STAAR Surgical and InSite Vision release Q1 results

Both STAAR Surgical (NASDAQ: STAA) and InSite Vision (AMEX: ISV) have released their first quarter results; both companies posted losses for the quarter ended Mar. 31, 2001.

For STAAR Surgical, the Monrovia, Calif.-based manufacturer of ophthalmic surgical products, revenues for the quarter were $13.0 million compared to $14.1 million for the first quarter a year ago. The company reported a net loss of $230,000, or a loss of $0.01 per share, compared to net income of $264,000 or a gain of a $0.02 per share a year ago. Company executives noted the company incurred an unfavorable exchange rate during the first quarter.

David Bailey, president of STAAR, focused on two highlights from the quarter: namely, the CE mark granted to the SonicWave Phacoemulsification System in Europe, allowing STAAR to enter Europe's estimated $300 million cataract market; and an agreement with Anika Therapeutics to begin marketing Anika's Staarvisc II, giving STAAR access into the U.S. viscoelastic market, estimated at $153 million.

Mr. Bailey noted his company could achieve higher margins from the Anika product than if STAAR had manufactured its own viscoelastic.

InSite Vision, the ophthalmic therapeutics, diagnostics and drug-delivery company based in Alameda, Calif., today also reported its financial results for the three months ended March 31, 2001. InSite's 2001 first quarter net loss was $2.1 million, or $0.08 per share, compared with a net loss before cumulative effect of change in accounting principle of $336,000, or $0.02 per share, in the first quarter of 2000.

Net licensing and royalty revenues for the 2001 first quarter were $2,000, compared to $402,000 in the first quarter of 2000, which included amortized licensing revenue for ISV-900.

InSite had cash and cash equivalents of $16.8 million on March 31, 2001, compared with $18.9 million on Dec. 31, 2000. Company executives further noted they expect net operating expenses to increase in future periods as more of the company's activities are shifted to programs, such as its antibiotic programs, that are not reimbursed by research partners. Additionally, executives anticipate incurring sales and marketing expenses related to the preparation and launch of its ISV-900 glaucoma diagnostic product.

InSite executives also announced that global development and commercialization rights to the company's ISV-205 (Diclofenac Eye) product for the treatment of glaucoma have been returned to InSite Vision following the completion of a phase 2b study as part of a refocusing at Pharmacia Corp.

The ISV-205 product is designed to treat the causes, rather than the symptoms, of glaucoma, a leading cause of blindness. The product is a DuraSite-based formulation of diclofenac, a well-known nonsteroidal anti-inflammatory drug. The DuraSite system is InSite Vision's proprietary polymer-based patented eye drop formulation that prolongs the duration of drug delivery to the eye.

S. Kumar Chandrasekaran, PhD, InSite’s chief executive officer, noted that ISV-900 is expected to launch in the second half of this year. Early marketing activities are being focused on physician education and developing awareness through scientific roundtable discussions on glaucoma genetics and the application of the company's diagnostic.

Also during the first quarter, InSite managers met with Food and Drug Administration (FDA) personnel to receive their input on the development and clinical plan for the ISV-401 antibiotic program. The FDA agreed to InSite's proposed product dosing regimen, which the company claims is significantly lower than that for products currently on the market. The FDA confirmed that if the planned phase 2 clinical trial is designed to provide statistical significance, this trial could serve as one of the pivotal trials required for product registration. Based on the FDA's information, InSite executives are anticipating submission of an investigational new drug application to the FDA early in the third quarter, and start of phase 1 clinical trials shortly thereafter.

During the first quarter, InSite also concluded the licensing of two new second-generation fluoroquinolone antibiotics from SSP Co. Ltd. of Tokyo. One of these compounds has been formulated using DuraSite and has been designated ISV-403.

At the recent Association for Research in Vision and Ophthalmology meeting, representatives from InSite and SSP presented the results of ISV-403 bioavailability studies with bacterial sensitivities, which indicate ISV-403 formulations containing SS734 should allow reduced dosing frequency to treat gram-positive and gram-negative bacterial conjunctival infections compared to fluoroquinolone products currently on the market.