things that we've talked about and seen is the challenges with vault sizing of ICLs. It seems to be a little bit more pervasive than maybe some of the global adoption. And so, you know, how have you overcome that? What's your comfort level with that? Whether the vault's too small or too large, you know, can obviously result in complications. And so, you know, what do you think the company needs to do to overcome this issue in the U.S.? And then the second question for Dr. Wang: You know, LASIK,
Surgeons in China and in other Asian markets are not as it seems like the opinion of LASIK is lower in Asian markets. And I'm wondering, you know, how you think about that relative to the U.S. and how the U.S. physicians overcome that in terms of their preference for LASIK versus ICLs?
I know that was directed toward Dr. Williamson, but of course, if any of the other surgeons want to speak up, please do.
Yeah. I mean, I think that sizing definitely, you know, is something that's perceived to be a challenge or maybe a barrier to entry. In our practice, I think the ability to use different devices to measure the eye has been very helpful. The experience of we've been doing it for 20 years now is very helpful. And if anything, trying to size down a bit, you're not as worried about a lower vault than you are a higher vault. So sort of erring on the side of a lower vault has been helpful as well for us, and I think that more and more surgeons are starting to understand that.
As a result, you know, I think it's becoming less of a challenge or a barrier as they get started.
I think in the past years, STAAR China has done a lot of work, working with the doctors in China to educate both the surgeons, doctors, and the patients. You know, I always say that the first step is to educate our doctors, because not all doctors know this new technology well. So we have to do this together with the industry. And the one most important thing I think is the more and more evidence of long-term safety has come out. As I mentioned earlier, as a surgeon, I'm not worrying about the optical quality or the visual quality of any phakic IOLs. What I'm concerned about most is the long-term safety.
ICL has been around for so many years, and there are so many cases to support the long-term safety. I think this is the number one driving force for the quick adoption of this technology.
The good news is definitely or the problem is definitely can be solved without too much work, as long as surgeons are willing to get the education, to log on to the webinars, to talk to the experts, to talk to the international community, which is saying, "Hey, we got it figured out." The EVO makes it pretty easy. It's wide range of acceptability. Don't worry as much as you used to. Just like every technology, when we started with lasers and started with cataracts, or when you first started doing your initial investor reporting, probably it's not the same as it 20 years from now because you're just learning. You learn from friends and others, and that's what we're doing here.
I think Dr. Zaldivar, I think you're going to-
Please.
Have some thoughts on that as well.
Yeah. I want to echo on the comments. I think today we do have a very, very effective and efficient methodology, has track record worldwide and very, very low amount of outliers, and it's working. But as I told you, it's natural that something can be optimized, and I think it's going to happen naturally with many of the AI-driven methodologies that are being pushed with different modalities, and it's good news. It's good news. It's happening. It's already happening. There have been two or three publications in the last two months, and that's available now for doctors, so it doesn't have to go through FDA approval or anything. It's harmonically growing and improving, something that is already very safe and effective.
Just one comment. Any sort of issue, you need to think it through to the consequences. And if you have an ICL and you're not happy with the vault or the sizing, they come out as easily as they went in, you know? I mean, it's not a difficult in or out. So that's, that's a saving grace. They're removable.
Great.
Anthony Petrone from Mizuho. A couple on just practice economics in the United States, and then I'll have a follow-up for Dr. Kerkhoff on retinal detachment. So when we look at some of the data, Warren, that you presented, just in terms of $1,800-$3,000 in terms of profits, when a practice has access to a surgical suite or they have access to an ambulatory surgical suite, what is that practice margin when they do not have access to a surgical suite? And how much of a barrier is that to adoption in the United States? And then I'll have a couple of follow-ups.
Yeah, please.
Okay, I can actually speak to that. We have both scenarios. We have an operating room fully built out in our clinic, and then we have an ASC fully certified Medicare AAAHC that is wholly owned by the practice, three OR as well. Doing these in the practice, in that OR, it does save a lot of money. So, it's significant. It is significant.
And then-
Do you want me to share some of that money with you?
Yeah, I know.
You seem to pause. I don't know.
No, what is the differential, right, for a refractive site that does not have access to a surgical suite and-
an OR.
Or an OR.
Okay, well, then that is an issue, and I have been there, too. And what you have to do is find the ASC that you take your cataract patients to and negotiate a facility fee, and that can be $1,500-$1,800 that you have to pay them for the facility and for anesthesia. So you have to charge more.
Per procedure.
Yes. Yes, sir.
$1,800. Maybe just to stay on the economics then. You know, when we think about LASIK 20, 30 years ago, when it started, LCA Vision, TLC Vision, they started to offer financing to patients. Do you think in the United States that we need to have financing for patients to open up the market a little bit more?
Ooh, okay. I was actually, along with Jeff Machat, the original medical director with TLC, so we started that years and years ago. You know, Financing, I can't really speak to how well that did. I can speak that the 20/20 guarantee was a big deal that actually worked. And I can also speak, you know, just like the Jonas Brothers, we did Tiger Woods, and I don't know if you remember him or his surgery, but that was a phenomenal boost. So I think they're onto something with their marketing drive here.
There are certainly a number of individual surgeons that are offering or practices that are offering the financing. It's, it's available. It's kind of independently decided upon. Sure.
Great. John Young from Canaccord. Thanks for this panel. It's really interesting. You know, when we think about the differences between the United States and international, I think there's maybe two barriers to adoption, economics, which we've kind of talked about, but also surgeon attitude. First, on the economics, you know, you've touched on the profit margins, but maybe compare that to LASIK and other procedures that you could offer to these patients. And also, when you think about that, think about the time that it takes of ICL versus LASIK. And then a second question for you, Dr. Slade, is: when you do this in an office space surgery center versus your ASC, and those price savings that you get, do you extend that to the patient, or is that kept in-house, essentially? Thank you.
