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  Title	Glaukos : 2024 Earnings Transcript
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  Published Date	Feb. 21, 2025, 8:21 p.m.
  Summary	February 21, 2025 at 03:15 pm EST Corrected Transcript 20-Feb-2025 Glaukos Corp. (GKOS) Q4 2024 Earnings Call CORPORATE PARTICIPANTS OTHER PARTICIPANTS Allen Gong Analyst, JPMorgan Securit
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  Content	February 21, 2025 at 03:15 pm EST Corrected Transcript 20-Feb-2025 Glaukos Corp. (GKOS) Q4 2024 Earnings Call CORPORATE PARTICIPANTS OTHER PARTICIPANTS Allen Gong Analyst, JPMorgan Securities LLC MANAGEMENT DISCUSSION SECTION Operator Welcome to Glaukos Corporation's Fourth Quarter and Full Year 2024 Financial Results Conference Call. Copies of the company's press release and quarterly summary documents, both issued after the market close today, are available at www.glaukos.com. [Operator Instructions] This call is being recorded and an archived replay will be available online in the Investor Relations section at www.glaukos.com. I will now turn the call over to Chris Lewis, Vice President of Investor Relations and Corporate Affairs. Please go ahead. Chris Lewis Vice President-Investor Relations & Corporate Affairs, Glaukos Corp. Thank you, and good afternoon. Joining me today are Glaukos' Chairman and CEO, Tom Burns, President and COO, Joe Gilliam; and CFO Alex Thurman. Similar to prior quarters, the company has posted a document on its Investor Relations website under the Financials and Filings Quarterly Results section titled Quarterly Summary. This document is designed to provide the investment community with a summarized and easily accessible reference document that details the key facts associated with the quarter, the state the company's business objectives and strategies and any forward statements or guidance we may make. This document is designed to be read by investors before the regularly scheduled quarterly conference call. As such, for this call, we will make brief prepared remarks and transition into a question-and-answer session. To ensure ample time and opportunity to address everyone's questions, we request that you limit yourself to one question and one follow-up. If you still have additional questions, you may get back into the queue. Please note that all statements other than statements of historical facts made on this call that address activities, events, or developments we expect, believe or anticipate, will or may occur in the future, are forward-looking statements. These include statements about our plans, objectives, strategies and prospects regarding among other things, our sales, products, pipeline technologies and clinical trials, US and international commercialization, market development efforts, the efficacy of our current and future products, competitive market position, regulatory strategies and reimbursement for our products, financial condition and results of operations, as well as the expected impact of general macroeconomic conditions, including foreign currency fluctuations on our business and operations. These statements are based on current expectations about future events affecting us and are subject to risks, uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Therefore, they may cause our actual results to differ materially from those expressed or implied by forward-looking statements. Review today's press release and our recent SEC filings for more information about these risk factors. You'll find these documents in the Investors section of our website at www.glaukos.com. Finally, please note that during today's call, we will also discuss certain non-GAAP financial measures, including results on an adjusted basis. We believe these financial measures can facilitate a more complete analysis and greater transparency into Glaukos' ongoing results of operations, particularly when comparing underlying results from period to period. Please refer to the tables in the earnings press release available in the Investor Relations section of our website for reconciliation of these measures to the most directly comparable GAAP financial measure. With that, I will turn the call over to Glaukos Chairman and CEO, Tom Burns. Thomas William Burns Chairman & Chief Executive Officer, Glaukos Corp. Thanks, Chris. Good afternoon, and thank you all for joining us today. Today, Glaukos reported record fourth quarter consolidated net sales of $105.5 million, up 28% versus the year ago quarter. These results reflect the continued acceleration of our business, and capped off a successful year of global execution, both from a commercial and development perspective, leaving us ideally positioned to sustain our momentum and execute our strategic plans in 2025 and beyond. For the full year 2024, consolidated record net sales of $383.5 million grew 22% versus 2023. We've also introduced full year 2025 net sales guidance range