VTI is an interesting little company which may not have the excitement of being a Telehealth digital player but has all the IP and potential to become a $bn + healthcare company. Can contact lenses be exciting?
$20m Market Cap
1) what is the technology - VTI have a unique patented vision correcting contact lense, it treats Myopia (bear sightedness) by slowing or stopping the retina deterioration - it is sold by them directly but is now just starting to both distributed and white labeled by some of the worlds biggest eye care companies - it is clinically proven to halt or slow myopia in over 90% of child cases - they have regulatory approvals in place already and are selling in US, Canada, Australia, Europe, HK and Singapore (Japan and China still need approvals)
2) what is Myopia? Surely contact lenses have been around for years? - Myopia who h starts as near sightedness is a deterioration of the ocular function which can if it progresses lead to serious cases such as retina detachment or blindness - 25% of kids have some type of mild Myopia but this is predicted to grow to 50%. Why? Because of excess screen time. Studies are increasingly showing the amount of screen time has direct impact on myopia. This is accelerating both from prevalence of kids have phones but now even more so from COVID driven home schooling. Of the Covid side effects and eyesight health crisis is a very real future concern. Some links here highlight this.
3) so why isn’t there growing awareness? - there is in 2019 and today a global inflection point both in the seriousness of the issue and need to treat it. - the World Council of Optometry is an not for profit organisation with 200,000 optometrist members in 60 countries. At the start of 2019 they formed a specialist advisory body formed of the worlds largest eye care companies to raise awareness GMAC or Global Myopia Awareness Coalition - VTI or Visioneering sits on this alongside the 10 largest eye care companies in the world. These are multi $bn companies. You can find the list of members here. - GMAC has significant reach but what’s also fascinating is the partners coming onboard to distribute or white label VTI products are the other members of this group.. more on that shortly
4) current revenue - sounds alright so far huh? For $20m market cap bet they don’t make and money? - VTI just selling through their own small sales team to optometrists have doubled revenue each year 2017 was $1m, 2018 $3m, 2019 $5.9m - whats awesome about their revenue stream is these are DAILY DISPOSABLE lenses. When you think about that you realise each customer once they start using will not buy once but continue to need more product daily. That is what will make VTI an absolute monster of a cash cow in the future. - there stats have shown that revenue per optometrist grows over time, this is because each time an optometrist prescribes for a new patient the previous ones keep buying more - they have also dealt with COVID exceptionally well and reduced staff from 40 to 22 and had a slow qtr as optometrists in US stopped opening in some cases but now sales are back to the same run rate as start of the year
5) partnerships - this is what will accelerate the current $5.9m revenue from last year into the stratosphere. I don’t expect revenue to double like they have already consistently achieved with there own small sales team in 2021/ 2020 more me like triple or quadruple. Here is why - there parented lense is so good the other members of the GMAC know it. VTI are not doing distribution deals with small players but the other members of this newly formed group - Oculus a GMAC member just announced they would be VTIs distribution in HK / Singapore - Menicon a GMAC member will be their Europe distributor. Let’s take a good look at Menicon. Menicon has revenue of $700m, they are in 80 countries. So must be like a sideline for them right? - WRONG Menicon are whitelabelling VTI technology to sell it under their own brand. They already sell Myopia specialist night time corrective lenses under the label ‘Bloom Night’. When they launch VTI lenses next qtr in UK they will be sold under the label of ‘Bloom Day’ through their distribution network as part of their core brand. The initial stocking purchase order for Menicon before they have even sold anything was $475,000 - it seems pretty obvious the other major GMAC players Like coopervision, Alcon etc are not going to want their competitors to have a significant point of difference. You will note the Menicon deal is non exclusive meaning VTI can also white label their technology to any of (or even all of) the other GMAC members over time.
Summary: so there you have it. - global approvals in place - track record of revenue doubling - unique IP - growing health crisis - $20bn global addressable market - creates ongoing sustainable cash stream - biggest global players starting to come onboard RIGHT NOW - if this is not an in your face Disallowed I can’t find you one - contact lenses might not be as exciting at Telehealth but for a potential mini cochlear at $20m market cap every chance of very decent gains from here - chart looks good to me also and interesting volume last couple of days