I'll take the first one, and then. So, you know, for us, I mean, you know, year to date, we're down 4% with LASIK, but we're up 39% with ICL, and a lot of it actually does have to do with, you know, more and more patients are using, you know, taking advantage of our in-house financing. The average household income in our town is, like, $40,000, so it's not a, it's not an affluent area, yet, you know, patients are choosing it more and more. Margins are good with it. I think that time-wise, I think it takes the same amount of time, obviously. Honestly, it takes less time for me with the actual surgery than LASIK, so I don't think it's a real time constraint.
Just real quick, Dr. Williamson, what is your price differential?
Yes, sir.
Your price differential-
We charge,
EVO and LASIK.
We charge $2,000 an eye for LASIK and $3,000 for EVO. Recently, it was higher, and so we're actually testing coming down and making it closer to LASIK price, because, again, in our town, you know, the cost was an issue. And even if we're recommending it, you know, to lots of our young patients, the difference between, you know, seven grand and four grand is a really big deal. And so we're trying to price it down closer to LASIK, and we think that that's going to drive the adoption of it because we think it's better.
Your question was that if it costs us less, do we give the patient that money?
Yes.
Let me see if I understand you here. This is New York City. Y'all are a bunch of finance people, and you're asking me if I should be into charity in my business? I'm okay. You know, I think what's important. You know, I'm kidding, okay? But I think what's important, and I love that what STAAR is doing with trying to equalize the prices. We always charged the same as much as possible across the different options, whether it be SMILE, whether it be LASIK or PRK, and we try to charge a smaller amount than some people do for the ICL, because I don't want that to be the factor with the patients. But just let me add one comment, and you know, there's cost, okay, and expenses and all that, but there's also value.
What are you delivering to the patient? Financially, they're paying you about as much as they would pay for a flat-screen TV or a couple of casts. This is not expensive stuff. What else can you spend money on in your life that you will use every waking moment of every day other than your eyesight? So I mean, seriously, I can't think of a thing, and I sit up at night and try to figure that one out. So $2,000, $3,000, I think, no matter how you analyze the actual profit margins or the efficacy of your spend or the capital cost, the amortization, that's a tremendous value. Raise your hand if you can think of something that has more value to someone-
Anybody? I mean, that's a value. It over time, if you just keep wearing contact lenses and glasses, you'll be spending more. Think about it. This is a great deal. It's a great value.
So actually, we're gonna take two more questions, but Dr. Zaldivar, I know we had some good conversation last night. You actually believe charging a premium for EVO in your case is important, if I heard you correctly last night. Do you wanna-
Yes, I kind of agree with what has been said, but I—since I consider the ICL to be the highest, the best optics and everything what has been said, I always position it more expensive. Yeah. So being in Argentina, this is a country, as you know, is continuously struggling economically. We have a very good price. We have similar prices than here, so. And we are doing 50-60 per month, so it's quite impressive. Yeah.
Tom Stephan with Stifel. Maybe a sort of a survey or a poll of each doctor. You know, can you talk about maybe for every 10 ICLs you perform, how many are patients who come in and demand it? I guess I'm mainly asking in the context of the U.S. Is that lower than more mature international markets?
Yeah. For me, out of 10 patients, I think maybe, you know, two or three come in asking for it specifically, and the others are patients that we've offered it to, who choose it for a number of reasons that we've shared today. You know, maybe only one or two of those patients are patients that the only option is ICL. So that's been the biggest change in my practice over the past years, is, you know, now that we offer it all the way down to -3, it's rare that I meet a patient whose only option is ICL, but maybe, you know, two or three come in specifically saying, "I want the ICL.
Maybe Dr. Kerkhoff, real quick on that same, because I know you have a different experience.
All our patients are coming in for laser, even the patients for presbyopic treatments. So laser is something in their head. They're looking on the website for laser, and when they get in, then they realize the high myops realize very quickly they can't get laser, and ICL is easily sold to them. But even in multifocal refractive lens exchange patients, they come for laser. That's-
Let me make a comment here because I'm originally from Mendoza. It is a wine country. I'm sure you have tasted our great Malbec, Malbec from Mendoza. So-
Did you bring some?
I realized that they are going to be a lot, so it wasn't a good idea. But going back to the question, Mendoza is now in Argentina, very popular for software companies to have their own, their main headquarters there. There are a lot of engineers and programmers and everything, and what's happening to our practice is quite unique. We have—if we do an ICL to a patient, then the referral automatically comes asking for an ICL. It used to happen with LASIK. Now, whoever has the surgery is bringing more patients with that. So what's happening is, I do a -6, -7 ICL, the friend comes, perhaps it's a -3 and wants to have an ICL, and I'm just performing an ICL.
More because they are from this interesting niche that are guys that are 20, 18, 17 hours in front of a computer, and I'm the message is very powerful. So I'm going to do an elective procedure that is reversible, that do not alter anything on your surface, that you will have a miracle recovery process, where you are going to be working in 20, 24, 48 hours. "This is fine. It's, I want it." That's it. So-
Dr. Zaldivar keeps looking at me like, are you convincing?
Yeah, because I'm. You don't know, but he's using contacts, so he's going to be my patient.
It used to be that nobody asked for an ICL, but when EVO came about here in the U.S., and I've been doing it since 2007, no one asked for it occasionally, except they had a friend who had it done. Now, I would say probably 10% come in saying, "I saw the Jonas ad," "I saw something on TV," "I saw the basketball players." And so about 10% are asking for it, which is completely new for us in the U.S. from a year and a half or two years ago.
