Sight Sciences, Inc. (SGHT): 5 FORCES Analysis [Nov-2025 Updated]

You're looking for a clear-eyed view of Sight Sciences, Inc.'s competitive position, and honestly, the Five Forces framework is the defintely right tool for the job. As a former head analyst, I see a company at a real inflection point as of late 2025: the Surgical Glaucoma business is hitting all-time high account numbers, pushing their full-year revenue guidance up to $76.0 million to $78.0 million, yet the Dry Eye segment revenue cratered 88% as they strategically chase reimbursement wins-a move that has already secured coverage for 10.4 million Medicare lives but leaves them exposed to supplier costs like the $1.0 million to $1.5 million tariff hit. Below, we break down exactly how intense the rivalry is with competitors in Minimally Invasive Glaucoma Surgery (MIGS) and how the high barriers to entry are shaping their long-term fight.

Sight Sciences, Inc. (SGHT) - Porter's Five Forces: Bargaining power of suppliers

You're looking at the supply chain for Sight Sciences, Inc. (SGHT), and honestly, it presents a clear leverage point for their component providers. The core issue here is that Sight Sciences relies entirely on third parties for the manufacturing of both the OMNI and TearCare systems.

This reliance is compounded because most products are produced and assembled in China. This geographic concentration immediately exposes the company to trade policy risks, specifically tariffs. You can see the direct financial impact in their guidance:

• The full-year 2025 tariff cost is expected to be between $1.0 million and $1.5 million, directly increasing the cost of goods sold (COGS) for the Surgical Glaucoma segment.
• For context, in the third quarter of 2025 alone, the company incurred $0.4 million in Surgical Glaucoma COGS specifically associated with these tariffs.

The complexity of the flagship product, OMNI, further tips the scales toward the suppliers. The OMNI device is a complex piece of equipment, reportedly featuring 29 precision-engineered parts. When you have that many specialized components sourced externally, the suppliers for those critical pieces gain significant leverage over Sight Sciences, Inc. (SGHT).

The lack of internal manufacturing infrastructure means that if a key supplier relationship sours, switching carries high risk and cost. While Sight Sciences, Inc. (SGHT) is moving to mitigate this, the timeline shows the immediate power dynamic. For instance, the company announced plans to establish third-party manufacturing lines outside of China, with a new line for OMNI Edge expected within 9 to 12 months from early 2025. Furthermore, new incremental manufacturing facilities are slated to start production in Q1 2026 to help offset tariff impacts.

Here's a quick look at how the tariff impact is playing out against gross margins as of the latest reported quarter:

This reliance on external, geographically concentrated production means that component suppliers hold substantial bargaining power, which is directly reflected in the COGS line item.

Sight Sciences, Inc. (SGHT) - Porter's Five Forces: Bargaining power of customers

When looking at Sight Sciences, Inc. (SGHT), the bargaining power of the customer-the ophthalmic surgeon-is heavily influenced by two main factors: the availability of competing technologies and the economics of reimbursement. You see this dynamic play out clearly in their Q3 2025 results.

Reimbursement is definitely the key lever here. When procedures aren't covered or the payment is uncertain, customer utilization drops off a cliff. We saw this directly in the Dry Eye segment. The strategic shift to achieve reimbursed market access meant that the Dry Eye segment's Q3 2025 revenue dropped a staggering 88% compared to the third quarter of 2024, falling to just $0.2 million from $1.5 million the prior year. That massive drop shows just how sensitive these customers are to cash-pay procedures when a clear, covered pathway isn't established.

However, the news on the reimbursement front for TearCare is a major confidence booster for those same customers. Sight Sciences announced that two Medicare Administrative Contractors (MACs), Novitas Solutions and First Coast Service Options, established jurisdiction-wide pricing for CPT® code 0563T, which covers the TearCare procedure. This is significant because these two MACs cover an estimated 10.4 million lives, representing about 30% of the total Medicare fee-for-service covered lives. That coverage, effective January 1, 2025, should start shifting customer behavior back toward utilization in those regions.

Despite the overall revenue dip of 1% year-over-year to $19.9 million in Q3 2025, the Surgical Glaucoma side shows that when the value proposition is strong and utilization isn't restricted, surgeons are adopting the technology. In fact, Surgical Glaucoma ordering accounts hit an all-time high of 1,197 in Q3 2025, which is an 8% increase compared to Q3 2024. This indicates that for the glaucoma segment, where the OMNI Surgical System is used, the customer base is willing to adopt, even with noted coverage restrictions on performing multiple MIGS procedures with cataract surgery for Medicare patients in most states.

