STAAR Surgical Charts Post-Merger Course: China Inventory Normalized, EVO+ Launch Underway
After a year of upheaval, STAAR Surgical (NASDAQ: STAA) is steering toward what its interim leadership calls a "return to execution." The ophthalmic device maker's fiscal 2025 was dominated by the disruption of a proposed, and ultimately terminated, merger with industry giant Alcon. Now, with that chapter closed, the company is outlining a focused plan centered on growth, profitability, and innovation for the year ahead.
"The uncertainty surrounding the transaction undoubtedly impacted our distributors' behavior globally in Q4," stated Interim Co-CEO Warren Foust during the company's earnings call. "Our priority now is singular: executing on our core business." Foust and Interim Co-CEO/CFO Deborah Andrews assumed shared leadership in February, while the board conducts a formal search for a permanent CEO.
A primary operational hurdle in 2025 was correcting elevated inventory levels in China, a critical market for STAAR's implantable Collamer lenses (ICLs). Following a double-digit decline in end-market sales in 2024, the company paused shipments and worked closely with distributors. By late 2025, Andrews reported that China distributor inventory had been reduced to contractual levels. "We've gained materially improved visibility into downstream data," she noted, adding that inventory is now monitored weekly and remains stable.
The launch of the EVO+ lens in China represents a key pillar of STAAR's renewed strategy. Touted as the first new lens introduced in China in over a decade, early demand is described as "encouraging." Production is being scaled up at the company's facility in Nidau, Switzerland. Andrews highlighted a strategic benefit: products manufactured there are not subject to U.S.-China tariffs, providing a near-term cost advantage and longer-term supply chain flexibility for the region.
Financially, Q4 net sales rose to $57.8 million from $49.0 million a year ago, with a sharp rebound in China to $17.5 million. Gross margin expanded significantly to 75.7%, though this was partly driven by one-time factors related to a large 2024 shipment. Adjusted EBITDA showed a marked improvement to a loss of $0.2 million, compared to a $20.8 million loss in the prior-year quarter, aided by cost-cutting measures implemented in early 2025.
While not providing formal guidance, management expressed optimism for 2026, anticipating a "significant" sales increase and targeting profitability for the fiscal year. Challenges remain, including potentially slightly lower gross margins due to higher costs from Swiss-made inventory. The company expects to maintain disciplined operating expenses and resume cash generation in the second half of 2026.
Analyst & Investor Commentary:
"This feels like a genuine reset," said Michael Thorne, a med-tech portfolio manager at Horizon Capital. "Normalizing China inventory removes a major overhang. The Swiss production for EVO+ is a clever move to navigate trade tensions. If they can hit profitability in '26, sentiment will shift materially."
"The lack of detailed guidance is frustrating, but understandable given the leadership transition," commented Dr. Anya Sharma, an independent healthcare analyst. "The improved data transparency in China is a positive long-term development. EVO+ needs to demonstrate it can command those higher ASPs they're hoping for to truly move the needle."
"A 'return to execution'? They never left it—they just executed poorly," countered Leo Grant, a vocal critic and editor of The Surgical Investor blog. "This is a company that let a merger distraction cripple operations for a year. Burning $11 million on a dead deal is a spectacular failure of oversight. The 'progress' in China is just cleaning up a mess they created. I'll believe their optimism when I see sustained, guidance-backed results."
"For practicing surgeons, stability is key," noted Dr. Rebecca Lee, a corneal specialist in Los Angeles. "The Lioli injector expansion is a quiet but important update. A reliable, innovative pipeline from STAAR is good for the field. I'm keen to see the clinical feedback on EVO+."