GLAUKOS Corp Q2 FY2023 Earnings Call

Welcome to Glaukos Corporation's Second Quarter 2023 Financial Results Conference Call. Copies of the company's press release and quarterly summary document both issued after the market closed today are available at www.glaukos.com. 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. 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 Quarter 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 effects associated with the quarter, the state of 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, U.S. and international commercialization, market development efforts, 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 our earnings press release available in the Investor Relations section of our website for a 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.

Okay. Thanks again, Chris. Good afternoon to all, and thank you all for joining us. Today, Glaukos reported record second quarter consolidated net sales of $80.4 million, up 11% versus the year ago quarter. These second quarter results reflected record sales and continued strong performance across our international glaucoma and Corneal Health franchises alongside the reemerging growth in our U.S. glaucoma franchise driven by the initial commercial launch of iStent infinite. I'd like to congratulate the dedication and performance of our teams around the globe who remain committed to their work and to advancing our key initiatives. Given our solid second quarter and our latest forward outlook, we are raising our 2023 net sales guidance range to $304 million to $308 million, versus the $295 million to $300 million previously. From a commercial perspective, strong execution of key strategies within each of our core franchises drove our record quarter. Within our U.S. glaucoma franchise, we delivered sales of $39.6 million, which grew 4% year-over-year and 13% sequentially. We continue to advance iStent infinite ahead of establishing formal MAC coverage and payment. On that front, 5 of the 7 MACs have issued proposed LCD reconsiderations that, if finalized, would provide coverage for iStent infinite, consistent with FDA approval and based upon our coverage reconsideration requests. In total, all 7 MACs have taken preliminary steps to assess iStent infinite coverage through either proposed LCDs or temporary LCA updates. Further, we continue to support expanding broad access to interventional glaucoma tools for physicians and will closely monitor the various MAC policies and processes as they advance and are ultimately finalized in the future. We were also encouraged to see as part of the CMS 2024 proposed rule the CPT code used to cover iStent infinite and standalone procedures, 0671T, has been lifted to APC 5492 from APC 5491. We are pleased with this initial proposal and believe, as we have stated in the past, that it more appropriately reflects the cost of infinite and similar standalone procedures. Separately, CMS also proposed to move the APC assignment for combined cataract plus trabecular bypass procedures 66989 and 66991 to a newly restructured APC 5493, which we also believe appropriately reflects the claims history as CMS stated in the proposed rule. If finalized, these changes will go into effect on January 1, 2024. As mentioned earlier, our international glaucoma franchise delivered record sales of $22.3 million on a strong broad-based year-over-year growth of 25% on a reported basis and 27% on a constant currency basis. As we continue to scale our international infrastructure, we are increasingly driving MIGS toward becoming a standard of care in each region and every major market in the world. While we focus on our near-term execution, we are also accelerating efforts to support one of our founding missions at Glaukos, which is to advance glaucoma care by driving intervention of therapies earlier in the treatment paradigm for glaucoma disease and, in turn, pioneering a new stand-alone market over time. We continue to lead and work closely with surgeons and thought leaders globally to organically drive this broader evolution in the standard of care, including through numerous events at the ASCRS annual meeting in May and more recently at the World Glaucoma Society Biannual Meeting in Rome in June. And finally, our Corneal Health franchise delivered record sales of $18.5 million on an 11% year-over-year growth, including Photrexa record sales of $15.9 million on year-over-year growth of 18% as key strategic initiatives implemented throughout the past year continue to take hold in support of this important business. Shifting gears to the development front, we continue to prudently invest in and successfully advance a robust 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. During the second quarter, we announced FDA acceptance of the previously submitted NDA for iDose TR, marking another important step in bringing this game-changing therapy one step closer to patients. We continue to be encouraged as we work closely with the FDA and their ongoing review process as we progress towards the agency's established PDUFA goal date of December 22, 2023. Alongside this, our teams continue to make nice progress with the preparation and planning of the iDose commercial launch targeted for early next year, including a robust set of peer-reviewed literature expected to be published over the remainder of this year and into 2024. Turning to the Corneal Health pipeline. During the second quarter, we completed enrollment in the second Phase III confirmatory trial for Epioxa, our next-generation corneal cross-linking therapy for the treatment of keratoconus. This expeditious enrollment completion, which occurred in less than 6 months from trial commencement earlier this year, is a testament to the favorable risk-benefit profile of this next-generation therapy as well as our team's hard work in bringing this important rare disease therapy one step closer to patients suffering from keratoconus, which is a sight-threatening corneal disease. We look forward to following these patients' outcomes as we target NDA submission for Epioxa by the end of 2024. As you can see, we have a lot to be excited about when it comes to the significant potential value that we believe our pipeline programs may create. At the same time, as we discussed last quarter, we continue to prioritize the cadence of our investments as we strive to strike the right balance of risk-based investments and our capital position now and in the future. As evidence of that, our non-GAAP, SG&A and R&D operating expenses in the second quarter moderated to 6% year-over-year growth, reflecting some of the initial development adjustments we've made in our earlier-stage pipeline programs as we continue to prioritize our resources ahead of the anticipated iDose commercial launch early next year. So in conclusion, I'm very pleased with the record quarter and building momentum in our business as we continue to successfully advance our mission to truly 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. So with that, I'll open the call for questions.

