Sight Science (NASDAQ:SGHT) tumbled over 40% after it warned its encountering lower demand for its surgical glaucoma treatments, and, downgraded revenue expectations.
The company, in a statement, said it expects to report $19 million to $20 million of revenue in the third quarter, versus the $22.9 million previously penciled by analysts.
It told investors that the drop in new treatment accounts is primarily due to ‘transitory uncertainty’ following recent local coverage determinations relating to Medicare – after a majority of Medicare administrative contractors determined that some procedures, including the company’s, could be deemed as ‘investigational and non-covered for Medicare beneficiaries’.
The company also said it expects revenue from ‘dry eye’ customers will be slightly down due to typical seasonality patterns, and, its changing go-to-market strategy.
“We typically see a strong second quarter followed by a slower start to the third quarter given traditional seasonality patterns,” said chief executive Paul Badawi.
“While we had a strong second quarter prior to the LCD proposals, we have faced a lower cadence of new account additions and relatively flat utilization and we have not experienced the expected increase in commercial activity thus far in August and early September.”
Badawi added: “While we are actively managing the proposed LCDs and their impacts on our business and customers, we believe that the ongoing uncertainty from the proposed LCDs has affected the ordering activity of certain customers in the third quarter.”
“We expect this impact to continue until there is clarity on longer-term coverage by the MACs.”
In New York, Sight Sciences stock fell $2.64 or 40.5% changing hands at $3.87.