Yeah. And what convincing is that we do a lot of family patients.
Yeah.
If you would have a technique which wouldn't be good enough, you wouldn't recommend it.
Well, thank you so much, all of you coming from very different parts of the world, other parts of the United States. I hope this was enlightening for you to get an inside view of some of the thought process going on in the U.S. with some newer, younger surgeons and some a little more seasoned that have been doing it for a while in different parts of the world. Thank you all so much for being part of the panel and sharing with this group.
Thank you, doctors. We'll take a break until 11:15 Eastern. Thank you.
All right. So we good? Oh, that's me. All right, well, first off, wanted to thank everyone and, thank Brian Moore. It's been a great event so far, so if we can give a round of applause. We've got some other folks that have helped out in the back, Jamie and Don, part of the team, so it's been really great. So, we're almost there. I said, save the best for last, but it's really because we're gonna go through the financials, which is really what you care about. A lot of familiar faces out there. I've known a lot of you for a long time. I think you've heard a lot of the enthusiasm.
So I'm gonna go through our vision and go through a few slides here, and then, of course, bring Tom up to bring it home for us. So with that said, I'm gonna cover three things: our financial strength, our target, our long-term plan, and what our vision is for 2026, and of course, doing this with continued strong financial discipline as we've done. But before I do that, I wanted to talk about 2023. And so on our last earnings call, we talked about updating our guidance, and today I am here to reaffirm our Q3 and full year guidance.
$80 million in Q3, the full year of $320 million-$325 million, about a 78% gross margin, 5% operating income, and we still plan to invest about $26 million in CapEx. So once again, we are reaffirming guidance today, and that is consistent to what we said during our Q2 call. So as we think about it, we took a step back and thought about you all have many choices. Where are you gonna take that dollar? Where are you gonna recommend that dollar to invest? And so looked at this in a couple different ways, whether you're a generalist or a specialist.
If you're a generalist, maybe you look at a bigger sector, and then if you're more in the healthcare med tech, then, of course, you can see what the sample size here between each of them. But now let's take a cut, right? There's a small midcap, right? $300 million-$10 billion of market cap. Let's look at those that are actually GAAP profitable and generating cash. Well, another cut, right? About 60% in all sectors get to an end of 95. Only 24% of the companies in med tech. If you followed med tech for a while, probably makes sense, right? Takes a little bit of time to make money in med tech. All right, well, let's take another cut. Companies that are growing over 15% a year, let's call those high growth, growth companies, whatever word you wanna use.
You can see all sectors, again, only 6% of the companies in all sectors and only 5% of the companies in med tech healthcare space. So you probably know where this is going, right? As Brian likes to say, "All road leads to STAAR." We are truly in rarefied air. We're a company that continues to have a strong track record of growth. We just outlined 15%-20%, three-year CAGR. I'm gonna get into the operating margins here in a second, but we are generating cash. And so whether you're a generalist or a specialist, we really believe that STAAR represents a unique investment opportunity. So I talked about the revenue. It equates to about $500 million-$550 million. Got a lot of questions on, Well, what does that look like? What's the breakout? So here you go.
Here's the breakout. In order for us to hit these numbers, and in order to hit the range between 15 and 20, we really look at our market in really three areas: APAC, EMEA, and the Americas, which are now considered North America and South America. So you can see here for the APAC region, we wanna grow between 15%-20% CAGR over the next three years, with China being on the higher end of that range. You heard Dr. Wang earlier talk about and got asked the question: "What do you think China can do? What do you think the Chinese market can do?" His words, "Not saturated." We're growing the extreme myopes above -10, and we're moving down and starting to get those high myopes at -6 to -10. So 20% growth is what we envision for China moving forward.
EMEA, three-year CAGR of 10%-15%. Why is that? We got some questions. Warren hit it. Some macroeconomic factors that we try to contemplate in some of these numbers as we move forward. And then, of course, the Americas, primarily driven by the U.S. We have a little bit of Canada in there as well, but a three-year CAGR necessary of 25%-30%, with the U.S. specifically being 30%-50% over the next three years. But in order to do this, what is gonna help us between the 15% and driving to that higher end of 20%, which Tom alluded to at the very beginning of the day? Well, we've got these five bullets here. So bullet number one, the pace of EVO adoption. Y ou heard the physicians talk about this quite a bit, right?
Becoming the first choice for -6 and above. We have to take that first step, right, at the end of the day, and we clearly see that we are good medicine. And as we heard, the comparison of the cars or the comparison of why not put this in a mid myope? That's exactly what we're looking to do. Clearly, the mix could have a difference where we land in that range of 15-20. If we're able to see higher contribution from our direct markets, which Warren outlined, the U.S., specifically Germany, Spain, some of the markets that we're looking now to go hybrid in, so we can get better economics as we partner with the in-country distributor logistics, but also then we own the demand creation.
Of course, a lot of talk on U.S., a lot of U.S.-centric folks here, and we understand that we view ourselves as a global company. You heard a lot of the initiatives that we're laying out. We can accomplish those. We could be on the higher end of that 15%-20% range. Other initiatives we talked about, and of course, the macroeconomic step, which we have contemplated in all these numbers. I do want to address one thing we got a lot of questions on. Well, is Viva included in this number? Viva is essentially immaterial in this 15%-20%. And so coming out of ESCRS, there's a lot of excitement on our side, but we're being cautiously optimistic about that opportunity.
