GLAUKOS Corp Q3 FY2024 earnings call

Management Statement and Operational Highlights:

• Glaukos recorded third quarter consolidated net sales of $96.7 million, up 24% year-over-year, and raised full-year 2024 net sales guidance to $3.77M - $3.79M from $3.70M - $3.76M.
• U.S. Glaucoma franchise saw record sales driven by iDose TR and iStent infinite, with continued clinical education efforts for iStent infinite.
• iDose TR launch progress: Expanded access to sales force, positive clinical outcomes, work on market access and reimbursement, including J-code transition and CMS updates.
• International glaucoma franchise had 21% YOY growth, with ongoing efforts to scale infrastructure and drive MIGS as standard-of-care.
• Corneal Health franchise had 5% YOY growth, with positive Phase 3 results for Epioxa, a next-generation corneal cross linking therapy, and ongoing pipeline investments.
• Redeemed remaining convertible Senior Notes due 2027 to solidify capital position.

Segment Performance:

• U.S. Glaucoma franchise: Third quarter net sales of $51.6 million, up 35% year-over-year, driven by iDose TR and continued growth in the iStent portfolio. Revenue contribution from U.S. Glaucoma was significant.
• International glaucoma franchise: Third quarter net sales of $24.5 million, up 21% year-over-year, with broad-based growth as the company scales international infrastructure.
• Corneal Health franchise: Third quarter net sales of $20.6 million, up 5% year-over-year, including Photrexa net sales of $17.9 million, impacted by entry into MDRP.

Guidance:

• Raised full-year 2024 net sales guidance to $3.77 million to $3.79 million from $3.70 million to $3.76 million.
• Q4 expectations: Corneal Health expected to face year-over-year decline due to MDRP headwinds lapping; international glaucoma expected lower growth due to currency and competition; U.S. Glaucoma expected continued acceleration with iDose and iStent growth.
• Anticipate commencing Phase 3 clinical trial for iDose TREX by end of 2024.

Risks:

• Regulatory uncertainties related to product approvals and re-administration of iDose TR.
• Reimbursement challenges across MACs for iDose TR, with some MACs still having manual and time-consuming processes.
• Competitive pressures in international markets and potential headwinds in corneal health from Medicaid drug rebate program.
• Foreign currency fluctuations impacting international sales and financial results.

Q: Can you talk about learnings from the first year of iDose TR launch?

A: Key learnings include importance of clinical outcomes and reimbursement confidence; while progress made, still work needed on reimbursement.

Q: How does reimbursement for iDose TR look in 2025?

A: Expect increasing adoption as reimbursement confidence grows, with methodical expansion in 2025.

Q: Any changes in iDose TR patient utilization?

A: Increased utilization across categories like standalone, combo cataract, post-DURYSTA, etc., with continued expansion.

Q: Progress on Epioxa's reimbursement pathway?

A: Epioxa procedure covered under existing T-code 0402T, with potential J-code for commercial launch in 2026.

Q: Cash flow breakeven and profitability?

A: Quarter generated small cash, near term focus on cash flow breakeven, with potential profitability in midterm as iDose volumes ramp.