You can see the segment divergence clearly in the Q3 2025 performance snapshot:

The customer base of ophthalmic surgeons has many alternative MIGS devices and dry eye treatments available, which inherently increases their power to negotiate or switch. This competitive environment is why reimbursement success is so critical for Sight Sciences, Inc. (SGHT).

Here's what that competitive pressure and reimbursement focus looks like on the ground for the customer:

• Surgeons have numerous established glaucoma procedures to choose from.
• The Dry Eye segment's low revenue of $0.2 million in Q3 2025 highlights the immediate pullback when reimbursement is uncertain.
• The new Medicare fee schedules for TearCare cover 8.0 million lives under Novitas and 2.4 million lives under First Coast Service Options.
• Surgical Glaucoma revenue growth was partially offset by lower utilization due to coverage restrictions on combination procedures for Medicare patients.

The fact that ordering accounts are at an all-time high of 1,197 in Q3 2025 shows that the product itself is gaining traction, but the financial hurdle of reimbursement remains the primary gatekeeper for broader customer adoption in the cash-pay-sensitive areas. Finance: draft a sensitivity analysis on Q1 2026 utilization based on the remaining 70% of Medicare lives by next Tuesday.

Sight Sciences, Inc. (SGHT) - Porter's Five Forces: Competitive rivalry

The competitive rivalry within the ophthalmic device space for Sight Sciences, Inc. is multifaceted, spanning established minimally invasive glaucoma surgery (MIGS) devices and a highly fragmented dry eye treatment sector. For the Surgical Glaucoma segment, Q3 2025 revenue reached $19.7 million, marking a 6% increase year-over-year, driven by an all-time high of 1,197 Surgical Glaucoma ordering accounts, up 8% compared to Q3 2024. Still, the broader global glaucoma surgery devices market is projected to grow at a Compound Annual Growth Rate (CAGR) of 4.60% from 2025 to 2034.

The OMNI Surgical System, which is implant-free, directly contests the market share held by implantable stents. Real-world data from a large-scale study comparing the most commonly used ab interno MIGS devices provides a clear picture of this direct competition across patient cohorts at 24 months post-procedure.

The Dry Eye market presents a different type of rivalry, characterized by fragmentation where Sight Sciences, Inc. must contend with large pharmaceutical entities. The U.S. addressable opportunity is estimated at $3 billion, with over 19.4 million diagnosed patients. The company's TearCare System specifically targets Meibomian Gland Disease (MGD), which affects an estimated 13.6-16.7 million U.S. patients. This segment's current financial performance reflects the difficulty of this competitive landscape; Q3 2025 Dry Eye revenue was only $0.2 million, an 88% decrease from $1.5 million in Q3 2024, due to the strategic pivot toward securing reimbursed market access for the procedure.

Rivalry enforcement has also played out in legal arenas. Sight Sciences, Inc. previously secured a significant victory in patent infringement litigation against competitors Alcon and Ivantis regarding the Hydrus Microstent. A jury verdict on April 26, 2024, awarded Sight Sciences, Inc. total monetary damages of $34 million for past infringement, which included $5.5 million in lost profits and $28.5 million in royalty damages. The initial lawsuit was filed in September 2021.

The overall market environment dictates a cautious outlook, which is reflected in the company's financial projections. Sight Sciences, Inc. raised its full-year 2025 revenue guidance to a range of $76.0 million to $78.0 million, which still represents a projected decline of 2% to 5% compared to full-year 2024 revenue.

• Surgical Glaucoma segment returned to growth in Q3 2025, with revenue of $19.7 million.
• Dry Eye segment revenue in Q3 2025 was $0.2 million, down from $1.5 million in Q3 2024.
• The company ended Q3 2025 with $92.4 million in cash and cash equivalents and $40 million in debt.
• The OMNI Surgical System is implant-free, contrasting with implantable devices like Hydrus and iStent inject.
• The company is focused on accelerating commercialization for TearCare following Medicare fee schedule establishment by First Coast Service Options and Novitas Solutions, covering approximately 30% of total covered lives.

Sight Sciences, Inc. (SGHT) - Porter's Five Forces: Threat of substitutes

You're analyzing the competitive landscape for Sight Sciences, Inc. (SGHT) as of late 2025, and the threat from substitutes is substantial across both core business segments. We need to look at the established alternatives that keep providers from choosing Sight Sciences, Inc.'s interventional technologies.