Our first question will come from Tom Stephan with Stifel.

Great. First one, I'll start with iDose. I guess, big picture, in your guys' minds, what does a successful launch in 2024 look like? You hear different numbers. I think $50 million has been cited as a year 1 number. But even if it's run rating more in the $30 million to $40 million range. Is that a decent starting point or benchmark as we try to refine our models for year 1 iDose now that we're getting much closer to hitting the market? But just any guardrails for how to think about 2024 iDose would be very helpful.

Tom, it's Joe. I'll start, and Tom may want to add some color commentary at the end too. As we think about iDose, and obviously, I'm not going to comment on the specifics of the guardrails of any given number, how will we define success? I think we're going to define success in a couple of different ways. First, the more broad theme of continuing to drive the interventional glaucoma mindset and really the need and reason for intervening with these safe and minimally invasive technologies. But specific to the launch, you've been around the story long enough to know that our focus is on making sure that we deliver the right kind of training and the right kind of outcomes for surgeons out of the gate. So we're going to prioritize doing this the right way and doing it the right way, both from the surgeon's perspective as well as ultimately in achieving the optimal sort of reimbursement outcomes and everything else that goes to drive long-term success over any particular quarter or target number for the year. Obviously, you know we're enthusiastic about what iDose means for our future, and we're going to make sure we put the right building blocks in place to achieve that success.

Got it. That's helpful. And then to pivot to infinite, maybe a 2-parter, but any trends you can speak of with Internet to date and maybe even into 3Q, just momentum with that product here in the U.S. Any color you can provide would be very helpful. And then in terms of the facility fee proposal, really encouraging to see I think, over a doubling of the ASC facility fee. Can you just talk about what that could mean in 2024 for the product? Maybe more specifically, do you think there's a good opportunity to take some price on that product?

I think first, in terms of the broader trends with iStent infinite, we are very pleased with the momentum as we navigate the formal MAC and coverage process for both Medicare and commercial payers. The early utilization and adoption we are seeing is particularly encouraging, especially considering our progress on reimbursement. Five of the seven MACs have proposed draft LCDs for coverage that largely align with our formal coverage request and the product label, while the other two have addressed the matter through local coverage articles or LCAs. We are making our way through that process, but it is still early. The momentum around iStent infinite and its utilization indicates a significant need for a product like this in the market, even as we work to secure proper coverage from the various MACs and commercial payers. Regarding the facility fee in 2024, we are pleased with the proposed rule regarding the facility fee for infinite and combo cataract procedures. This aligns with our historical expectations based on the data we have. However, it can take time to work through the process, so we are encouraged by the proposed rule and what it means for 2024. As for product pricing, it is influenced by several factors including product attributes, our overall portfolio, competition, and reimbursement. If the proposed changes are finalized, they will allow facilities to receive appropriate reimbursement for these sight-saving procedures, making them financially feasible. Ultimately, this will benefit patients as well.