That is an ability to perhaps drive not only on the high end of the 20%, but if that product really gets going, then we may actually even see beyond that. So now operating margins. So what does this look like, our vision of 2026? So clearly, depending on where we end up on the CAGR over the next three years, we'll have a direct correlation to the leverage we get on our operating margins. We expect to see 12%-16% in 2026, which equates when you monetize that in dollars in 2026 to anywhere between $60 million-$90 million. It's a pretty big range, 50% higher, right, on the high end of dollars actually created. We clearly can drive significant profit and cash generation. We know this, and now I'm gonna show you those slides that will break that out.
What you see here is a little bit of an eye chart, so you'll have to go back and look at your computers afterwards. But I wanted to show here is really where are we at in 2023? Our growth, our SG&A, sales and marketing, R&D, G&A, and then we put the low end in there of growing 15% CAGR over the next three years, and then, of course, the high end at 20%. Margins. Getting a lot of question on gross margins. Well, you'll notice on here, gross margins are staying relatively flat, right? 81%, both in the low end and the high end, as we look to go to 2026. Well, why is that? Well, I believe we can expand our gross margins.
I think we can get cost of goods savings, the stuff that we're doing on the operational side, the stuff that we're doing with manufacturing. But we wanted to be very thoughtful about how we approach this. And as we start expanding and becoming the first choice at those lower diopters, we wanted to make sure that any ASP changes that might happen were contemplated, which is why you see our gross margin kind of staying steady. Still, in my mind, above the 80%, which in my experience, and I'm sure in your experience in med device, is a target that you wanna hit. Let's look at G&A. We get a little bit of leverage there. But sales and marketing, we're remaining committed to. Notice, still 35%, both in the high end of the 20% CAGR and the low end of the 15% CAGR.
Why is that? What you heard from the physicians, what you heard what we wanna do, the excitement that we are trying to build here, we wanna make sure that we keep some of that dry powder in our back pocket to be able to invest in the sales and marketing engine. Of course, R&D, we're gonna stay committed to that. We'll get a little bit of leverage as we end some of our clinical trials and our post-follow-up and everything else. But clearly, at the low end, we are gonna be able to drive an improvement over the next three years of over 700 basis points of operating margin, and if we're able to hit that high end of 20% CAGR, we will drive 1,100 basis points of operating margin expansion over the next three years.
So Tom kind of said at the beginning, you gotta look at where you were to figure out where you're going. So as many of you have followed us, in 2018, we became GAAP profitable for the first time. Of course, we have 2020. By design, we're not putting the 2024 and 2025 numbers. We're focused on Vision 2026. This is a long-term plan. But I will tell you that you can see the range there of 500-550, and so the natural question will be, well, what is the step gonna look like as you move forward throughout the years?
Clearly, the initiatives that you've heard about, the ability to penetrate, specifically in markets like the U.S. and some of those other direct markets, the continued growth in China, we would expect that our year-over-year growth rate from 2025 to 2026 will probably be at the higher end of that range when we think about it. So what does that mean for operating margin? Once again, a clear history of demonstrated operating leverage. Look at 2021. Look at 2022. We all know that we were running at a higher operating margin before our Q2 call, where we had to reduce numbers on our revenue side. In a short amount of time, when you reduce your number by over $20 million, of course, it's gonna have an impact on operating margin. But we know we will climb back up from that.
This is a low point in 2023, and as I showed you before, we're gonna be able to generate upwards of 16% and maybe even more as we think about all the things that I've already outlined. So now I want to take your eyes to the right side and sort of cash generation and our CapEx and what to expect. So on the right side, you can see in 2018, there's a big spike, right? Going up to over $100 million in cash balance. We did do a secondary at that point. We raised about $70 million of cash. But since then, that is 100% organic growth. That is pure cash generation from our EVO lens to over $226 million at the end of 2022.
On the left side, giving you a little bit of what I call a cash generation proxy, adjusted EBITDA, excluding stock-based compensation. So you can see there, $75 million-$110 million in 2026. That's the cash generation that we expect. Then you take out CapEx, which we expect will be in the range over the next three years of $20 million-$30 million a year. We are still generating quite a bit of cash, and that balance that you see at the end of 2022 will be higher when we exit 2026. So this kind of pulls it all together, right? We've got our 15%-20% CAGR. Got the $500 million-$550 million that equates to in the range. You've got the operating margin. You can see there the cash generation at the bottom.
And ultimately, in that far left, when we do what we've laid out here today, we fundamentally believe that STAAR is a truly unique investment that has a ton of value creation. So those are the financials, and with that, I'm gonna turn it over to Tom to bring us home.
Thank you, Patrick. We certainly have thrown an awful lot at you this morning, so I'm sure you're gonna have fun writing your notes and figuring out where you're going to focus your your positive comments, if you will. But you know, let me try to review some of the initiatives, the projects we talked about, and certainly the basis for our growth and our investment. Each one of these projects and investments have a very date certain, as you can see on this slide. Some happen by the end of this year, some happen in 2024, and some run into 2025. But we're really focused on being a better partner to our customers, and we're centered around creating growth. And speaking of growth, I hope you walk away this morning recognizing that we are an exciting global growth company.
We continue to grow double digits around the world, and I think that's going to continue. But if you even look beyond our planning period of 2026, there are additional markets that we feel very, very good about that aren't even contemplated in our 2026 outlook. Markets like India, where we have grown at 19%. But my personal opinion is India reminds me of where China was 5 years ago, and we're gonna double down in India, spend more time there, increase our resources, and I think it's a tremendous opportunity moving forward. Indonesia, you heard Warren talk about Brazil and Mexico, where we are creating hybrid opportunities. All of these populations are big, they're growing, they're establishing middle class and wealth, and market research indicates that's where we need to be, because that's the future of EVO patients.
