On Friday the FDA hosted a panel to review Staar’s Visian Toric Implantable Collamer Lens (TICL). With the consensus recommending approval of the device, analysts believe that approval should come in the next several months.

Despite concerns about protocol deviations within the company’s trial (more than 700 occurrences reported), the panel consensus was overall positive with respect to both safety of the device and effectiveness. With respect to safety, five panelists voted in favor that there is a reasonable assurance of safety, one voted against, and three were neutral. As far as effectiveness, seven of the panelists voted in favor, one voted against, and one remained neutral. When asked whether the Visian Toric’s benefits outweigh the risk, six panelists voted yes and three remained neutral. While the positive outcome is not by a landslide like we saw with the Bausch & Lomb panel held in April 2013 (with 10 panelists recommending approval and 1 voting against), we believe that it should be enough to obtain regulatory clearance in the coming months.

We continue to believe that the ultimate approval could be a catalyst for the company and stock, as it should accelerate adoption of Staar’s ICL products. While there is no guarantee that the FDA perspective will mirror the panel view, historically the two groups tend to take the same side. While certainly speculative on our part, we believe that the approval of the toric version will be fairly quick (mirroring the time frame of B&L, which occurred four months after the panel).

At this point, labeling details are already locked down, and we believe that the company would be disappointed if approval were to take longer than a couple of months, although we remain conservative in our estimated time frame given the uncertainty associated with the FDA. Commercialization should follow shortly thereafter, and we would not be surprised if the company submitted a PMA supplement for the CentraFLOW technology this year or next as well.

Our industry sources have cited pent-up demand for this modality; several clinicians have a list of patients who would like an ICL but need a toric version, and others refrain from using ICLs because of their inability to treat astigmatisms, which present frequently. The management team at Staar has mentioned that having a toric product on the market could add more than $5 million in annual revenue; this contribution would almost double the company’s U.S. revenue base (today it stands at about $6 million annually). We estimate this incremental revenue would add about $0.08- $0.09 in earnings per share.

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