Your next question will come from the line of Ryan Zimmerman with BTIG.

The results are strong. I want to start by discussing guidance. Based on the results, it seems like there might be a decline in absolute dollar amounts in the second half of the year, especially considering the typically strong seasonal fourth quarter. Can you share your perspective on this? Additionally, I've noticed the proposed LCD and the other two MACs this quarter. What numerical impact have they had, and how has that influenced physician behavior? I have a follow-up as well.

Sure, Ryan. In that context, I expected this. Let me start by saying that we had a strong first half, and the second quarter exceeded our expectations in terms of execution. For 2023, our focus is on building a solid foundation ahead of what we anticipate will be a transformative period for our company with infinite, iDose, and Epioxa. While we had a strong start in the first half, we still have much work to do in laying that foundation. At the beginning of the year, we made it clear that we wanted to take a cautious approach to guidance. The update we're providing reflects that we are now starting to gain momentum. We aim to highlight the encouraging trends from the first half and their potential implications. We also consider that the landscape shows generally healthy health care procedure trends, which may have improved as staffing issues from 2022 began to ease, allowing accounts to address their backlog. Our guidance today anticipates a normalization of these realities in the second half and does not account for significant benefits from the finalized LCDs in 2023, particularly regarding iStent infinite. This is connected to your second question, as we can elaborate on the LCD process, but we lack certainty about when these will be finalized. Once we have that information, we can better assess the potential impact on iStent infinite. We need to consider the seasonal slowdown in summer, particularly in Q3, which has become more noticeable in recent years post-COVID. Ongoing competitive dynamics, including from Alcon and more invasive procedures, are also a factor. Regarding your second question about the proposed LCDs, I wouldn’t say we’ve noticed any impact from them in the current marketplace situation. They are still proposed and haven't altered the existing coverage rules for these products. Until there is a change, I expect surgeons will continue to operate based on the existing reimbursement and coverage.

Okay. Very thorough on that. I want to squeeze in one more. Just, Tom, you talked about moderating spending, and I thought that was an interesting comment given kind of we're about to prepare for what is arguably one of the biggest products in the company's history and a launch around that. And so I think the earlier question kind of talked about what is a successful launch. But maybe on the other side of the P&L, I mean what does moderating spending mean in terms of how you go to market and sell iDose from a commercial standpoint?

Yes, that's a great question, Ryan. I'm referring to various organic development programs that we have in place as we move forward. This requires me to prioritize and allocate our capital effectively to achieve a favorable balance of benefit to risk and optimal returns for our shareholders. That's our approach. I want to clarify that we have significant capital that we will invest in the successful launch of iDose. The timing is key, with some activities expected to occur later this year and into 2024. We recognize the substantial impact this launch could have on the company, and I assure you that we will allocate the necessary capital to make it a success.

Your next question comes from the line of Larry Biegelsen with Wells Fargo.

This is Charles on behalf of Larry. First, congratulations on a strong quarter. I have a question regarding guidance, specifically about the quarterly sales cadence for the latter half of 2023. You mentioned some summer seasonality, so I'm curious if that suggests that Q3 may be weaker while Q4 sees a boost. Any insights on that would be appreciated. Additionally, I have a quick follow-up regarding iDose.

Yes, Charles, you asked the question very well. If you look at the implied guidance, the second half appears to resemble the first half. I believe the summer seasonality trend we've observed in recent years will manifest in the third quarter. The last month of the quarter often significantly influences performance as people resume procedures globally. So, we'll see how that unfolds. However, at this time, I would anticipate a slight decline in Q3 due to summer seasonality, followed by a recovery in Q4.

Great. And then a follow-up on iDose. Do you still expect no restrictions on the repeat procedures upon approval? Also, you mentioned planning to work towards reimbursement for iDose in the office setting. How long do you think that could take after launch? Do you believe that's a significant catalyst for adoption?