But if you look beyond 2026, Warren talked about how we're building up our operating capacity to certainly keep with demand. But we're, at our heart and in our head, believe STAAR Surgical's a billion-dollar company. And to be able to support a billion-dollar company, we are contemplating today, looking at a new manufacturing facility in Arizona, and we call it Project Roadrunner. It'll be phased, but it'll increase our capacity such that demand will never outstrip supply. Our investment plans will be phased and have been contemplated through the numbers that Patrick's reviewed with you. So in conclusion, I said it's our time. It is EVO's time. You know, I've had the privilege of sitting in this chair now for about nine months, and I remain confident that STAAR is poised for continued growth as we take STAAR Surgical to the next level.
I'm incredibly excited about Vision 2026, and I hope you are as well. So I thank you for your attention this morning. Thank you for the coverage you have given us. I want to thank our team for an excellent job, the key opinion leaders that traveled here from around the world to share their perspectives, and look forward to a Q&A session and answering any remaining questions you have. Thank you.
We have a question we were holding, David, first.
Okay. Thanks. David Saxon from Needham. Maybe one for Tom to start. One of the doctors, Dr. Williamson, mentioned getting marketing dollars.
Yeah.
So maybe talk about that program. What's it look like for the doctor? How do you identify doctors, you know, you think are qualified? And then I think one of the slides mentioned partnering for office-based suites, so maybe talk about that. And then I'll have a follow-up for Patrick.
Sure. I'll start and certainly ask Warren to add, because he's a little closer to it than I am. But what we did with Blake and his practice is geared towards market share, where we said, "You know, we wanna make sure that you're focusing on really making this offering to anybody eligible. And to the degree that you do that, and you commit volume, we will provide marketing dollars to help support your internal and external efforts." And there's a formulaic approach that we take, and I don't know the exact amount of dollars that are coming his way, but it's based upon their commitment to volume and their commitment to adopting the process.
Yeah, thanks for the question. The only thing I would add is, it's essentially just a long-term commitment. It's a way that the customer will commit a market share to us and a certain number of units over time, let's say three years, and then we essentially advance dollars that they're gonna earn for their performance through that contract. If they don't earn the dollars, they don't get to keep them, of course. The dollars will come back. But we will upfront. Sometimes they want equipment, maybe they need a microscope, maybe they want some sort of front-end diagnostic, maybe they want to build out the operating room suite in the example. So we'll partner, bring in a consultant. We don't spend the money. We're actually just allowing them to spend the money that they're gonna earn later as a result of the commitment.
So many of you are familiar with co-op marketing. You've seen that in other areas, so it's very similar to that in terms of how we would think about it. You had one follow-up, David?
Yeah. Yeah, thanks, Patrick. So just on the operating margin target, you know, 15.4% last year. So, you know, I guess why couldn't you be higher than, you know, call it mid-teens in 2026? Is that path linear? Is it more back-end weighted? And then you've also talked about, you know, potentially outperforming on the top line. So to what extent would, you know, outperformance drop through to the P&L? Thanks.
Yeah, I think we've shown that there is upside to it, for sure. You know, the sales and marketing number that we put out there, the gross margin that we put out there, flat, right? To 2026, from where we're basically at today. Our normalized gross margin this year is actually closer to 80%. As you know, we took a little bit of a write-off as we were leaving our IOL business that we did in Q2. But when you normalize that, we're already at about 80%.
So yeah, I think there is some potential upside, but what we wanted to do as we were laying out our vision 2026, is make sure we kept enough for Warren to do the things that he wants to do, and it and really, if there's an opportunity for us to accelerate, which is really the goal here, right? What can we do to push it beyond 2026?
. percent. What can we do with Viva? What can we do with some of the areas that Tom ended with, like India, right? Like Brazil. So we're trying to maintain some flexibility, but I do think that that is a, for lack of a better term, a very reasonable number for us to hit with the potential to expand.
Thanks, Anthony. Mizuho, maybe one just high level U.S. within the 2026 vision plan. You have 600, I think, active, actively trained sites. It seems like the strategy is to go deeper in those sites, but as you go to 2026, should we be expecting more sites in that number? And, you know, if so, what will that be? And then I'll have a quick follow-up on margins.
Yeah, look, Anthony, I think it's reasonable to assume that demand will continue to be there, particularly as we penetrate deeper and deeper in these accounts. But as you've heard me say, and what Warren eloquently laid out, is we're putting pods together to go deeper. So just to clarify, the numbers are about 400 and some practices that represent about 600+ surgeons. And we can build the business just on that as we go deeper into those practices with all the initiatives we laid out. But there's gonna be demand that comes in and will continue to grow. But our focus is to go deeper through the approach. As Warren said, we're targeting very select accounts within those 400 and some practices to really show true adoption.
Then just to follow up on margin, would be just the mix between direct and distributor and how different that margin profile is for STAAR today. There's sort of a view there that maybe in China actually have some direct in there at some point, or is that not in the plan? Thanks.
Yeah, so I'll-
That's very helpful. Thank you very much.
Yeah, I'll hit the stratification on kind of some of the questions we got. So, obviously, in the break, in between. So first of all, you saw the 81% gross margin as we go today, going through 2026. We have contemplated that as we move down and what I'll call being more LASIK-like, right? That the prices may drop, right? We might see some changes in the ASP, and so we wanted to contemplate that so we can maintain some of that flexibility. As a reminder, our direct markets, we're over around $1,000 for one single EVO lens. Our global ASP is around $500. So there is room there to still come down a little bit, yet still maintain a very, very strong gross margin of 80%+. That has been contemplated.
