Contributor, Benzinga
January 20, 2022
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If you had to lose one of your five senses, which would it be? A cruelly warped question, it’s no longer a theoretical musing during a schoolyard recess or a plotline in one of the Saw franchise of horror films. Instead, as a 2016 Newsweek article pointed out, 94% of adults will lose at least one sense, with many losing more.

Perhaps predictably, in a 2018 YouGov survey that asked which of the senses respondents would miss the most, the overwhelming majority (70%) answered their vision. Under a twisted interpretation of Pascal’s Wager, most will do anything to protect their sight as it tangibly undergirds the lion’s share of economic and infrastructural functionalities.

To put it bluntly, you can theoretically land an airplane with just your sense of sight and touch. But the outlook becomes rendered virtually impossible should you lose the former element.

In fairness, Robert H. Schmerling, MD, senior faculty editor of Harvard Health Publishing, reminds readers that even overlooked perceptual attributes such as smell play critical roles in wellness and safety. Nevertheless, vision is arguably the greatest gift of existence to which all other senses complement and contextualize. Therefore, the upcoming market debut of retinal medical equipment specialist Samsara Vision Inc. makes a compelling case.

What Is Samsara Vision?

A privately held specialty medical device company poised to launch its initial public offering (IPO) soon, Samsara Vision actively conducts “research, development, manufacture and marketing of proprietary implantable ophthalmic devices and technologies that are intended to significantly improve vision and quality of life for individuals with untreatable retinal disorders.”

Samsara’s flagship technology is the Implantable Miniature Telescope (IMT). Per the company’s website, it’s the first and only implantable medical device approved by the Food and Drug Administration (FDA) that has been demonstrated to “improve vision and quality of life in qualified individuals with the most advanced, irreversible form of age-related macular degeneration (AMD), or Late-Stage AMD.”

When Is the Samsara Vision IPO Date?

On Nov. 3 of last year, Samsara Vision filed its IPO prospectus with the U.S. Securities and Exchange Commission (SEC). At the time, management disclosed its intention to raise up to $31 million.

In subsequent amendments to the prospectus, Samsara revealed that it intends to distribute approximately 4.17 million shares with an expected per-share price range between $5 and $7. At the midpoint of the estimate spectrum, the medical equipment maker will raise $25 million before deducting expenses related to the IPO.

Samsara commands a market capitalization of $134.7 million and an enterprise value of $136.85 million. The company will enter the IPO calendar on Jan. 21, with shares trading on the Nasdaq under the ticker symbol SMSA. ThinkEquity represents the sole bookrunner for the offering.

While all IPOs — the first time a private enterprise lists its shares for public (retail) acquisition — entail a great measure of risk because of concerns about the unknown, Samsara arguably attracts even more anxieties with the timing and nature of its offering. Simultaneously, these factors could also aid SMSA stock.

Providing the bad news first, Samsara is entering the IPO arena after a year in 2021 that saw U.S.-based new listings collectively generate a massive, record-breaking valuation of over $301 billion. Add in international offerings, and the figure balloons past $594 billion. Therefore, it’s not entirely clear if investors have the appetite for risky ventures now.

In addition, the Federal Reserve vocally expressed concerns about soaring consumer prices, strongly suggesting that the central bank will pivot from an accommodatingly dovish policy to a more restrictive hawkish policy. In short, the projected tightening of monetary flow will likely raise borrowing costs, thus disincentivizing risk-on assets while incentivizing passive-income generating stocks.

Further, the euphoria over cryptocurrencies, electric vehicles, cloud computing and the metaverse — among other hot topics — have diverted eyes toward flavor-of-the-week investment categories. Still, Samsara’s focus on AMD could distinguish SMSA stock from the litany of copycat public offerings.

Finally, the timing of this IPO could also yield a silver lining. With so much speculation built into popular trades like meme stocks, the incoming hawkish monetary environment could force speculators to be more selective. It’s possible, though hardly guaranteed, that Samsara’s groundbreaking medical innovations could attract a series of calculated risks.

Samsara Vision Financial History

As with most speculative medical technology firms, Samsara is an aspirational business. However, some investors might regard its underlying flagship technology as one of the most innovative in memory.

To fully appreciate Samsara’s extensive research and development, you must understand the frustrating nature of macular degeneration. Typically catalyzing as blurred or reduced central vision, the most severe cases render patients unable to perform basic functions such as reading, driving or recognizing faces. Even worse, the Mayo Clinic states that as of now, there is no reversible treatment for the condition.