Yes, Charles, I'd be happy to address those questions. Your first question was about whether we expect any restrictions on exchanges. We have previously addressed this and remain confident that it won’t pose an issue for us. During our exchange study involving reconsenting patients in the Phase IIb study, we followed 33 patients over five years and observed no significant differences between the treatment and control groups. Therefore, we are confident that we won't face restrictions in that study. Regarding our launch strategy, it's crucial that we approach this in two ways. First, we aim to provide site of service options for surgeons to administer iDose both in the office and in ambulatory surgical centers (ASCs). As we get closer to launch, we will engage with Medicare Administrative Contractors (MACs) to establish a suitable professional fee, which will be assigned to an Ambulatory Payment Classification (APC). Typically, we expect to see this in the first half of the year. For the drug payment aspect, we will have a miscellaneous J-code at the time of launch and will also apply for a HCPCS code, which usually takes about two quarters to obtain. This J-code will apply to both ASCs and office settings. We anticipate that in-office use will become increasingly important over time. To enable this, we need to establish non-facility payment, which requires us to work with MACs individually and obtain support from specialty societies and key opinion leaders. We will develop a practice expense work-up to inform MACs on what the professional fee should be for non-facility payment in office settings. As you know, professional fees are generally higher in non-facility settings since there is no facility payment involved. Therefore, we expect the professional fee to be greater than that on the ASC side. This process will occur gradually and on a case-by-case basis as we engage with the MACs. As I've mentioned since our IPO, this will be a critical component in the long term, allowing physicians to use the office as a site of service for what we believe will be a transformative technology.

Your next question comes from the line of George Sellers with Stephens.

Congrats on a great quarter. Sticking with iDose. You've obviously had some success with iStent infinite adoption despite working through some of the reimbursement processes with the MACs. But I'm just curious, as it relates to iDose, is there anything we can kind of take from that commercialization of iStent infinite and apply to the expected commercialization of iDose? And I know we're still waiting on approval and it's a little bit more complicated than infinite in a lot of ways. But what could demand for iDose look like prior to reimbursement fully coming together? And how do you expect that to sort of progress.

It's challenging to establish a direct connection between experiences with different products since each has its own branding, indications, and target patient groups. However, what remains clear is our dedication to executing our plans correctly. We approach the launch of these products methodically, ensuring thorough training for our surgeons and navigating the reimbursement process carefully. Over the past couple of decades, we've gained significant experience in introducing new products into untapped markets. iDose will serve as another instance of this as we move ahead. There are numerous variables at play, so we'll provide our expectations for 2024 when we share our guidance for that year rather than speculate on them now.

Okay. That makes sense. Maybe switching gears a little bit. You also recently announced an agreement with Radius XR. And I'm just curious if you could give some additional details on that deal. Any incremental costs you're expecting this year associated with that? And then also maybe what's assumed from that in the current guidance?

I will start by saying that from an expense perspective, it is relatively insignificant. I wouldn't highlight anything specific, and yes, it is included in our guidance. However, I wouldn't consider it a major factor in our guidance at this moment. The main reason behind our collaboration with Radius is our commitment to pioneering these markets and expanding their reach. We want to help democratize testing and screening so that we can identify patients and assist them no matter where they first present, whether at an optometrist's office, retail locations like Walmart Optical, or within a medical setting. Our goal is to ensure that they have access to technology that can efficiently test for sight-threatening diseases, ideally identifying these conditions earlier and providing the necessary care sooner rather than later. Currently, many optometry centers, and even some other clinics, have limitations regarding their diagnostic capabilities and the timing of deploying the technology they possess to test patients effectively. We believe that by enhancing the technology we view as best-in-class with Radius, we can contribute to democratizing and advancing the screening and diagnostic process.

Your next question comes from the line of Joanne Wuensch with Citi.