of $475 million to $485 million. Our record performance in the fourth quarter and full year 2024 reflects our unwavering dedication to advancing our mission to transform vision by pioneering novel, dropless platforms that can meaningfully advance the standard of care and improve outcomes for patients suffering from sight threatening chronic eye diseases. At Glaukos, we are in the business of pioneering entirely new marketplaces within ophthalmology. Innovation is at the core of everything we do. Our mantra We'll Go First embodies our commitment and determination to take chances, push the limits of science, and disrupt the legacy treatment paradigms in glaucoma, rare disease, or retinal diseases through our pursuit of game changing technologies. Our fourth quarter and full year record results were primarily driven by both our US and international glaucoma franchises, where we continue to accelerate efforts to pioneer and develop the interventional glaucoma, or IG, marketplace with new standalone therapies designed to slow disease progression and reduce drug burden for the benefit of physicians and patients. Our goal to advance and improve glaucoma treatment by driving earlier intervention continues to build momentum as we educate surgeons and thought leaders globally, to organically drive this broader evolution in the standard of care for the benefit of patients. While we remain in the early stages of these IG efforts, we are encouraged with the increasing levels of clinical interest for this paradigm changing evolution. Within our US glaucoma franchise, we delivered record fourth quarter net sales of $56.3 million on strong year- over-year accelerating growth of 45%, driven primarily by growing contributions from iDose TR. As we pass the one-year anniversary of our controlled launch of iDose TR, I could not be more pleased with our team's execution of our plans for this first of its kind intracameral procedural pharmaceutical that was designed to continuously deliver glaucoma drug therapy for up to three years. Over the course of 2024, we accomplished several key objectives that together create a strong foundation to support our future iDose growth plans that include, one, developing and implementing a superlative training program to support a growing number of trained surgeons and accounts, two, building an expanding set of clinical literature now consisting of nine different peer-reviewed publications highlighting iDose TR as a transformative new treatment alternative for patients suffering with glaucoma and ocular hypertension. And three, establishing key market access objectives to create an optimal reimbursement environment through a permanent J-code, a facility fee, a published ASP from CMS, building professional fee coverage and payment from MACs and expanding commercial and Medicare Advantage coverage. Most importantly, clinical outcomes and product feedback from a growing number of cases and trained surgeons, continue to be very positive and reaffirms our view that with the launch of iDose TR, we are pioneering a brand new therapeutic category that has the potential to reshape glaucoma management as we know it today. Coming off of our national sales meeting earlier this month, the energy and excitement from our sales team and commercial organization for iDose TR and our broader interventional glaucoma strategy was profound. Our primary near-term focus remains on broadening market access among MACs, commercial and Medicare Advantage payers, while there is certainly more work to do here, particularly as we expand efforts into the commercial arena over the course of 2025 and beyond. We are encouraged by the overall progress our teams are making to support increased reimbursement confidence through more streamlined and consistent J-code coverage and payment in the majority of MACs to date with more to come. Alongside this, we're also making good progress securing professional fee coverage and payment, with three of the seven MACs now including CPT code 0660T, in their professional fee schedules at rates in line with our expectations and generally consistent with comparable standalone glaucoma procedures. As noted in the past, we expect increasing adoption as reimbursement confidence is gained by our customers over the course of 2025. This will further be supported by our plan to accelerate marketing investments as the universe of trained surgeons and accounts continue to expand. While we advance our iDose TR efforts commercially, we also plan to expand the robust body of clinical evidence for iDose TR. On that front, we recently announced several positive iDose clinical studies. First, a new 36-month follow-up analysis of iDose TR's two Phase 3 pivotal clinical trials demonstrating sustained substantial IOP reductions as approximately 70% of iDose TR subjects were being well-controlled on the same or fewer IOP lowering topical medications at 36 months after a single administration