NOVA EYE MEDICAL LTD (EYE) - Record US Sales: Inside the Glaucoma Treatment Revolution

The ophthalmology world is taking notice as Nova Eye Medical achieves its strongest US sales quarter ever. In this fascinating conversation with Managing Director Tom Spurling, we unpack the remarkable growth trajectory of their minimally invasive glaucoma treatment technology that's winning over doctors and patients alike.

Spurling reveals the powerful simplicity behind their success: "We have a really good product and a driven sales team. The more doctors that try our product, the more take it up." With approximately 1,300 monthly procedures already and an estimated 20,000-30,000 minimally invasive glaucoma procedures occurring monthly in the US market, Nova Eye's runway for growth appears substantial and sustainable.

The financial transformation is equally impressive, with the glaucoma segment nearly achieving break-even in Q3 – posting just a $30,000 EBITDA loss compared to a $1.8 million loss in the first half. This dramatic improvement stems from enhanced manufacturing processes, resolved supply chain issues, and accelerating sales. Perhaps most exciting is the forecast of break-even performance for the glaucoma segment by second half FY25, with group-wide profitability following shortly thereafter.

Beyond the core glaucoma application, Nova Eye has identified a potentially transformative opportunity in ocular drug delivery. Pharmaceutical companies have approached them about leveraging their iTrack technology for targeted medication delivery within the eye – potentially opening an entirely new revenue stream. With minimal exposure to international trade uncertainties and clear catalysts on the horizon, Nova Eye Medical demonstrates why they're positioning themselves at the forefront of ophthalmic innovation. Listen now to understand how this Australian company is revolutionizing glaucoma treatment globally!

Chapters

• 0:00 Introducing Tom Sperling from Nova Eye
• 0:44 Record US Sales and Growth Trajectory
• 1:36 Near Break-Even Performance and Path Forward
• 2:33 Clinical Engagement and Key Opinion Leaders
• 3:36 Conference Success and Market Expansion
• 4:27 Ocular Drug Delivery Opportunities
• 5:54 China Market and Future Catalysts

Transcript

Andrew Musgrave Host

Welcome to another episode of ASX Briefs, and today we welcome back Tom Spurling, the Managing Director of Nova Eye Medical Limited, trading under the ticker code EYE. Nova Eye Medical continues to lead innovation in the ophthalmic treatment technologies, achieving significant milestones in its journey to revolutionise glaucoma care. Tom, thanks for joining me again and welcome back to the ASX Briefs podcast. 

Tom Spurling Guest

Hey, thanks very much for having me, Andrew. It's always great to talk about Nova Eye. 

Andrew Musgrave Host

Okay, now, we've spoken a few times in the past, so, to kick things off, Nova Eye just posted its strongest US sales quarter ever. So, what's driving this momentum in the glaucoma segment and how sustainable is this growth trajectory? 

Tom Spurling Guest

Andrew, it is simple and it's exciting. We have a really good product and a driven sales team. The more doctors that try our product, the more take it up. Getting a motivated sales team on the ground to promote the product is driving our growth. Now, In the US, we estimate that there are about 20,000 to 30,000 minimally invasive glaucoma procedures taking place every month. We recently reported that our monthly US sales, based on a rolling three-month average, was about 1.3 million. That's about 1,300 procedures a month. With such a large number of potential procedures, we think the growth trajectory is very sustainable. 

Andrew Musgrave Host

And with the glaucoma segment nearly breaking even in Q3, what levers have you pulled to achieve this turnaround and how close is the overall group to positive cash flow? 

Tom Spurling Guest

Our good bottom line result of just a small $30,000 EBITDA level loss in the quarter, compared, that showed a fantastic improvement compared to the $1.8 million loss in the first half. It was achieved by a combination of a lift in our gross margin as we recovered from our supply chain problems, improved our manufacturing in the first half, as well as good sales growth. We are forecasting a break-even performance for the glaucoma segment in the second half of FY25 and for the group soon thereafter. About $200,000 a month of corporate costs and costs of our alphaRET division are coming, so a positive EBITDA at a group level is within reach. 