I'm curious about two things. One is, at what stage are you comfortable sharing with us what the ASP is for iDose because we've heard a number of different numbers tossed around. And then the second question I have is your OUS mix is really strong. And I'm curious whether or not there is pent-up demand or a new region you opened up, any stocking? And would you be surprised if this didn't continue for the remainder of the year?

Thank you, Joanne. I'll address the first part of your question. Regarding iDose pricing, we are still considering what that price will be. As I have mentioned before, we are taking a careful approach. We are analyzing Markov transition probabilities and the burden of illness. I'm also considering the implications of charging over $2,000 in a J code for four months of therapy. Additionally, I'm looking into surgical pharmaceuticals for both the anterior segment and the retinal side, which I believe will inform what I consider to be a fair and compelling price. I don't expect to disclose that price until we receive FDA approval. We will take our time to ensure we get it right, and shortly after FDA approval, we will announce the pricing for iDose.

On the international front, we achieved another remarkable quarter with 27% constant currency growth year-over-year. This growth was broad-based and reflects the strong execution by our global teams. We are pioneering a change in the standard of care across these markets, similar to what we have been doing in the U.S. for some time. Each market is at a different stage of this transition, and the efforts we have made to establish the MIGS marketplace, supported by the community, surgical treatment algorithms, and reimbursement dynamics, vary across these regions. Most of the markets we are in are still in the growth phase. We did not introduce any new regions or special drivers. At the beginning of 2022, there was still a slight lag effect in some regions that experienced a touch of COVID, which affected year-over-year growth numbers. Overall, we are extremely pleased with our team’s performance. I expect to see some normalization in the second half of the year, not just in the U.S. but globally, as we clear the backlog and restore business operations to normal levels. Therefore, we anticipate growth to moderate slightly in the second half compared to what we have seen so far this year.

Your next question will come from the line of Matt O'Brien with Piper Sandler.

This is Phil on for Matt. Thanks for squeezing us in at the end, and congrats on another great quarter. Just for starters, I don't want to belabor the point here, but laying the groundwork for an early 2024 launch of iDose, how are those conversations with docs going as far as using the currently available miscellaneous J code? And what I'm really trying to get at is, that requires that process. So are docs aware of how that process works and what might early utilization look like there?

Sure, Phil. First, since iDose has not yet received approval, there aren't any specific discussions regarding iDose related to reimbursement and the dynamics of miscellaneous codes. Most of our customers have prior experience with similar situations, although some are more proficient at it than others. I can assure you that we are fully prepared for that aspect of the launch and will educate our customers accordingly, making them comfortable with the process. As expected, many will want to see the product and experience its successful use firsthand. We anticipate that they will take gradual steps before fully engaging, but we are ready to support and educate each customer individually at the launch. Ultimately, their current understanding is more influenced by their broader industry experience rather than being specific to iDose.

Phil, this is Alex. I'll just kind of comment on that. And it goes kind of what Tom was earlier speaking about, which is we have sat down as we looked at our capital position, we looked at our pipeline, we looked at iDose launch and what we needed to invest in for that activity. And so we've started to make decisions around allocating those resources appropriately, in order to really fulsomely prepare for and invest in the iDose launch that's coming up. I don't think we've gotten much more granular than that.

Yes. I don't think we've said anything specific to any individual programs. But you can imagine that the iDose franchise remains a top priority for us, not just the first generation, but I heard you reference TREX and sort of the extended release portion of that, and we continue to move forward full steam ahead on that front.

Your next question comes from the line of David Saxon with Needham.

This is Joseph on for David. Maybe one on iStent. In terms of adoption for iStent infinite, are you seeing traction from new docs to Glaukos? Or is the adoption primarily centered around current iStent inject users?

Yes, Joseph, you will always see some of that, but it’s important to consider the context of our current stage. Right now, most of the adoption and utilization is happening among customers who have been with Glaukos for a while. This is typically how we launch new products, and it seems to be the case with iStent infinite as well. As we progress and secure reimbursement coverage, we hope to see broader adoption, especially within the glaucoma community where this product is expected to be positively received. For those who currently focus more on late-stage procedures like tubes and trabs, we anticipate that they will begin to adopt iStent infinite as reimbursement coverage improves and they have more freedom to do so.