Glaucoma Substitutes: Medication and Surgery

For managing intraocular pressure (IOP) in glaucoma, traditional prescription eye drops remain a primary substitute. Prostaglandin Analogs, a common first-line drug class, accounted for 41.8% of the glaucoma treatment market share in 2025, driven by their once-daily dosing convenience. Furthermore, more invasive traditional surgeries present a procedural alternative to Sight Sciences, Inc.'s OMNI Surgical System, which focuses on canaloplasty and trabeculotomy.

The broader Glaucoma Treatment Devices Market was estimated at USD 6,200.0 million in 2025. Within this, other Minimally Invasive Glaucoma Surgery (MIGS) devices offer direct substitutes that use different mechanisms, such as stenting, which surgeons can easily switch to. The global MIGS Devices Market was projected to reach USD 0.9 billion in 2025, growing from USD 0.7 billion in 2024. Key competing MIGS technologies include the Hydrus Microstent and the iStent inject.

Here's a quick comparison of the glaucoma treatment landscape:

Also, for glaucoma patients also needing cataract correction, cataract surgery alone acts as a procedural substitute capable of reducing IOP.

Dry Eye Substitutes: Pharmaceuticals and Lubricants

The Dry Eye Disease market presents a different set of substitutes, heavily weighted toward established pharmaceutical and over-the-counter (OTC) options. The total dry eye market is valued at $6.36 billion in 2025. Sight Sciences, Inc.'s TearCare system competes against these established modalities.

The primary substitutes are:

• Prescription drugs targeting inflammation and tear production.
• OTC lubricants and artificial tears for symptomatic relief.

Prescription dry eye drugs are the fastest-growing segment within the overall treatment category, expanding at a 9.1% CAGR through 2030. To be fair, OTC artificial tears still held a significant portion of the market in 2024, capturing 39.5% of the dry eye disease treatment market share.

Consider the breakdown of the Dry Eye Disease Treatment Market in 2025:

If onboarding takes 14+ days for reimbursement, churn risk rises, especially when cheaper, immediately available OTC options exist.

Sight Sciences, Inc. (SGHT) - Porter's Five Forces: Threat of new entrants

The barrier to entry for new competitors in the ophthalmic device space where Sight Sciences, Inc. (SGHT) operates is significantly elevated by regulatory hurdles and the capital intensity of clinical validation.

• High barrier from the stringent FDA 510(k) clearance process for ophthalmic devices. For 2025 year-to-date, FDA 510(k) review times averaged between 140-175 days, with 70-80% of submissions exceeding the 90-day target review timeframe.
• Requires substantial capital investment for R&D; clinical trials for the OMNI® Surgical System, such as the TRIDENT European Trial, were designed to enroll 459 subjects. Full year 2024 Research and development expenses for Sight Sciences, Inc. totaled $18.0 million. For the third quarter of 2025, Research and development expenses were $3.4 million.
• Existing, broad IP portfolio, backed by patent litigation, deters direct competition. Sight Sciences, Inc. secured a $34 million patent infringement verdict against Alcon and its Hydrus Microstent. As of March 2024, the OMNI® system alone was covered by 33 listed U.S. Patents.
• New entrants must build a specialized sales force to penetrate the established ophthalmologist network.
• Securing national reimbursement coverage is a multi-year process that limits immediate market access. The strategic shift by Sight Sciences, Inc. to focus on reimbursed market access for TearCare resulted in Dry Eye segment revenue decreasing from $1.5 million in the third quarter of 2024 to $0.2 million in the third quarter of 2025. Medicare Local Coverage Determinations (LCDs) restricting coverage for multiple MIGS procedures became effective in mid-November 2024. The Medicare-covered lives in MAC regions alone for TearCare are estimated at 10.4 million.

Here's a quick look at the financial and clinical scale involved:

The cost of market entry is substantial, not just for regulatory approval but for proving clinical superiority against established standards.

• The OMNI Surgical System is indicated for canaloplasty followed by trabeculotomy, addressing 360 degrees of the conventional outflow pathway.
• A large-scale, real-world study evaluated outcomes across 77,391 patients with glaucoma.
• Sight Sciences, Inc. has a portfolio of U.S. patents covering OMNI, TearCare, and SION as of March 2024.