Why Second Sight Medical Products, Inc. Shares Are Soaring

Source: National Eye Institute

What: Shares in Second Sight Medical Products jumped by 10% earlier today after the company reported positive results from a long-term study of patients who had received its vision restoring prosthetic.

So What: Second Sight's clinical trial results, which were published in the Journal of Ophthalmology, show that 29 of 30 patients remain implanted with the company's Argus II system three years later and that visual function and other factors associated with sight were maintained over this period of time.

The study also reports that 80% of subjects benefited from the Argus II in terms of functional vision and quality of life and that 89% of patients demonstrated an improvement in vision relative to native residual vision at year three.

Now What: Second Sight's Argus II is an early generation solution designed to stimulate retinal cells with electrical impulses that the patient can then interpret to regain some visual function. The Argus II is being used in blind patients diagnosed with severe retinitis pigmentosa, a relatively rare condition.

The real commercial opportunity for Second Sight, however, exists in expanding the use of Argus II in larger patient populations, such as those with age-related macular degeneration, and creating next-generation devices that can more effectively restore vision, such as the Orion visual cortical prosthesis.

Although the potential to restore vision to blind patients is remarkable, investors need to remember that Second Sight's revenue is limited, its losses total in the millions of dollars each quarter, and that there's no guarantee that future trials or products will succeed. For those reasons, I'm going to remain on the sidelines on Second Sight, at least until the Argus II proves its potential in a bigger patient population.

The article Why Second Sight Medical Products, Inc. Shares Are Soaring originally appeared on Fool.com.

Todd Campbell has no position in any stocks mentioned. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may have positions in the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.