of iDose TR versus 50% of timolol control subjects. In addition, iDose TR continued to demonstrate excellent tolerability and a favorable safety profile through 36 months across both Phase 3 trials. Second, a new six-month follow up analysis of a Phase 4 single-arm clinical study demonstrated that iDose TR implanted in combination with cataract surgery, achieved a profound mean IOP reduction of 11.3 millimeters of mercury, or 44% at six months compared to baseline. And last but certainly not least, we commenced a Phase 2B 3 clinical program for iDose TREX, our next generation iDose therapy. iDose TREX designed to be very similar in size and form factor to the original iDose TR, but has nearly twice the drug capacity. Shifting to our US stent business, the utilization of iStent infinite for glaucoma patients that failed medical and surgical therapy continues to expand, as our ongoing clinical educational efforts and improving market access landscape take hold. During the fourth quarter, five of the seven MACs implemented final updated MIGS LCDs that established coverage for iStent infinite that is consistent with our original reconsideration request. In addition, these final LCDs also eliminated coverage for cases that utilized two different MIGS devices in the same procedure. As anticipated, we believe these LCDs did cause some transient turbulence in the market during the fourth quarter, and we expect this may continue into 2025 as providers continue to navigate the impacts associated with these LCDs. Moving on, our international glaucoma franchise also delivered record net sales of $27.9 million on year-over-year growth of 28% on a reported basis and 29% on a constant currency basis. This strong growth was once again broad-based, as we continue to scale our international infrastructure and execute our plans to drive MIGS forward as the standard of care in each region and major market in the world. Consistent with prior quarters in 2024, our new French health authority rebate agreement was favorable to our fourth quarter reported revenues. This year-over-year growth tailwind will sunset in 2025. We remain in the early stages of expanding our IG and product portfolio initiatives globally ahead of anticipated new product approvals and expanding market access in the years to come. As previously discussed, we expect the trialing of new competitive products in some of our major international markets may become an increasing headwind this year, alongside the material foreign currency exchange headwinds that emerged at the end of 2024, and have continued into 2025. And finally, our Corneal Health franchise delivered net sales of $21.4 million, including Photrexa net sales of $18.8 million. As discussed throughout 2024, our fourth quarter results reflect the growing impact of Photrexa realized revenues as a result of our entry as a company into the Medicaid Drug Rebate Program, or MDRP. Going forward, we will continue to focus on expanding access for keratoconus patients suffering from this rare disease. Staying on Corneal Health but shifting to our pipeline, in December 2024, we were pleased to announce NDA submission of Epioxa, our next generation corneal cross-linking iLink therapy for the treatment of keratoconus, a sight threatening disease. This submission sets up an anticipated FDA approval decision by the end of 2025. The NDA submission for Epioxa represents an important milestone for our company, as it brings us one step closer in being able to provide keratoconus patients and the ophthalmic community with the first FDA-approved non-invasive corneal cross-linking drug therapy that does not require the removal of the corneal epithelium, the outermost layer of the front of the eye. We look forward to working closely with the FDA in their pending review process and continue to believe that Epioxa, which is designed to reduce procedure times to improve patient comfort and shorten recovery time, represents a potentially meaningful advancement in the treatment paradigm for patients suffering from keratoconus. We are already well underway with a team of cross-functional leaders across our commercial and market access organizations in the preparation and planning of the Epioxa commercial launch targeted for next year. It's worth reminding investors that an Epioxa approval also provides us with the opportunity to launch a rare disease pharmaceutical supported by the right long-term pillars to optimize patient access, a persistent and at times frustrating challenge for us historically with Photrexa. We also continue to advance a Phase 2 clinical program for our third generation iLink therapy designed to use biomechanical modeling to deliver a customized pattern cross-linking treatment, tailored to each patient's unique corneal topography. Beyond our cross-linking franchise, we continue to prudently invest in and successful advance our broader pipeline of novel promising platform technologies