Shareholders of Second Sight Medical Products, Inc. (NASDAQ: EYES) appear to be the happiest on Wall Street. A few days ago, the FDA approved the company’s Argus 2s Retinal Prosthesis System to treat retinitis pigmentosa (RP). As a result, in a few days, the share price increased more than 100%. I believe that the share price may continue its upward trend. Let’s see why.
Second Sight Medical – The Treatment Of Retinitis Pigmentosa
Founded in 2003, Sight Medical Products, Inc. (NASDAQ: EYES) develops implantable visual prosthetics to enable blind individuals to achieve greater independence potentially.
See below one of the company’s products:
The company’s flagship product, Argus® II retinal prosthesis system, entered clinical trials in 2006 and received FDA approval for sales in the US in 2013. However, the company did not use the retinal prosthesis to treat retinitis pigmentosa until now. In March 2021, the FDA approved the company’s product for the treatment of RP.
Second Sight Medical Products (NASDAQ:EYES) a leading developer and marketer of implantable visual prosthetics that are intended to create an artificial form of useful vision for blind individuals, today announced U.S. Food and Drug Administration (FDA) has approved the Argus 2s Retinal Prosthesis System, a redesigned set of external hardware (glasses and video processing unit) initially for use in combination with previously implanted Argus II systems for the treatment of retinitis pigmentosa (RP). The Company expects that the Argus 2s will be adapted to be the external system for the next generation Orion Visual Cortical Prosthesis System currently under development.Source: Press Release
In my opinion, investors pushed the share price up because the market opportunity for RP treatments is massive. According to market analysts, the global RP treatment market is equal to $16.45 billion. Note that the company’s current market capitalization is below one billion. With this in mind, the upside potential in the stock price is significant:
Other players in the RP market are well-known pharmaceutical companies. Ionis Pharmaceuticals, Inc. has a valuation of more than $7 billion. Ocugen, Inc. has a market capitalization of more than $1 billion. They have sufficient financing to help Sight Medical develop its new product. With that, notice that the company may soon execute a merger with Pixium Vision. It seems that everybody wants to do business with Sight Medical:
A decision on when or if to begin production of the newly approved hardware is pending completion of Second Sight’s planned business combination with Pixium Vision, which currently is in progress. Should the business combination be completed, the new management team will then evaluate how best to proceed with the Argus 2s Retinal Prosthesis System, as well as all other products in development.Source: Press Release
I Don’t Think That The Merger Contribution Is Fair
The company signed the merger agreement with Pixium a few weeks ago. The financial advisors did not take into account the FDA approval. They did not know that EYES share price would increase. With this in mind, I believe that they need to change the number of shares for Pixium’s contribution.
My Takeaway: Sight Medical Products Is A Hidden Gem
With a market capitalization of less than $1 billion, EYES may go to the moon in the coming months. There are two reasons. First, thanks to the FDA, the company’s market opportunity is now significant. Besides, I believe that EYES will have to negotiate the terms of the merger with Pixium. If EYES has to issue a small number of shares for Pixium, the stock price will most likely increase.
My advice is that you follow Second Sight Medical Products, Inc. like these other well-known market participants:
Disclosure: We Don’t Hold Shares Of EYES