That makes sense. I'm wondering about the bigger picture. With the products you've approved today, how do you see your long-term growth profile? What are your thoughts on the potential growth of the glaucoma business in the long term? You previously mentioned that Corneal Health could grow by 8% to 12%. Is that still your outlook, or could there be additional potential as reimbursement becomes more defined?

I believe there are several elements in your question regarding the Corneal Health business. Currently, we anticipate it will experience high single-digit growth. We are encouraged by the results we've seen in the first half of the year, but we will need more data before adjusting our growth outlook. More broadly, it's challenging for us to project exact growth rates at this stage. Both the U.S. glaucoma and Corneal Health sectors, as well as international glaucoma, are still relatively small markets compared to what we are about to pursue. The potential of the combination cataract opportunity is significant, especially as we aim to transform interventional glaucoma standards of care and the many patients who could benefit from this approach. This is why we are excited about the future of Glaukos. Similarly, Epioxa represents a transformative opportunity for us in the cornea sector as we near potential approval and launch. Overall, we have many reasons to be optimistic about our long-term growth prospects, as we are entering a much larger market. We believe this will be advantageous for us and our shareholders.

Your next question comes from the line of Steve Lichtman with Oppenheimer.

This is Ron on for Steve. Congrats on the quarter. Just wanted to ask you guys, in your earnings desk, you mentioned potential normalization of procedure volumes in the second half of the year, following what may have been worked on over the backlog in the first half. So can you guys talk about a little bit about what you're hearing from the field on that front? And where do you think we are in terms of the backlog?

Yes, Ron, I think in some ways, it's what we're not hearing from the field. And so if you think about it last year, and we called this out on several of our calls, what we were hearing from doctors in the field was a fair amount of feedback around staffing levels and constraints and the turnover and the inability to hold and retain a fulsome staff that enabled, for example, doctors who have 2 OR bases to work in both simultaneously. You were pretty consistently hearing that theme. And I think as we turn the corner into this year and certainly as we've made it along, we've heard less and less of that, if at all, quite frankly, I'm sure it obviously still exists in pockets, but it's less pronounced. And I think the broader point around procedure trends and the backlog is almost more of a macro one. When we look across the landscape, and obviously, you cover a lot of different industries and companies, and we saw this in the first quarter, you see it again in the second. It feels like, in general, procedure volumes have been pretty robust. And I think that, why I can't point any specific number or item in ophthalmology or within MIGS procedures, in general, it feels like folks have been back to work. And they've been working their way through. And net-net, they're making their way through whatever backlog tends to exist. It's impossible to know exactly when that will normalize, but we felt like it made more sense to make the assumption that whatever elevation existed in the first half that it may not continue in the second half. And if it does, obviously, that will accrue to all of our benefits.

That's great. And just one small follow-up on iDose. Do you guys think there's any chance that a panel will be called for this? Or is it already too late for that to happen?

I'm happy to take that question. This has been asked a few times before, but I'm glad to address it again. We currently do not believe that there will be an advisory panel requested. Right now, as we move towards our PDUFA date, everything is on track and going very well. We just completed a pre-approval inspection, which we believe went exceptionally well, and we expect to file a written confirmation of that in the next few weeks. Additionally, the FDA is involving CDER and CDRH for a mid-cycle review, and we anticipate receiving some interim questions, which we hope will put us in a very advantageous position leading up to the PDUFA date. So, to answer your question, no, we do not expect that there will be an advisory panel.

Your next question comes from the line of Allen Gong with JPMorgan.

I think a lot of the questions have been asked already. So I'll just keep it to one. But when I think about iDose, I fully understand that it's kind of hard to predict the success. But when I think about the competitive landscape, the fact that there is a somewhat comparable product. The profiles are clearly very different but somewhat comparable product on the market already. How should we really think about maybe iDose benefiting from that as a secondary player, whether or not we might see competitive dynamics from that early or if it is more just about expanding the market opportunity and kind of establishing iDose as a differentiated solution?

