SYLMAR, Calif.—Second Sight Medical Products (NASDAQ:EYES), makers of the Argus II retinal implant, reported sales decreases for both the 12- and three-month periods ended Dec. 31, 2016.

For the 12 months ended Dec. 31, 2016, net sales were $4.0 million compared to $8.9 million in 2015. The decline was primarily driven by a reduction in global implant volumes, and a reduced revenue per unit, resulting from a lower U.S. CMS reimbursement rate for 2016, the company said.

Gross loss in 2016 was $6.1 million versus a gross profit of $3.7 million in 2015. The 2016 results include the unabsorbed production costs and an excess inventory reserve adjustment mentioned above.

“As a result of our revised and newly implemented U.S. Centers of Excellence (COE) strategy, we expect to see a strong first half of 2017. Our COE strategy enables us to deliver a full range of high-quality services critical to better patient outcomes, including patient recruitment and surgery, and post-surgical programming and rehabilitation. We’ll measure our success by the number of centers that conduct implants on a regular basis,” stated Will McGuire, chief executive officer of Second Sight.

“On the reimbursement front, we are continuing to pursue more widespread coverage decisions in the U.S. and are pleased with the 2017 CMS reimbursement rate of $150,000; we are also making progress in other global markets with recent reimbursement successes in England and Germany. These achievements, combined with our R&D and clinical programs, should enable us to drive adoption and expand our reach into broader patient populations.

“We look forward to providing updates throughout 2017 as we demonstrate traction of our COE model, work to upgrade the existing Argus II technology, gather data to support the treatment of better-sighted individuals and initiate human trials for the Orion I,” concluded McGuire, referring to Second Sight’s proprietary visual cortical prosthesis.

Total operating expenses during 2016 were $27.1 million versus $23.7 million during the same period in 2015. Net loss in 2016 was $33.2 million compared with a net loss of $20.0 million in the prior year.

As of Dec. 31, 2016, Second Sight had $10.9 million in cash, cash equivalents and investments. On March 6, 2017, the company raised $20.1 million in gross proceeds through the issuance of Second Sight stock and warrants in an oversubscribed rights offering to existing shareholders as of Feb. 10, 2017.

Second Sight’s generated net sales of $715,000 in the fourth quarter compared with $2.4 million in the fourth quarter of 2015. The decrease in revenue was mainly driven by the decrease in units sold. The revenue per implant was $102,000 in the fourth quarter of 2016, compared with $112,000 in the fourth quarter of 2015, according to Second Sight.

Gross loss was $2.6 million in the fourth quarter of 2016, compared to a $691,000 gross profit in the fourth quarter of 2015. The cost of sales during the fourth quarter of 2016 was $3.3 million, including a $2.3 million reserve for excess inventory and approximately $686,000 of unabsorbed production costs due to lower production volumes.

Total operating expenses in the fourth quarter of 2016 were $7.8 million, compared with $6.2 million in the fourth quarter of 2015, reflecting higher research and development costs and higher stock-based compensation and salaries.