In terms of China, I'm gonna let Warren talk about that and what EVO+ is gonna bring for us, and how we think about that strategy as we go forward. But yes, direct markets, very good gross margins, hybrid, a little bit less, and of course, classic distributor, the least amount. But, I'll let Warren go with that.
Yeah, it's another good question, and it's just, just on the distributor and direct mix relative to, the question on, would we go direct in China, as an example. Remember that distributors, even in China and outside of China, oftentimes they're serving a purpose of logistics only, and in some instances, they're involved in demand generation. So of course, we're looking at each one of our distributor models and markets and saying: Should we be in control of the demand generation, even if we use a logistics distributor? So oftentimes, we'll still use a logistics distributor, one, for importation, and two, for just country logistics. That's important. So that's under evaluation on an ongoing basis. You should expect us to do, I think, what's right there. We feel good about our approach.
Then just on EVO+ in China, I'm pretty excited about this, and we highlighted it a couple of times. What EVO+ gives us in China is the ability to have a product segmentation strategy, which is really important because we can establish through that a premium market, even within the EVO ICL branding. That's also going to give us some downstream benefit. Think of protection against a VBP as it comes. Eventually, more competition will come to China. That'll open up maybe VBPs for ICLs, but as you have a newly introduced premium or segmented product mix, then that may exonerate us even from a VBP, at least with that SKU.
Ryan?
A couple questions. Number one, Joe Jonas hasn't made an appearance yet. I'm wondering if you still maybe bringing him in?
Okay.
Just wanna make sure.
Joe, why don't you come out now?
Yeah. All right. Couple questions on China, and then I appreciate those comments, Warren. We've seen some anti-corruption initiatives in China. This is a more near-term question, but there's been some concerns that that is having some impact on refractive demand in China. You know, appreciate Patrick reiterating guidance for third quarter. Just maybe talk to us about kind of what you're seeing on the ground in China in the near term, how you think about the impact of stocking versus destocking, you know, sell and sell out rates in China in the near term. And then longer term, when we see the introduction of competition, potentially in the Chinese market, certainly there could be some, you know, price dynamics that occur. How do you think about margin profile in China as a result of competition?
And again, I understand kind of the strategy over time, but maybe, you know, initially in 2024, what could that do from a margin perspective if there is price competition?
Yeah, let me take the first one, and then I'll let Warren weigh in on the rest of your questions. I think from this corruption perspective, again, as I said way in the beginning, we have very good feet on the street in China. And I think certainly, any high volume procedure, and I think EVO ICL is considered high volume in China, particularly in the public hospital sector, some of the hospitals have been aware and made sure that, you know, they were doing everything appropriately. but we have not seen any material impact other than just being aware that the public sector was a little skittish when the government first came out with it. But materially, nothing has changed.
On the private sector, which is the majority of where our revenue is generated, there's been no impact whatsoever.
So we have about 70 – in China specific, it's about 75% we sell into private and 25% into, into public. And we hear this, whether it's VBP, whether it's anti-corruption. Remember, we are a cash pay procedure, right? Normally these types of things, and it's not just China, we see in the U.S. with insurance pushback, right? Many of you have experienced that with me back in the NuVasive days. So we know that insurance companies or any agency that has to come out of pocket, doesn't want to come out of pocket. So what are they gonna go after? They're gonna go after over-prescription, over, surgicals that don't need to be done. A 10-level pedicle screw system on someone complaining about back pain. That's not our procedure.
People are walking in the door and self-diagnosing and saying, "I would like to get out of my glasses, and I'm gonna pay for it myself. Will you please do that?" Right? So ultimately, we see this as a fairly low risk. In fact, we were just at ESCRS meeting and learning more about China, and we heard that from folks out of the other from China itself, so we feel very good about it. And then in terms of price, I'll let Warren certainly talk about some of the price stratification and some of the new entrants. But I wanted to—and Dr. Wang sitting up here at front, I'm looking at him. What did you hear him talk about constantly? Years and years of safety, clinical efficacy, and more importantly, the long-term clinical benefit that EVO provides.
When a new product comes into the market, they've got a long way to go to prove to him that it's got the same standard that EVO does. Sorry if I stole your thunder.
No, no, no, it's, it's good. And look, exchange of value is important, and the value that our organization provides, that Lena and that Professor Wang, through treating patients, provide. It's hard to just show up as an organization and be able to deploy the training resources, the educational resources, the support resources that exist. We've got 70-some-odd people now in China, and we have a robust distribution and importation system, and that's gonna be hard to match. That's one. The second, Collamer is differentiated. It is special. It is an elegant material, and many of our competitors, they come forward with acrylic and silicone lenses, and those things do not do well in the environment, in the front of the eye. And so as competitors come, and they're gonna be charged with. Forget about price for a second.
They're gonna be charged with clinical outcomes, which they're gonna struggle to be able to match EVO ICLs, largely because of Collamer, largely because of the surgical technique, which has been trained and trained and trained again in China specifically and in broader Asia. So I feel good about that. I actually, Tom said it's flattery that competitors will come. We need competitors to come because that's gonna continue to grow the ICL market as a genre, if you will. Remember that most of the competitors that come are non-Collamer lenses. They're NCLs or, you know, pick a name to call it, but they're not made of Collamer, and so that's gonna be a differentiator. Then pricing strategy.
You heard what I said about EVO+. I won't repeat, but I think it's gonna give us really good footing there to have a premium market in China.
Great.
John Young, Canaccord. Two questions for me. The first one just made from Magda on the intermediate-sized lens. I didn't see it in the timeline, so just any timelines around getting that lens to the United States market and the clinical, and regulatory pathway to do so. Will a trial be needed?