However, the revolution behind Samsara’s IMT is that the system enables surgeons to implant miniaturized telescopes safely in the eye. Moreover, the “platform employs first-of-kind bi-convex and bi-concave convergent and divergent micro-lenses, coupled with air lenses, to create a magnified image onto healthy retinal tissue surrounding the degenerated macula.” Thus, the “magnification helps these more peripheral parts of the retina ‘see’ the image viewed in straight-ahead vision by reducing the apparent impact of the blind spot.”

It’s really something out of a science-fiction movie, but does science fiction pay? That’s the multi-million-dollar question with IPOs of this nature, necessitating extreme due diligence. First, Samsara barely avoided being labeled a pre-revenue firm although by the slimmest of margins, with revenues of $72,000 in 2019 and $31,000 in the six months ending June 30, 2021, sparing its blushes.

However, as management discloses in its IPO prospectus, Samsara’s inability to generate a profit is a serious concern. In 2019 and 2020, the medical-equipment specialist posted net losses of $6.17 million and $6.2 million, respectively. So far, the company is on track to mitigate some of the damage, with the first half of 2021 resulting in a $2.47 million net loss. Still, stakeholders will want to see dramatic improvements moving forward.

Samsara Vision Potential

Easily the biggest potential upside catalyst for SMSA stock is the underlying total addressable market (TAM). According to data from Mordor Intelligence, the global macular degeneration treatment market reached a valuation of $7.76 billion in 2020. By 2026, industry experts project that the sector will hit $11.49 billion, registering a compound annual growth rate (CAGR) of 6.9% between 2021 through 2026.

As the research firm also noted, one of the “major driving factors for the macular degeneration treatment market is the aging population.” Plus, the COVID-19 pandemic imposed a negative impact, resulting in the “reduction of attendance at scheduled clinic visits and intravitreal injections (IVI).” When the crisis fades, though, the normalization may benefit Samsara.

However, the biggest headwind against SMSA stock is the capricious nature of attempting to address presently incurable diseases. Obviously, if forwarding such solutions were easy, a medical or pharmaceutical firm would have already presented them. Thus, Samsara is biking up a hill using the highest gear imaginable.

Further, sector-rival Ocugen Inc. (NASDAQ: OCGN) has been attempting to generate a treatment for AMD, only to suffer catastrophic failures. Later, its pivot to distributing a COVID-19 vaccine is also losing traction after previously attracting much fanfare. On a year-to-date basis, OCGN is down a worrying 19%.

How to Buy Samsara Vision IPO (SMSA) Stock

If you choose to acquire SMSA in the open market, you’ll need to know how to buy stocks. Below are some key pointers.

Step 1: Pick a brokerage.

Because the best brokers compete on similar financial incentives, take the time to determine which platform ideally suits you.

Step 2: Decide how many shares you want.

IPOs are always risky because of the unknown, so if you engage, do so with a balanced share count.

Step 3: Choose your order type.

Before trading, learn these market concepts.

  • Bid: The buyer’s best offer for a stock.
  • Ask: The seller’s lowest acceptable price.
  • Spread: The difference between the bid-ask price, the spread indicates market risk as this is also the profit margin for market makers.
  • Limit order: Buy or sell requests at a predetermined price, limit orders provide transparency but no execution guarantees.
  • Market order: Market orders guarantee fulfillment but only at the current rate.
  • Stop-loss order: Stop-loss orders automatically exit your position at either a predetermined price or anything lower.
  • Stop-limit order: Stop-limit orders only leave positions at a specified price, but they also carry non-fulfillment risks.

Step 4: Execute your trade.

Follow these steps to execute a market order:

  1. Select your action type (buy or sell).
  2. Enter the shares you want to acquire (or sell).
  3. Hit the Buy (or Sell) button.

Follow the same sequence for limit orders (but include your execution price).

SMSA Restrictions for Retail Investors

Review the Financial Industry Regulatory Authority (FINRA) rules on restricted persons before participating in an IPO. Don’t engage if you have privileged information.

SMSA Pre-IPO

Investors interested in acquiring SMSA on a pre-IPO basis should open an account with ClickIPO.

Potential in the Eye of the Beholder

Given how most people would give up any other sense before sight, almost everyone supports the fundamental narrative of Samsara Vision. It’s the financial backdrop, though, that keeps many on the sidelines. While SMSA stock features incredible potential, it’s helpful to consider the odds of success for speculative medical innovators.

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About Joshua Enomoto

His distinct writing style of distilling convoluted data into relatable and compelling narratives has earned him recognition among several investment-related publications.