Andrew Musgrave Host

Now your iTrack™ canaloplasty has seen widespread clinical engagement, especially in the US. So how has feedback from key opinion leaders shaped your market strategy? 

Tom Spurling Guest

Our product offering is compelling. 

iTrack™  lowers intraocular pressure to build up a pressure in the eye and reduces or even eliminates patients' reliance on drops without the need for cutting tissue blood or a permanent implant, and patients like that, and iTrack™  therefore makes the doctor look good in front of their patients as a result. We have a lot of supportive, key opinion leaders, that is, who are willing to pass on their experience to their peers. Peer-to-peer selling is very powerful. We have some wonderful supporters and we're now receiving inbound unsolicited sales inquiries because our customers are telling their colleagues. Just this month, some doctors from the Cleveland Eye Clinic in Ohio a prestigious clinic sent some doctors our way. They're absolutely integral. KOLs are absolutely integral to our promotional part of our strategy. 

Andrew Musgrave Host

And you've had strong exposure at major US conferences like AGS and ASCRS. So, what kind of interest or opportunities have emerged from these events in terms of adoption or partnerships? 

Tom Spurling Guest

So, at ASCRS we had 21 posters that was just in late April 21 posters, papers and podium talks on iTrack™ by doctors. Now this was a record. Let me point out that such participation is not something a company pays for. The organising committee must select a presentation based on clinical and scientific merit. These talks drive doctors to our booth to find out more. We scan badges and we chase them down and return to their clinic to mature them into regular customers. It's exciting to see a general inquiry from a doctor mature into a doctor speaking on our behalf 18 months later. 

Andrew Musgrave Host

And you've identified a major opportunity for iTrack™ in ocular drug delivery. So, can you explain what makes this application so transformative and how it could reshape Nova Eyes future? 

Tom Spurling Guest

So, the original FDA clearance we have for the device is fluid infusion or aspiration during surgery and this has only been exploited for glaucoma. We've had some inbound inquiries from pharma companies who have seen our device and approached us on the potential to use it for targeted drug delivery. At the moment it just contains biocompatible hydraulic fluid OVD to help flush the canal. There are several drugs in use and in studies the efficacy of which could be improved if the pharma companies were able to place the drug in the eye in a better spot. So, at this stage we think it's a potential revenue opportunity. If it's realised, we would envisage being able to deliver special devices to our partner and it's good that the approaches have been made. We are not calling it transformative yet, but we think it's a wonderful additional revenue opportunity when and if it will happen. We think our potential partners like the look of it, but our current mandate is a profitable growth with our existing glaucoma franchise. 

Andrew Musgrave Host

And how are you navigating the uncertainty around sales to China and how material is this market to Nova Eyes medium-term strategy? 

Tom Spurling Guest

We make our stuff in the US. 77% of our sales are in the US, so we're very much shielded. 18% of our sales are in the EU who are not applying the reciprocal tariffs. There's 1 million just 5% of our revenue being made to China which are being exposed by reciprocal tariffs. Now we didn't make any deliveries to China in the third quarter of FY25, which is on schedule. That was our agreement and under that agreement, they're scheduled right now, Q4. Now, as of yesterday, there's a pause in the introduction of large tariffs and we're in discussions with our China-based distribution partner as to the next delivery. This announcement by the administration is potentially a very positive development for our FY25 sales and operating result. 

Andrew Musgrave Host

Now, just looking ahead, what are the major catalysts or milestones that investors should watch for, as Nova Eye continues to scale in both glaucoma and drug delivery markets? 

Tom Spurling Guest

With respect to our glaucoma segment, we are focused entirely on sales growth and improving the bottom line. That's what we think will drive our share price improvement. This is our mission over at least the next one or two quarters to deliver on our promises. With respect to direct delivery, we saw the time was right to inform our shareholders about the potential here as a longer-term option, so we'll keep them appraised, Andrew. 

Andrew Musgrave Host

All right, Tom. Well, it's been great to catch up again to get an update on where the company is at, and we look forward to further updates from Nova Eye Medical in the upcoming months. 

Tom Spurling Guest

Great, thank you. 

Andrew Musgrave Host

That concludes this episode of ASX Briefs. Don't forget to subscribe and we look forward to catching you on our next episode.