Great question. Thank you so much for asking. You know, it's the regulatory path, I'll speak to in a second. We're actively in the R&D phase of making sure we can get all the documentation for, you know, submission to a regulatory body. The regulatory path, typically, globally, for expansion of sizing is actually more straightforward, depending on whether the sizing is within the parameters already approved. So we think the regulatory path is fairly straightforward, but again, TBD and stay tuned for news around when we expect to get that into the market.
Great, thanks. And then just a quick follow-up, too. On the call center in the United States and just internal expectations around that as you, you know, enter the pilot program or the program at the end of this year, you know, how it gets to productivity, how you are gonna re-accelerate sales and marketing investment once that's up and running, and then just any differences in the strategy going forward as you target those 100 accounts now, specifically?
Yeah, John, I think it's a good question, but as I said, we're gonna continue to invest where those dollars are best rewarded. And the pilot will start in October. It'll run through the balance of the year. It starts in two small cities, it expands to the entire West. And I think we're gonna learn a lot through the balance of the year, and I expect that by closing that loop, we're gonna see that our investment dollars in creating awareness are richly rewarded. And if that is what it happens, I think today we're going through a third party. I think we'll continue with that mindset, but certainly if it works, and I know I've had this conversation with you and Bill before, there's no reason not to think that we would bring it in-house.
Hey, Steve.
Warren, I just want to make sure I understand in terms of the focus, I think, on the sales side in the U.S.
Can you make sure the mic's on, Steve?
Sorry, speak like an Oppenheimer. Warren, you mentioned marshaling a lot of your resources in the U.S. toward the subset of customers. So in terms of the other customers that you're not focusing on, is there gonna need to be a increase in investment in terms of clinical educators or anything like that to support them? Or how are you thinking about, you know, maintaining a presence in those other non-focus accounts?
Yeah, it's a good question. We shouldn't be. If we're doing it right, we shouldn't be adding resources to take care of the customers that are out in the long tail of this discussion. In fact, it may be the opposite. We need to determine the level of resource necessary to go in and go deeper with the customers that we are targeting. So for clarity, the customers that we are focusing on are already in our database. They're the 438 customers and the 600 and some odd surgeons, and based on their existing behavior, their economics around the surgery center or in-office suite, based on their utilization now of premium IOL, so they've demonstrated that they can sell over a premium product and so on.
All of that has been classified now, and we'll segment the customers and go after. We've said 100, it could be 70-100, depending on. And then we'll have some back and forth with our field organization to say, "Hey, I've got a prospect over here and a prospect over there." We'll allow some of those to come into that funnel, and then we'll solidify it, because we obviously wanna hold ourselves accountable to it, and we can't just have people coming in and out of it. But for clarity, we will still service all of our customers. They're gonna order from us. They're gonna seek input from Dr. Barnes and the clinical team if they want help with sizing and OCOS and so on.
I just don't want, and none of us want our resources getting on planes or getting in cars and driving 2 hours to try and get someone trained who's trying to clean up a -13, a -14 that they've had on the shelf for a long time, and we've got to go through the process of training them and educating them and hoping for a good outcome, and they do 2-4 cases every 6 months. That's not a good use of our resources. So we're gonna dial in the support, white glove, from customer service to clinical and medical, to all of the commercial organization on the customers that can matter the most. And then we will continue to expand, which is when we will need more resources.
Thanks. And then, Patrick, just a follow-up. In terms of your gross margin outlook for 2026, are you assuming U.S. pricing remains stable, or are you building any degradation, either because of patient customer pushback or as you want to move down the diopter curve?
Yeah, I think it'll be less about patient customer pushback, but yes, we have factored that in. We have modeled out that the price in the U.S., which is around $1,000, as we move down and become the standard of care, we'll call it, maybe for minus six and above, or the first choice for minus six and above, we did contemplate that there might be some price erosion there on our ASP.
And just one thing to add on that, it's important. It's not just about price for us with our customer, it's about partnership if the customer is willing to create more parity between the price of LASIK and EVO ICL. There's no value in us giving, you know, 100, 200, 300, 400 dollars off on a price to watch a customer charge $9,000 when they charge $4,000 for LASIK. That makes no sense. So it takes the partnership in order for us to exchange prices.
We will be purposeful where we give dollars out.
Well said.
Stephan?
Tom Stephan.
Tom, sorry.
All good. I want to start with office-based surgery in the U.S. Tom or Warren, maybe for you. Any color on utilization in those specific customers, maybe relative to the other buckets? And then a follow-up to that is how quickly do you think that office-based surgery customer base can expand in the U.S., and are there ways that STAAR is helping to build that out with your customers, whether it's, you know, outfitting their offices? Just any comments there.
Yeah, let me start.
And then a follow-up.
You can add. I think within our current makeup of customers, I could be wrong, but I think it was somewhere around 30% of current EVO ICL customers in the U.S. are in and out in office-based surgical suite. I think nationally, it's maybe somewhere around 10% of the market is in that kind of setting of care. But I believe personally, office-based surgery is the future, and I think five years from now, it'll probably be where most of the ophthalmic procedures are performed. Not today, but I think over the next five years.
Yeah, I fully agree, and there's nuance in this discussion. Sometimes an office-based suite is a laser room that's not being utilized as much in a practice, and they wanna convert that over to an office-based suite to just do something like EVO ICL. Sometimes customers have ambition to start taking advantage of the refractive lens exchange market, which is off-label for marketing in the U.S. for the companies that provide IOLs, but it's a well-known procedure that happens in that practice. If they're doing that, they're trying to grow their practice much more probably on the premium IOLs, and so we sometimes take a backseat in that discussion. So there's a bit of, again, choosing the right archetype of customers, which is why we're getting really specific about where we're going to try and grow.