Well, I'm happy to take the first part of this, Joe answer as you will. But Alan, I would just tell you that I really don't see DURYSTA as something that I would take a lot of comparability towards. I mean you've got a product that is bioerodible, that is lasting a period of 4 months, relatively short period of time, has shown a relatively high rate of endothelial cell loss, which restricts its use to a one-time use and throws off relatively high rates of hyperemia as well, due to its dosing profile of release versus a product such as what we have, which is showing basically a safety profile where we have no endothelium or limited to minimal endothelial cell loss that we see and a 3% rate of hyperemia and a product that you've seen in the Phase IIb clinical trial that in 70% of patients is controlling glaucoma in 3 years. And so I don't see a lot of comparability between the 2 products. I don't take a lot of, use DURYSTA as a predicate. I think where DURYSTA serves our interest is the fact that they did establish a J-Code at $2,100 for 4 months of therapy, I think that will serve us well going into the pricing for this product. I will tell you this, given some of the limitations of DURYSTA , I might draw some high optimism that even with these limitations in place, there has been a relatively strong appetite, at least for the concept of intracameral drug delivery.

I would just add that there are two key factors that will benefit us in the launch of iDose. Firstly, while DURYSTA is not directly related, anything that promotes an interventional glaucoma approach is beneficial. As we work to shift the standard of care, the efforts made by DURYSTA, Allergan, and their representatives are significant, and we hope this will influence the industry towards what we believe is the best care course for these patients. Secondly, it's not so much about competitors; it's more about the current state of the industry. Reflecting on when Glaukos first launched MIGS and iStent, there were many foundational aspects that needed to be addressed, particularly re-educating surgeons on surgical techniques they hadn't practiced since their residency. Now, as we approach products like iStent infinite or iDose, the good news is that surgeons are now much more knowledgeable about angle-based surgeries and their technical details. The focus has shifted to the features, benefits, and safety profile of the individual products, as well as their specific use cases for appropriate patients. Therefore, we are entering the market with a more informed audience regarding interventional options, and we will certainly do our part to accelerate this progress.

And our final question will come from the line of Anthony Petrone with Mizuho.

Congratulations on a strong quarter. I have two quick questions. First, regarding the core mix space, how do you anticipate it will develop next year if non-implantable MIGS procedures become non-covered in certain MAC territories? Second, can you provide any updates on the iDose label, particularly regarding the duration of the implant and what can be included in the label concerning that duration?

I will begin and then Tom can provide additional insights regarding iDose. We are prepared for any possible outcomes related to the proposed LCDs, and at this point, I am hesitant to speculate or attempt to quantify the situation due to the numerous factors involved. As these matters are finalized, we hope to have more clarity in the coming months or quarters. Our focus remains on fostering a robust and growing market that ultimately benefits patients. We believe that supporting surgeons in their clinical decisions, rather than payers, is the most effective approach. In the long term, we all agree that successfully implementing interventional glaucoma solutions like iStent infinite and iDose is likely to be much more significant for our future than the immediate dynamics at play. Although I recognize and value your question, that is where our priorities lie.

I'm happy to address the second part of your question. Regarding the label, we are following a 505(b)(2) regulatory path, and we expect the label to focus on the reduction of intraocular pressure in patients with ocular hypertension and open-angle glaucoma. This label will be quite broad and will be based on the 3-month non-inferiority primary efficacy endpoint established in our pivotal trial. We do not anticipate the label to specify our extended duration. We've successfully extended the Phase IIb study after three years, which is an important aspect. The 3-year cohort study we conducted in Phase IIb will enable us to approach payers to demonstrate the necessity for coverage and payment. Okay. Thanks to everybody for all your time and attention today. We thank you for your continued interest and support in Glaukos. Thanks, and goodbye.

That will conclude today's conference call. We thank you all for joining, and you may now disconnect.