that we believe have the ability to significantly expand our addressable markets and fundamentally transform our company over time. In addition to our pipeline milestones already discussed, we anticipate commencing a Phase 2 trial for iLution blepharitis along with a US IDE trial for PRESERFLO MicroShunt in 2025. As we've discussed, we continue to prioritize the cadence of our investments as we strive to strike the right balance of risk-based spending and our capital position now and in the future. One such area of planned investment is in our operations function, where we recently announced plans to build an expansive research, development and manufacturing facility in Huntsville, Alabama, to augment our current infrastructure and support our future expansion plans. Over the course of 2024, we successfully executed several transactions designed to further solidify our already strong capital position, including the retirement of the full $287.5 million in principal amount of our convertible senior notes due 2027, leading to a deleveraging and de-risking of our balance sheet, as well as a significant reduction in future cash interest expense. In addition, during the fourth quarter, we successfully unwound 50% of our cap call transactions associated with this convertible note issuance, generating cash proceeds of approximately $53 million for our company. As a result, we ended 2024 in a strong capital position with cash and equivalents of roughly $324 million and no debt. In conclusion, I'd like to recognize our more than 1,000 employees around the globe for whom our company mantra, We'll Go First, is more than just a company tagline. Rather, it is something that defines who we are as an organization and how we lead every day. I believe our foundation has never been stronger and our prospects never as promising. We are excited to build upon the growing momentum in our business in 2025 and beyond as we advance our mission to transform vision for the benefit of patients worldwide. So with that, I'll open the call for questions. Operator? QUESTION AND ANSWER SECTION Operator Thank you. We will now begin the question-and-answer session. [Operator Instructions] And your first question comes from the line of Tom Stephan with Stifel. Your line is open. Thomas M. Stephan Analyst, Stifel, Nicolaus & Co., Inc. Q Great. Hey, guys. Thanks for the questions. Tom or Joe, to start with you, can you elaborate a bit on just the trends you saw with iDose in the quarter and then maybe observations year-to-date. Obviously, a lot of investor focus on the ramp. So, I guess I'm just wondering if there's anything to call out in terms of new factors that have emerged of late and maybe anything that's different from plan? Joseph E. Gilliam President & Chief Operating Officer, Glaukos Corp. A Sure. Hi, Tom, it's Joe, I'll start and if Tom wants to add anything he can at the end. I would really characterize, through the quarter, another strong quarter of performance, really heads down execution on all fronts. And that led to what I believe would be probably a doubling of iDose TR revenues in most of your models in the quarter relative to what we saw in the third. I think, more importantly underneath that, as we think about the building blocks of what it takes to build the foundation for long-term success and kind of our progress there, first and foremost, we continue to be really pleased with the real world outcomes clinically, and that's further supported by the growing body of peer-reviewed evidence that Tom mentioned in his prepared remarks. We continued to see the number of surgeons trained expand rapidly on iDose and in parallel the education of the office staff on the reimbursement dynamics associated with the procedural pharmaceutical like iDose. And then on the reimbursement front, we continued to make progress in establishing confidence. It's subjective, as I've said before, but I can now say that five of the seven MACs are adjudicating and processing the J-code in a normalized and efficient manner. That's really kind of emerged here over the course of the beginning of 2025, but an important milestone as we continue to make progress on that front. And then, as Tom mentioned, we've recently added Novitas and First Coast alongside Noridian has having established formal professional fee schedules associated with iDose. And finally, as I think about us as we move forward here, we'll begin to slowly and methodically roll out that commercial and Medicare Advantage policies and support that as we enter into Q2 and certainly in the second half of the year. These are all consistent with what we've been saying now for a couple of quarters, and we continue to remain on track - so. And from a macro standpoint as we sit here today, I think we have growing confidence on the impact that iDose is going to have in the years ahead, including the impact it's going to have on 2025 as reflected in our guidance, I'm sure