But of course, the OBS makes a big difference. So yes, we are partnering. We have examples where surgeons have come to us and said, "Hey, I'd like to build this out." We again, engage into a commitment of relationship with them. They'll use those dollars to get a consultant to come in, help their OBS, maybe even help build them out.
We've talked about sort of the range, and it'll differ by geography or city, right? You're focused on the U.S., clearly. So, you know, $50,000-$75,000. I wanna put that in perspective, what it costs. Now, maybe we go half and half. You know, we talk about 400 accounts, right? 400 areas, over 600 doctors. So, you know, with the numbers that we laid out there, it's not a significant investment that we would have to make. If we feel that that's the right approach to take, and the doctor says that this will help, you know, as we know, make better economics for them, which will drive more volume as they move down and make Evo the first choice.
Got it. And then just a quick follow-up, Patrick, for you. 2023 guidance, the 5% operating margin and the $18 million, is that reaffirmed as well, or any comments there?
Yeah, it is. So I wanted to make sure I said it during the comments, but, yes, still, the U.S. will be approximately $18 million for the full year, and the 5% approximately operating income, operating margin, for the full year well, is reaffirmed today.
George?
Thanks for taking the question. George Sellers at Stephens. I wanted to follow up on Viva. There was some comments on it earlier, and I know it's not included in 2026 numbers, but just curious, you know, where that product is in development and in commercialization efforts, and is there a conscious effort to maybe slow that commercialization to focus more on the U.S., and, and that's why maybe it's taking a little bit longer to show up more materially numbers or just some color there would be helpful.
So great, great question, and one that's timely, because coming out of ESCRS, we just had a really nice session, and Dr. Frank Kerkhoff was part of it. Look, EVO Viva, when a company launches a presbyopia-correcting lens, an EDOF lens, all of the tendency of the organization is to say: This is the cure for presbyopia. I'm 47, I'm emmetropic my entire life. I'm now becoming presbyopic. My wife makes fun of me. She's like: "It's time to raise the font on your phone," and I refuse to do it. I will have to soon, and I would love that to be the solution for me. And I think the EVO Viva, which is approved in Europe and in markets that rely on the CE Mark, so we can commercially sell that product.
We have taken a the stance of we wanna really make sure we do what's right for the brand, for EVO Viva and for the patient and control the rollout of it, because otherwise, you run the risk of, in the hands of surgeons that don't understand the things that some Dr. Kerkhoff and some high-volume users understand, Dr. Zaldivar is here as well, who has a lot of experience with this, you end up putting that in patients where you're, you're trying to help presbyopia instead of what you're actually trying to solve, which is myopia. So we just had a really, really nice session with five surgeons with tons of experience, and they nailed, nailed the discussion in a group of surgeons in Europe.
And what they told them, which is right, is their data suggests it's -4 and above for 45- to 55-year-olds, and do not use it for anyone else until we get a ton of experience with it. And then you start to understand, based on your own performance, how you're gonna use it. And so to me, that's the patient population, and so we'll go in concentric circles. We'll make sure that we're trained. We'll make sure that we, from a commercial organization, we're gonna be able to execute against a message that's aligned. If you've heard anything today from me, hopefully, you're hearing that, and we're gonna drive that.
So it's gonna be small to start for also a really important reason you should take note of, we won't launch the toric version yet because the clinical work is still being done on toric. So we'll only have spherical, which eliminates about 75% of the patients, probably in that -4 and above to -45 to -55. So you can see why we're describing it as great clinical product, but we're going to roll it out slowly for the right patient population. Is that good?
Yeah.
Yeah. David Saxon from Needham. Just one question for me. I think in the slides, Japan has. You have 50% share in Japan. So is there something unique about that market that's allowed you to get to 50%? And is there any reason why you couldn't see that in, you know, China, South Korea, or even, you know, EMEA, for that matter? Thanks.
Yeah, sure. Let me address Japan specifically. As you may or may not recall, Japan really had a negative reaction to laser vision correction several years ago, to the point where most Japanese ophthalmologists do not offer it, do not want it, and it had a lot of bad, negative press in Japan. Obviously, EVO ICL was there at the same time, was able to pick up that slack, and led to us, in a sense, dominating that market. I think, again, you know, we, we've said our, our vision is to be the first choice for doctors and patients, but to be the first choice, you have to take the first step. I think as we take that first step to really dominating minus six and above, we're gonna have a very successful company.
And I think as we grow to control that segment of myopia, we can approach 50% in many of the markets that we're in. It'll just take time. But I think if you've heard anything throughout today, the company's smarter than we've been, whether it's about EVO Viva, whether it's about how we're gonna attack the U.S. market, whether it's about where we're gonna spend our dollars, and I hope you will walk away with the same level of confidence that we have as a management team, that in the words of one of my, I wouldn't say idols, but somebody that I really enjoy listening to, Frank Sinatra, "The best is yet to come.
Thank you, Tom. Thank you, STAAR Management. That concludes Vision 2026 Investor Day. Thank you all for attending here in the room and also on the webcast.
Before we leave, one more round of applause for Brian Moore.
Yeah.
Thank you all for joining us. I know we have lunch prepared for you. Hopefully, some of you can stick around. Again, appreciate all your support.
Thanks again. Lunch is gonna be set up very shortly.
Thank you, Dr. Moore. Thank you so much. I understand. I understand.
Look at her dance. Just take it off!