we'll get into here in a bit. Of course, having said that we'll continue to remind folks that as a procedural pharmaceutical, the adoption ecosystem is pretty complex, just as it was when we launched iStent many years ago. So, progress from a reimbursement confidence and establish pro-fee schedules are exactly that. They can sometimes take a few quarters to move the needle, but we're excited about what we just did in the fourth quarter and what it means as a set up for 2025 and beyond. That's great color. And then my follow-up just on guidance, Joe or Alex, can you just elaborate a bit on the components of the 2025 revenue guide between the different segments, and any color on the core US stent business growth as well would be helpful. Maybe it seems like that slowed a bit due to the LCDs in 4Q, but just any color on the component of guidance would be great. Thanks. Joseph E. Gilliam President & Chief Operating Officer, Glaukos Corp. A Yeah, it did, Tom. And so, let me break down kind of the how to understand I think the fourth quarter and then certainly as we think more broadly, I think the guidance looking forward. Specific to the latter part of your question, we did see the new LCD restrictions slow our non-iDose or stent growth, if you will, down to kind of the mid-single digits for the quarter. Obviously that was more than offset by the iDose performance that I referenced in the first part of your question. And so, as we think forward on the guidance around that specific point, and I'll save more color for other folks to ask the questions on. As we think about that guidance, we do expect those LCD headwinds and the volatility that we told you all to expect, as well as the expiration of the Hydrus royalty to generate flat to maybe even down low- single digit growth for our non-iDose revenues in 2025. So when you kind of put all that together and again, we'll talk about it a bit more throughout the call, you'll see that implied in our guidance is very healthy expectations around the iDose franchise and really growing as we've made our way into 2025 and what we think we'll accomplish this year with iDose. Thomas M. Stephan Analyst, Stifel, Nicolaus & Co., Inc. That's great color. Thanks, Joe. Q Operator Your next question comes from the line of Larry Biegelsen with Wells Fargo. Your line is open. Simran Kaur Analyst, Wells Fargo Securities LLC Q Hey, guys, congrats on the quarter. Thanks for taking the question. This is Sam on for Larry. Maybe just to follow- up a bit on the 2025 guidance. So US glaucoma, it sounds like the core business should continue to see some of those headwinds from the LCDs. Is that - how do we think about cadence in terms of impact? Is that first half weighted? And some return to growth in the second half, or do you sort of expect to see depressed volumes throughout the year? And how do we think about the cadence of iDose throughout 2025? Joseph E. Gilliam President & Chief Operating Officer, Glaukos Corp. A Simran, it's Joe. So, maybe I'll start in reverse and just talk about seasonality for a second, then I'll get into the question around the LCDs headwind. So, as you know, having been around story for a while, typical seasonality patterns for us are underway in the first quarter, and sort of equal weight in the middle part of the year and then pretty heavy into the fourth quarter. Clearly, the dynamics around iDose are going to drive an increasing weighting towards the second half. I would point investors to something that's probably a little closer to, call it, 21% contribution in the first quarter, 23%, 24% in the second quarter, 25% in the third and 30% in the fourth. And again, that's really largely driven by just the continued expectations of ramp for iDose within that. And that leads into sort of the second part of your - maybe was the first part of your question. I think we certainly would expect that the LCD headwinds would be at their peak here in the first half of the year and start to abate a little bit as we get in the second half. And certainly, as you get into the fourth quarter where you already experienced a little bit of that headwind-related slowing in the fourth quarter of 2024. So, I don't think it's just something that's equal throughout the year, I think we should see some improvement over that. But as I said in the prior question, we do expect for the overall year the combination of those MAC headwinds as well as the expiration of the Hydrus royalty, which really begins in the second quarter, driving flat to potentially even down to low single digits growth for the non-iDose part of our US glaucoma business. Simran Kaur Analyst, Wells Fargo Securities LLC Q Got it, that's very helpful. And maybe just a bigger picture question on how we should be thinking about iDose sales. If look at total MIGS procedures in 2024, it looks like there were about 100,000 procedures. And the patient population is only about 500,000 to 700,000 eyes. Could the number of iDose procedures eventually surpass the number of implantable MIGS procedures in the US? Joseph E. Gilliam President & Chief Operating Officer, Glaukos Corp. A Hi, Simran. I think over the medium to long-term, absolutely, especially with the numbers that you just put out there. And maybe to supplement that what you just said a bit, I think the overall, I'll call it, glaucoma procedures market, which includes MIGS as we define it, maybe some of the more tissue-destructive procedures, it's probably more like 200,000 to 250,000 procedures a year that are being done. That's largely today, as you know, done in combination with cataract and that's where you referenced the 500,000 to 700,000 eyes market. When we talk about iDose, or quite frankly iStent infinite or interventional glaucoma overall, you are going after a much, much larger market. So, when we think about that there are north of 20 million eyes at any given time that have either ocular hypertension or glaucoma in the US. Somewhere in the neighborhood of 13 million to 14 million of those are diagnosed at any given time, and around 10 million are actively treated. So iDose and iStent infinite as well as a handful of other products with much broader labels are all going after a much larger market in that 10 million eye market versus the 500,000 to 700,000 that we've been constrained with in combination with cataract surgery historically. Simran Kaur Analyst, Wells Fargo Securities LLC Got it. That's helpful. Thank you. Q Operator Your next question comes from the line of Ryan Zimmerman with BTIG. Your line is open. Iseult Mcmahon Analyst, BTIG LLC Q Hi, this is Izzy on for Ryan. Thanks for taking the questions. So, I just want to stick with iDose. So, over the course of 2024 and as you guys have rolled out the limited launch, I was curious if you are seeing any share gains from DURYSTA, or has the growth you've seen so far been more of extension of the market and bringing in new users? Joseph E. Gilliam President & Chief Operating Officer, Glaukos Corp. A Hi, Izzy. This is Joe. I would characterize it as more overall market growth. I think we're - just as an extension of the prior question that was asked by Simran, we're in [indiscernible] (00:27:39) earliest phases of a much, much larger market movement towards standalone interventional care. I think, there's a lot of opportunity for many products, including obviously, DURYSTA and iDose, to be growing for the foreseeable future in lockstep. So I see it as an opportunity, it's less about share. I think the real question is as an industry, how do we continue to take share from legacy eyedrops and the shortcomings that are on that front from a clinical perspective. Iseult Mcmahon Analyst, BTIG LLC That's helpful. Thank you. And do you have any updates on the status of re-administration? Q Thomas William Burns Chairman & Chief Executive Officer, Glaukos Corp. A Yeah, we do. I'll be happy to take that one, Izzy, this is Tom. And so, as I promised to investors, this is going to be a process that will take several months, indeed it has. We've been in negotiation with the FDA for some time. I think we're in a good position now to be able to submit a post-approval supplement to the FDA for appeal during the first half of this year. And the FDA has a statutory guideline of 180 days once we submit that. And so, we should know by the end of this year whether we're successful or not, getting a re-administration claim of the iDose. I remind investors, though, that the belt and suspenders approach that we have of having iDose TREX already in a clinical trial and potentially being available during the planning period for commercial entry, I see that as a de facto next implantation design product for our current iDose product. So I think, either way we're covered. We continue to be hopeful. But as I have strongly said in the past, we're not counting on anything. Iseult Mcmahon Analyst, BTIG LLC Understood. Thanks for taking the question. Q Operator And your next question comes from the line of Richard Newitter with Truist Securities. Your line is open. Richard Newitter Analyst, Truist Securities, Inc. Q Hi. Thanks for taking the questions. Maybe on iDose to start here. Can you give us any color on what your doctor installed base of iDose performing physicians looks like? And anything on how you're going to progress that training effort. I know you at the last quarter said, you're moving into kind of a full commercial launch and I just want to get a sense for, especially exiting the quarter and you have some of the reimbursement and MAC progress being made. How should we think about that in terms of the number of docs being trained? Attachments Original document Permalink Disclaimer Glaukos Corporation published this content on February 21, 2025 , and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on February 21, 2025 at
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